SWOT Analysis of Coca Cola and Pepsi Term Paper

SWOT Analysis of Coca Cola and Pepsi - Term Paper Example This paper seeks to compare and contrast the elements of business adapted by the two soft drinks giants, including PEST and SWOT analyses (Elsbach, 2006). Additionally, the paper analyzes the business culture, performance, and other organizational elements of the two giant organizations. Coca Cola and Pepsi share a similar history: an insignificant business from a simple idea that grows to a multi-billion dollar company after a century. Currently, Coca Cola sales in more than 160 countries to over 6 billion people speaking more than eighty different languages. Similarly, Pepsi is a recognized brand in the whole world, operating in numerous countries and actively competing with Coca Cola for market share. Both organization use mass-marketing strategies, focusing on the entire market rather than particular segments. Moreover, both companies offer similar product line to the same industry, thus propagating stiff competition. Both companies are very innovative as far as product packaging is concerned. Coca Cola introduced the airtight bottle concept, a major revolution of in the packaging and bottling industry. Similarly, Pepsi followed suit and introduced different sizes of returnable bottles (Fernando, 2006). The concept of non-returnable bottles, frosted bottles, and cans is attributable to both the giants. SWOT Analysis of Coca Cola and Pepsi Strengths Both Pepsi and Coke have long history of the world culture for quite some time. The products from the two companies represent over-romanticism and fun, an image that majority of people take deeply at heart. In addition, the brands are well recognized throughout the world, a major strong point. This enables them to operate on the global market while maintaining a local approach. Independent business people with authority to sell and distribute Coke and Pepsi products operate and own majority of the local bottling companies. Indeed, Pepsi and Coke have among the largest distribution networks in the world, which is among the strengths of the two companies (Fernando, 2006). Weaknesses Similar to any other businesses, Coke and Pepsi have their own weaknesses. For instance, the cola drinks from the two companies have experienced a significant saturation and subsequent decline in the past few years. This is attributable to the increasing awareness on the contents of the drinks. Nowadays, consumers are more attracted to healthy drinks than carbonated soft drinks, as addiction to cola drinks has an adverse effect on the human body (Czinkota, Ronkainen, and Moffett, 2009). Opportunities One of the factors affecting the competitive positions of Pepsi and Coke is brand recognition. About 94% of the world populations are aware of the two brands. Despite the saturation in North America, the two brands have enormous potential to expand and operate in non-North American market. For instance, per head consumption of Coke in India is only six bottles per head compared to 700 bottles in the United States. The refore, the two companies have potential for expansion (Oppong, 2011). Threats Being the industry leaders, the two companies face significant threats from emerging companies in the industry. Moreover, the companies are facing serious threats of substitute. Consumers are more attracted to healthier drinks, including coffee, tea, milk, hot chocolate, and milk. Nonetheless, the two giants control over 40% of the