The beverage industry has achieved massive growth over the past several decades. The Coca-Cola Company has emerged as one of the strongest brands and players in this industry not only in the United States but also in other parts of the world (Kotler et al., 2020). The firm has diversified its product portfolio in the beverage industry as a way of increasing its revenues. One of the formidable challenges that the company currently faces in the market is competition. Numerous firms have emerged, both in the home and foreign markets, offering similar or closely related products. The success of this firm currently depends on its ability to manage competition in the market. It has to ensure that it attracts and retains customers by offering quality products and ensuring that the pricing reflects what the rivals charge. In this paper, the researcher analyzes strategies used by the Coca-Cola Company’s direct and indirect competitors.
Direct Competition and the Competing Strategies
The number of players in the beverage industry has been increasing rapidly over the past years as it continues to grow. Ciafone (2019) argues that there are numerous small and mid-sized companies that have focused on sub-sets of the industry, such as soft drinks, bottled water, energy drinks, nutritional drinks, milk products, and tea or coffee-based products. Other dominant players operate in different subsets of the industry, just like the Coca-Cola Company. Some of the dominant players in the industry include PepsiCo, Red Bull, Monster Beverage, Fever-Tree, and Britvic (Kotler et al., 2020). Products from these companies can perfectly replace products of the Coca-Cola Company, which means that they are direct competitors.
PepsiCo has been the archrival of the Coca-Cola Company for decades, both in the United States and in the foreign markets. Ciafone (2019) explains that these firms have used different strategies to outmaneuver. Founded in 1965, PepsiCo has experienced massive growth over the years. It is currently one of the largest employers in the United States and offers a variety of products. Ciafone (2019) observes that this firm has 23 sub-brands and with sales valued at over 100 billion dollars. These two rivals are both American companies with global presence. They offer cola products and other related drinks in these markets.
When facing stiff competition in the industry, one of the competing strategies that companies often use is differentiation. PepsiCo has used the same strategy to distinguish its products from that of its rivals. One of the ways of differentiating its products is through branding. In the United States, PepsiCo is one of the strongest brands. The firm uses its brand name to ensure its customers can easily identify its products. Each of the sub-brands also has unique names for easy identification, such as Mountain Dew, Diet Pepsi, 7Up, and Mirinda.
The company is also using diversification as a competing strategy in the local and global markets. Instead of focusing on just one product, the firm has introduced a wide range of drinks to meet diversified needs. The company understands that different people have different tastes. To capture a wide market segment, the company has been keen on ensuring that it offers diversified products. The firm has also invested in promotional campaigns to strengthen its brand. It uses both traditional media and social media platforms to reach out to customers.
Indirect Competition and the Competing Strategies
The Coca-Cola Company is also facing stiff competition from firms that offer alternative products. These indirect competitors do not offer cola products, but the beverages they sell are sometimes consumed instead of the cola products. As health concerns relating to cola products continue to emerge, a section of customers is now moving to alternative products considered healthy. Such a move may have a major impact on the firm’s ability to achieve success. Some of the dominant indirect competitors of this company include Nescafe, Tassimo, Jacobs, and Starbucks.
Nescafe is a Swiss coffee company that currently operates in the global market. Founded in 1938, the company has grown rapidly to become one of the dominant players in this sector (Kotler et al., 2020). It offers its coffee products in different forms and flavors to reflect the expectations of its diversified customers. When one uses any of these products, it becomes unnecessary to use cola products, making it an indirect competitor to the Coca-Cola Company. Its primary competing strategy is that its products are healthy stimulants. As customers increasingly become concerned about cola products, Nescafe has been promoting its products as healthy alternatives.
The Coca-Cola Company is one of the most successful and dominant beverage firms in the world. One of the primary challenges that it faces both in the United States and the global markets is stiff competition. Several firms have emerged offering similar products as this firm. These direct competitors are using different strategies to attract customers. The Coca-Cola Company also has to deal with the threat of indirect competitors offering substitute products. It is critical for the management of this company to determine how to manage the stiff rivalry in the market.
Ciafone, A. (2019). Counter-Cola: A multinational history of the global corporation. California University of California Press.
Kotler, P., Armstrong, G., Harris, L. C., & He, H. (2020). Principles of marketing. Pearson.