Coke Wars Case Study

Coke Wars pil pathetic consequence Analysis Competition, Strategy, and Implications Webster University Summer 2012 INTRODUCTION The rivalry amongst Coca-Cola & Pepsi bottomland be deemed as legendary, the top buggy drink competitors in the world pass by millions of dollars yearly to try and convince you that their version of soft drink is break set ashore (Dotson pg 1).Over the historic century, it seems they return feuded everywhere e reallything from who has superior taste, to the pursuit into space, and to a greater extent deep over NASCAR and the brotherly media race. Regardless of who is ahead in the op panorama, the battles between Coca-Cola & Pepsi controvert classic strategic admitations that the kind of a littles moldiness execute so as to arrive at in the constantly changing realms of client satisfaction, personal credit line environments and technology.This paper for vanquish 1) review the strategic issues presented in the Coke Wars teddy d angio tensin converting enzyme the occasion of the strategical Management poseur as applied to some(prenominal) Coca-Cola & Pepsi 2) foreground extreme strategies & tactics so as to break apart the inherent competition between both lots and finally 3) discuss implications of creations presented in the case for the optic manager so as to grasp lessons learned for afterlife application.STRATEGIC wariness MODEL (SMM) The text describes strategic circumspection as the set of decisions and actions that vector middle in the formulation and implementation of plans knowing to achieve a confederacys objectives (Pearce, Robinson pg 3). With this definition in mind then, the strategic Management mannequin can be considered as a very wasting diseaseful poser by which managers plan and implement ancestry strategies.More importantly, in todays worldwide business environment substantials need perfect processes that reply to increases in the size and number of competing firms to t he expanded role of government as a buyer, seller, regulator, and competitor in the free-enterprise system and to greater business meshing in international trade (pg 3). Further more, opus businesses vary in the processes they workout to formulate and direct their strategic management activitiesthe basic comp iodinnts of the models utilise to analyze strategic management trading operations is similar (pg 9).In reaction to national and come outside(a) environmental business/economic pressures Coca-Cola & Pepsi have manipulated the SMM in various shipway so as to remain viable/powerful competitors in their individual application. Coca-Cola Model Application According to the Coca-Cola Companys annual propound 2011, they be the worlds largest beverage troupewith more than euchre nonalcoholic beverage strike offsown the worlds top tail fin nonalcoholic sparkling beverage brands yields bearing their trademarks, have been sell in the United States since 1886, and are now sold in more than both hundred countries (pg 1).Coca-Colas report to shareholders notices that they are continuing to remain combative in the beverage/snack industry due to a multitude of salubrious strategic decisions. When analyzing Coca-Cola from the strategical Management Model perspective one can determine that while the internal/external environment pass on of all prison term remain unpredictable, the softenment of viable plans/processes can assist a sight in remaining flexible and responsive to necessary change. Coca-Colas direction is to refresh the worldinspire moments of optimism and happinesscreate evaluate and yield a rest (Annual make-up Mission, fancy, and Values).Their current goals are to use company assetsbrands, fiscal strength, unrivaled dissemination system, global annoy and the talent and wholesome commitment of management and associatesto blend more warring and to accelerate maturement in a mood that creates value for shareholders (pg 1) . Overall, the mission statement is quite powerful and accurately describes the companys product, commercialise, and technological areas of emphasis in a way that reflects the values and priorities of the strategic decision makers (Pearce, Robinson pg 10).With keep an eye on to inside Analysis, the hatful has identified its operating structure as the basis for financial reporting and is broken down into 7 different operating groups (Annual base pg 2). The method for financial reporting is important because this is where/how investors and executives a same assess the criterion and quality of the companys financial, human, and physical resourcesand contrasts companys past victores and traditional concerns with the companys current capabilities (Pearce Robinson pg 11).Coca-Colas Annual Report is intumesce designed, informative, and relatively easy to read as well. An important internal analysis factor of note is that of leadCEOs and panel members alike must adequately analy ze the direction/vision of the alliance so as to not become fixated upon past gloriesinstead embracement sweet opportunities (Ward pg 3). The impertinent Environment that the company experiences is one full of pressures to admit extreme competition, distri merelyion system management challenges, and social responsibility struggles.Additional competitive factors include those of just now not limited to pricing, advertising, sales promotion programs, product innovation, change magnitude efficiency in production techniques, the introduction of refreshing packaging, new vending and dispensing equipment, and brand/trademark development & protection (Annual Report pg 8). Concerning Strategic Analysis and Choice, Coca-Cola can be considered as effective at edifice sustainable competitive advantage based on constitute value chain activities and capabilities (PR pg 11) and have identified their bottling operations as equity method enthronisations.The investments are intended to re sult in increases in the unit case volume, net r raseues and profits at the bottler level, which in turn generate increased concentrate sales for the company concentrate and syrup businesswhen this occurs both the corporation and the bottling partners benefit from long-term growth in volume, im farmd notes flows, and increased shareholder value (AR pg 7). The long-term Objectives should reflect areas such as profitability, return on investment, competitive position, technological leadership, productivity, employee relations, exoteric responsibility, and employee development (PR pg 11).According to the provided case materials, the company has strong goals for the future and has transformed into a more innovative, adventure taking companybecoming more adventurous in responding to changes in the beverage market for healthier alternatives so as to respond to customer desires, technology, and competitive environment (Ward pg 3). Coca-Colas Generic Strategy is that of differentiation, making their products superior to those in the industry, by stressing the attri notwithstandinge above other product qualities, the firm attempts to build customer loyalty (PR pg 158).Their meter Strategies can be delimitate as concentrated growth, market development, product development, innovation, vertical integration, turnaround, and strategic alliances. Coca-Cola is more and more globalized and their Generic and Grand strategies seem to be creating valuable success for the corporation and is transforming into a more innovative, risk-taking company (Ward pg 2). Short Term Objectives for the corporation have effective merchandising strategies that appeal to existing customers and new clientele as well.They have embraced social media, the health craze and more recently the 2012 Olympics to successfully reach an increasingly global audience. In fact, Cokes strongest implementation has been experienced in emerging markets in Russia, China, and Brazil, and has also improved its position in North America and Europe as well (pg 3). put through Plans are in incarnated and employed globally by executives and managers alike at Coca-Cola and those plans are laid out in the Annual Report.Everything from distribution systems, bottling methods, responses to competition, primitive material acquisition, and investment plans are outlined which provides exact methods by which the corporation plans to remain a viable player in the industry. In sum they plan to use the Companys assetsbrands, financial strength, unrivaled distribution system, global reach and the talent and strong commitment of management and associatesto become more competitive and to accelerate growth in a manner that creates value for shareholders (Annual Report 2011 pg 1).Functional Tactics used by the corporation to achieve short term goals and attain competitive advantage include espousal of marketing strategies that appeal to not only health conscious customers but to a global audience. In fact Coke is bringing out mid-calorie versions of some of its brands like Sprite and Fanta, and is teaming up with Grammy award winner put Ronson for its 2012 London Olympics anthem (Hernandez pg 1).Additionally, Coke continues to centre on selling soft drinks globally and even vows to rebuild Coke sales in the US market through focusing upon non-carbonated sports drinks such as PowerAde, Aquarius, and Fuze (DAltoro pg 2). Coca-Cola suddenly has Policies That Empower Action as demonstrated by the information contained in the Annual Report and via their website Work Smart Act with urgency, remain responsive to change have the courage to change course when needed, remain constructively discontent, and work efficiently (Coca-Cola Website pg 2).The work smart mentality allows for decisions to be make whenever possible at the lowest level of the corporation. Organizational Structure is segmental into the following areas Eurasia and Africa, Europe, Latin America, North America, Pacific, B ottling Investments, and Corporate (Annual Report pg 2). Coke is preponderantly organized into an international area structure that allows for operational efficiency and regional competitiveness.However Coca-Cola faces the additional struggle of remaining socially responsible to societies and environments in which it operates and has face up several legal implications with respect to human indemnifys issues in South American Bottling plants (FRONTLINE). Nonetheless Coca-Cola reiterates that despite the volatile environment, the company and its bottling partners have maintained operations and worked to provide safe, stable economic opportunities for the people in nations that they operate in (FRONTLINE).Strategic Control and Continuous Improvement is facilitated by Coca-Colas organizational structure, leadership, and 2020 Vision campaign. In fact their website reiterates that in order to continue to expound as a business over the next 10 years and beyond, they must look ahead, und erstand the trends and forces that impart shape their business in the future and move swiftly to prepare for what is to come (Coca-Cola Website).This statement reveals that the corporation is affiliated to detecting changes and making necessary adjustmentsin strategy that allows their organization to respond more proactively and timely to rapid developments that inherently affect ultimate success. Pepsi Model Application Much like Coca-Cola, Pepsis Mission statement is very clear, concise and purposeful Captivate consumers with the worlds most love and beat-tasting convenient foods and beverages through the use of its strengths fault Image, Positioning, Innovation, Distribution Capabilities, Productivity Focus, merciful Capital and Purposeful Performance (Pepsi Annual Report).Pepsi also reiterates that being socially responsible is of utmost importance and commitment to do right for the business by doing right for people & the planet effectively creates a accelerator for busin ess growth and innovation, enabling them to be financially successful and globally responsible (Pepsi Annual Report). As covered in the Letter to Shareholders the CEO, Indra Nooyi, reveals the inherent Analysis of Pepsi Co. to be that of strong progress and on a center field basis net revenue was up 14% for 2011 (Pepsi Annual Report). This success was due to improvements n the following areas investment in emerging markets, brand management, research and development, differentiation, efficiency and global operating structure to fully supplement the scale of PepsiCo (Pepsi Annual Report). PepsiCo is most certainly proud of their improvements and strategic focus but also realizes that the creation of an adaptive team and cultureone that can continually renew itself and thrive on change perform today while transforming for tomorrow is necessary for success into the future and believes that their best days are yet to come (Pepsi Annual Report).Pepsi experiences similar External Envir onmental conditions to that of Coca-Cola. Intense competition, globalized marketplace, social responsibility, and economic conditions all affect the strategies that PepsiCo decides to implement. Additionally, Pepsi must allocate its attention to not only the beverage industry but to their global snack line as well which while designed to be complimentary can prove to have possible ban effects when considering the volatility of each of these industries.The Strategic Analysis and Choice, that Pepsi has selected, untold like Coca-Cola can be considered as effective. In order to gain a sustainable competitive advantage Pepsi is pursuing specific strategic investment and productivity initiatives to build a stronger, more successful company through global brands, innovation, and advertising/marketing campaigns (Pepsi Annual Report). As mentioned earlier, the following areas are of importance in Pepsis strategic analysis/choice Brand Image, Positioning, Innovation, Distribution Channels, Productivity, Human Capital and Social Responsibility.As the report outlines, Pepsis Long-Term Objectives support increasingly globalized operations, global brand recognition, public responsibility, and industry leadership in beverages and snacks. In fact Pepsi was the first to realize the customer rift to healthier lifestyles and responded before Coke to changes in the beverage market as consumers shifted from fizzy drinks to healthier alternatives (Ward pg 3). Furthermore Pepsis new strategy Better-For-You Productscomes down to health concerns and being socially responsible wherelifestyles have changedand Pepsi has modified its products (DAltorio pg 1).Pepsis Generic Strategy, like that of Coca-Cola, is that of differentiation. This is why the Cola Wars have been so distributive and prevalentthey both are striving to make their products superior to those of the competition. Their Grand Strategies can also be identified as concentrated growth, market development, product develop ment, innovation, vertical integration, turnaround, joint ventures, divestiture and strategic alliances.Additionally, Pepsi is becoming more globalized in nature and their Generic and Grand strategies reflect this they are a $66 million global powerhouse concentrate upon two complementary businesses with lovable growth margins and returnsglobal snacks and global beverages to achieve global nutrition achievements general (Pepsi Annual Report). Pepsis Short Term Objectives are focused upon investment in their global brand management and streamlining distribution methods so as to attain measurable efficiency.In fact last year three brands diet Mountain Dew, Brisk and Starbucks ready to drink beverageshad each grown to more than $1 billion in annual retail sales, expanding PepsiCos portfolio of billion dollar brands to 22 (Pepsi Annual Report). Their distribution methods remain largely bizarreand in 2011 they successfully changed distribution for Gatorade products in the US in the thingumajig and other impart from a warehouse-delivered-go-to-market system to DSD, in order to more efficiently serve customers (Pepsi Annual Report).Much like Coca-Cola, Pepsis Action Plans are employed globally and specific intentions are revealed in the Annual Report. The difference is however that Pepsi has two industries upon which it has to contend with beverages AND snacks. Their action plan for 2012 and beyond stresses pentad imperatives 1) build and extend macro-snacks portfolio globally 2) sustainably and profitably grow its beverage business worldwide 3) build and expand the nutrition business 4) increase and capitalize on the high coincidence of snack and beverage consumption 5) match prudent and responsible financial management (Pepsi Annual Report).Functional Tactics used by Pepsi so as to achieve its short term goals/competitive advantage include marketing strategies and socially responsible business practices that reach a more global audience. Adopting the respon sibility of Global sustenance demonstrates Pepsis commitment to a healthier population and have developed new strategies with new soft drinks which will catch on to part of the public that is the new health craze (Dotson pg 2).The development of products such as Gatorade G2, which is low in calorie than the regular sports drinks, and Propel demonstrate that Pepsi in focused upon innovative products that cater to the health conscious customer needs/wants. As revealed by the Annual Report, Policies That Empower Action for Pepsi begins with the Power of One conceptoperating as one company to connect with consumerinnovating globally, delighting locally and cognitive process with purpose to achieve sustained growth and success.While Pepsi has many difficulties to confront with respect to competition, multiple industries, and internal/external economic stressors they are continuing to adapt to their environments and reiterate that the challenge to renew a successful company is one that they embrace (Pepsi Annual Report). Pepsis Organizational Structure is segmented into quaternity business units 1) PepsiCo Americas Foods 2) PepsiCo Americas Beverages 3) PepsiCo Europe 4) PepsiCo Asia, heart and soul East, Africa (Pepsi Annual Report).Pepsis structure allows for certain control and efficiencies both across the country and globally in the beverage and snack industries. In addition Pepsi has convertible the reportable segments of each business so as to allow for detach analysis and competitive advantage measurement by region. With respect to Strategic Control and Continuous Improvement, Pepsis organizational structure, leadership, and Power of Pepsi campaign reveal that the corporation is committed to remaining a sustainable competitor well into the future.Furthermore, as they look ahead they are positioning their company for sustainable growth by building its brands around the globe, bringing innovative products to the marketplace, capitalizing on the coincidenc e of consumption of snacks and beverages, unleashing the full potential of its global scale and ensuring that PepsiCo continues to be a best place to work embodies ways in which Strategic Control and Continuous Improvement are going to be accomplished. compend & IMPLICATIONS FOR MIDDLE MANAGERSThe strategic models that each corporation adopts are similar but produce different levels of success for each organization. Both Coke and Pepsi have adopted aggressive marketing strategies and have struggled amongst one another to develop superior products and attain customer share maximization. Competition, while at multiplication can be frustrating for the organization, in this case has allowed for the creation of breach products and increasingly globalized operations resulting in inherent successes for both organizations.The Cola-Wars have been real for quite a while, but as this point in time it can be said that Coca-Cola is the leader in the beverage industry segment Pepsi was knocked into third place behind Coca-Cola and Diet CokeCoca-Cola sold 1. 6 billion cases of regular soda and 927 million cases of diet soda, while Pepsi sold only 892 million cases (WIKIPEDIA). However, Pepsi is still remaining competitive globally through the realization that there are other industries upon which to capitalize and get wind sustainability into the future.In fact, as far as Pepsi is concerned the cola wars are over and needs to focus on convincing investors that it has the right focus in the new health kick (DAltorio pg 2). While Pepsi is focusing upon Global Nutrition they still need to realize that carbonated beverages still produce much of the companys sales and are still a key to Pepsis financial health (DAltorio).Into the future both Coca-Cola and Pepsi will prove to be viable competitors as revealed by their strategies/mission statements contained in their Annual Reports. The real key however, will be whether consumer demand remains in the carbonated beverage industr yif the tides somehow change, Pepsi will emerge as the victor due to their diversification strategyone that has crossed channels and decided to create advantages with both beverages and snacks.The Cola Wars bring up important implications for middle managers in the form of strategic analysis, implementation, and adaptation. Organizational success depends in the long run upon the ability of the organization to connect with consumers by providing an array of options so as to meet consumer desires, needs and lifestyles and these principles are largely motivated by corporate leadership and direction.Furthermore, the talent of employees must be empowered by management so as to execute goals and objectives effectively. A corporations assets brands, financial prowess, distribution systems, global influence and the talents of employees must be effectively employed so as to become more competitive and to influence accelerated growth in manners that create value for customers, shareholders, and the company itself. CONCLUSIONThe Coca-Cola/Pepsi conflict has raged on for decades and has even been dubbed as the Battle of the Century but has revealed in the process two corporations that have been successful in adopting strategies and processes so as to survive in the constantly changing, volatile business and economic environments representative of the current times. Coca-Cola and Pepsi will continue to face challenges into the future in the realms of economics, technology, and an increasingly globalized business environment.In effect, the corporation that is able to effectively exploit the new social media front of marketing strategy into the future will most likely end up as the frontrunner in most any industryCoke and Pepsi are amongst a multitude of companies buying into social medias ability to build up their brandsconsumers are 55% more likely to recall ads that include social media components than non-social adsconsumers today are incredibly empowered and what used to work to get their attention now needs a bit more rumination (USA TODAY).This paper 1) reviewed 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) highlighted fundamental strategies & tactics so as to analyze the inherent competition between both corporations and finally 3) discussed implications of concepts presented in the case for the middle manager so as to grasp lessons learned for future application.Both Coca-Cola and Pepsi are on the right track as far as determining appropriate strategies to thrive in the environments in which they operate but the challenge into the future will be the appropriate analysis and adaptability in which to adequately respond to customer needs, economies of scale, and the dynamic business environment. CASE STUDY MATERIALS/REFERENCES 1) Frontline. Coca-Colas union troubles in Columbia http//www. pbs. org/frontlineworld/fellows/colombia0106/ Retrieved 3 Ju ly 2012. 2) Coca-Cola Annual Report. http//www. thecoca-colacompany. com/investors/annual_other_reports. hypertext markup language http//www. hecoca-colacompany. com/ourcompany/mission_vision_values. html 3) PepsiCo Annual Report. http//www. pepsico. com/Investors/Annual-Reports. html Retrieved 4 July 2012. 4) Wikipedia. The Cola Wars http//en. wikipedia. org/wiki/Cola_wars Retrieved 2 July 2012. 5) Terhune, Chad. Coca-Cola trying to renegotiate its syrup trend with bottlers Soda Rebellion A Suit by Coke Bottlers Exposes Cracks in a Century-Old System Serving Wal-Mart Is at Issue, But Spat Shines shine up On Local Businesses Role The Brownes 84-Year History Wall Street daybook (Eastern edition). New York, N. Y. Mar 13, 2006. p. A. 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Retrieved 06 July 2012. 12) Snider, Mike. Social Media is Latest Front of Cola Wars USA Today 30 April 2012. http//www. usatoday. com/tech/news/story/2012-04-30/pepsi-coke-social-media/54631902/ Retrieved 12 July 2012.