However, Coca-Cola remains the company with the highest annual profit as compared to its main rival Pepsi, PepsiCo Inc. A competitive advantage has a more inward looking focus and ask questions such as to why is it that your customers buy from you, there could be a variety of reasons for example lower prices or higher quality of products or services. In contrast, Coca-Cola only focuses on a diversified product portfolio within the beverage industry and has few products outside of that industry. Coco Cola maintains a competitive advantage through its secret recipe and innovation in product developments. Market performance is an important tool in conducting the market analysis of the company.
When it comes to Coca- Cola, it is the market leader of soft-drink industries owning 42. Thums Up, for example, has been decreased to Rs. High debt level due to acquisitions 4. Our success further depends on the ability of our people to execute effectively, every day. So, Coca Cola has sued a mix of cost leadership and differentiation to gain competitive advantage and to build customer loyalty.
Without these characteristics, valuation estimates become very uncertain. With over 34 million fans as of 2011, Coca-Cola harnesses the power of social networking to spread the word concerning new products, test advertorial campaigns, invite users to play games and associate Coca-Cola products with positive feelings. There are people who consume the products if Coca-Cola daily while others purchase it weekly and even more rarely. Since every large market has been fully tapped by the beverage industry, the remaining smaller markets require efficient operations to turn a profit and make a lucrative investment, since the sales volume felt in countries such as the U. A good competition strategy should focus on the weaknesses of the competitor but avoiding the strengths. For example, a comparative advantage for Australia would be their vast deposits of natural minerals and resources, including coal, iron, nickel and gold. 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.
The following are four key comparisons between Coca-Cola and PepsiCo's business model that make the two companies fierce competitors and unique businesses. Inventive business solutions Coke continuously tries to increase its manufacturing and distribution capacity to maximize operating efficiency. Differentiation, differentiation focus, cost focus and cost leadership are some strategies put forward Michael,2006. Dedicated organizational, production processes Coke's has a dedicated team members involved in processes related to organization and production and they are very prompt in handling any kind of competitive, socio political and economic, changes in environments Miller, 2008: 67-9. These attributes can include access to natural resources, such as high grade ores or inexpensive power, or access to highly trained and skilled personnel human resources.
This strategy is best for competitors who offer products targeting a broader group of customers with different tastes and preferences. Not only does freestyle technology allow a greater variety of drinks through its computer-like interface, but the dispenser records information concerning consumers' drink choices, then sends the data back to Coca-Cola as market research. Microeconomics: Private and public choice. This strategy is usually associated with large scale production companies with products accepted to the majority of consumers. For example Coca-Cola and Pepsi, two similar companies competing for the same market can employ these strategies to outdo each other.
Strategic management and competitive advantage, concepts. A competitive advantage is a distinctive and unique feature that is hard for competing firms to imitate. Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself. The company produces, distributes and sells non-alcoholic beverage concentrates. Coca-Cola at A Glance: Infographic.
Examples could include natural resources, such as arable land or an abundance of timber or minerals that other countries may not have, or deliberate national policies in global competition. On the surface, Coca-Cola and PepsiCo have very similar. The suppliers are not concentrated or differentiated. Coca-Cola Funds Scientists Who Shift Blame for Obesity Away From Bad Diets. In addition, Coca-Cola as a commitment to corporate social responsibility is recorded through an annual press release referred to as Annual Sustainability Reports. For more information on please refer to our article.
However, the departure of Heyer in June 2012 was viewed as huge loss for the company Coca-Cola, 2012. The secret formulae of its soda beverages are also an important source of competitive advantage for the brand. This flavored hookah combines the taste of generations which are not harmful and are suitable for girls, ladies, old people etc. He wants to own simple, stable businesses that possess sustainable competitive advantages. As it is a soft drink, Coca-Cola Company follows Intensive Distribution.