For more than 100 years, the PepsiCo (pep) and the Coca-Cola Company (KO) have enjoyed being the two most enjoyed consumer brands globally. The two companies have maintained their popularity through the sale of beverages and ancillary products including consumer packed products. Both companies have been leading worldwide in the beverage industry, with hundreds of beverage brands offering to their customers. The companies sell beverages worth billions of dollars annually. Both companies are fierce competitors and exhibit unique business models. Customers who enjoy soft drinks are usually divided into either Pepsi-lovers or coke lovers. Both divides substantiate their favoritism on facts, ideas, flavor, and preferences and then allowing them to remain true to their selection.
PepsiCo and the Coca-Cola are giant companies which are facing marketing saturation. Their markets are diminishing, and expansion is declining since there are few remaining untapped markets for both companies. Notably, both companies have ventured into the energy drink beverage category. Since both companies are experiencing market saturation, they are making strong commitments and dedication to ensuring efficiency and effectiveness for them to take advantage of the remaining few markets.
PepsiCo is more popular than Coca-Cola due to its diversified product range not only in the beverage industry but also in the consumer packed goods industry among others. On the contrary, coca-cola company has majored its focus on a diversified product range in the beverage industry and only having few products outside the beverage industry. Pepsi accounts for about 50% of its total earnings from the packed foods category and the other half from the beverage industry. However, for the Coca-Cola Company, its revenue is generated from its numerous drinks products. As a result, PepsiCo is likely to survive in case the beverage industry fall. In contrast, the decline in sales in the beverage industry means that Coca-Cola is likely to falter. Nevertheless, since Coca-Colas focus is solely in the beverage industry, it can make major, specialized and outstanding investments and develop effective communication with its customers.
Recently, carbonated soft drinks have lost value while as noncarbonated drinks have gained more value than in the past. The American people have also reduced their consumption rates of soft beverages. In efforts to face the declining consumption of soda in the United States, both companies have resolved to increase their prices to cover the loss of sales volume. However, increasing prices have not solved the problem completely. These companies have therefore grown their product portfolios in depth and breadth while concentrating in the manufacturing of non-carbonated beverages. The increasing reduced soft beverage consumption along with the legal risks including taxes on sodas threatens the growth of these soda companies. However, product diversification seems a better strategy to ensure business continuity as opposed to product specialization. In this regard, PepsiCo seems to be safer survival grounds than the Coca-Cola Company.
PepsiCo and Coca-Cola have different business models. PepsiCo has a diversified business model that enables the company to make complementary goods in both the beverage industry and the packed food industry. In contrast, coca-cola has a focused business model which gives it the advantage of specialization. However, PepsiCo creates a scenario that increases its sales as the sale of one product will induce the need to buy their other product. For instance, a customer is likely to buy a salty snack made by PepsiCo and also purchase a PepsiCo beverage. On the other hand, Coca-Cola has managed to dominate the beverage industry market.
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