Question

1. Identify any strategic groups that might exist in the industry. How does the intensity of competi- tion differ across the strategic groups you have identified? My company is Pepsi Co

2.How dynamic is the industry in which your com- pany is based? Is there evidence that industry structure is reshaping competition, or has done so in the recent past? My COMPANY IS PEPSI CO.

Answer 1

1. Strategic Group Analysis aims to identify organizations with similar strategic characteristics, following similar strategies or competing on similar bases.

Student has chosen Pepsico. Its main competitor worldwide is Coca-Cola Co. Both these companies are in the business of non alcoholic sugary drinks.

In economic terms there is clear duopoly in the world as market share of Pepsi and Coca-Cola combined is 60%. Out of which Pepsi has 20 % and Coca-Cola is 40%.

Both these companies are facing competition from growing market of healthier alternatives to sugary soda drinks, such as energy and nutritional drinks. Eg. Big Cola in India.

2. It is clear that both these companies have huge rivalry between them. They also have emerging competition. New product launches, advertising, sponsorships is the main area in which they are focusing to increase market share. Industry structure has not changed much but the market share of both these companies is slowly going down as consumer taste to healthier drinks is increasing. These companies have also entered in this business of healthier drinks and launched products in this field. They are likely to continue dominate for a few years at least.