Question

Consider you are a regional soft drink company competing in the US soft drink market. Dr. Pepper was such a player, operating mostly in and around Texas. How could you compete successfully in this industry that is dominated by two large companies? Use appropriate frameworks to support your answer.

Answer 1

Solution:

The two major soft drink companies in the US are Pepsico and Coca-Cola. Hence, these two companies are so huge that they are operational worldwide across hundreds of countries. The size of the business of Dr. Pepper is extremely small in comparison to these giants in the soft drink market. Hence, it may be difficult to visualize this small player can do the business when these two huge players already dominating the market.

In such cases, the small player has to offer something which is not offered by these two huge players. Since the size of the company is small they should operate in a niche and produce products only in that niche. This will help the small player build a reputation in the market as a niche player who is expert in a particular type of soft drinks. Hence, coming up with a product that has the demand and is not provided by the giant competitors is one strategy that can help the company make significant business.

In such a situation the mindset should not be to compete directly with the giant players because that will only exhaust the company and ultimately put an end to the business. Hence, the small players should focus on their own products and their target audience and ensure they are providing their consumers with a product which no other player is offering. Hence, if you are actually offering good value to the consumers there will always be people willing to buy your product. Hence, for small businesses the focus should not be on competitng directly with majorindustry players rather focus on serving their customers better.

Hence, this is how the small player should compete in the US soft drinks market.