Competitive
Analysis
In
this
section
of
the
report
we
will
examine
the
Coca‐Cola
Company’s
(Coke)
two
main
competitors
and
determine
what
threats
they
pose
to
Coke’s
position.
Despite
PepsiCo
and
the
Dr
Pepper
Company
each
having
their
own
unique
competitive
edge
the
Coca‐Cola
Company
still
maintains
a
firm
hold
on
the
top
spot
of
the
carbonated
soft
drink
industry.
The
Coca‐Cola
Company
is
the
benchmark
in
the
industry
and
the
actions
of
PepsiCo
and
the
Dr
Pepper
Company
prove
that
to
be
true.
While
Pepsi
stands
as
Coke’s
top
competitor
matching
them
just
about
blow
for
blow,
Dr
Pepper
is
the
more
unique
of
the
two.
Both
competitors,
within
the
last
year,
have
implemented
strategies
aimed
at
keeping
up
with
and
even
involving
the
Coca‐Cola
Company.
PepsiCo
is
using
acquisitions
to
improve
its
competitiveness
and
keep
up
with
Coke,
while
on
the
other
hand
Dr
Pepper
is
using
the
Coca‐Cola
Company
as
a
channel
to
improve
their
reach
of
distribution.
Despite
this
both
companies
are
still
falling
short
of
Coke.
PepsiCo
Is
Coke’s
Strongest
Competitor
PepsiCo
is
Coke’s
strongest
competitor
and
for
every
soft
drink
one
firm
has
you
can
be
assured
the
other
has
one
to
match
it.
As
it
stands
right
now
PepsiCo
is
ranked
second
in
the
carbonated
soft
drink
industry
according
to
(Hoover’s
Inc.
2011,
para.
1).
They
currently
hold
a
29.3%
share
of
the
CSD
market
but
that
is
down
.9%
from
2009.(Sicher,
Beverage‐Digest,
2011).
Their
North
American
drink
sales
in
2010
were
$20.4
billion,
which
made
up
35%
of
their
total
sales
(Hoover’s
Inc.
2011).
Hoover’s
Inc.
(2011)
also
reported
that
last
year,
in
a
move
to
try
and
gain
ground
on
the
Coca‐Cola
Company,
PepsiCo
bought
their
two
largest
North
American
bottling
companies.
This
acquisition
allows
them
to
“cut
significant
costs
and
rapidly
respond
to
changes
in
the
supply
chain”
(Hoover’s
Inc.
2011,
para.
2).
According
to
Beverage‐Digest
(2011)
PepsiCo
along
with
the
U.S.
soda
market
has
been
declining
in
the
last
couple
of
years
while
the
Coca‐Cola
Company
has
been
gaining.
The
Beverage‐Digest
article
also
shows
that
Pepsi‐cola,
last
year,
dropped
down
to
third
on
the
top
ten
soda
chart
bellow
non
other
than
Coke
and
Diet
Coke.
Declining
U.S.
Soda
Market
is
Bringing
Pepsi
Down
With
It
In
a
SWOT
analysis
in
2010,
one
of
PepsiCo’s
weaknesses
was
its
“over
dependence
on
the
U.S.
market”
(Datamonitor
SWOT,
2010).
This
being
said,
it
should
come
as
no
surprise
that
when
the
U.S.
soda
market
starts
to
decline
PepsiCo
will
as
well.
As
it
stands
now
according
to
Hoover’s
Inc.
(2011),
reports
that
Pepsi,
in
2010,
generated
35%
of
its
total
revenue
in
the
U.S.,
which
is
compared
to
the
30%
of
Coke.
According
to
the
Datamonitor
SWOT
(2010)
one
of
the
reasons
for
the
decline
could
have
something
to
do
with
a
population
that
is
becoming
more
health
conscious.
According
to
Beverage‐Digest
PepsiCo
does
not
pose
a
strong
threat
to
Coke’s
position
at
this
moment
and
as
the
article
has
also
shown,
people
in
the
U.S.
prefer
not
only
Coca‐Cola
to
regular
Pepsi
but
they
also
prefer
Diet
Coke
to
regular
Pepsi.
Dr
Pepper
Presents
A
Unique
Threat
to
Coke
In
The
U.S.
The
Dr
Pepper
Company
or
Dr
Pepper
Snapple
Group
(Dr
Pepper)
does
not
pose
any
real
threat
to
Cokes
current
position
as
the
leading
soft
drink
maker
in
the
world
but
they
do
present
a
unique
threat
in
the
U.S.
Dr
Pepper
is
currently
ranked
third
in
the
North
American
carbonated
soft
drink
industry
(Hoover’s
Inc.
para.1).
They,
as
of
2010,
hold
a
16.7%
share
of
the
CSD
market,
which
is
up
.3%
from
2009
(Sicher,
Beverage‐Digest,
2011).
Their
revenue
is
not
nearly
to
the
point
of
Coke
or
Pepsi
but
they
do
hold
their
own,
in
the
last
three
years
they
have
brought
in
$16.8
billion,
which
averages
out
to
be
a
hair
over
$5.6
billion
a
year
in
total
revenue
(Hoover’s
Inc.,
2011).
Dr
Pepper
is
also
not
the
worldwide
brand
that
coke
and
Pepsi
are,
in
2009
their
revenue
from
outside
United
States
was
only
$563
million,
which
amounted
to
only
15%
of
their
total
revenue
for
that
year
(Hoover’s
Inc.,
2011).
Despite
these
comparatively
low
revenue
numbers
the
Dr
Pepper
Snapple
Group
is
one
of
Coke’s
top
competitors
because
of
its
number
one
non‐cola
flavored
soda
ranking.
According
to
Hoover’s
(2011)
Dr
Pepper
is
the
number
one
ranked
non‐cola
flavored
CSD
(soda)
maker
in
North
America.
According
to
the
company’s
annual
report
(2010)
“Approximately
77%”
of
Dr
Peppers’
“volume
is
from
brands
that
are
either
number
one
or
number
two
in
their
category”(p.1).
The
Dr
Pepper
Snapple
Group
has
a
strong
repertoire
of
brands
starting
with
their
namesake
soda
Dr
Pepper,
which
accounts
for
39%
of
the
company’s
annual
sales
according
to
(Dr
Pepper
Snapple:
A
Growth,
Margin
and
Free
Cash
Flow
Story,
2011).
Among
many
other
brands
Dr
Pepper
Snapple
Group
has
what
they
consider
their
“Core
4
Brands”
which
include
Sunkist
orange
soda,
7up,
A&W
Root
Beer,
and
Canada
Dry
ginger
ale.
The
only
one
of
these
core
brands
that
is
not
number
one
in
its
category
is
7up,
which
currently
sits
in
the
second
spot
of
the
lemon/lime
category
behind
Coke’s
Sprite
(DPS
Annual
Report,
2011).
With
all
of
these
leading
brand
names
Dr
Pepper
has
a
unique
ad
vantage
over
Coke.
Dr
Pepper’s
Advantage
Over
Coke
Dr
Pepper
is
sitting
pretty
with
regards
to
the
U.S.
soda
market.
According
to
Dr
Pepper’s
annual
report
flavored
CSDs
are
projected
to
“out
perform
colas”
in
2011.
(DPS
Annual
Report,
2011,
p.
3).
If
the
projection
is
correct
than
Coke
could
be
in
trouble.
With
their
many
leading
non‐cola
CSDs
this
projected
trend
in
the
market
will
benefit
Dr
Pepper,
“our
brands
will
help
us
capitalize
on
this
trend”
(DPS
Annual
Report,
2011,
p.
3).
This
is
a
threat
to
Coke
because
they
trail
behind
Dr
Pepper
in
three
of
the
four
flavor
categories
that
make
up
the
Dr
Pepper’s
core
four
brands.
Coke
will
have
to
do
something
to
keep
up
with
Dr
Pepper’s
non‐cola
flavored
CSDs.
Coke
Is
The
World
Leader
As
it
stands
right
now
the
Coca‐Cola
Company
is
the
industry
leader
with
a
strong
balance
of
U.S.
and
global
generated
revenue.
As
the
Beverage‐Digest
(2011),
brand
leader
chart
shows
Coke
holds
the
top
two
sodas
and
four
of
the
top
ten
sodas
in
the
U.S.
market.
Though
U.S.
market
is
projected
to
change
Coke
still
has
their
global
sales
to
fall
back
on.
After
all
they
are
a
staple
of
the
worldwide
culture.
The
next
piece
of
this
report
will
highlight
more
strengths
and
the
rest
of
the
SWOT
analysis
for
the
Coca‐Cola
Company.
STATEMENT
OF
PROBLEMS
AND
OPPERTUNITIES
With
every
challenge
come
opportunity
and
Coke
is
no
exception
to
that.
Coke
has
an
opportunity
to
combat
the
issue
that
will
arise
if
the
projections
for
flavored
CSDs
stated
in
Dr
Pepper’s
annual
report
are
correct.
If
the
flavored
CSDs
do
out
perform
colas
it
will
give
Dr
Pepper
a
huge
advantage
over
the
market,
and
Coke
will
have
to
fight
to
come
back.
Coke
can
however
try
to
revamp
their
flavored
CSDs
to
compete
with
Dr
Pepper’s
“Core
4”.
Not
only
could
this
product
improvement
help
compete
with
Dr
Pepper
but
it
could
also
help
coke
distance
itself
from
PepsiCo.
Coke,
Dr
Pepper
Sign
Distribution
Deal.
(2010).
Beverage
World,
129(7),
8.
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Business
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