TYPES OF COMPETITIVE ADVANTAGE When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. Did you know that Coke was the leading soft drink in 1896 just as it is today? It is famous all over the world for its excellent marketing. With the Indian markets, Pepsi had the first-mover advantage over Coke. More importantly, PepsiCo isn't just a beverage company. This tremendously affected and cost advantage of Pepsi, thus reducing the company’s competitive advantage. This was renamed as Pepsi-Cola during the year 1898 and then to Pepsi in 1961. The company has a great portfolio of food and beverage which provides more choice to the customers. Pepsi, in short, is a drink built to shine in a sip test." And Coca-Cola is superior in this thing. To have a competitive advantage in a particular market, […] The Coke Pepsi Rivalry : When the cola giants, Pepsi and Coke, entered the Indian market, they brought with them the cola wars that had become part of global folklore. Competitive advantage gives customer advantage for example if Coca Cola deliver its product better than any other competitors then customers will choose Coca Cola over … Coke and Pepsi have long been chief rivals. Coca-Cola exceeds the vision, by selling a variety of beverages daily. Fares Ben Ghorbal Coke and Pepsi Assignment 1-Pepsi would be interested in Coke's confidential information in order to gain a competitive advantage over coke and use such information against them. Recently Coca-Cola has made a major investment to win over customers. PepsiCo is a multinational company that deals in snack food manufacturing and beverages, among others. Pepsi uses franchise system for international expansion. Pepsi’s range of healthy products has grown in recent years. Cost advantage 2. Competitive benefits is the benefit a company or product has over other companies in terms better attributes such as cost edge, differentiation advantage, network circulation, and customer care that will help the business gain better sales in comparison to other companies (Hao, Ma 1999). Moreover, management strategies have raised concern over its reaction to criticism on health and environmental issues. Sources of competitive Advantage for Coca Cola. Though Pepsi and Coke sold reverse-osmosis purified water instead of spring water, they had a distribution advantage over competing water brands.26 Coke and Pepsi launched other While Coca-Cola determines entertainment, optimism, and passion as the main concepts to promote the product, PepsiCo focuses on the other segment of the target audience, emphasizing the idea of the healthy lifestyle and high-quality nutrition. This has happened due to the below competitive advantages that it has kept since the company was started. Strong Brand Image: Coca-Cola has maintained a very strong brand over the years. In response, Pepsi had to cut its advertising and drop its selling price, decreasing its cost advantage (Coke and Pepsi’s uncivil). The products are available worldwide and they have about 22 brands. A competitive advantage is simply what a company excels best at. Pepsi has a competitive advantage over Coke because of its brand image & good word of mouth. Conclusion. The company, PepsiCo manufactures Pepsi which is a carbonated soft drink was developed in the year 1893 by Caleb Bradham. PepsiCo Diversification beyond Drinks. Pepsi ran its Pepsi Max World Challenge in 2006 so that it could take over the presence of Coca Coke in the World Cup 2006 being held in Germany. It’s a surprise that something can keep its value for so long. Therefore as more businesses stock Coke instead of Pepsi it amplifies the convenience advantage, and thus creates Coke’s Dominance Chain, shown above. This soft drink was introduced in the nineteen century. "Pepsi is sweeter than Coke, so right away it had a big advantage in a sip test. Also, Coke earns about $35 billion in revenue annually, while Pepsi generates nearly $60 billion annually – again, largely because of an expansion beyond the beverage market. May 1, 2016 ... the marketing tagline of “Live for Now” associated with Pepsi brand has been modified as “Yalla Now” and “Oh Yes Abhi” for Middle East and Indian markets respectively taking into account cross-cultural differences associated with these markets. In the local supermarket the consumer considers buying the drink as part of a 6-pack for the smallest price available. In the year 2010, Coke’s publicity was again attempted to be hijacked. This case study details the various battles fought in India by the two rivals with its focus on the publicity campaigns where the two sought to steal each other's fizz. Competitive Advantage Does Coca-Cola have a competitive advantage? The price war between Pepsi and its competitors has been continual for decades. A company must have a sustainable competitive advantage because it benefits the company in longer runs. In the 21st century with the level of competition very high, it is imperative for every brand to have more than one sources of competitive advantage. Pepsi is also characterized by a citrusy flavor burst, unlike the more raisiny-vanilla taste of Coke. But why is a competitive analysis an important part of your business plan? The packaging itself is enough to gather the attention of the market and become the preferred one. Dr Pepper Snapple is the perpetual third behind The Coca-Cola Company and PepsiCo in the U.S. carbonated soft drinks market, which has been shrinking for 10 … It offers its drinks in an identically shaped bottle which is unique than everyone else in the market. PepsiCo has an extensive portfolio of food and drinks with 100 brands serving. As a result, PepsiCo is enjoying competitive advantages regionally with the assistance of big companies. Now you do. Coca Cola is also known as a Coke. Pepsi's Diversified Revenue Stream Gives It an Advantage over Coke jacobwolinsky@gmail.com (Jacob Wolinsky)via The Motley Fool Jan. 22, 2013 Updated: Jan. 22, 2013 10:23 p.m. Sources of Competitive Advantage: PepsiCo has competitive advantage in terms of worldwide distribution & the company is able to produce all its products in the country where they are consumed. Yet Coke re-entry into India was a great threat to the company. There have been many news which reported that Pepsi tried to hijack the FIFA World Cup sponsorship owned by Coke. Coke and Pepsi are huge players not just in following brand design trends but in setting them. Coca Cola Competitive Advantages Over Pepsi: Coca Cola soft drink is being used all around the world. It generates over 60% of its revenue and 80% of its operating profit from outside the United States. While cool-drink consumption has declined in recent years as people ditch sugary drinks, Coca-Cola found success advertising its cola brands under the "One Coke" umbrella and in its Diet Coke relaunch earlier this year. Over time, managers are making effective policies to promote their organization. A competitive analysis enables you to assess the strengths and weaknesses of your competitors. By the late 1990s to early 2000s, Coke began to lose the competitive advantage that it had on Pepsi in profit in the United States. The Cola Wars between the two industry giants Coca-Cola Company and PepsiCo continues today after over 100 years of rivalry. PepsiCo’s intensive growth strategies enable the company to effectively use its generic strategy to maintain strong competitive advantage.PepsiCo’s success is an indicator of the appropriateness of these strategic directions, especially how … Pepsi is seen as having occupied that market more successfully than Coke with products like Lipton, Pure Leaf and its organic drinks. Coke followed in 1999 with Dasani. Apart from juices and waters, Pepsi has also brought more low and zero calories foods. Each evolution of a brand can either result in neutrality, which seems like a waste of money, improvement or a decline in the eyes of the public. Further, branding is a dangerous game. A long lasting and sustainable competitive advantage is not possible without having some critical strengths. PepsiCo Business Strategy and Competitive Advantage By John Dudovskiy. The goal of much of business strategy is to achieve a sustainable competitive advantage. PepsiCo had coined its own special slogan for the Indian market too that became quite popular with the crowd. However, it is most difficult to change the culture of a company. A comprehensive research and analysis of competition is one of the most significant elements of an in-depth market analysis. And it continually uses diversification into snacks over soft drinks. It also markets and distributes these products. Pepsi’s Aquafina went national in 1998. However, it is necessary to focus on three ways which the companies use to compete within the market and take the leading positions. Consider the purchase of a Pepsi can. When looking at the Pepsi group, both Ica and Pepsi were rated the same, “much tasty”, with as much as 44.8 percent respectively, while only 10.3 percent thought Coca-Cola was the tastiest. Pepsi’s advertising is a major strength. Marketing :-Pepsi’s marketing strategy is a key strength. In the quest for creating competitive advantage, companies struggle to build unique capabilities and to acquire the means to protect these capabilities. The competitive strategies of Coca-Cola and PepsiCo have been examined, and even though they are different, both seemed to have been successful to become the first and second companies in the soft drink industry. There are two basic types of competitive advantage:(1-2)[3] 1. But that burst tends to dissipate over the course of an entire can. Because Coke has primarily stuck with beverages and Pepsi has had a very lucrative foray into the snack food business, Pepsi has a slight advantage with stock values. The American companies have jostled for consumer attention with pointed ads over the decade. 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