Increase sales and market share by developing or acquiring new products to better serve the current product. Create new flavors of Coca-Cola. Appeal to customers’ desire for full taste, but less calories. 2. Market through horizontal diversification growth strategy.
To be sure, there was tough competition between Coke and Pepsi for market share, and this occasionally hampered profitability. For example, price wars resulted in weak brand loyalty and eroded margins for both companies in the 1980s. 2Compare the economics of the concentrate business to the bottling business: Why is the profitability so different? Concentrate business is highly profitable compared to the
Does he want to spend more to have the opportunity to make more or does he just want to cut costs to have the opportunity to put more money in his pocket? These are definitely questions that Nemarq probably asked before accepting the position of managing director. Nemarq’s Strategy Between 2002 and 2007 One of Nemarq’s strategy was to modernize the product and also target a larger clientele who were less financially endowed. This is a good strategy because if normal working women can afford the jewelry for pleasure the company will see an increase in volume sold. In sales, higher volume at lower price can lead to more profits compared to
In short run profit maximization will increase however in long run it is harder to increase companies profit because they will need perfect information in order to prevent the risk of the market. According to reality in most of times big companies work for society, to get a brand image and name lowering prices, use child labor and pesticides in order to create lower cost and therefore increase their profit. Sometimes companies make polices in order to get subsides as low carbon emission. As a result more consumers are demanding these products. In the short run firms may not increase their profits because the cuts in prices but if they achieve this in long run they may experience maxim profits.
Through R&D, production costs can be significantly reduced to offer competitive pricing and/or increase profitability. By providing newer, better and unique products, companies are able to differentiate and stay ahead of the competition. Companies that invest heavily in R&D are able to release commercial products more quickly and anticipate changing consumer demands more rapidly. They can better assess how long a product
Coke Zero’s communication strategy was taste-led in a category which was already suffering from the stigma of perceived bad taste. Pepsi Max was successfully battling this stigma, surpassing Coke Zero in penetration among young adults. Furthermore, the diet cola category was in -2.3% decline, and 60% of young adults polled had never tried a Coke Zero. With category volume and penetration both in decline, it was obvious that something about Coke Zero needed to change. Brand positioning was seen as its best leverage as Coke Zero competes in a category where factors such as price, costs, competition and distribution are relatively unchanging.
Innovation impacts the cost of production as well. Even the innovation helps in lowering the cost of production and making economies more efficient – producing more outputs with the same number of inputs. Technology affects market structure. In today’s market world, technology advances more rapidly because individuals gain incentives, in the form of profits, to discover new and cheaper ways of doing things. Even the dynamic efficiency refers to a market’s ability to promote cost-reducing or product-enhancing technological change.
This means that Tesco will be more profitable as customers have more money to spend, they will need to employ for staff and it is better for the economy as Tesco can exports mass amount of home grown products cheaply. Cost of Borrowing Money – When the economy is stable Tesco will be able to borrow more finance if they wish to expand or move into a new country. This also would increase the potential for employment in Tesco and so will have a positive effect on the state of the economy. Tesco tend to borrow finance when the banks interest rate is lower. In recent years, the interest rate has been at an all time low.
Development and Analysis of Two Mini Case Studies The SWOT analysis I am writing about is Coca-Cola and its competitor Pepsi, to be then followed by a developed cross-case analysis of the two mini cases. The success and failure between the cases is based on the sales, and reputation of the two organizations. Coca-Cola SWOT Analysis Coca-Cola is one of the most successful organizations on the planet. The success comes from focus on the best lines, reinvestment, focus on the consumer, and differentiation with customers whether it’s direct customers or end customers. The list below is the mission statement, and SWOT analysis for Coca-Cola.