Business Level Strategy

Pepsi logo

Pepsi seems to be in a growth stage in the industry life cycle . The reason I believe they are in a growth stage is because they are doing many things to differentiate themselves from other companies such as Coke. In the differentiation process I think it is important to talk about their relationships with stores and different companies, so in other words there network is very strong. They are well known for their brand or image. They have many commercials that have famous actors or people drinking Pepsi products in them and that is what gives them their image. They also have good customer service. This is actually personally known by me because I had to call and deal with them because I bought a defective twelve pack of Pepsi and it was bad so they sent me coupons for a couple free twelve packs to make it up to me. It was exceptional service. I would say they are not doing much as far as trying to be a cost leader because all pop prices are the same the majority of the time so they don’t have lower prices.

Pepsi has its logo that keeps changing and that has a copyright along with they probably have patents on their different products. There are many substitutes for Pepsi but they are very successful and they try to stay on top. This is referring to Porter’s five forces model.  They also have bargaining power over their suppliers because they produce such large amounts of their product that they have to have a good relationship with their suppliers in order to keep up such a good product. I wouldn't say that Pepsi has control over the buyers just because they have other options if they don't want to buy Pepsi.

 

 

The Pepsi logo came from http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=8h1hjJRpz0PJuM&tbnid=hnv3uzuDZYUuxM:&ved=0CAQQjB0&url=http%3A%2F%2Fhtmlgiant.com%2Frandom%2Fwell-be-back-soon-drink-pepsi-products%2F&ei=QbBMUbimJcPc2gWu4IDYBg&bvm=bv.44158598,d.aWc&psig=AFQjCNE8VXQ4aF2hYz4_-_VXOpEMenHSaw&ust=1364066719267442

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Intellectual Capital

Pepsi is a very large company. They are in the business of many different products. Pepsi has a large base for intellectual capital. From human capital such as employees and the knowledge they have of their jobs and just how to best do their job. They want to retain employees so they have everything from insurance to retirement plans and have a competitive workforce. They want the people they have working for them so they have the benefits to help entice them to stay. They have to have a good line of communication between their human resources communication and their employees. In order to keep themselves current with what their employees want they have to be evolving along with the generations to be as large and successful as they have been. With evolving times it is important to know what the employees value and what will keep them doing good work and keep them at Pepsi. Other than human capital they also have patents and copyrights that they have in order to keep their brand and image in good shape. They don't want just anyone to be able to make Pepsi on their own because then it would take away from their business. Pepsi overall has a lot of intellectual capital.

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Internal enviroment

I want to talk about the value chain within Pepsi. Pepsi is such a large company I think that they don’t outsource many aspects of the value chain. I think they might outsource marketing just because they are all over the place. They also dont have a service. They distribute the product and then they are done with it. Pepsi has a general administration, but on that note I do not believe they have a service section. They have a pretty good outbound logistics because they are good at the distribution. they also must have a good Procurement to because they are such a large company that they make a mass amount of products so they have a buyer power. The also probably have a very productive inbound logistics because they have such a big operation so they need to be organized. I believe that Pepsi’s core competency is quality and price.

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General Enviroment, Enviormental Scanning and Porter's Five Forces of iIdustry Competition

For Pepsi Company there are several things to think about in the general environment of the business. For instance, with the nation and the world being so focused on the health of the population there might be less people buying Pepsi soda when you think of the demographic group of 16-30. Then on the other side with people older than the 30 who grew up drinking soda they might be less prone to trade out a healthier option for the soda. There are also a couple other things to take into consideration. When it comes to the sociocultural part of the general environment there will be some problems with the people focusing on the health aspect of the products that Pepsi offers. They might be less prone to buy pop and maybe more prone to buying a water or juice in which Pepsi also has products in. I believe they have to focus on pointing out that pop maybe isn’t as unhealthy as everyone makes it out to be. I couldn’t find anything that went with the legal or political side of the spectrum. Technology could be improved to have a better turn out on any of the parts of bottling or production of the many products that Pepsi sells. Thinking about the economical setting of the general environment the rise in minimum wage will have an impact on Pepsi because that will drive cost of making and distributing the products to go up which will in turn raise prices which will maybe put more people on the fence about buying the products all together.

Then there is external scanning which could be the watching of other pop and juice products producers and trying to determine the changes before they happen. This would be like watching Coke products and tracking the trends as they occur. This can help keep the firm with a competitive advantage. Last but not least let’s talk about porter’s five forces model. With much consideration and review it does not seem like there is a potential for new entrants just because Pepsi is a huge company and trying to compete with Pepsi and Coke products may be difficult with both their vast amount of products.  With looking at all the information don’t think they have bargaining power of buyers either.  But people could definitely have substitutes for Pepsi such as coke or other products in the market.

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Video war

Thank you very much for your attention and for following us during these last months. It is the last post of our blog. We hope you enjoyed our work on these two historical brand.
A good illustration of the war is available on youtube videos:

And for a funny end, here are our favorite commercials about COKE VS PEPSI:

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Brand Mantras

Pepsi Brand mantra	Excitement,music,fun,adventure
Coca Cola brand mantra	Hapiness,Joy,Family,magic

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