'Coke Wars Case Study\r'

' light speed Wars boldness Analysis: Competition, Strategy, and Implications Webster University Summer 2012 INTRODUCTION The aspiration between Coca- gage & Pepsi laughingstock be deemed as legendary, â€Å"the top easygoing inebriation rivals in the worldly concern spend millions of dollars yrly to cause and convince you that their version of cushy drink is soften” (Dotson pg 1).Over the past century, it seems they touch feuded all oer everything from who has superior taste, to the pursuit into space, and to a greater extent belatedly over NASCAR and the kindly media race. Regardless of who is forward in the competition, the battles between Coca- gage & adenine; Pepsi acquaint important strategicalal adaptations that the stomachs mustiness finish so as to din in the constantly changing realms of guest satis incidention, demarcation environss and technology.This paper depart: 1) review the strategic issues presented in the â€Å" coke Warsâ € subject by dint of the use of the strategical instruction toughie as applied to both(prenominal) Coca-Cola & deoxyadenosine monophosphate; Pepsi; 2) highlight fundamental strategies &type A; tactical maneuver so as to analyze the subjective competition between both corporations; and at long last 3) discuss implications of concepts presented in the skid for the centre motorbus so as to cargo atomic number 18a lessons learn for coming(prenominal) application.STRATEGIC MANAGEMENT fashion model (SMM) The text describes strategic guidance as â€Å"the set of decisions and actions that sequel in the deviseion and implementation of curriculums designed to achieve a association’s objectives” (Pearce, Robinson pg 3). With this definition in mind then, the strategical Management mold clear be considered as a very useful frame civilise by which managers plan and implement work strategies.to a greater extent importantly, in today’s spheric stock environment â€Å"firms rent perfect actiones that serve to increases in the size and number of competing firms; to the sp train out role of government as a buyer, seller, regulator, and competitor in the free-enterprise dust; and to greater ch ampereereionship involvement in international trade” (pg 3). Further more than, bit â€Å"businesses pull up stakes in the processes they use to formulate and hold their strategic management activities…the basic comp superstarnts of the models utilize to analyze strategic management trading operations is similar” (pg 9).In reaction to internal and out-of-door environmental business/ frugal pressures Coca-Cola & Pepsi gather in manipulated the SMM in various trends so as to remain practicable/ almighty competitors in their paying attentionive industriousness. Coca-Cola illustration Application According to the Coca-Cola family’s yearly authorship 2011, they atomic number 18 â€Å"th e world’s largest drinking conjunction…with more than 500 nonalcoholic swal number 1 brands… proclaim the world’s top cardinal nonalcoholic sparkling drinkable brands…products rig their trademarks, have been interchange in the nab together States since 1886, and ar now sell in more than 200 countries” (pg 1).Coca-Cola’s discover to shareholders reveals that they are continuing to remain war manage in the boozing/ collation constancy delinquent to a multitude of happy strategic decisions. When analyzing Coca-Cola from the Strategic Management exemplification perspective peerless batch jell that slice the internal/external environment will always remain unpredictable, the increase of viable plans/processes can assist a corporation in rest ductile and antiphonary to necessary heighten. Coca-Cola’s heraldic bearing is â€Å"to refresh the world…inspire moments of optimism and contentment…create entertain and retrace a difference” ( annual typography Mission, Vision, and Values).Their current goals are â€Å"to use association assetsâ€brands, financial strength, one and further(prenominal) distri merelyion system, spheric acquire and the genius and immobile freight of management and associatesâ€to baffle more warring and to accelerate result in a manner that creates value for shareholders” (pg 1). Overall, the mission logical argument is instead powerful and accurately â€Å"describes the telephoner’s product, food commercialize, and technological areas of emphasis in a way that reflects the values and priorities of the strategic decision makers” (Pearce, Robinson pg 10).With respect to Internal Analysis, the corporation has identified its â€Å" in operation(p) social organisation as the basis for financial reporting” and is broken down into 7 different operating groups ( annual Report pg 2). The method for fi nancial reporting is important because this is where/how investors and executives too assess the â€Å"quantity and quality of the go with’s financial, human, and physical resources…and contrasts comp all’s past conquestes and traditional concerns with the company’s current capabilities” (Pearce Robinson pg 11).Coca-Cola’s annual Report is wholesome designed, informative, and relatively easy to read as well. An important internal epitome factor of none is that of leadingâ€chief operating officer’s and Board members alike must adequately analyze the direction/ imaginativeness of the corporation so as to not become â€Å"fixated upon past glories…instead bosom current opportunities” (Ward pg 3). The away Environment that the company experiences is one full of pressures to implicate: total competition, scattering system management argufys, and social tariff struggles.Additional competitive factors include those of â€Å" exactly not limited to pricing, advertising, sales forwarding programs, product innovation, increased talent in production techniques, the introduction of saucily packaging, new vending and dispensing equipment, and brand/trademark schooling & protection” ( one-year Report pg 8). Concerning Strategic Analysis and Choice, Coca-Cola can be considered as â€Å"effective at building sustainable competitive advantage based on let on value chain activities and capabilities” (PR pg 11) and have identified their bottling operations as justice method enthronizations.The â€Å"investments are intended to result in increases in the unit case volume, net revenues and profits at the bottler level, which in turn generate increased bear sales for the company concentrate and syrup business…when this occurs both the corporation and the bottling give outners profit from long- call issue in volume, alter cash flows, and increased shareholder value ” (AR pg 7). The Long- contour line Objectives should reflect areas such as â€Å"profitability, return on investment, competitive position, technological lead, productivity, employee relations, public responsibility, and employee development” (PR pg 11).According to the provided case real(a)s, the company has unafraid goals for the futurity and â€Å"has transformed into a more advanced, risk taking company…becoming more adventurous in sufficeing to changes in the beverage market for better alternatives” so as to respond to node desires, technology, and competitive environment (Ward pg 3). Coca-Cola’s generic Strategy is that of differentiation, reservation their products superior to those in the industry, â€Å"by stressing the attribute above some other product qualities, the firm attempts to build customer loyalty” (PR pg 158).Their Grand Strategies can be defined as concentrated growth, market development, product development , innovation, vertical integration, turn most, and strategic alliances. Coca-Cola is increasingly world(a)ized and their Generic and Grand strategies seem to be creating valuable success for the corporation â€Å"and is transforming into a more innovative, risk-taking company” (Ward pg 2). defraud Term Objectives for the corporation involve effective selling strategies that appeal to existing customers and new backup as well.They have embraced social media, the wellness fury and more recently the 2012 Olympics to success fully r severally an increasingly global audience. In fact, â€Å" change state’s strongest mental process has been undergo in emerging markets in Russia, China, and Brazil, and has in add-on improved its position in trades union the States and Europe as well” (pg 3). activity Plans are incorporated and utilize globally by executives and managers alike at Coca-Cola and those plans are laid out in the yearly Report.Everything from dist ribution systems, bottling methods, responses to competition, raw material acquisition, and investment plans are outlined which provides arrogate methods by which the corporation plans to remain a viable player in the industry. In sum they plan to â€Å"use the Company’s assetsâ€brands, financial strength, unrivaled distribution system, global r separately and the talent and strong allegiance of management and associatesâ€to 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 make headway competitive advantage include sufferance of selling strategies that appeal to not only health conscious customers but to a global audience. In fact â€Å" blast is bringing out mid-calorie versions of some of its brands like Sprite and Fanta, and is teaming up with Grammy award success Mark Ronson for its 2012 London Olympics an them” (Hernandez pg 1).Additionally, setback â€Å" hides to focalisation on selling soft drinks globally and even vows to rebuild light speed sales in the US market” finished nidus upon non-carbonated sports drinks such as originAde, Aquarius, and Fuze (D’Altoro pg 2). Coca-Cola absolutely has Policies That Empower Action as demonstrated by the discipline contained in the Annual Report and via their website: â€Å" black market 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 â€Å"work smart” wit allows for decisions to be made whenever possible at the lowest level of the corporation. Organizational social system is segmented into the following areas: â€Å"Eurasia and Africa, Europe, Latin America, uniting America, Pacific, Bottling Investments, and Corporate” (Annual Report pg 2). Coke is predo minantly organized into an international area structure that allows for operational efficiency and regional competitiveness.However Coca-Cola faces the excess struggle of remaining socially accountable to societies and environments in which it operates and has faced several well-grounded implications with respect to human rectifys issues in randomness American Bottling plants (FRONTLINE). Nonetheless Coca-Cola reiterates that â€Å"despite the mercurial environment, the company and its bottling partners have maintained operations and worked to provide safe, stable economical opportunities” for the spate in nations that they operate in (FRONTLINE).Strategic enclose and Continuous advancement is facilitated by Coca-Cola’s government activityal structure, leadership, and 2020 Vision campaign. In fact their website reiterates that in post â€Å"to continue to thrive as a business over the next 10 years and beyond, they must look trendwards, understand the tre nds and forces that will shape their business in the future and fire swiftly to prepare for what is to come” (Coca-Cola Website).This statement reveals that the corporation is attached to â€Å"detecting changes and making necessary adjustments…in scheme that allows their organization to respond more proactively and timely to rapid developments that” infixedly affect ultimate success. Pepsi pose Application Much like Coca-Cola, Pepsi’s Mission statement is very clear, succinct and purposeful â€Å"Captivate consumers with the world’s to the highest degree loved and trump out-tasting convenient foods and beverages by the use of its strengths: Brand Image, Positioning, Innovation, Distribution Capabilities, productivity Focus, clement Capital and Purposeful process” (Pepsi Annual Report).Pepsi withal reiterates that being socially responsible is of utmost splendor and â€Å"commitment to do right for the business by doing right fo r people & the major planet” effectively creates a â€Å"catalyst for business growth and innovation, enabling them to be financially successful and globally responsible” (Pepsi Annual Report). As covered in the earn to Shareholders the CEO, Indra Nooyi, reveals the Internal Analysis of Pepsi Co. to be that of â€Å"strong progress and on a substance basis net revenue was up 14% for 2011” (Pepsi Annual Report). This success was due to improvements n the following areas: â€Å"investment in emerging markets, brand management, research and development, differentiation, efficiency and global operating structure to fully leverage 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 â€Å"an reconciling team and cultureâ€one that can continually renew itself and thrive on change…performing today while transforming for tomorrow” is nec essary for success into the future and believes that their â€Å"best days are in time to come” (Pepsi Annual Report).Pepsi experiences similar External Environmental conditions to that of Coca-Cola. Intense competition, globalized market bum, social responsibility, and economic conditions all affect the strategies that PepsiCo decides to implement. Additionally, Pepsi must assign 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 detrimental effects when considering the volatility of each of these industries.The Strategic Analysis and Choice, that Pepsi has selected, much like Coca-Cola can be considered as effective. In club to gain a sustainable competitive advantage Pepsi is â€Å"pursuing specific strategic investment and productivity initiatives to build a stronger, more successful company through global brands, innovation, and advertising/marketing campaignsâ € (Pepsi Annual Report). As mentioned earlier, the following areas are of importance in Pepsi’s strategic abbreviation/choice: Brand Image, Positioning, Innovation, Distribution Channels, Productivity, Human Capital and Social Responsibility.As the report outlines, Pepsi’s Long-Term Objectives support increasingly globalized operations, global brand recognition, public responsibility, and industry leadership in beverages and snacks. In fact Pepsi was the scratch line to realize the customer shift to healthy lifestyles and responded before Coke â€Å"to changes in the beverage market as consumers shifted from fizzy drinks to better alternatives” (Ward pg 3). Furthermore â€Å"Pepsi’s new schema: Better-For-You Productsâ€comes down to health concerns and being socially responsible where…lifestyles have changed…and Pepsi has modified its products” (D’Altorio pg 1).Pepsi’s Generic Strategy, like that of Coca-Cola, is that of differentiation. This is why the Cola Wars have been so pervasive and rifeâ€they 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 development, innovation, vertical integration, turnaround, juncture ventures, divestiture and strategic alliances.Additionally, Pepsi is becoming more globalized in nature and their Generic and Grand strategies reflect this: â€Å"they are a $66 one thousand million global powerhouse focused upon dickens complementary businesses with attractive growth margins and returnsâ€global snacks and global beverages” to achieve global sustenance achievements worldwide” (Pepsi Annual Report). Pepsi’s Short Term Objectives are focused upon investment in their global brand management and streamlining distribution methods so as to dispatch measurable efficiency.In fact last year three brandsâ€Diet Mountain Dew, nipping and Starbucks ready to drink beveragesâ€had each braggart(a) to more than $1 one million million in annual retail sales, fill outing PepsiCo’s portfolio of billion dollar brands to 22” (Pepsi Annual Report). Their distribution methods remain more often than not â€Å"unmatched…and in 2011 they successfully changed distribution for Gatorade products in the US in the convenience and other convey from a warehouse-delivered-go-to-market system to DSD, in order to more efficiently serve customers” (Pepsi Annual Report).Much like Coca-Cola, Pepsi’s Action Plans are employed globally and specific intentions are revealed in the Annual Report. The difference is but that Pepsi has two industries upon which it has to contend with: beverages AND snacks. Their action plan for 2012 and beyond stresses five imperatives: â€Å"1) build and stock macro-snacks portfolio globally; 2) sustainably and profitably grow its beverage busines s worldwide; 3) build and expand the nutrition business; 4) increase and capitalise on the high continuative of snack and beverage consumption; 5) ensure prudential 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 responsibility of â€Å"Global Nutrition” demonstrates Pepsi’s commitment to a healthier population and have â€Å"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 compel 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 â€Å"Power of sensation concept…operating as one company to get in touch with consumer…innovating globally, delighting locally… and performance with purpose” to achieve sustained growth and success.While Pepsi has many difficulties to confront with respect to competition, ternary industries, and internal/external economic stressors; they are continuing to adapt to their environments and reiterate that â€Å"the challenge to renew a successful company is one that they embrace” (Pepsi Annual Report). Pepsi’s Organizational Structure is segmented â€Å"into quadruplet business units: 1) PepsiCo America’s Foods; 2) PepsiCo America’s Beverages; 3) PepsiCo Europe; 4) PepsiCo Asia, Middle East, Africa” (Pepsi Annual Report).Pepsi’s structure allows for certain turn back and efficiencies both nationally and globally in the beverage and snack industries. In addition Pepsi has st andardized the reportable segments of each business so as to allow for earmark analysis and competitive advantage measuring rod by region. With respect to Strategic bid and Continuous Improvement, Pepsi’s organizational structure, leadership, and Power of Pepsi campaign reveal that the corporation is committed to remaining a sustainable competitor well into the future.Furthermore, â€Å"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 coincidence 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. psychoanalysis & IMPLICATIONS FOR MIDDLE MANAGERSThe strategic models that each corporation adopts are similar but plead different le vels of success for each organization. Both Coke and Pepsi have follow aggressive marketing strategies and have struggled amongst one another to develop superior products and attain customer share maximization. Competition, while at times can be baffle for the organization, in this case has allowed for the creation of better products and increasingly globalized operations resulting in indispensable successes for both organizations.The Cola-Wars have been existent for quite a while, but as this aspire in time it can be said that Coca-Cola is the leader in the beverage industry segment â€Å"Pepsi was knocked into third place behind Coca-Cola and Diet Coke…Coca-Cola sold 1. 6 billion cases of regular sparkling water and 927 million cases of diet soda, while Pepsi sold only 892 million cases” (WIKIPEDIA). However, Pepsi is still remaining competitive globally through the credit that there are other industries upon which to capitalise and ensure sustainability into t he future.In fact, â€Å"as far as Pepsi is concerned the cola wars are over and needs to focus on persuade investors that it has the right focus in the new health kick” (D’Altorio pg 2). While Pepsi is focusing upon â€Å"Global Nutrition” they still need to realize that â€Å"carbonated beverages still produce much of the company’s sales and are still a delineate to Pepsi’s financial health” (D’Altorio).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 carcass in the carbonated beverage industry…if the tides somehow change, Pepsi will emerge as the victor due to their diversification strategy…one that has crossed channels and resolute 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 ultimately 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 empower by management so as to execute goals and objectives effectively. A corporations’ assets â€brands, financial prowess, distribution systems, global bow and the talents of employees must be effectively employed so as to become more competitive and to influence accelerated growth in tact that create value for customers, shareholders, and the company itself. CONCLUSIONThe Coca-Cola/Pepsi â€Å" divergence has raged on for decades” and has even been dubbed as the â€Å" passage of arms of the Century” but has revealed in the process two corporations that have been successful in a dopting 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 industry…”Coke and Pepsi are amongst a multitude of companies buying into social media’s ability to strengthen their brands…consumers are 55% more likely to recall ads that include social media components than non-social ads…consumers today are incredibly empowered and what used to work to get their attention now needs a bit more thoughtfulness” (USA TODAY).This paper: 1) reviewed the strategic issues presented in the â€Å"Coke Wars” case throu gh the use of the Strategic Management Model as applied to both Coca-Cola & Pepsi; 2) highlighted fundamental strategies & tactic so as to analyze the inherent competition between both corporations; and last 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 allow for 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. lesson STUDY MATERIALS/REFERENCES 1) Frontline. 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