Competitor Analysis is an integral part of corporate and market planning process and involves the assessment of the strengths and weaknesses of actual and potential business rivals (Murray, 2006). An analysis of competitors helps organizations to identify current gaps in satisfaction of customers as well as the potential threats posed by these competitors; it is therefore an important tool for organizations to acquire and sustain competitive advantage.
Competitor analysis does not limit itself to Companies often operating in the same market which targets customers with similar products but is wider and seeks to involve all those Companies that target the market segment in which the particular Company is interested in. The identification of both direct and indirect competitors is more effective than narrow definition of competitors that directly compete with a organization as commonly happens when undertaking competitor analysis.
Definition of Industry
This is the first place to start when undertaking the process of competitor analysis because one requires a broad definition of the industry the company operates in. The industry that Pepsi operates in is the non-alcoholic beverage industry that a consumer takes with at least one of the following objective; to quench thirst, for refreshment, for enjoyment or for health purposes.
These drinks include bottled water, carbonated drinks, canned drinks, fruit juices drinks, mineral water and milk products among others which would imply that any Company that is involves in production of any of these products or related products is actually a Competitor to Pepsi Company.
The most significant competitors for Pepsi Company are Coca-Cola and Dr Pepper Snapple; there are other smaller competitors but which are insignificant compared to these two global competitors (Pepsi.com, 2011). But coca-cola is the most important competitor amongst all because of its huge asset base, suppliers and distributors networks, product portfolio, innovativeness and global product popularity that is very similar to that of Pepsi. In fact the global soft drink industry is defined by the activities of these two multinationals.
Market Segment and Success Factors
The market can be defined as any person who needs a pleasant tasting non-alcoholic refreshment to quench his or her thirst. The refreshment should not have adverse side effect or cause medical or health conditions. The key success factors in the beverage industry are innovation, flavor, market size, customer loyalty and price among others (Murray, 2006).
This means that Companies must keep on recognizing needs and adjusting themselves to meet those needs (Murray, 2006). New flavors are continually being developed and are essential for promoting market penetration. Another factor is the size of the organization and its ability to operate efficiently; a large market size enables the firm to take advantage of economies of scale while at the same time guaranteeing global reach.
Brand loyalty has been identified as a key factor in this industry as consumers tend to be fiercely loyal. Price is another important factor in this market; the price must be competitive and must relate to the perceived benefits. Presentation is also important in this sector and packaging, advertising and corporate image is always kept polished. Finally, there is convenience which is an important factor as it ensures that the product has to be present in as many places as possible.
Main Competitor Analysis Coca Cola
Coca Cola was founded in1892 and it is headquartered in Atlanta, Georgia in the USA and is a global company; its current CEO and chairperson is Muktar Kent (Coca-cola.com, 2011). Its products include its main brand Coca-Cola other carbonated sodas and soft drinks, bottled water, packed juices and amongst others (Coca-cola.com, 2011).
The Company’s revenue for 2010 was estimated at about 35 billion and has a total asset base that exceeds 70 billion dollars (Coca-cola.com, 2011). The company operates in more those 200 countries where it sells over 400 products with Coca-cola being the leading brand in the world (Coca-cola.com, 2011).
It is the dominant player in the soft drink industry with its products coke and diet coke occupying the first two positions (Coca-cola.com, 2011) ahead of its rival Pepsi who had once claimed first position for many years. Coca-Cola’s major products include Fanta, Sprite, Minute Maid, Powerade, Nestea, Fruitopre, Dasani water amongst others and these products closely match with those of Pepsis products (Coca-cola.com, 2011).
Coca-cola.com. (2011). Soft Drinks & Beverage Products. Retrieved from https://www.coca-cola.com/
Murray, B. (2006). Carbonated Water, Hoovers. Web.
Pepsi.com. (2011). Pepsi. Retrieved from https://www.pepsi.com/en-us/