Amber Franco

Dr. Taylor Keen

BUS 471
September 7, 2016
Cola Wars Continue: Coke and Pepsi in the 21st Century
1) What portions of the value chain are more profitable and why?

For the Cola industry, the outbound logistics is the most

profitable potion of the value chain. Being that Coca-Cola is a
global chain company, they have an efficient system that allows
the companies to deliver products to customers, and store their
products globally. It goes to PepsiCo as well. Since the company
is a global chain, they want to be readily available for their
customers, in such way that there customers will always come
back. If Coca-Cola cannot complete their orders, the customers
that they had will no longer want Coca-Cola and go with another
company. This is the mentality of Coca-Cola Company, which
serves as a more profitable portion of the value chain.

2) Using a SWOT analysis, examine the competitive positions of

both Coke and Pepsi. Who is in a better position? Is it a
symbiotic relationship?

Strengths: Loyal customers, globally recognized brand, many

products besides just soda.

Weaknesses: Since Coca-Cola has been in the market for a long

time, it is hard for PepsiCo to attract the older, loyal customers of

Coca-Cola to buy from Pepsi. With that being said, Pepsi then
attracts to the younger crowd. Global recognition brings in some
problems. Both companies are faces with cultural differences,
political instability, price controls, advertising restrictions, and
the lack of infrastructure.

Opportunity: Coca-Cola and Pepsi are good at seeking new

opportunities, such as portfolio expansion. This includes Pepsis
expansion with Aquafina, and Coca-Cola with Dasani.

Threats: Due to the expansion of their portfolio, both companies

have threat for new competition. This turns in to more
substitutes for their products.

Better Position:
In todays society, Pepsi is preferred over Coca-Cola, during
a blind taste experiment, customers preferred Pepsi to
Coca-Cola. However, Coca-Cola is shown to be higher in
numbers. Even though Pepsi won the blind taste test, they
did not win the heart of customers. Coca-Cola is preferred
in food stores, soda fountains, vending machines, and
other sources.

Symbiotic Relationship:
Coca-Cola and PepsiCo, with the vast amount of
competition, they still keep a symbiotic relationship, which
they maintain for competitive strategy that helps them

innovate and compete with emerging companies. This

symbiotic relationship also helps in solving problems, such
as what should be done differently, and so forth.
3) Describe the strategy of each company. Also, who is best
prepared to thrive in the long run and why?

Coca-Colas Strategy:
Differentiation. Coca-Cola wants their brand to be readily
available to their customers, meaning having their product
available in every corner of the world. an arms reach of
desire, said Robert Woodruff, CEO in 1923. Coca-Cola
wants consumers to associate their brand with happy
things, such as Polar Bears, and the red branding which
symbolizes Christmas.

Pepsis Strategy:
Differentiation. Pepsi expands their brand portfolio and
creating complementary products. Pepsi figured that if you
buy carbonated soft drinks, they will also purchase salty
snacks. Which is why Pepsi partnered with Frito-Lay.

Side Note:
One analysts said that Coca-Cola may have grown
internationally, but Pepsi grew and expanded from FritoLay.