Preview

Coke Wars Case Study

Best Essays
Open Document
Open Document
3862 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Coke Wars Case Study
Coke Wars Case Analysis: Competition, Strategy, and Implications
Webster University Summer 2012

INTRODUCTION
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

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Bus 475 Wk 2 Quiz

    • 320 Words
    • 2 Pages

    Strategic management is the process by which the management team determines a firm’s goals. It is achieved by examining internal and external strengths, weaknesses, threats and opportunities.…

    • 320 Words
    • 2 Pages
    Satisfactory Essays
  • Best Essays

    MHA 612 FINAL PAPER

    • 3334 Words
    • 10 Pages

    Strategic planning is describes the strategic management as the art of making complex, long-term, future-oriented decisions and taking actions that result in the formulation and implementation of plans designed to achieve a company’s objectives. The process focuses on the belief that a firm’s mission can be best achieved through a systematic and comprehensive assessment of both its internal capabilities and its external environment. Strategic management process is the implementation of the company’s strategy by executive management considering its resources, circumstances, and environment to position the organization to complete is mission in a cost-effective, efficient manner. The corporate goals, policies, and tactics are incorporated into this process.…

    • 3334 Words
    • 10 Pages
    Best Essays
  • Good Essays

    Hrm/531 Week 9

    • 525 Words
    • 3 Pages

    After reading chapter nine about strategic management I have found out that it is a key component of an organization. Many objectives have to be kept in mind when implementing strategic management such as understanding that both planning and designing a strategy involves a great amount of risk and resource assessment, the ways to counter the risks, and obtain effective utilization of resources all while trying to achieve a significant purpose. Organizations are normally established with a goal in mind, which defines the purpose for its existence. All of the work carried out by the organization revolves around this particular goal, and it has to align its internal resources and external environment in a way that the goal is achieved in rational expected time. Strategic Management on a corporate level normally incorporates…

    • 525 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of the firm 's objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm 's objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales and production to achieve organisational goals. It is the highest level of managerial activity, usually initiated by the board of directors and executed by the firm 's Chief Executive Officer (CEO) and executives.…

    • 3573 Words
    • 15 Pages
    Powerful Essays
  • Powerful Essays

    Cola Wars

    • 1161 Words
    • 5 Pages

    The case study “Cola Wars Continue: Coke and Pepsi in 2006” focuses on describing Coke and Pepsi within the CSD industry by providing detailed statements about the companies’ accounts and strategies to increase their market share. ‘ Cola war’ is the term used to describe the campaign of mutually targeted television advertisement & marketing campaigns between Coke & Pepsi. Furthermore, the case also focuses on the Coke vs. Pepsi goods which target similar groups of costumers, and how these companies have had and still have great reputation and continue to take risks due to their high capital.…

    • 1161 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    Strategic Management according to Jasper and Crossan (2012) is the “essential process for coping with external change” (p. 838). Strategic Management is the linking of strategic thinking and analysis to organizational action. Strategies are initiatives taken by leaders on behalf of an organization involving the use of resources to improve their performance and external environment. Three elements are involved in strategic management, the first is to knowing where the organization is strategically through a strategic analysis, a strategic choice is the understanding of what guides strategic decisions. The last one is strategy implementation referring to the translation of the strategies into action plans. Strategic Management “ties the organization with a shared sense of purpose, improves financial performance, improves overall coordination within the organization, and encourages innovation” (Swayne, Duncan, & Ginter, 2008, p. 20).…

    • 879 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Coke Case Study

    • 900 Words
    • 4 Pages

    I don't think that Coke can stay up with changing tastes for non-cola drinks. I believe that Goizueta did have the right idea to develop new products, but Coke fell behind after some embarrassing problems within the company, such as the 1999 contamination scare, their slowing unit growth, ugly class action racial discrimination suit (which result in a $195.2 million settlement with 2000 employees), and an aborted takeover offer for Quaker Oats and its Gatorade Sports drink brand. Losing out to PepsiCo in the Gatorade battle left the company with a weakened strategy of beefing up its "fizless" soft drink products. Daft plans to launch coke's first U.S. coffee brand, Planet Java, but the problem now is that they have not dominated this market at all yet. The competition (Pepsi and Starbucks) are well established companies with very well recognized brand names. I think at this point, the most he can expect is for Coke to take half of the market share. For example, Sony came out with the first ‘walkman' portable tape player. If apple had come out with a walkman as well they could have expected to take over half the market at most. By creating the ipod, a completely original and different idea, they were able to take over the entire market. The difference here is that people personalize food and drink. It is hard to introduce new products because people become accustomed to what they like. When they consistently enjoy a certain product, there is a certain comfort level they have to that food or drink, and therefore people usually reject new products.…

    • 900 Words
    • 4 Pages
    Satisfactory Essays
  • Powerful Essays

    The competition within the $74 billion carbonated soft drink (CSD) industry has been remarkable ever since Coca-Cola was formulated in 1886, and further intensified when Pepsi was introduced in 1893. Ever since then, the CSD industry has been dominated by these two companies, with Coke taking the lead in the early stage, followed by Pepsi doubled its market share between 1950 and 1970 by offering its concentrate at a lower price than its competitor. The CSD industry has been profitable historically due to numerous reasons. Firstly, in the world’s largest market for CSD products, consumption had been growing at a steady rate of 3% annually from 1970 to 2000 in the U.S., marking a high growth stage in the industry life cycle (Appendix B). This allowed both Coke and Pepsi (C&P) to achieve annual sales growth of around 10%, while competing head-to-head against each other and other smaller CSD producers. Competition between C&P reinforced their brand image, as the increase in marketing efforts could be transferred into profit and sales growth when the overall demand was increasing in a growing industry. However, the increasing industry volume was largely obtained by C&P, leaving other smaller firms vulnerable with stagnated growth opportunity. Secondly, according to Porter’s Five Forces analysis in Appendix A, high barrier for new entrants, low bargaining power of suppliers of both concentrate producers and bottlers, moderate buyer’s bargaining power and low degree of threats of substitutes prior to 2000, have been favorable to the high profitability and growth of the CSD industry. In terms of concentrate producers, the manufacture process involves little fixed costs and capital investments. This ensures high level of gross margin for them and frees up funds for marketing related expenditures. As the industry became more consolidated, large firms such as C&P gained pricing power over bottlers through master price contracts. For bottlers, even though heavy capital…

    • 1227 Words
    • 5 Pages
    Powerful Essays
  • Best Essays

    There are three ongoing processes that strategic management of an organization entails; these are the analysis, decision making and action. The main concern of strategic management is the analysis of strategic goals, as well as the analysis of both the external and internal environment of an organization. A strategic management directs the overall company goals, which includes multiple stakeholders, incorporates short term as well as long term objectives, and oversees the trade-offs between effectiveness and efficiency. Having a good management strategy, an organisation is able to achieve its goals and meets its expectations. With the used use of well formulated strategies, a company will always prosper and generate great results. Without well formulated objective goals a company or an organisation cannot exist, since every company has a reason for it existence.…

    • 4639 Words
    • 19 Pages
    Best Essays
  • Powerful Essays

    Historically, the soft carbonated soft drink (CSD) industry has been valued at $74 billion in the United States. In order to understand the reasons why the industry has been hugely profitable despite the ‘Cola Wars’, an examination of the CSD industry with Porter’s five forces analysis will be conducted. As market leaders, the analysis will be centred on both Coke and Pepsi (hereafter “C&P”).…

    • 1231 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    Pepsi vs. Coke

    • 514 Words
    • 3 Pages

    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.…

    • 514 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Strategic Management is the groundwork for a company 's vision and allows a company to be ready to capitalize on opportunities. Strategic management is a process of evaluating a company 's mission, establishing the company 's design, developing the company 's organization and relationships, and guiding the company 's plan to execution to ensure that the management is consistent with the company 's strategy. Strategic management also enhances or protects…

    • 967 Words
    • 4 Pages
    Powerful Essays
  • Powerful Essays

    The Cola Wars

    • 2269 Words
    • 10 Pages

    There are two well known beverage companies, Coco-Cola and Pepsi. They have competed considerably and distributed the beverage market profit for several decades. In the open market, it is difficult to exactly tell which one is the winner within the perfect competition, since both companies use different style of promotion and product to expend their markets.…

    • 2269 Words
    • 10 Pages
    Powerful Essays
  • Best Essays

    In today’s business environment, business strategy plays a crucial role to the organizations in order to achieve the competitive advantage over the other competitors. Coca Cola Company is one of the business organisations facing a fierce competition in the global market with Pepsi, its major competitor, in addition, the company has to deal with the significant threats such as a health concerns, apparently an increasing trend among society nowadays. This trend has posed a tough task for beverage manufacturers, especially the Coca Cola Company. Yet, this soft drink company still gains profits with a growing number of customers in over 200 countries (Taylor,2000). Over the past few years, a great many strong and innovative strategies has been launched so as to maintain its long term sustainability amongst the fast changing trend. Four important strategies of Coke Company will be analysed in either Western or Chinese markets.…

    • 1519 Words
    • 7 Pages
    Best Essays
  • Powerful Essays

    Jamaica Broilers Group

    • 8914 Words
    • 36 Pages

    Strategic management refers to the art of planning your business at the highest possible level, and focuses on building a solid underlying structure to your business in order to maintain a competitive edge over your competitors. Strategic management hinges upon answering three key questions; what are the business objectives, what are the best ways to achieve these objectives, and what resources are required to achieve these objectives.…

    • 8914 Words
    • 36 Pages
    Powerful Essays