Case Analysis 03: Hyper-Competition: Pepsi Vs Coke Name:Roll No. _________________ Question 1) Based on the Hypercompetition: Pepsi Vs Coke story, Do you agree with Pepsi’s allegations that Coke tried to destroy their business by poaching the executives, independent bottlers, brand ambassadors, distribution partners and institutional clients through unlawful means? Justify your reasons. I agree with the allegations by Pepsi that Coke has tried to destroy their business by poaching the executives, independent bottlers, brand ambassadors, distribution partners and institutional clients through unlawful means.
Competition is lawful till the point it carries no malafied intentions to hamper the other competitior’s business. The allegations by Pepsi can be justified by the following points: 1. Coke purposedly targeted the entire sales team of Pepsi to work for Coke with increased salary and emoluments so that they would be lured to breach their contract with Pepsi and join hands with Coke. In this way Coke would be successful in hampering its competitor’s business and get hold of a larger market share by the mean time Pepsi hires a proper sales team in place.
Coke would also have the advantage of knowing Pepsi’s trade secrets and other operational and distribuition data. Coke was so strong in its targeting that they had appointed a person specifically to contact employees and offer them blank cheques to terminate their contract with Pepsi and join Coke. 2. Coke left no stone unturned to give a set back to current position of Pepsi. Coke was successful in influencing the employees of Goa Bottling Private Ltd. to terminate their contract with Goa Bottling and join Coke as there was a switch in franchise of the company from Coke to Pepsi.
Then also Coke has eyed the sales team so that it could indirectly slow down Pepsi’s business by destroying its bottler’s sales team. 3. Even till poaching of employees and employees of independent bottlers could be seen as Coke’s intention of improving its own business but then Coke was also successful in inducing the brand ambassador of Pepsi to sign up with Coke. Even Coke approached the music consultant to breach their contract with Pepsi and work with Coke.
It was like Coke tried to cut down all branches of Pepsi that would grow towards success. Coke could have gone for any other brand ambassador or sponsor some other event for its marketing, why was it that coke had to take away all that was with Pepsi. It is vey clear that it was all done to destroy Pepsi’s business. Pepsi did also follow up with a written evidence of the matter that Coke had offered one of its distribution partner’s an amount of 25 lakhs plus to fulfil any of their requirements as against breaching of their contarct with Pepsi.
This evidence was qiute a strong one to prove Pepsi’s allegations against Coke. Coke has time and again tried to hamper Pepsi’s business directly and indirectly via lawful or unlawful means as its intentions got clarity from the third point as state above. Question 2) If you were the CEO of Pepsi, how you would have responded to the strategies adopted by the powerful competitor like Coke as narrated in the story?
Although Coke had adopted strong strategies to hamper the business of Pepsi, yet Pepsi could not just sit back with personnel and financial loss to see Coke building huge empire on the foundation that was primarily built by Pepsi. If I were the CEO of Pepsi, I would have undertaken the following strategies to respond to Coke’s strategies: 1. Coke had hampered Pepsi’s market to a great extent. The situation demanded Pepsi to confront Coke with similar strategies as business cant wait for legal judgement to be passed. ***********