Question
I need a peer reponse to this post please, it is about pepsiCo launching a new lime lemon soft drink and compete with coca cola.
I need a peer reponse to this post please, it is about pepsiCo launching a new lime lemon soft drink and compete with coca cola.
First, it is clear that Coca-Cola and Pepsi are a duopoly in the cola market. The information provided that Pepsi could lose out on earning $100 million profit if they decided to not introduce a lemon-lime soft drink. As a manager at PepsiCo, I would try to analyze two possible scenarios to my coworkers like so. The best scenario would be that Coca-Cola will accept the competition and accept the market split of 50-50 for cola market, while lemon lime 30/70. This is a win-win situation for both. We will both make profit for the main product and more from the lemon-line line. However, there is also a chance that Coca- Cola will respond more strongly against the introduction of Pepsi's lemon line. We successfully survived in the cola market despite the brand awareness and customers' preference. I think it is possible to do the same for the lemon-lime. Even if there is a price war, we will be able to earn more profit from new products and cover some of the market share in the lemon line market, better than nothing if we don't release one. So both scenarios provide PepsiCo with more profit and opportunity to adjust the market share. If we don't release the product, Coca- Cola will own 100% of the lemon line market. Customers will decide to buy Coca- Cola other brands as well and it will affect the cola market as well. According to Mr Enrico, PepsiCo's chief executive, Pepsi does not have to beat Coca-Cola to be able to stay profitable and dominate the market (Tomkins, 1996). It is best to grow alongside and capture all the market capabilities.
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