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 - – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing commodity prices, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, 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 -
Operational resilience
– The operational resilience strategy in the Hundred-Year War: Coke vs. Pepsi--1890s-1990s Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
High brand equity
– Coke Pepsi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Coke Pepsi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Coke Pepsi has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Coke Pepsi are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Coke Pepsi is present in almost all the verticals within the industry. This has provided firm in Hundred-Year War: Coke vs. Pepsi--1890s-1990s case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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.
Ability to recruit top talent
– Coke Pepsi is one of the leading recruiters in the industry. Managers in the Hundred-Year War: Coke vs. Pepsi--1890s-1990s are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Organizational Resilience of Coke Pepsi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Coke Pepsi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 -
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 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.
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.
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.
Interest costs
– Compare to the competition, Coke Pepsi has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hundred-Year War: Coke vs. Pepsi--1890s-1990s, in the dynamic environment Coke Pepsi has struggled to respond to the nimble upstart competition. Coke Pepsi has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 to strategic competitive environment developments
– As Hundred-Year War: Coke vs. Pepsi--1890s-1990s HBR case study mentions - Coke Pepsi takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Coke Pepsi has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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 -
Learning at scale
– Online learning technologies has now opened space for Coke Pepsi to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Coke Pepsi can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Hundred-Year War: Coke vs. Pepsi--1890s-1990s, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Coke Pepsi to increase its market reach. Coke Pepsi will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
Developing new processes and practices
– Coke Pepsi can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Coke Pepsi can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
Buying journey improvements
– Coke Pepsi can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hundred-Year War: Coke vs. Pepsi--1890s-1990s suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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 .
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.
Stagnating economy with rate increase
– Coke Pepsi can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Coke Pepsi will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Coke Pepsi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Coke Pepsi in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Coke Pepsi
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Coke Pepsi.
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.