In this session, we would analyze Coke and Pepsi internally using SWOT analysis. SWOT is the short form of Strengths, Weaknesses, Opportunities and Threats. In Appendix A, we can see that the major strength for Coke is its name value. Coke is the World’s leading brand for CSD. Marketing and advertising is the major battleground for the CSD industry, from the SWOT analysis, we can see Coke did a great job for that. Being the market leader is definitely a huge advantage. It will in turn increases Coke’s bargaining power to the bottlers and retailers
For Pepsi, we think that their aggressive and fast adapting working team is contributing a lot to their success. In 1978, they entered the fast food business by acquiring Pizza Hut, Taco Bell and KFC before other CSD. In 1950, the CEO of Pepsi, Alfred Steele made “Beat Coke” as his motto. Moreover, Pepsi was more aggressive than Coke in shifting to non-CSD. Pepsi developed a portfolio of non-CSD products that outsold Coke’s rival product in each key category. It shows that Pepsi has a strong training program and great working environment which could be very beneficial to the company.
Porter Five Forces External Analysis (Appendix B)
Soft drink industry is very profitable, more so for the concentrate producers than the bottler’s. This is surprising considering the fact that product sold is a commodity which can even be produced easily. There are several reasons for this, using the five forces analysis we can clearly demonstrate how each force contributes the profitability of the industry.
Barriers to Entry:
There are several major barriers to enter CSD industry. The value chain of the company consists of concentrate producer, bottlers and retailers. Assuming you have a formula as good as Coca Cola, you will still need a bottler network. Also, the retail shelf space is now filled up by giant two, Coke and Pepsi. Furthermore, huge advertising expenses and...