Executive Summary
The case “Coca Wars Continue: Coke and Pepsi in 2010” highlights the major issues that has been confronting these two marketers of carbonated drinks. The multinationals have been engaging in endless competition. The firms have been fighting for more suppliers and bottlers. They also identify new suppliers in order to reduce their production costs (Yoffie & Kim, 2011). These firms produce similar products in an attempt to compete successfully.
Coca Cola has produced different drinks to cater for the emerging needs of its customers. Pepsi has also been using the same strategy to produce new products. Pepsi launched “new products such Diet Pepsi, Teem, and Mountain Dew in order to remain competitive” (Yoffie & Kim, 2011, p. 6).
The companys’ advertising strategies have also focused on the expectations of many customers. For instance, Coke used its famous American’s Preferred Taste campaign in order to market its products in 1955. Pepsi also “came up with Pepsi Challenge” (Yoffie & Kim, 2011, p. 7).
Coke responded to Pepsi’s strategy using numerous price reductions, rebates, and advertisements (Yoffie & Kim, 2011). As well, Pepsi introduced new products in the market. Such products were also marketed using cheaper prices. Coke went ahead to identify new ways to acquire cheaper concentrates. The important goal was to minimize its production costs. The move was undertaken in order to make the firm successful.
As well, the changing health needs of different consumers continue to force these corporations to produce appropriate products. For instance, Diet Coke was aimed at addressing the health issues of many Americans. In order to improve its performance, Coke decided to introduce Dasani (Yoffie & Kim, 2011). Pepsi responded by producing its Aquafina. Coke’s decision to operate internationally forced Pepsi to undertake similar strategies.
Price wars have also continued as the organizations try to dominate the industry. The declining sales recorded today will force the corporations to identify new competitive advantages. Many companies are currently producing non-carbonated drinks. This trend will revolutionize the nature of this rivalry in the future. However, the agreeable fact is that the wars have led to new opportunities for different players. The strategies continue to satisfy the needs of different customers.
Recommendation
This case study shows clearly that the Cola Wars will continue in the next years. That being the case, every company should identify the most appropriate strategy that can create a difference. Coke can produce new non-carbonated drinks in order to attract the attention of many consumers.
This approach is relevant because many people have become aware of the health issues associated with carbonated products (Yoffie & Kim, 2011). The greatest fear is that such a strategy might encourage Pepsi to use a similar approach. The issue of bottler-consolidation should be taken seriously in order to support the best business processes.
The firms can also acquire new resources and production facilities in an attempt to reduce their expenses. These strategies will ensure the firms’ products are produced and delivered to the targeted buyers in a timely manner. The firms should also use the power of research and development (R&D) to produce new products that can serve the needs of the global consumer.
The issue of sustainability should also be embraced in order to have a successful business venture. In conclusion, the ongoing wars will continue to support the changing needs of different global customers (Yoffie & Kim, 2011). This is the case because every strategy embraced by the two companies will eventually empower more consumers.
Reference
Yoffie, D., & Kim, R. (2011). Coca Wars Continue: Coke and Pepsi in 2010. Harvard Business School, 1(1), 1-22.