Marketing Management Strategies in Leading Global Corporations
MKT 425 - Global Marketing Management
Arizona State University
July 2, 2024
The Role of Marketing in the organization
Shell Oil Company is a global group of energy and petrochemicals
organization that specializes in producing oil, natural gas, and chemicals.
The company’s major production and exploration units are located in the
deep waters in the Gulf of Mexico with origins in Anglo-Dutch, which is
amongst the largest petroleum companies in the world. Due to the high
demand for its products in the US, Shell decided to partner with Saudi
Aramco Company to help in refining and marketing its products in the
country. Other products produced by the company include
petrochemicals, liquefied natural gas, and gasoline.
On sustainability and green issues, I intend to narrow down my research
my assessing Shell’s company activities in the past decades. We should first
analyze the company’s major investments and sponsorships that have
been taking place in the past few months such as its interest in
conservation initiatives and social investment as part of its commitment to
sustainable development. As we enter the second year of recession,
companies are striving to survive hard economic times by heavily investing
in company resources in turn depleting natural resources and polluting the
environment. Therefore sustainability and green issues continue to be
important items that incorporate agendas. Shell Oil Company continues to
pursue efforts in support of green technology by sponsorship key projects
in consulate countries. For instance, on March 17, 2010, the company
proposed to support the Doha Green and Sustainability Summit (DGSS) by
being the main sponsor of the summit. The summit is aimed at creating a
platform for businesses, communities, and individuals to exchange ideas
on how to find practical solutions for environmental sustainability (Mashni
online).
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
The chief executive of Shell laments that their contribution to sustainable
development is part of their integral way of doing business. The company
expands the concept of administrative responsibility by benefiting local
communities by reducing the impact of oil emissions on the environment.
One of its newest projects in Qatar, the giant Pearl Gas is designed with the
latest technology that is highly integrated, efficient, self-sufficient, and
enables reuse of heat and water materials hence minimizing the depletion
of natural resources. In another project, the company plans to sponsor the
Qatar Science and Technology Park research by injected $70 million in the
coming few months (Mashni online: Shell 2010)
Another underway project Shell is proposing to undertake is the Science
Park specializing in developing innovative and environmental ways to
utilize sulfur emissions. The company proposes to replace sulfur with
cement in concrete in bitumen. Qatar’s 2030 vision includes the
development of human, social, economical, and environmental
developments and it anticipates that Shell Oil Company partnership will
help the vision become reality. It’s also reported that the company has
secured a Chair in Sustainable Development at the Qatar University to help
in sustainability visions. Also, the company is committed to investing up to
$100 million in programs over the next 10 years. The DGSS Working
Committee member upholds Shell Oil company involvement in local and
international businesses as the summit will offer the opportunity to engage
and exchange knowledgeable ideas (Mashni online).
Climatic change
About Shell’s millennium development goals, the company pledges to
commit to global environmental standards and reduce environmental
pollutions by subjecting all its operations and joint ventures to Health
Safety, Security and Environment (HSSE) policies. Companies are
encouraged to operate in line with HSSE values to reduce pollutions. Shell
has also considered the impacts of climatic change and launched
campaigns calling upon the government, industries, and energy users to
take action to curb the threat (Mashni online: Shell 2010).
Biodiversity
Shell was the first company to adopt biodiversity standards by engaging in
activities such as protecting construction sites, partnering with other
companies to maintain ecosystems and conserve diversity. This strategy
has helped conserve natural World Heritage Sites by limiting the extraction
of oil and natural gas.
Water
Shell pledges to implement a better mechanism that will economize water
usage and minimize depletion.
Customer support
The company has committed to reducing environmental pollution by
providing optional energy supply customers can choose from.
Developing alternative energies
The company plans to extensively invest in research and development by
focusing on renewable energy in the coming years. It also proposes to
heavily invest in wind power to generate more fuel by increasing its
reliability and safety. Plans are also underway to develop thin-film solar
aimed at cutting down energy production by half hence reducing gas
emissions.
Partnership and Policy dialogue
Shell has partnered with several trade associations throughout the
continent in reducing green gas emissions and promoting an eco-friendly
environment. Some of the trade organizations mentioned by Mashni
include;
International Petroleum Industry Environmental Conservative Association
(IPIECA) is a non-profit organization that deals with global and social issues
concerning the petroleum industry. Secondly, the Oil Companies
International Marine Forum aimed at ensuring safe and environmentally
friendly operations of oil tankers and terminals. Thirdly, the World Business
Council for Sustainable Development (WBCSD) which comprises a coalition
of 180 international companies committed to ensuring sustainable
development. Lastly, the company supports international codes that cover
environmental responsibility such as the United Nations Global Compact,
OECD Guidelines for Multinational Enterprises, and the ICC Business
Charter Sustainable Development” (online).
Shell also engages in several environmental responsibility and
conversations projects by partnering with international companies as
mentioned by Mashni as:
Asian Clean air Initiative, national government agencies, NGOs, World
Bank, industries, and international development agencies in addressing air
quality in Asia. Some of the partnerships include; Partnership for Clean
Fuels and Vehicles (PCFV) aimed at bringing together governments,
organizations, and industries by working to reduce motor vehicle air
pollution by promoting the purchase of clean gases. The EMBARQ World
Resources Institute Centre for Transport and Environment by sponsoring
the organization into finding solutions to urban mobility problems. Energy
and Biodiversity Initiative (EBI) partnership project was aimed at mobilizing
energy and conservation companies to work together in promoting best
practices in biodiversity conservation. Partnership with Global Gas Flaring
Reduction Public-Private Partnership was directed at helping national
governments and petroleum industries reduce the exploitation of gases.
Lastly, the Renewable Energy and Energy Efficiency Partnership (REEEP)
brought together companies, governments, and businesses to commit to
speed the development of renewable and energy efficiency systems in
their countries (online).
Environmentalists have long argued that Shell’s sponsorship of high
technology machinery for oil extraction in developing countries may
eventually lead-heavy extraction of oil and higher crude prices. Increased
production will also increase the emission of greenhouse gases with the
implementation of the new technology.
Shell’s oil extraction is not as clean as the industry claims since there have
been reports of visible heavy hauler trucks in their extraction sites which
are not environmentally safe. Preliminary research indicates that
greenhouse gas and sulfur dioxide emissions are often higher than those
emitted in mining, therefore Shell’s proposal to substitute sulfur with
cement will highly intoxicate the environment. It’s also reported that
greenhouse emissions use more water compared to mining, therefore the
company’s claim to conserve water seems impractical. Shell Oil Company
should therefore propose social and environmentally friendly gas and oil
extraction activities that operate on reducing air emissions, reduce water
use, and reduce greenhouse emissions.
Apple Company
Apple started as a computer company in the 1970s and has continued to
expand its products over the decades to more specialized products. Its full
inventions came in 2001 when it introduced the iPod, a product that
ranked top in the market leader in music players. Eventually, the iPhone
came into play in 2008, which has also been widely successful. Throughout
the year’s Apple has been able to introduce other products such as Mac,
iPad, and iTunes with eminent good customer support throughput its
product base. Apple assessment analyses the results of a study presented
to examine the extent to which service firm utilizes customer satisfaction
data obtained from a formal feedback mechanism.
Apple was voted as the best service company in the American Consumer
Satisfaction Index (ASCI) in the second quarter of 2009. The company was
credited for offering the best technical customer satisfaction service within
the Personal Computers category with a base score of 77 on a 100 point
scale and earned 83 points in the second quarter of 2006. Business analysts
have argued that the company’s ability to focus on product innovation and
customer satisfaction has won the company’s loyal customers compared
to other Pc vendors. Quality of customer service is always the determining
factor for the success of any company but not its products and Apple in this
case have gained tremendously from such strategy. Van Amburg argues
that Dell customers were very frustrated with the company’s customer
service despite the quality of its PC hence loss of loyal customers and the
services continued to deteriorate as years went by (Moore & Knight 2010).
In ensuring quality satisfaction in information collection, Apple Company
launched a Consumer Privacy Policy that ensures the collection, use, and
disclosure of personal information regarding customer issues are kept at
optimum security. The company pledges to safeguard personal
information collected when visiting the company’s website, purchase of
products and services, and when a customer calls the sales team or support
associates. Personal information collected here is aimed at helping the
company deliver higher customer service and provide convenient access to
the company’s products and services. Information collected from
customer’s reviews also helps the company implement and post the latest
product announcement on special offers, software, and events (Apple
Online).
Apple collects personal information on various occasions such as 1). When
discussing a service issue on the phone with a customer service
representative, downloading software updates, online surveys, registering
or purchasing products, and when registering for seminars. 2). Personal
information may be collected in events where a client interacts with Apple
and information relevant to the situation such as names, phone number,
mailing address, in some instances credit card information and about Apple
products i.e serial numbers, date of purchase and customers experience
with support or service issues may be collected. 3). Personal information
may also be collected for market research purposes for example a clients
may be asked how often they use their computer and where they use it at.
This particular question is aimed at gaining a better understanding of
customers’ needs hence provide more valuable services. 4). Information is
also collected when customers visit the company’s website, iTunes, and
MobileMe stores. The company then uses the data to improve products
and determine how best to provide useful information (Apple Online).
Apple also partners with other service vendors such as MobileMe and
iTunes stores to help in the collection of information by requiring
customers to customer’s to create an “Apple ID” before the purchase of
products. The ID is a strategy that is designed to help customers have easier
access to web services and saves them time since they don’t have to give
their personal information when requesting services. The procedure
requires the creation of personal profiles by adding the name, phone
number, email address, or credit card number together with a suitable
password that will be used to access the profile. Once the signing up
procedure is completed, the customer is allocated a personal ID and a
password that the system generates automatically. Therefore next time
the customer enters the website to re-purchase products is welcomed by
personal greetings by mentioning his name and can access up-to-date
information regarding the product purchased which can be used wherever
the client goes (Apple Online).
Publicly displayed information is public
The information posted in chat rooms or bulletin boards is regarded as
public and Apple holds no responsibility for any misuse of such information
by third parties. Therefore information regarding personal details can be
collected by third parties and used for purposes it was not intended for and
Apple for this case should not be held responsible. Apple claims to avail
personal information in situations where “ companies may help us process
information, extend credit, fulfill customer orders, deliver products to you,
manage and enhance customer data, provide customer service, assess
your interest in our products and services, or conduct customer research
or satisfaction surveys” (online). The companies have therefore delegated
the responsibility of ensuring clients’ personal information kept by Apple’s
policies of confidentiality (Apple Online).
Cookies
Apple admits to using cookies on its website as a strategy of keeping
statistics on what parts of the websites are most hit and how much time
clients spend on the website for purposes of product improvement.
Secondly, cookies help in tracking the effectiveness of online advertising
and for studying online traffic patterns. Thirdly, when personal details like
the IP address is tracked, cookies may be used to customize customers’
experiences by offering services that can be found within the client’s
location. For example, when a customer visits the sales website, support
representatives let the visitor register their name by signing up so that they
can be referred by name next time they visit the website and even offered
the opportunity to choose the country and language they wish to shop in
hence increasing their online experience (Apple Online).
Apple automatically collects certain information on its website and stores
in its log files such as the Internet Protocol address, Internet Service
Provider, browser type, operating system, date and time stamps, referring
and exit pages and clickstream data which help in analyzing trends, track
users movements around the site, collect demographic information and
administer site activities. The information collected here is used for market
surveys and indirect marketing purposes. Email is also considered an
effective marketing strategy if used appropriately. Apple for this case sends
emails to clients with “click-through URL” that links customers to the
company’s products when clicked through. When the customer links
through various links, cookies enable the company to determine a
particular group’s interest and the effectiveness of customer
communications (Apple Online).
Pixel tags
Tiny graphics are embedded in Apple’s website to help in tracking
customers’ activities and measure the effectiveness of click-through links
customers perform on the website for purposes of service improvement.
Pixel tags also help keep track of opened emails to avoid future spamming
and keep customers up to date with software downloads and new
company products (Apple Online).
Feedback system
Lately, Apple has been using the feedback system for paying out on
defective machines. For example, one of the Company’s products “iMac”
was widely reported to be giving clients problems and the company
responded by giving 15% refund bonuses to all faulty 27 inch iMac in the
UK and was also reported to extend $300 apologies to all its aggrieved
customers in the US. In resolving the issue, the company responded quickly
by offering free repairs to all the affected machines and launched a support
page where it described how minor problems could be resolved and the
resulting warranty extension for each affected machine. The company also
reimbursed customers who used their own money to repair the faulty
machines and advised them to take their drives to official Apple repair
channels (Moore & Knight 2010).
Apple extended its repair period for the affected Macs three years from
the date it was purchase, which is indeed a very good customer service any
company could offer its clients since many extend up to the warrant
period. Apple needs to regain the trust of the million iPhone customers
who want to share their information across devices and the web by making
the MobileMe service free. This strategy will instantly regain the trust of
iPhone users hence more sales of their products. The company should also
look into giving away unlimited online storage, this way clients will be able
to take advantage of MobileMe services and the cost of providing this
support will come down. For instance, if the company gave customers free
storage amount of 30GB and maybe charge a reasonable fee of $5 a year,
in the long run, the company would be benefiting from the low cost of
providing support. Lastly, the company should open up user feedback and
blogging on MobileMe devices so that users could make suggestions for
improvements.
Developing and Implementing Market Plans
Soft drink companies have long been dominated by two companies; Pepsi
and Coca-cola. Both companies have spent significant huge amounts of
money on advertising and promotion and have been reported to create
brand loyalty that has made it difficult for other competitors to enter the
market. The two companies have devised a strategy of cutting down prices
soon a new competitor tries to enter the market thus forcing them to
curtail expansion plans. I will therefore narrow down my assessment to
Pepsi Company with intentions of carefully analyzing their competitive
models in comparison to their closest competitor. The relevant
competitive models chosen for this assessment include Michael Porte’s
five forces such as entry of competition, threats to substitutes, bargaining
power, power of suppliers, and rivalry which helps assess and analyze the
competition strength and position of an organization.
The entry of competition
Several factors have been studied to steer competition which includes
economies of scale, capital investment, customer switching costs, access
to industry distribution, access to technology, brand loyalty, the likelihood
of retaliation, and government regulation. Pepsi Company was reported to
have invested over $500 million in its blue project which gained it $30.4
billion in revenue. The company was ranked 20 in the 500 fortunes with
averages of 35% in beverages, 37% fast-food restaurants, and 28% in
snacks. The Pepsi diet generated over 40% of US beverage sales and 70%
of international sales. In brand recognition, when the company changed its
brand to blue, consumers viewed it as modern and cool as it was exciting
and dynamic and communicated refreshment (Dehmardan 2,22).
Threats to substitutes
Pepsi has been able to gain a competitive advantage over Coca-cola
because of its ability to attract the young with the image it portrays of
“New Generation”. Also, the Rich Blue branding introduced in the
packaging represented eternal youthfulness and openness every youth
wanted to be associated with. This strategy made it one of the coolest
brands recognized by teenagers all over the world (Dehmardan 5).
Bargaining power of supplies
Previous research indicates that Pepsi customers buy almost five billion
gallons of soft drinks a year due to the following reasons; first; the
company has enabled high accessibility of their brands by stocking every
food venture, gas stations, drug stores, and any available stores. Secondly,
good tastes, affordable prices, and good packaging were some of the
contributing factors for the company to gain power over competitors.
Thirdly; Pepsi avails its customers a wide variety of products to choose
from and invests heavily in its promotional campaigns. Pepsi brands are
distributed all over the US where customers can easily access the like
supermarkets, gas stations, movie theatres, restraint, and at any
convenience store, it can supply. Pepsi for this case has lost its bargaining
power over the since because of its concentration fast food industries
(Dehmardan 4: Palmer and Cooper 241).
Rivalry
About Rivalry, Pepsi has experience intense competition from Coca-cola
over the years and continues to devise strategies to beat the markets. For
example, the company launched a price-oriented campaign in the 1930s
which doubled a nickel. In the 1970s, the company introduced taste
superiority to challenge its competitors and invested heavily in
advertisements. Also, when a new product has high switching costs, the
rivalry is reduced. In terms of stability, Infant industries are often subjected
to high competition compared to mature industries and therefore unable
to pursue aggressive growth strategies but Pepsi never seemed to
experience the problem since it had strong market power and could
introduce new products without stressing its budgets. Pepsi changed its
advertising image in the 1980s to target teenagers which seemed to have
worked well (Dehmardan 5-8)
Power of suppliers
To survive in the competitive environment firms have to devise several
strategies to beat their competitors like changing the price of the product
which is a temporary solution, Improving product features- key to success,
creatively using channels of distribution, and exploiting relationship with
suppliers. When we look at these examples, brand recognition seemed to
cut down the costs of advertisements, and Pepsi association with youth
seemed to have done the trick. Coca-cola tried to re-brand their products
by taking a broader and traditional position in re-introducing classic
contour bottle and sponsored moist sports events, celebrity endorsements
and tried to entice the youths. Pepsi brand identity included changing the
old signs with new ones and consistent presentation of the Pepsi brand to
customers helped the company gain brand loyalty (Dehmardan 9).
How Pepsi adopts to a competitive environment
Pepsi Cola beverages were founded by Caleb Bradham as a soft drink
company and have over the years grown to be an international brand with
branches to over 190 countries. According to Beverage Digest, the
customer base for a soft drink is the largest base in the world and more
precisely in the US putting Pepsi in a better position to dominate the
markets. Pepsi for this case has segmented its markets into four categories;
New Generation, Generation Next, Pepsi Generations, and Generation X
and uses the categories to attracting different age brackets. The company
uses different age groups to adapt to its product which makes it easy to
establish loyal customers for life. Although Pepsi strives to dominate the
industry, Coca-cola has maintained the household name as evident from
their campaigns such as “Always Coca-Cola”, which refers to the traditional
heritage name of its classics, a strategy Pepsi has failed to implement. They
also reinforce the name “Coca-cola Classic., a name that reflects an image
of value, reliability, and old-time values (Biray 1: Palmer & Cooper 241).
Pepsi on the other hand has continued to strengthen its brand by
developing the large corporation into strong franchise systems of great
entrapped spirit. The introduction of the franchise system was reported to
have increased the company’s production during the first years of its
invention. The company also puts aside an enormous budget of $225
million in advertisement only in a year. This strategy was implemented to
allow the company to introduce new products and make the consumer
aware of it. Pepsi is also credited for making wise investment decisions like
that of acquiring several large fast-food restaurants and snack companies
like the Frito Lay, which did quite well after the acquisition. Pepsi another
competitive strategy included the introduction of a variety of soft drinks
for clients to choose from. Some of the brands included Mountain Dew,
Diet Pepsi, Pepsi, and Caffeine Free Diet Pepsi and the latest Lipton Tea
ranged as the number one tea in the United States. Some strong brands
include All Sport, Starbucks, Aquafina, Slice, Tropicana, and Ocean Spray
Juices which made it to the world’s top beverages (Biray 1).
The markets today require companies to act as separate entities instead of
several small units to centralize production and encourage specialization.
The disadvantage of Pepsi operating on a franchise system was that first;
the company was unable to manage all its operations in all the franchise
systems. Secondly, the franchises produced their labels hence a direct
competition to Pepsi products. The franchises were also unwilling to make
a capital expenditure to keep up with Pepsi’s strongest competitor Coca-
cola that does not operate on franchise levels. Despite the contributions
the franchises made to Pepsi, it was concluded that ownership of fast-food
restaurants weakened the company’s soft drink division franchises
Pepsi has over the years continued to change its brand hence causing
inconsistency and lack of recognition and integration, a strategy that made
the company lose its customers to its competitor. Another shortcoming of
the company’s competitive model is that it did not have any particular
color to brand its identity. Colors kept shifting from red blue, red-black, red
white and so much more. The company also failed to express the energy
essence and did not work well on the sides of its marketers like the trucks
or vending machines. Clients also complained their Pepsi cans look like
motor oil. The company should have instead designed a more attractive
Pepsi can with attractive colors that would attract people of different
generations. To strengthen the brand identity, the company needs to
develop a flexible design it plans to use for the rest of its years. Instead of
shifting from one color to the other, Pepsi needs to use blue as a dominant
color, develop a mnemonic device, and create a modern Pepsi look that
will contrast Coke’s traditional positioning. The company should realize
that is it cheaper to maintain an old customer than it is to attract a new
one by sticking to one color theme and brand recognition.
Works Cited
Apple. Apple Customer Privacy Policy. Web.
Biray, Dennis. “Coca-Cola vs. Pepsi: Which Stock is a Better Buy?” Ezine
Article (2006):p.1.
Dehmardan, John. “Pepsi Blue”. Marketing classes (2008):p.1-50.
Mashni, Rima, A. Shell partners with Doha Green and Sustainability
Summit. Web.
Moore, Charles & Knight, Dan. Apple Retains Lead in Customer Satisfaction,
iMac Screen Problem Resolved, 64 GB for Mac Pro and More. Web.
Shell. Goal 7: Ensure environmental sustainability. Web.
Palmer, R., Cockton, J. and Cooper, Graham. Managing marketing:
marketing success through good management practice. Oxford: Elsevier,
2007.
