PepsiCo is the respected household brand name, and Pepsi is the famous carbonated drink sold. It is an American multinational company that sells snacks, food, and beverages. This company operates across more than 200 countries and territories. A strong Pepsi competitive advantage is required to withstand the changing market conditions and competition.
Pepsi has various competitive advantages like distribution and pricing strategies, sponsors and partners, number of locations, and marketing. However, the brand must face some related challenges and improve itself.
Competitive Advantages For Pepsi
PepsiCo understands the need for competitive advantages for Pepsi to stand out from the crowd.
The following are the competitive advantages for Pepsi:
- Sponsors And Partners
The brand has sponsorship deals with various national and global sports teams. Pepsi makes the celebrities endorse the brand, and they may be local or international. Strauss Group is a 51% stakeholder of Pepsi, while Sabra Dipping Company is the other partner.
These partnerships help Pepsi get more capital. Similarly, it tries to capture the Indian market by partnering with TATA, the Chinese market through Tingyi, and more.
Pepsi gets adapted according to the location. In the name of marketing, the brand addresses the youth. It shows how affordable it gets. The company has invested a lot in changing the packaging according to the changing time. Similarly, it has changed the logo over the years to represent its uniqueness and the changes in the consumers.
- Pricing Strategy
This brand considers the budget of the customers and market conditions for setting the prices. Pepsi diet coke is more expensive than the regular one because the company knows that diet-conscious customers will pay more for the drink. It offers heavy discounts to the retailers that buy Pepsi in bulk to boost the relations.
- Distribution Strategy
Pepsi gets distributed from the wholesalers to retailers and finally to the consumers. So, we can see the vertical flow of the product. This brand may communicate with the retailers to discuss the distribution. The retailers can be stadiums, malls, vending machines, supermarkets, restaurants, and more.
- Number Of Locations
Pepsi gets sold in the Middle East, Africa, America, Greater China, Asia, and more. Only North Korea and Cuba do not sell it. So, this brand can develop relationships across borders. The global presence helps Pepsi to win the trust of potential customers and have a stable income source. So, having a loyal customer base is one of the strengths that Pepsi has in the world.
Factors Affecting Pepsi’s Competitive Advantages
The following are the factors affecting Pepsi’s Competitive advantages:
Pepsi has tried to prove itself more worthy than its competitors (especially Coca-Cola) but lost sometimes. It must prove how it gets better than others. Similarly, it must get ready to face the reactions from them. Not every Pepsi product could win. Pepsi Blue, Crystal Pepsi, and other such products failed.
- Health Issues
Pepsi contains soda that results in obesity, dehydration, insulin resistance, and more. Doctors do not advise the patients to continue consuming the drink. Environmentalists criticize it. Moreover, people could fulfill only the basic necessities due to the inflation during the pandemic, and Pepsi is not one.
Pepsi has received a lot of criticism due to its advertisements. It had made an advertisement where the drink reduced the tension between the police and the protestors. People mocked Pepsi a lot by calling it racially insensitive. Similarly, it has contributed significantly to the pollution due to plastic. So, even environmentalists may not like the brand.
Areas Of Improvement
PepsiCo understands the importance of e-commerce. So, it has decided to increase its online presence. It is doing and will continue to do so. Accordingly, the revenue of the company increased over three years.
Since Pepsi gets considered unhealthy, the company must make it healthy with lower calories. Accordingly, the brand continues to reduce calories, fat, salt, and sugar from the drink.
It may expand the types of the drink. For example, the brand claims to provide Diet Pepsi for diet-conscious people. It may introduce the drink as per different age groups, flavors, seasons, cultures, and more. This brand has more opportunities in Africa, Asia, and South America.
Pepsi’s competitive advantages address how it performs better than its competitors. Other brands may grow if they understand the trick behind these strategies. Though Pepsi has many competitive advantages, it faces a lot of challenges. Thus, it may focus on the possible areas of improvement. The brand accepts some mistakes and shows how it works on them.
Frequently Asked Questions
- Who Are The Competitors Of Pepsi?
Its biggest competitor is Coca-Cola. The other competitors of Pepsi are Red Bull, Kellogg’s, Monster Beverage Corporation, Nestle, and more.
- Is Pepsi Vegan?
The standard Pepsi is vegan. But, Diet Pepsi might not suit vegans.
- Is Pepsi Good For Children?
No. Drinking Pepsi and other such carbonated drinks cause tooth decay, dehydration (due to caffeine), weight gain, and more.