Strategic Management PEPSI, McDonald's

Introduction

According to Narayan, (2000); strategic management model depends on some basic organized steps the organization depends on in order to improve its current strategic position in the market and reach higher competitiveness that can raise the company's profitability. The video related to cola wars explains how Cocacola and Pepsi companies competed together in order to reach market rivalry since they began as according to Mishra and Lomash, (2003) each company depended on a different strategic model such as using advertising campaigns, making good deals with restaurants as KFC and Burger King and making blind tasters tests which helped the two companies boost all other companies in the market and according to Karami and Analoui, (2003) the strategy of franchising the two companies helped making them global businesses. The current portfolio aims at discussing strategic management issues such as models of strategic management based on a video for Cocacola and Pepsi and using case study of CEMEX that shows how the company faced challenges by its strategic management plans.

Analysis

According to Shahri, (2011) corporate branding strategy is very important as Cocacola company began in the American market with a unique branding strategy as the product was delivered in high quality and unique skirt shaped and then the main competitor appeared as Pepsi with a bigger sized bottle as Pepsi focused on providing a product with a digestive quality so as to attract customers to try a healthier product that helps in the digestion process. Pepsi depended on culturally relevant marketing and providing a reasonable in price product which was a remarkable strategic decision for Pepsi. Sustainability was focused on by the two companies as this was seen through the companies' advertising strategies. (Yoffie, 2009) The two companied depended on making relationships with the bottlers to make them strategic partners as Cocacola depended on fountain sales and Pepsi focused on retailers. Cocacola made good deals with restaurants as McDonald's and Burger King while Pepsi tried to follow inimitability strategy and made a deal with KFC and Pizza Hut. (McKelvey, 2006)The two companies were faced by social claims of the products causing diabetes and obesity so Cocacola presented Coke diet that was welcomed by many people and this helped in raising profits as the product was seen as regarding corporate social responsibilities. Pepsi used public figures such as Michale Jackson in its advertisements and sustainability can be seen by adapting with time and using a figure as Brittney Spears which left great impressions on people. Refranchising and operations were focused on by Cocacola as main strategies to beat the market other brands as Shweppes.(Whitaker, 2016)

Grundy, (2006) discussed how Porter's five forces model can be applied to different strategies and this can be applied on Coal industry as follows:

Barriers to entry

The two companies have international franchises where the bottling network controls bottlers from producing any new brand. The two companies are following special advertising strategies that depends on targeting different cultures as according to Hill and Jones, (2012); this technique is effective in finishing the cultural problems with the products. 

Suppliers

While Cocacola depends on fountain, Pepsi focused on retailers in their distribution strategy. According to Harrison and John, (2013); suppliers are very important to the business as applied by the stakeholders' theory. Cocacola and Pepsi applies the theory by choosing the most important suppliers and focusing on them such as food stores, retailers and fountains.

Rivalry

The two companies rivalry depends on sharing the market with the biggest share for each of them beating other competitors.

Customers

The two companies follow pricing strategies and advertising campaigns that attract customers.

Substitutes

The two companies depend on providing substitutes as mineral water, chips and other products for filling the market with them.

Recommendations

The two companies are recommended to make a new strategy to follow such as for example, making a mixing strategy that depends on providing new mixed products that customers can purchase based on the reputation of the two companies. They are also recommended to make a joint venture to boost the market.

Conclusion

In conclusion, strategies followed by business companies should be based upon models such as Cocacola and Pepsi's strategies that are shown in the video as the two companies witnessed strong beginnings when each tried to compete the other and get more competitive advantages over the other. The two companies followed steps in their strategies and they focused on sustainability and inimitability in the ways they followed to boost the market. The two companies were faced by claims of being harmful to customers' health which made Cocacola present its Coke Diet that was welcomed by large scales of customers worldwide. Depending on Porter's five forces' model, it can be understood how each company addressed the market and followed many strategies to invade the international market by making different franchises all over the world with high control in addition to producing other different products such as mineral water and others.