c




   c   

2 m OLIDIX CONSULTANTS

pm The Pepsi-Cola Company

pm Competitive Analysis

OLIDIX CONSULTANTS
2 m Our Task

pm Phase 2

pm Analyse the Market

pm Phase 2

pm Suggest Recommendations

OLIDIX CONSULTANTS
3 m CONTENTS

pm 2 Our Industry

pm 2 Competitive Analysis

pm 3 Market Research

pm Ô Issues

pm ë Competitive Aids (Theories)

pm 0 Recommendations

pm G Bibliography

OLIDIX CONSULTANTS
Ô m 2 Our Industry

pm Pepsi operate as producer in the

pm Œast Moving Consumer Goods (ŒMCG) Industry

pm Other ŒMCG industry producers could include: Toiletries, groceries, magazines, Newspapers, even
in this day and age mobile phones

pm  Œast Moving Consumer Goods are products that have a quick turnover, and at a relatively low
cost

pm ( Mingrong, L 200G)

OLIDIX CONSULTANTS
ë m Current Position
 pm Oligopoly

pm Œew Market Leaders

pm righ Barriers of Entry

OLIDIX CONSULTANTS
0m
pm Typology (Consumer Classification)

pm Millennial¶s (Television Week, 200G)

pm Advertising and Promotion

pm Check out the Pepsi Refresh Anthem

pm Targeting

pm Multi-Segmented marketing approach

pm Audience Motivation

pm Taflinger, in his book, µTaking Advantage¶, argued that audience motivation is a visual or aural
influence on one¶s subconscious mind and emotions

Current Audience OLIDIX CONSULTANTS

G m Market Analysis

pm Important to consider:

pm Demographics : The global market

pm Elasticity : The relative effects of changes in price to demand

pm Market trends :

pm The decline of sales in carbonated drinks (Mintel, 2009)

pm The rise of functional soft drinks: Juices, enriched vitamin water and nutraceuticals
(NutraIngredients com, 2003)

pm Streamlining of production lines (Sidel com, 2009)

OLIDIX CONSULTANTS
8 m 2 Competitive Analysis

pm Direct and indirect competitors

pm Direct: Cola producers:

pm Supermarket own brands

pm Coca-Cola

pm Indirect : Producers of all beverage types

 pm Tea/Coffee

pm Water

pm Juices etc

pm Brand differentiations

pm Modernity vs Tradition

OLIDIX CONSULTANTS
9 m Company Analysis

pm Combined revenue of $28 Billion

pm Earnings per share grew 23%

pm Net revenue growth of 22% (three times industry growth)

pm Retained profits of $0 9 Billion

pm  To be the worlds premiere consumer product company focused on convenient foods and beverages
we seek to produce healthy financial rewards to investors as we provide opportunities for growth and
enrichment to our employees, our business partners and the communities in which we operate And
in everything we do we strive for honesty fairness and integrity"

pm - Source: Pepsi Co 200G annual report

OLIDIX CONSULTANTS
20 m
pm Œor our primary market research to be of use to our competitive analysis, we had various questions
we needed answering and therefore split our survey into three parts

pm Branding

pm Promotion / Advertising

pm Taste test

OLIDIX CONSULTANTS 3 Market Research

22 m OLIDIX CONSULTANTS Results«

22 m ë Issues«

pm rard to differentiate product in terms of taste as product variety is very limited within cola based
beverages

pm Coca-Cola has such a strong base of loyal customers, who identify with the cola brand

pm Consumer tastes are changing, away from carbonated drinks towards functional soft drinks (Mintel,
et al 2009)

OLIDIX CONSULTANTS
23 m ë Competitive Aids

pm Porter¶s ë Œorces

pm S W O T Analysis

pm Porter¶s strategies for Competitive Environments :

pm Cost-Leadership

pm Product-Differentiation

OLIDIX CONSULTANTS
2Ô m Porters ë Œorces

pm Competitive Rivalry

pm Threat of New Entrants

pm Power of Suppliers

pm Power of Customers

pm Threat of Substitutes

OLIDIX CONSULTANTS
2ë m SWOT Analysis

pm Strengths: Large market share, purchasing economies of scale, customer loyalty, world wide brand
recognition, huge distribution network

pm Weaknesses: Smaller market share than main rival Coca-cola, inability to substantially product
differentiate, hard to compete with Coca-Cola¶s strong brand identity and customer loyalty

pm Opportunities: Adapting to market trends (Pepsi health drink) could create an advantage, opportunity
to be known as a socially responsible producer however this incurs costs which may not be met with
the current economic climate,

pm Threats: righ levels of competition from main rival Pepsi will lose market share if other companies
adapt to market trends faster

OLIDIX CONSULTANTS
20 m Porter¶s Strategy

pm  While strategy may be about competing and surviving as a firm, it is products, not corporations that
compete, and products are developed by business units
(Porter, 2980)

pm Business Unit Level Strategy:

pm Porters Two Strategies

pm Cost-Leadership

pm Product-Differentiation
 OLIDIX CONSULTANTS
2G m Porter¶s Strategy Continued«

pm Cost-Leadership

pm Industry¶s lowest cost producer

pm Price setting over price following

pm Benefit from higher profit margins

pm Product-Differentiation

pm The differences in one product from another

pm Unique customer perception

pm Packaging and Promotional activities

OLIDIX CONSULTANTS
28 m 0 Recommendations

pm We believe that there are two main areas that The Pepsi Cola Company could improve on in order to
maintain a competitive advantage over its rivals

pm Adopting a Cost-Leadership Strategy

pm New Product Development

OLIDIX CONSULTANTS
29 m Cost-Leadership Strategy

pm Advertising and innovative promotion

pm Optimal outsourcing for production and vertical integration

pm Improving production efficiencies through Kaizen

OLIDIX CONSULTANTS
20 m New Product Development

pm Produce a range of µhealthy¶ alternatives under the brand name µPepsi Œresh¶

pm Our suggestion would be a range of Vitamin enriched waters under the name µPepsi Œresh¶

OLIDIX CONSULTANTS
22 m G Bibliography

pm Websites:

pm ŒMCG Definition:

pm http://www shentrepreneur org/html/oldnewsroom html

pm âlast accessed 22/02/09>

 pm Modularisation

pm http://cavehill uwi edu/fpas/cmp/online/cs22k/revision/problem%20solving/modularisation htm

pm âlast accessed 22/02/09>

pm Consumer Trends

pm http://www nutraingredients com/Consumer-Trends/Œunctionality-set-to-shape-soft-drinks-sector

pm âlast accessed 22/02/09>

OLIDIX CONSULTANTS
22 m Oligopoly definition http://moneyterms co uk/oligopoly/ âlast accessed 23/02/2009> Porters Strategy
http://www quickmba com/strategy/porter shtml âLast accessed 2Ô/02/2009> Books : Krugman, P
Wells, R Graddy, K (200G) Economics: European edition 200G USA: Worth Publishers Inc raig, M
(200Ô) Brand Royalty: how the worlds top 200 brands thrive and survive London: Kogan Page ltd
Online Reports : Sicher, J (2008) Beverage Digest: Top 20 CSD Results for 200G [online] Available
from: http://www beverage-digest com/pdf/top-20_2008 pdf [Accessed: 20/02/2009] Sidel (2000/9)
CSD Market Trends [online] Available from: http://www sidel com/products/what-do-you-
package/csd/csd-market [Accessed: 20/02/2009] Mintel 2009, Carbonated Soft Drinks - UK - Œebruary
2009 [online], (p 2), Available from:
http://academic mintel com/sinatra/oxygen_academic/search_results/show&/display/id=3938G2 [Accessed:
02/03/2009] OLIDIX CONSULTANTS

23 m
pm Mintel (2009), Œruit Juice and Juice Drinks - UK - November 2008 [online], (p 2), Available from:

pm http://academic mintel com/sinatra/oxygen_academic/search_results/show&/display/id=3938G2/displ

ay/id=22GGG8 [ Accessed: 22/02/2009]

pm Nexis UK (2008), Drink Makers' Optimism Not Dry; Coke, Pepsi sales down; Plans Up [online], (p
2), Available from: http://www lexisnexis com:80/ uk / nexis /results/ docview / docview do?
docLinkInd =true& risb =22_Të92G23228G&format=GNBŒI &sort=BOOLEAN& startDocNo =2&
resultsUrlKey =29_Të92G232290& cisb =22_Të92G232289& treeMax =true& treeWidth =0&
selRCNodeID =23& nodeStateId =Ô22en_GB,2,2& docsInCategory =Ô2& csi =83G9& docNo =2
[Accessed: 22/02/2009]

pm

pm Nexis UK (2008), Pepsi Sales are Œlat, but Bottler's Profit Edges Up [online], (p 2), Available
from: http://www lexisnexis com:80/ uk / nexis /results/ docview / docview do? docLinkInd =true&
risb =22_Të92G23228G&format=GNBŒI&sort=BOOLEAN& startDocNo =2& resultsUrlKey
=29_Të92G232290& cisb =22_Të92G232289& treeMax =true& treeWidth =0& csi =0GÔ2& docNo
=2 [Accessed: 22/02/2009]

pm Pepsico (2008) 200G Annual Report [online] Available from:

http://www pepsico com/Investors/Annual-Reports/200G-Annual-Report aspx [Accessed:
02/03/2009]
 OLIDIX CONSULTANTS
2Ô m Online Journals : Sharp, B & Dawes, J (2002), 'What is Differentiation and row Doeas it Work?', Journal
of Marketing Management, Argyll, Vol 2G, pp G39-ë9 Imai, M (2980), Kaizen: The Key to Japan's
Competitive Success , Random rouse, New York Images: Excelsia (2009) SWOT analysis [online]
Available from: http://www excelsia ch / htmlgb / blog /images/ swot -analysis-image png âlast
accessed 02/03/2009> Dublin City University (2009) Porters ë Œorces [online] Available from:
http://student dcu ie /~hillc3/ Pmodel gif âla