Digital Marketing

Lessons from A Competitive Analysis of Coca Cola and Pepsi.

A comprehensive research and analysis of competition is one of the most significant elements of an in-depth market analysis. A competitive analysis enables you to assess the strengths and weaknesses of your competitors. But why is a competitive analysis an important part of your business plan? To have a competitive advantage in a particular market, you must have a thorough knowledge of your competition.

What types of organizations should you consider as dominant competitors?

Any business that has a large market share and market products similar to, or as substitutes for  your products in the same geographic region is a direct dominant competitor. Companies with large market share and offer substitutes or dissimilar products in relation to your products are considered indirect dominate competitors.

When preparing or conducting a competitive analysis of dominant players in a particular market, it is important to follow these steps:

  • Conduct Research
  • Gather Competitive Information
  • Analyze Competitive Information
  • Determine Your Own Competitive Position

For example, maybe you have established a firm that produces soft drinks. The first question you should ask yourself before conducting competitive analysis is: what are the main players in the soft drink industry? Currently, the dominant players in the soft drink market are Pepsi and Coke. Throughout the globe, these dominate players have been fighting it out for a larger chunk of the ever-growing soft drink market.

Coca-Cola

To conduct competitive analysis of this company, we need to know its market shares, strategies, strengths and weaknesses, and its market position.

Coca-Cola, a company that developed in in 1886, has the most known and admired trademark around the world. Currently, the company is the biggest soft drink company on the planet. The company produces, distributes and sells non-alcoholic beverage concentrates. Its products include non-carbonated beverages, certain water products, and juice drinks.

The company owns production sites, telecommunications infrastructure and distribution centers.  The company also boasts of US$90.093 billion assets and 123,200 employees.

Competitive advantage of the company derives from its ability to exploit and assemble an appropriate combination of resources. The company also strongly advertises its products and creates its products in response to ever changing market conditions.

Pepsi

PepsiCo is one the biggest companies in the world. It appears amongst the leading 15 companies in the world according to the number of employees hired.  The company has assets worth US$69.667 billion and 263,000 employees.

The company boasts a of large market share, worldwide brand recognition, purchasing economies of scale and customer loyalty. It weakness includes: smaller market share than Coca-cola, inability to differentiate products, weaker customer loyalty and brand identity compared to Coca-cola. The company’s opportunities are its ability to adapt to market trends.

Conclusion

Depending on what market you are operating, schedule a competitive analysis regularly. Remember that competitive analysis is an on-going process. Competition keeps changing and new players may emerge tomorrow. It is only after you carry out competitive analysis that you can understand your own market position. Only then can you exploit competitors ‘weaknesses and improve your marketing efforts.

Angela Scott-Briggs

Editor, TechBullion.com | Interested in Innovations in Business, Finance, and Technology .

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Angela Scott-Briggs

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