Coca Cola and PepsiCo Business
Coca Cola and PepsiCo have various similarities since they produce beverages and target the same customers. However, they have differences in terms of the business model and diversification. Coca Cola is more focused on beverages and the target customers are in Europe, Middle East and Africa (Kayaba, Boyraz & Derdiyok, 2017). Conversely, PepsiCo had diversified into food products since over 50 percent of its revenue is from food and not beverages (Chalikias & Skordoulis, 2017). PepsiCo focuses on the United States market. Coca Cola has a focused business approach while PepsiCo has a diversified business approach.
The two global giants have adopted lean decision-making models to eliminate layers of management that complicate management practices. The decisions are thus made easily and speedily to support needed changes in the market (Kayaba, Boyraz & Derdiyok, 2017). The lean decision-making model is efficient since consumer habits change fast. For example, there are concerns in the beverage industry about healthy choices of drinks (Chalikias & Skordoulis, 2017). The two companies have invested in healthy drinks to allow consumers to choose from a variety. Diet coke and Diet Pepsi is a classic example of healthy beverages.
The two companies have invested heavily in marketing since they spend billions of dollars annually to woe new clients. For example in 2017 Coca Cola spent $6 billion whereas PepsiCo spent $4 billion on marketing campaigns. The focus is to create a strong brand positioning and market dominance (Kayaba, Boyraz & Derdiyok, 2017). The two have huge revenues since they cover hundreds of countries where they sell their products. PepsiCo recorded $64 billion revenue in 2018 while Coca Cola registered $31.85 billion in the same year (Purkayastha & Rao, 2017). Both companies have succeeded in increasing their market share and customer satisfaction across the world. The two companies engage in stiff competition to dominate different markets in various countries by lowering prices or producing diversified products.
Chalikias, M., & Skordoulis, M. (2017). Implementation of FW Lanchester’s Combat Model in a Supply Chain in Duopoly: The Case of Coca-Cola and Pepsi in Greece. Operational Research, 17(3), 737-745.
Kayaba, T. D., Boyraz, G., & Derdiyok, R. (2017). Examining Coca-Cola and Pepsi Brands under the Basis of Globalisation and Multinational Companies. International Journal of Academic Research in Business and Social Sciences, 7(12), 351-358.
Purkayastha, D., & Rao, A. S. (2017). Sustainable Development at PepsiCo. In Case of Studies in Sustainability Management, 77-98. Routledge.