The external and internal environment plays a significant role in the operations of organizations. The external environment includes social, economic and legal forces. The Coca-Cola is the world's largest beverage company. Both Pepsi and Coca-cola companies operate on the same legal and economic environments. The legal climate includes government agencies, laws, and other groups of people affecting the operations of the company. Besides enjoying a high profile global presence, Coca-Cola prides in having a wide-based bottling strategy. Amongst five leading brands, Coca-Cola has got four of them. Additionally, Coca-Cola has 47% of the world volume in the sales of carbonates.
Even so, Coca-Cola brand has specific weaknesses affecting the brand. For example, there is a significant decline in the sales of carbonates globally. Secondly, Coca-Cola does not relate well to other bottlers in America and other countries. The distribution system for noncarbonated drinks is currently not efficient. Pepsi, on the other hand, prides in being the second best-selling brand in the world. It has maintained constant innovation of the product. Also, it enjoys celebrity endorsement as a marketing strategy as well as having a high profile global presence. The weakness of Pepsi includes the decline in the markets for carbonate products and the fact that it only targets the young.
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Coca-cola creates a market for its brand. The company makes strategies on how to increase the regional operations while centralizing the production facility which reduces the costs of manufacturing. The company does this to ensure that production, marketing, and distribution channels are most reliable in operation and efficient in utilization of resources to optimize long-term sales, shareholders equity and cash flow. Pepsi Company, on the other hand, is successful in the constant innovation of its brands. Introduction of products meeting the needs of customers has put Pepsi as a significant threat to the Coca-Cola Company.
Going forward, I commend that Coca-Cola continues to innovate and expand their product line. The company should focus on how to develop the international market and grow what they offer. The company should also strive to increase the brand loyalty that they have enjoyed over the years. This will enable the company to sustain their profits as well as maintain the market shares. The company should also find ways of reducing their debts. Similarly, for Pepsi, I recommend that Pepsi should find ways of developing their international markets in different countries across the globe. They should also find ways of penetrating into new markets through continuous advertisement and campaign of the brand name and quality. Also, it should revise its pricing strategy since many competitors are now focusing on the pricing.
