Principle of management

LIEW SOOK MUNCEB130025

ENDORSED BY DR. MOHAMMED NAZRI

Dealing with

competition

COMPANY BACKGROUND

CASE STUDY

How much do you know about the companies?

To be or not to be?That is the question.

We’ve promised America’s parents

that we would change the drinks

we’re selling in schools.

As the consequences, we are the

FIRST among the competitors to

remove full calories beverages from

all schools over 200 countries.

Coca-Cola

YES for primary

schools upon request

YES for secondary &

high schools

Pepsi

NO for primary

school

NO for secondary &

high schools

Don’t take my competitive advantage!!

QUESTION I

Map the soft drink industry by using

Porter's five industry forces

QUESTION II

What are the

risks and opportunities

of the strategies

followed by

Pepsi? Or Coca-cola?

SWOT Analysis (STRENGTH)

PEPSI COCA- COLA-Strong market position

 -Solid brand portfolio

-Product diversity

- Adapting market trends and social changes

-Corporate Social Responsibility (CSR) projects

-World’s largest market share

-High sales revenue

-High sale growth

-Large capital base

SWOT Analysis (WEAKNESS)

PEPSI COCA- COLA-Conflicting interests

-No existing customers for new products

-Much weaker brand awareness and market share in the world market

-High expenses, may have trouble balancing cash-flows

-Global awareness of issue for health care may lead to boycotts

-Intrapreneurship may not be welcomed

- Undiversified product portfolio

SWOT Analysis (OPPORTUNITY)

PEPSI COCA- COLA-No government interference such as FDA & ABA

-Acquisitions & alliances

-Service

-Huge and growing market in the healthy products

-Brand recognition

-Monopolize the competitive advantage

SWOT Analysis (THREAT)

PEPSI COCA- COLA -Product recalls

-Intense competition

-Face losing market share to the competition

-Not entirely patentable, constant replicated by competitors

-Decline in Carbonated Drink Sales worldwide

-Very elastic demand, almost pure competition

-hanging health-consciousness of the market could have a serious affect

QUESTION IIIHow would you respond to coca-cola's change in sales

policy?

How would you ensure Pepsi's board that this response will

allow you to remain competitive and profitable?

Suggested Strategies

Attack

Emphasize the slogan

“Why you have to gain fat if you can

be slim”

Use artificial and natural sweetener

Suggested Strategies

Response

Collaborate with all schools

Employ spokesperson

Rebuilding healthierbrand image

So as to convince the Pepsi’s board…

We might lose to coca-cola in short terms of revenue.

But as long as we are the one who have sustainable competitive advantage, the victory belongs to us.

Conclusion

This,

is a

neverending

WAR.

REFERENCE• www.pepsico.com

• www.ameribev.org/files/240_School%20Beverage%20Guidelines%20Final%20Progress%20Report.pdf

• http://www.caloriecontrol.org/articles-and-video/feature-articles/what-the-labels-mean

• http://www.livestrong.com/article/407494-definition-of-low-fat-low-calorie-low-sodium/

• http://m.cdc.gov/en/HealthSafetyTopics/HealthyLiving/HealthyWeight/HealthyEating/CuttingCalories/rethinkDrink

• http://www.ameribev.org/nutrition--science/school-beverage-guidelines/progress-reports/

• Business And Competitive Analysis by C.S. Fleisher & B.E. Bensoussan

• Letting Go Without Losing Control by J.. Payne & S. Payne

• Principle of Management by C. Williams

THANK YOU for your time