Cola Wars Continue: Coke and Pepsi in 2010 Essay

Analysis of the US carbonated soft drinks (CSD) industry (a) Strategic issues The CSD market in the US (approx. $74 billion) is dominated by two concentrate manufacturers – namely Coke and Pepsi –. Both companies have been competing intensely since the 1970s, yet have thrived from this competition and have grown the business very profitably, as both have benefitted from the CSD market growth rates of around 10% p.a. until the early 2000s, when domestic consumption started to decline and in 2009 fell back to levels of 19901: U.S. Liquid consumption Trends (gallons/capita): 1970 Carbonated soft drinks 1990 2000 2009 22.7 46.9 53.0 46.0 U.S. Soft Drink Market Share (Unit Case Volume %): 1970 Coca-Cola Company PepsiCo, Inc 1990 2000 2009e 34.7 19.8 41.1 32.4 44.1 31.4 41.9 29.9 In order to understand the strategic issues of the concentrate manufacturers in the US market, an analysis of the CSD industry structure appears necessary. A practical tool for assessing strategic issues is Porter’s Five Forces, as this tool supports analyses of competition, as strategy is fundamentally about competition2. The model of Porter is an outside-in business unit strategy tool that analyses the attractiveness (value) of an industry structure, capturing the key elements of industry competition. Source: HBS case study ‘Cola Wars Continue: Coke and Pepsi in 2010’ May 26, 2011, Exhibit 1 Source: Porter, ‘Competitive Strategy’ Figure 1: Porter’s Five Forces Analysis Summary on figure 1 Barriers to entry are very high due to the following key factors: (1) anybody trying to break into the CSD market must compete with Coke’s and Pepsi’s combined market share of >75%; (2) the market leaders have – over decades – built up strategically critical supply, production and sales channels, which would require enormous investments for followers to copy and (3) the strong brand recognition in the market mainly developed via the cumulative effect of long-time advertising and the geographical availability of their products. Understanding the CSD industry and its competitive landscape and – given that the overarching goal of the concentrate manufacturers is to secure profitable growth – the primary strategic issue (central problem) for the concentrate manufacturers is the declining demand for CSDs, as these manufacturers have built their strategy over the decades on large volume production and distribution involving high amounts of investments (fixed assets) which are now (1) underutilized and (2) are not designed for alternative products (‘non-carb’). (b) Macro-environmental factors shaping the US CSD industry Since the early 2000s several macro-environmental factors have started re-shaping the US CSD industry. To obtain a full picture of the potential macro-environmental impact on this industry, I used the PESTLE framework. PESTLE stands for – Political, Economic, Sociological, Technological, Legal and Environmental. This framework is a tool for identifying, tracking, projecting and assessing macro-environmental trends and patterns which helps decision-making and to plan for future events. Figure 2: PESTLE Analysis Summary on figure 2 Based on the PESTLE analysis, 4 major trends that have already shaped respectively will continue to shape the current US CSD industry and influence the attractiveness of this industry are: (1) Shift in consumption  patterns towards healthier nutrition (non-carbs such as juices and juice drinks, sports and energy drinks and tea-based drinks but also bottled water) causing the CSD to fizzle (2) US Government fighting the US #1 health problem obesity by tightened nutrition guidelines and imposing taxes on CSDs (3) Increasing pricing power of emerging mass-merchandisers (e.g. Wal-Mart) posing a new threat to profitability for Coke, Pepsi and their bottlers (4) Non-carb market is open to new market entrants, as it is a stronger fragmented market not dominated by the ‘classical’ CSD companies (Coke, Pepsi, DPS, etc.) The PESTLE analysis also reveals that the change in the US CSD industry is not a one-timeimpact but rather an ongoing process: 2000s (early): start of a declining domestic consumption of CSDs 2005: new federal guidelines to fight obesity 2010: already 29 states introduced a ‘soda tax’ (c) Future attractiveness of the US CSD industry The US CSD industry will continue to be a very attractive market for the established players alone considering the size of the market and the strong position in the market of these players. The 3 A’s (Advertising, Addiction, Availability) continue to be the main purchasing criteria for consumers. Still these players will have to adapt their strategies to maintain market levels for CSDs. Possible strategic moves to act / react on the trends stated above should be based on the findings of the Five Forces Analysis and the PESTLE Analysis and could include: (1) Development of (approved by the US F&D Admin.) alternative sweeteners to reduce obesitycausing sugars (2) Compete on availability (through their impressive geographical reach) (3) Create a fragmented bottling network but give territorial exclusivity to bottlers as incentive to ‘grow the pie’ and use the bottling network as a competitive firewall (especially against massmerchandisers) (4) Escalate advertising sp ending to keep out entry Further market analysis can be carried out by using proven tools such as ’Ansoff’s Growth Strategy Matrix’ (market present vs. market future / product present vs. product future) or the brand analysis (brand strength = differentiation + relevance vs. brand stature = knowledge + esteem) but which I have not described in this report. The competition in the CSD industry is a stronghold between Coke and Pepsi with a few minor players together holding approx. 25% market share. Coke and Pepsi leverage their strong market position and build on economies of scale crowding out smaller players or – if necessary – acquire them. Competition between Coke and Pepsi is reciprocal, with both responding to each other’s strategy shifts. Most prominent were the development of diet and flavored varieties of CSDs. To further support the analysis of the future attractiveness of the US CSD industry, the following Force Field Analysis is useful, as it also reveals potential ‘restraining forces’ of change. As figure 3 shows, especially the market disruptions coming from domestic consumption of CSDs continuously declining have caught – to a certain extent – the ‘classical’ CSD companies by surprise, as they cannot respond to this development by standard measures – such as increasing advertisement or bringing new CSDs to the market – but are now facing a structural change in the beverage market with an uncertain outcome. Figure 3: Force Field Analysis The Force Field Analysis – as described in literature – is especially useful to identify â€Å"resistance to change†, providing a systematized framework that supports identify factors that hinder change (restraining forces) and factors that support change (driving forces). Kurt Lewin developed the principle, which is a significant contribution to the fields of social science, organizational development, process management, and change  management. (d) Potential impact of the four pressures (industry dynamics, globalization, risk and ethics) on the future attractiveness of the US CSD industry The insights gained from the analyses carried out under 1(a), 1(b) and 1(c) summarize the potential impact of the four pressures as follows: (1) Industry dynamics (defined as understanding how industries and companies change over time and understand their drivers of these changes): The environment in which CSD companies have been operating until the early 2000s was 5  characterized by competition but the industry dynamics tended to be ‘evolutionary’. The PESTLE analysis has shown, that since that time, market dynamics have dramatically picked up and several lasting disruptive changes (e.g. introduction of a ‘soda tax’) have happened. Subsequently this has had an impact on top and bottom line of the CSD industry (‘Cola Wars’ business case, Exhibit 3a). (2) Globalization (defined as when an industry globalizes, it undergoes structural shifts, so that the organizations within it find that their position in one country is significantly affected by their position in another country): Even if the aforementioned analyses are aimed to the US CSD industry, the data provided by the case study reveals that Coke’s share of US business in % of total global business is around 20% while Pepsi’s share is around 50%. The international business – in contrast to the US market – has been growing nicely given the strong population growth in emerging countries and the establishment of a ‘middle class’ in large nations such as India and China that can now afford CSDs. Coke has stronger benefitted from this growth as Pepsi has. This should give Coke further potential for economies of scale which should benefit bottom line considerably. (3) Risk (defined as the evaluation of levels of risk and reward attached to each potential business opportunity): The exposure of risk in the CSD industry – given that especially Coke and Pepsi (a) have a significant share of business in the single largest CSD market worldwide, which is the US and (b) rely on the success of a single type of product (carbonated soft drink) – is high. Impacts coming from macro-environmental factors – as shown in the PESTLE analysis – can be game changing for this industry, as already happening since the early 2000s. (4) Ethics (defined as a set of values and beliefs that do transcend cultures, time and economic conditions): Again stressing PESTLE, environmental protection has become one of these values that have affected the CSD industry and have at least forced the CSD companies to re-think their packaging strategy and in consequence potential changes in the production and bottling process. From the aforementioned I would draw, that industry dynamics has the major impact on the future attractiveness of the US CSD industry. General observations on using module concepts Engaging with theory and applying this to day-to-day business life has many advantages of which I would highlight: best quality: proven concepts efficiency: not to â€Å"re-invent the wheel† for free: applying theory in daily business life is – from an intellectual property stand point – basically not linked to any cost [except costs for implementation] The challenge left for every corporation is to understand, select and implement the theories, methods and tools that best suit their purpose. This requires experienced managers and experts that are capable of making use of theory to change practice. 1. Module concept I: Porter’s Five Forces Strategy is fundamentally about competition. Competition comes from many places. Therefore it is essential to carry out an ‘environmental scan’ in a systematic way. Porter Five Forces model is a proven outside-in business unit strategy tool that analyses the attractiveness (value) of an industry structure, capturing the key elements of industry competition. (a) Strengths of the framework Porter refers to these forces as the micro environment or line-of-business industry level (those forces that are close to the company and that drive the business). If changes happen in one of these forces, the company should re-assess their strategic position and – if required – take corrective action. Also it provides useful input for performing a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. (b) Limitations of the framework The framework does not look at strategy from the inside-out. Consequently the view on core competencies on a company are ignored. I would have found it useful to understand where Coke has developed a competitive advantage vs. Pepsi and vice-versa. Therefore a SWOT analysis should always complement the Five Forces Analysis. Another critique I would make to the framework is the fact, that the 4 forces (1) entrants, (2) substitutes, (3) customers and (4) suppliers only relate to the center (competitors) but do not ‘interact’ among themselves. In the ‘Cola Wars’ e.g. the interaction between substitutes and customers would have been of interest. Last I would criticize the framework is not very useful for environments that are characterized by rapid, systemic and radical change which requires more flexible or emergent approaches to strategy formulation (this often happening with industries where disruptive innovation is foreseeable). This is also true for disruptions that give the possibility to create completely new markets (how to create uncontested market space and make the competition irrelevant)3. 2. Module concept II: PESTLE framework The PESTLE framework is a powerful tool and I used it to weigh up the wide range of factors in an organization’s environment that will impact on its strategy. Reading through the ‘Cola Wars’ business case it quickly became evident, that it is not one but several factors that are influencing the US CSD industry. PESTLE very much serves as a checklist of macro-environmental factors that can influence strategy. I personally prefer using the PESTLE framework in combination with the Force Field Analysis as I believe that PESTLE covers well the ‘driving forces’ of change but does not address the ‘restraining forces’. This becomes particularly evident in the analysis carried out under 1(c). (a) Strengths of the framework Similar to the Risk Management System, PESTLE provides a comprehensive ‘checklist’ of macro-environmental factors to make sure, that all ‘dimensions’ have been thought of and have been documented systematically. Also these factors can be classified as opportunities  and risks in the SWOT analysis as well as a risk register. Last but not least, PESTLE is easy to use and adaptable to any business. (b) Limitations of the framework Except for the stated under 2., I have not identified any major limitations of the framework, making it a tool I prefer working with. 3. Module concept III: Lewin’s Forces Field Analysis Lewin’s Force Field Analysis belongs to the great change management tools. He saw the drivers for and against change as a moving equilibrium and developed a way to analyse these drivers, giving birth to what he called a ‘force field analysis’. By knowing the driving and restraining forces of change, strategies can be developed to reduce the impact of the restraining forces and strengthen the driving forces. Even if the Force Field Analysis looks simple at a first glance, the following benefits are built into the system: Dynamics on action vs. reaction Allows different perspectives Highlights most critical matters (size of the arrow) (a) Strengths of the framework The Force Field Analysis complements the PESTLE framework as PESTLE covers well the ‘driving forces’ of change but does not address the ‘restraining forces’ in a structured or transparent manner. It is easy to use and adaptable to many situations in business. Especially I would like to highlight, that one has to put himself in the shoes of the other to understand drivers and restrainers for change. This can make a difference in outlining a strategy. (b) Limitations of the framework The Force Field Analysis is – different to e.g. a Risk Management System – by far not so sophistically developed. One generally starts the analysis on a white piece of paper with only very few supporting guidelines. ‘Checklists’ to avoid omissions of major drivers / restrainers are not known to me.

Movie: Film and Book

Nowadays, when many good novels are turned into good films, it can be tricky to decide which to enjoy first, the book or the film based on it. Reading the book is an intimate experience that can challenge your mind and tickle your heart. But watching the film is often more convenient, especially if you don't have much time. Not to mention that you get to see beautiful scenery and often a fine leg and some nudity as well. † During summer vacation, I read the book the hunger games.It was a great book. The details were so well put together. In my opinion the movie was Just plain awful, I didn't think it went well with the book. The book gives you more a visual look at it. The movie Just made it seem more spasmodic then it should have. What I comprehended from the book, Catkins Evergreen, the main character, was strong and fiery. When she went into battle, she knew exactly what she was fighting for. Catkins sometimes was in some muddle situations.The dilemma was, that she had to su rvive the hunger games or die. Catkins survived along with PETA. What I comprehended from the movie, minors dying along with adults or teenagers. It made it seem like an awful environment to live in. It seems that everyone in the society was admonishing each other. Sometimes I like the movie better than the book. In this case, I liked more the book then the movie. But In my opinion, read the book first and then watch the movie.

HW Essay Example | Topics and Well Written Essays - 500 words - 3

HW - Essay Example The body system is mostly affected by the long-term consumption of the alcohol. The system respond negatively to the ingested substances which is abused or largely taken into the system and has these sides effects to the users; fatty liver, gastritis, pancreatitis, ulcer diseases, chronic active hepatitis and alcohol hepatitis. Most of the students find themselves addicted into alcoholism and the other narcotic drugs such as the bhang and cocaine. This narcotic leads to hallucination and poor judgment of the users of the hard drugs (Kane, 2011). It is also seen that addiction is part of the bio psychosocial model in that it has multiple ways or procedure of treating the whole individual not taking part of rehabilitation from the drugs but also the transformation of individual’s behavior. The addiction of each and every person is not determining emotions, social, cultural or physical factors but it is mostly influenced by the biological factors which will determines drinking and the addiction. This includes the genetics as the general exposure to drugs and alcohol (Miller, 2011). The enabler is an individual who catalyze an addict to continue with his self-destructive behavior. He encourages the addict to through criticizing or rescuing him/her. While on the other hand codependency is the relationship in which one of the parties of both allows each other to act in maladaptive ways. The two characteristics gives the relationship that is irrational to the thoughts and the behavior of the individuals thus they can’t judge what is right or wrong. Hence, a person who is in the field of health and wellness has these features as he seeks to have control over the situation. He also influences the people around him by controlling on what to be done (Kane, 2011). The addicts will continue with their behavior in the presence of their sound family or friends because there will be fear of losing them. They tend to protect

Politics Essay Example | Topics and Well Written Essays - 1500 words - 4

Politics - Essay Example Swayed by the European lines of thought, these parties managed to grow in numbers since they appealed mostly to the oppressed people as well as the distressed workers in the country. They successfully managed to field candidates throughout the nation in numerous elected positions for the next several years. However, towards the beginning of the 1920’s, these socialist movements faced severe resistance and condemnation from the government and eventually broke off the movement. The parties ceased to attract numbers to support its cause in the beginning of the early 20th century, though the Socialist Labor Party remained alive until the end of the 20th century. Socialism refers to a system whereby the ownership and control of majority of assets in a given country is granted to the central government. The United States, unlike other countries such as Japan and Germany, has not employed this system of running the economy. Though the system has worked very well in the above mentioned countries, the United States continues to thrive well without its enforcement. Politically, socialist parties in the United States began fairing very poorly in the run up to the general elections. For instance, in the year 2008, socialist candidates and their parties received less than two of the three socialist candidates (Caramani pg. 201). This is way below what other socialist candidates in other nations receive. In Germany for example, socialist parties gathered close to 50% of the total votes cast in each successive election since the 1970’s. There are several theories, however, that explain this phenomena in United States politics or governance. The United States has never had a feudal system. Other nations have had hierarchical systems which was lead from the top by a supreme deity while at the bottom of the system lay the commoner. Such systems were discriminatory in nature since it gave too much power to the person at the top at the expense of the common man at the bottom.

McClelland's Trichotomy of Needs and other Concepts of Motivation Essay

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Information System Risk Management Paper Essay Example | Topics and Well Written Essays - 1500 words

Information System Risk Management Paper - Essay Example Threats to an organization can be both from internal sources and external. While the motives may vary, the system is vulnerable to several risks. This paper will examine the vulnerabilities, the potential threats and the levels of security that could help mitigate the risks and allow uninterrupted workflow. Risk has been defined as the chance of exposure to the adverse consequences of future events (Egbuji, 1999). The likelihood and consequences have to be understood to provide for the right security measures. For a risk to be understandable, according to the Software Engineering Institute (SEI, 2006) of Carnegie Mellon University, it must be expressed clearly. This also implies that possible losses must be identified. Risks have to be assessed continuously and used for decision-making. In the field of computer technology and the information systems, technology enhancement is an ongoing process, which further necessitates continuous risk assessment. Besides, the losses due to lack of security controls could be in the areas of production, revenue, damaged reputation, and financial performance. Benefits of proper security measures could result in enhanced operational efficiency and competitive advantages (Kim, 2006). An organization must invest in IS security and know where to cut corner s. They should be able to spell the difference between security success and disaster (Gupta and Hammond, 2006). According to SEI, seven principles provide the framework to establish effective risk management. These include having a global perspective, the system should be at par with the larger systems, forward-looking view that is identifying and anticipating uncertainties, open communication – information and communication at all levels should be free flowing, integrated – risk management should be a vital and an integrated part of management, continuous – regular upgradation and constant vigil, shared product vision – having common purpose, shared

Dream catchers Essay Example | Topics and Well Written Essays - 1000 words

Dream catchers - Essay Example Dream Catcher, a first nation Canadian-based organization that mainly export to China, identifies, assess, analyzing (developing controls and making various decisions in respect to risks), implementing controls, as well as supervising and evaluating the risk or hazard. These processes are essential in identifying the best way to deal with the problem. Whereas identification of risk within Dream Catcher involves defining the various types of hazards that the company is facing, analysis of risk entails understanding the likelihood of such hazardous aspects occurring within the business. Understanding the likelihood of risk happening within Dream Catcher involves the analysis of risk in terms of probability, frequency, and severity of the risks. In risk identification, Dream Catcher engages in activities that identify various stakeholders that are involved and likely to be affected by the occurrence of the hazard. Once risks and affected stakeholders are identified, there is monitoring and reviewing of the process coupled with communicating and consulting different stakeholders and branches within the Dream Catcher Company. Dream Catcher on the other hand, attempts to define the likely impact on the firm as well as the stakeholders. Such impacts may be economic, political, or social. Identification of economic, social, or political impact, consequence, or cost of risk within Dream Catcher Company is done during the analysis stage. Risk assessment refers to identification and assessment of the hazards an organization is facing individually (Crouhy, Galai & Mark, 2006). In most cases, organizations assess hazards collectively in a bid to reducing costs associated with applications of resources that help in reducing, eliminating, or transferring the risk. Dream Catcher uses the risk assessment matrix in order to estimate the degree of severity as well as the probability of the involved hazards. Risk assessment within Dream