Strategic Management: Analysis of Coca-Cola and PepsiCo

Running Head: Strategic Management
Strategic Management

Strategic Management 1
Table of Contents
Executive Summary......................................................................................................... 2
Literature Review............................................................................................................. 2
Strategic planning............................................................................................................ 3
External Analysis (PESTLE analysis)...............................................................................4
Political factors..............................................................................................................4
Economic factors.......................................................................................................... 4
Social factors................................................................................................................ 4
Technological factors....................................................................................................5
Legal factors................................................................................................................. 5
Environmental factors...................................................................................................5
Internal Analysis (SWOT).................................................................................................6
Competitive analysis........................................................................................................ 7
Industry analysis.............................................................................................................. 9
Bargaining power of suppliers.......................................................................................9
Bargaining power of customers..................................................................................10
Threat of new entrants................................................................................................10
Threat of substitutes................................................................................................... 10
Industry rivalry............................................................................................................ 10
References.....................................................................................................................12

Strategic Management 2
Executive Summary
Since a very long time, Coca-Cola and PepsiCo are selling various types of beverages
and fast food items. In this context, both companies are trying to control the whole
market along with gaining competitive advantage. This rivalry is since 1950s and yet,
both the companies are in constant battle in terms of controlling the market share.
Current scenario says that both the companies are constantly engaged in adaptation of
unique strategies in terms of attaining the largest market share in the soft drink industry.
As per researches and studies, it has been observed that amongst all leading producers
of soft drinks across the globe, Coca-Cola is an iconic brand and it has attained a huge
brand value in the international beverage industry. It has been observed that the Coca-
Cola brand is available in international market and its drinks are consumed more than
685 million times a day. Hence, Coca-Cola has made its effective and strong brand
image through delivering enjoyment and quality.
In order to determine the intensity of rivalry amongst these companies in the global
market, various analyses will be conducted in this report. With regards to this, strategic
planning, internal and external analysis, industry and competitive analysis will be
conducted.

Strategic Management 3
Literature Review
Strategic management is the process of evaluation and formation of effective strategies
performed by the management team on behalf of owners of organization along with the
stimulation of attainment of desired goals and objectives considering the internal and
external environment. This procedure develops certain plans in order to attain the
desires of the organization and these plans are developed on the basis of organizational
requirements, rules, regulations and policies. While developing the strategies for the
organization, it is necessary to consider some important points such as external and
internal marketing environment, current position in the global market. Coca-Cola and
PepsiCo are two big brands of soft drink industry and both of them plays effective role
for being each other’s competitor.
Strategic planning
Strategic planning is a combination of objectives, plans and policies which is done to
develop effective organizational strategies with regards to attain competitive advantage
in the marketplace. An organization’s efficiency could be determined with its strategies,
thus, it is necessary for every organization to consider every crucial aspects such as
external and internal business environmental conditions before developing strategies in
order gain competitive advantage. in terms of international market, Coca-Cola is
considered as strong because it holds almost 50% share of the overall non-alcoholic
market share in the global market whereas, PepsiCo holds approximately 25% market
share. This means, PepsiCo nowhere stands close to Coca-Cola in the international
beverage industry. But due to few companies’ engagement in this industry, PepsiCo is
considered as the direct competitor for Coca-Cola in the global market (Cassidy, 2016).
Rivalry amongst both the companies is bit old now but still competition between
PepsiCo and Coca Cola is considered to be the top rivalry between the two recognized
international brands in the world. Thus, PepsiCo tries to attain competitive advantage by
adopting unique and innovative measures in their strategies while Coca-Cola is doing
the same as defensive strategies in order to maintain their acquired image in the global
market (Ling, 2017).