Competition, Strategy, and Implications
Webster University Summer 2012
The rivalry between Coca-Cola & Pepsi can be deemed as legendary, “the top soft drink competitors in the world spend millions of dollars yearly to try and convince you that their version of soft drink is better” (Dotson pg 1). Over the past century, it seems they have feuded over everything from who has superior taste, to the pursuit into space, and more recently over NASCAR and the social media race. Regardless of who is ahead in the competition, the battles between Coca-Cola & Pepsi demonstrate important strategic adaptations that the corporations must execute so as to thrive in the constantly changing realms of customer satisfaction, business environments and technology. This paper will: 1) review the strategic issues presented in the “Coke Wars” case through the use of the Strategic Management Model as applied to both Coca-Cola & Pepsi; 2) highlight fundamental strategies & tactics so as to analyze the inherent competition between both corporations; and finally 3) discuss implications of concepts presented in the case for the middle manager so as to grasp lessons learned for future application. STRATEGIC MANAGEMENT MODEL (SMM)
The text describes strategic management as “the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives” (Pearce, Robinson pg 3). With this definition in mind then, the Strategic Management Model can be considered as a very useful framework by which managers plan and implement business strategies. More importantly, in today’s global business environment “firms need perfect processes that respond to increases in the size and number of competing firms; to the expanded role of government as a buyer, seller, regulator, and competitor in the free-enterprise system; and to greater business involvement in international trade” (pg 3). Furthermore, while “businesses vary in the processes they use to formulate and direct their strategic management activities…the basic components of the models used to analyze strategic management operations is similar” (pg 9). In reaction to internal and external environmental business/economic pressures Coca-Cola & Pepsi have manipulated the SMM in various ways so as to remain viable/powerful competitors in their respective industry. Coca-Cola Model Application
According to the Coca-Cola Company’s Annual Report 2011, they are “the world’s largest beverage company…with more than 500 nonalcoholic beverage brands…own the world’s top five nonalcoholic sparkling beverage brands…products bearing their trademarks, have been sold in the United States since 1886, and are now sold in more than 200 countries” (pg 1). Coca-Cola’s report to shareholders reveals that they are continuing to remain competitive in the beverage/snack industry due to a multitude of intelligent strategic decisions. When analyzing Coca-Cola from the Strategic Management Model perspective one can determine that while the internal/external environment will always remain unpredictable, the development of viable plans/processes can assist a corporation in remaining flexible and responsive to necessary change. Coca-Cola’s Mission is “to refresh the world…inspire moments of optimism and happiness…create value and make a difference” (Annual Report Mission, Vision, and Values). Their current goals are “to use company assets—brands, financial strength, unrivaled distribution system, global reach and the talent and strong commitment of management and associates—to become more competitive and to accelerate growth in a manner that creates value for shareholders” (pg 1). Overall, the mission statement is quite powerful and accurately “describes...