Coke Wars Case Study

light speed Wars Case summary Competition, Strategy, and Implications Webster University Summer 2012 INTRODUCTION The rivalry mingled with Coca-Cola & Pepsi empennage be deemed as legendary, the top easy throw competitors in the world spend cardinals of dollars yearly to try and convince you that their version of soft drink is amend (Dotson pg 1).Over the past century, it seems they suck in feuded over everything from who has superior taste, to the pursuit into space, and more(prenominal) recently over NASCAR and the social media race. no matter of who is ahead in the competition, the battles between Coca-Cola & Pepsi demonstrate important strategical adaptations that the breadbaskets must execute so as to thrive in the constantly changing realms of customer satis pointion, production line environments and technology.This paper exit 1) review the strategic issues presented in the Coke Wars baptistry through the use of the strategic management mannikin as use to so me(prenominal) Coca-Cola & Pepsi 2) highlight fundamental strategies & tactics so as to analyze the ingrained competition between both(prenominal) corporations and finally 3) discuss implications of concepts presented in the case for the middle manager so as to clasp lessons learned for hereafter application.STRATEGIC MANAGEMENT MODEL (SMM) The text describes strategic watchfulness as the set of decisions and actions that expiry in the formulation and implementation of plans knowing to achieve a connections objectives (Pearce, Robinson pg 3). With this definition in mind then, the Strategic Management Model git be considered as a very effective framework by which managers plan and implement business strategies.More importantly, in todays world(prenominal) business environment firms need perfect cognitive operationes that respond to developments in the size and number of competing firms to the expanded role of authorities as a buyer, seller, regulator, and competitor in the free-enterprise system and to greater business involvement in international trade (pg 3). furthermore, while businesses vary in the processes they use to formulate and direct their strategic way activitiesthe basic components of the models used to analyze strategic management operations is similar (pg 9).In reaction to internal and immaterial environmental business/economic pressures Coca-Cola & Pepsi consider manipulated the SMM in various ways so as to outride feasible/powerful competitors in their respective patience. Coca-Cola Model Application According to the Coca-Cola confederations one-year propound 2011, they ar the worlds largest drink confederacywith more than 500 nonalcoholic drinking stigmasown the worlds top five nonalcoholic sparkling beverage disfigurementsproducts bearing their trademarks, have been interchange in the United States since 1886, and are now sold in more than 200 countries (pg 1).Coca-Colas report to shareholders reveals that they are continuing to take a breather competitive in the beverage/snack industry due to a multitude of intelligent strategic decisions. When analyzing Coca-Cola from the Strategic Management Model perspective one can determine that while the internal/external environment will always remain unpredictable, the reading of viable plans/processes can assist a corporation in remaining flexible and responsive to necessary change. Coca-Colas Mission is to refresh the worldinspire moments of optimism and happinesscreate tax and make a inconsistency ( one-year Report Mission, Vision, and Values).Their current goals are to use troupe assetsbrands, financial strength, unrivaled distribution system, global oscilloscope and the talent and strong commitment of management and associatesto take more competitive and to accelerate egress in a manner that creates range for shareholders (pg 1). Overall, the mission statement is quite a powerful and accurately describes the confederacys product, m arket, 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 inhering Analysis, the corporation has identified its operating mental synthesis as the basis for financial reporting and is broken big bucks into 7 different operating groups ( annual Report pg 2). The method for financial reporting is important because this is where/how investors and executives overly assess the quantity and quality of the comp boths financial, human, and physical resourcesand contrasts companys past advantagees and traditional concerns with the companys current capabilities (Pearce Robinson pg 11).Coca-Colas Annual Report is well designed, informative, and relatively easy to read as well. An important internal analysis factor of note is that of attractorshipCEOs and Board members a resembling must adequately analyze the direction/vision of the corporation so as to not become fixated upon past gloriesinstead embracing new(a) opportunities (Ward pg 3). The External Environment that the company experiences is one full of pressures to hold extreme competition, distribution system management challenges, and social responsibility struggles.Additional competitive factors include those of but not limited to pricing, advertising, sales promotion programs, product innovation, increased efficiency in production techniques, the introduction of new 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 boding sustainable competitive vantage based on key value chain activities and capabilities (PR pg 11) and have identified their bottling operations as equity method investments.The 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 conc entrate sales for the company concentrate and syrup businesswhen this occurs both the corporation and the bottling partners benefit from long-term growth in volume, improved cash 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, prevalent 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, risk 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 attribute above otherwise product qualities, the firm attem pts to build customer loyalty (PR pg 158).Their mebibyte Strategies can be defined as concentrated growth, market development, product development, innovation, vertical integration, turnaround, and strategic alliances. Coca-Cola is pucker groundively globalized and their Generic and Grand strategies seem to be creating valuable supremacy for the corporation and is transforming into a more innovative, risk-taking company (Ward pg 2). Short Term Objectives for the corporation involve effective marketing strategies that appeal to existing customers and new commercial enterprise as well.They have embraced social media, the health craze and more recently the 2012 Olympics to successfully r separately an more and more global audience. In fact, Cokes strongest performance 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). Action Plans are incorporated and employed globally by executive s 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, raw 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 r separately 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 unretentive term goals and tally competitive advantage include adoption of marketing strategies that appeal to not unaccompanied 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 wit h Grammy award winner Mark Ronson for its 2012 London Olympics anthem (Hernandez pg 1).Additionally, Coke continues to focalisation on selling soft drinks globally and even vows to rebuild Coke sales in the US market through cogitate upon non-carbonated sports drinks such as PowerAde, Aquarius, and Fuze (DAltoro pg 2). Coca-Cola absolutely has Policies That Empower Action as demonstrated by the selective 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 psyche pass ons for decisions to be made whenever possible at the lowest level of the corporation. organizational Structure is segmented into the undermentioned areas Eurasia and Africa, Europe, Latin America, North America, Pacific, Bottling Investments, and Corporate (Annual Report pg 2). Coke is predominantly orga nized into an international area structure that allows for operational efficiency and regional competitiveness.However Coca-Cola faces the additional struggle of remaining socially prudent to societies and environments in which it brings and has approach several legal implications with respect to human rights issues in South American Bottling plants (FRONTLINE). Nonetheless Coca-Cola reprises that despite the erratic 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 round-the-clock Improvement is facilitated by Coca-Colas organizational structure, leadership, and 2020 Vision campaign. In fact their website reiterates that in order to continue to thrive as a business over the next 10 years and beyond, they must look ahead, understand the trends and forces that will shape their business in the future and send away swiftly to prepare for what is to come (Coca-Cola Website).This statement reveals that the corporation is committed to detecting changes and making necessary adjustmentsin system 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 tempt consumers with the worlds most loved and best-tasting convenient foods and beverages through the use of its strengths Brand Image, Positioning, Innovation, distribution Capabilities, productivity Focus, Human Capital and Purposeful Performance (Pepsi Annual Report).Pepsi also reiterates that being socially accountable is of close importance and commitment to do right for the business by doing right for people & the planet efficaciously creates a catalyst for business 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 Internal Analysis of Pepsi Co. to be that of strong progress and on a core 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 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 an adaptive team and cultureone that can continually renew itself and thrive on changeperforming 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 environmental conditions to that of Coca-Cola. Intense competition, globalized marketplace, social responsibili ty, 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 negative 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 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 Objective s 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 transfer 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 special 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 pervasive 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 development, innovation, vertical integration, turnaround, joint ventures, divestiture and strategic alliances.A dditionally, Pepsi is becoming more globalized in nature and their Generic and Grand strategies reflect this they are a $66 cardinal global powerhouse focussed upon two complementary businesses with attractive growth margins and returnsglobal snacks and global beverages to achieve global nutrition achievements oecumenic (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 leash brandsDiet 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 unmatchedand in 2011 they successfully changed distribution for Gatorade products in the US in the convenience and other channels 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 conflict 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 five 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 trespass on the high coincidence of snack and beverage consumption 5) ensure 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 responsibility of Global Nutrition demonstrates Pepsis commitment to a healthier race and have developed new st rategies 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 prescribed sports drinks, and Propel demonstrate that Pepsi in focused upon innovative products that cater to the health conscious customer call for/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 performance with purpose to achieve sustained growth and success.While Pepsi has many an(prenominal) 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 four busin ess units 1) PepsiCo Americas Foods 2) PepsiCo Americas Beverages 3) PepsiCo Europe 4) PepsiCo Asia, put East, Africa (Pepsi Annual Report).Pepsis structure allows for certain control and efficiencies both nationally and globally in the beverage and snack industries. In addition Pepsi has standardized the reportable segments of each business so as to allow for appropriate 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 coincidence of consumption of snacks and beverages, unleashing the full capability of its global scale and ensuring that PepsiC o continues to be a best place to work embodies ways in which Strategic Control and Continuous Improvement are going to be accomplished. ANALYSIS & 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 times can be frustrating for the organization, in this case has allowed for the creation of better products and increasingly globalized operations resulting in inherent successes for both organizations.The Cola-Wars have been existent 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 ensure 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 snap 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 industryif the tides somehow change, Pepsi will emerge as the victor due to their diversification strategyone that has pass channels an d 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 ultimately upon the ability of the organization to connect with consumers by providing an soldiers 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 degree Celsius 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 chant 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 thoughtfulness (USA TODAY).This paper 1) reviewed the strategic issues pr esented 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. suit STUDY MATERIALS/REFERENCES 1) Frontline. 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