February 5, 2002
Pepsi versus Coke
The rivalry of Coca-cola and Pepsi is extremely widespread. In order to remain competitive in a two-person race it is important to analyze the way a company does business. This article gave a competitive analysis between Coke and Pepsi by looking at both the industry structure and at the individual competitors. As it looks at the industry structure, it refers to Porter’s Five-Force model to determine Coke and Pepsi’s strengths and weaknesses. Secondly, at the individual competitor level, it analyzes how Coca-Cola and Pepsi position themselves, in external markets, to sustain a competitive edge.
This article looks at the specific actions Coke and Pepsi are taking to set themselves apart from each other and maintain competitive advantage. Coke is in danger of losing its edge. Consumers today are looking into different products than soda. They want green/white teas, energy and fitness drinks, and coca-cola has been slow in answering the call. Mary Minnick, head of marketing and innovation/strategy at Coca-Cola Co., is advocating the push from soda-centric products to those meeting the primal “need states” the consumers have. Pepsi on the other hand has aligned itself with the right people to slowly close the gap on Coke. Steve Refinement, Pepsi's chairman and CEO, said that Pepsi plans to spend more on advertising and promotion, including coupon offers, in order to counter Coke's moves. The main point in this article is that the rivalry between Coca-cola and Pepsi is second to none. The two have been butting heads for awhile now. However, the global market has changed and the demand for carbonated drinks has significantly declined. How Pepsi and Coke answer the call will determine future success.
I felt this article was critical to this course because when determining a company’s strength and weakness it is imperative to utilize Porters Five Force Model. This article had some great points that...