Case Study Description of Hundred-Year War: Coke vs. Pepsi--1890s-1990s
Through their competitive battle, Coca-Cola and PepsiCo have created a stable and highly profitable duopoly in the U.S. soft drink industry. As the domestic industry matured and the cola wars moved to international markets, Coke and Pepsi tried to redesign their competitive strategies as well as the vertical structure of their corporations. A rewritten version of an earlier case by Michael E. Porter and David B. Yoffie.
Swot Analysis of "Hundred-Year War: Coke vs. Pepsi--1890s-1990s" written by Chiaki Moriguchi, David Lane includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Coke Pepsi facing as an external strategic factors. Some of the topics covered in Hundred-Year War: Coke vs. Pepsi--1890s-1990s case study are - Strategic Management Strategies, International business, Marketing, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Hundred-Year War: Coke vs. Pepsi--1890s-1990s casestudy better are - – geopolitical disruptions, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs,
increasing household debt because of falling income levels, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Hundred-Year War: Coke vs. Pepsi--1890s-1990s
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hundred-Year War: Coke vs. Pepsi--1890s-1990s case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coke Pepsi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coke Pepsi operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hundred-Year War: Coke vs. Pepsi--1890s-1990s can be done for the following purposes –
1. Strategic planning using facts provided in Hundred-Year War: Coke vs. Pepsi--1890s-1990s case study
2. Improving business portfolio management of Coke Pepsi
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Coke Pepsi
Strengths Hundred-Year War: Coke vs. Pepsi--1890s-1990s | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coke Pepsi in Hundred-Year War: Coke vs. Pepsi--1890s-1990s Harvard Business Review case study are -
Analytics focus
– Coke Pepsi is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Chiaki Moriguchi, David Lane can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Coke Pepsi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coke Pepsi has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Coke Pepsi digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Coke Pepsi has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Coke Pepsi is one of the most innovative firm in sector. Manager in Hundred-Year War: Coke vs. Pepsi--1890s-1990s Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Coke Pepsi has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Hundred-Year War: Coke vs. Pepsi--1890s-1990s HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Coke Pepsi in the sector have low bargaining power. Hundred-Year War: Coke vs. Pepsi--1890s-1990s has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Coke Pepsi to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Coke Pepsi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hundred-Year War: Coke vs. Pepsi--1890s-1990s Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Strategy & Execution field
– Coke Pepsi is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Coke Pepsi in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– Hundred-Year War: Coke vs. Pepsi--1890s-1990s firm has clearly differentiated products in the market place. This has enabled Coke Pepsi to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Coke Pepsi to invest into research and development (R&D) and innovation.
Learning organization
- Coke Pepsi is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Coke Pepsi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hundred-Year War: Coke vs. Pepsi--1890s-1990s Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Coke Pepsi has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Coke Pepsi is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Hundred-Year War: Coke vs. Pepsi--1890s-1990s | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hundred-Year War: Coke vs. Pepsi--1890s-1990s are -
Lack of clear differentiation of Coke Pepsi products
– To increase the profitability and margins on the products, Coke Pepsi needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Hundred-Year War: Coke vs. Pepsi--1890s-1990s can leverage the sales team experience to cultivate customer relationships as Coke Pepsi is planning to shift buying processes online.
High cash cycle compare to competitors
Coke Pepsi has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s, is just above the industry average. Coke Pepsi needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Coke Pepsi supply chain. Even after few cautionary changes mentioned in the HBR case study - Hundred-Year War: Coke vs. Pepsi--1890s-1990s, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Coke Pepsi vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Coke Pepsi has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Coke Pepsi even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, firm in the HBR case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Coke Pepsi 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hundred-Year War: Coke vs. Pepsi--1890s-1990s HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Coke Pepsi has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Coke Pepsi is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s, it seems that the employees of Coke Pepsi don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Hundred-Year War: Coke vs. Pepsi--1890s-1990s | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s are -
Manufacturing automation
– Coke Pepsi can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Coke Pepsi in the consumer business. Now Coke Pepsi can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Coke Pepsi can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Coke Pepsi has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Coke Pepsi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Coke Pepsi can use these opportunities to build new business models that can help the communities that Coke Pepsi operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Coke Pepsi is facing challenges because of the dominance of functional experts in the organization. Hundred-Year War: Coke vs. Pepsi--1890s-1990s case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Coke Pepsi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Coke Pepsi to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Coke Pepsi to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Coke Pepsi in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Coke Pepsi can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Coke Pepsi can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Coke Pepsi to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Coke Pepsi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Coke Pepsi has opened avenues for new revenue streams for the organization in the industry. This can help Coke Pepsi to build a more holistic ecosystem as suggested in the Hundred-Year War: Coke vs. Pepsi--1890s-1990s case study. Coke Pepsi can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Hundred-Year War: Coke vs. Pepsi--1890s-1990s External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s, Coke Pepsi may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Coke Pepsi.
Regulatory challenges
– Coke Pepsi needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Shortening product life cycle
– it is one of the major threat that Coke Pepsi is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Coke Pepsi high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Coke Pepsi can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Coke Pepsi in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Coke Pepsi with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Coke Pepsi demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– Coke Pepsi has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Coke Pepsi needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Coke Pepsi needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Coke Pepsi can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Coke Pepsi needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Hundred-Year War: Coke vs. Pepsi--1890s-1990s Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hundred-Year War: Coke vs. Pepsi--1890s-1990s is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Coke Pepsi needs to make to build a sustainable competitive advantage.
