Technology is constantly diminishing barriers, leading to the increasing rise of the individual. One person – and their smartphone – can be the impetus for change. Who would have ever thought revolutions could be directly attributed to Facebook, Twitter, or You-Tube?
For many companies, the proliferation of technology can prove problematic. One false move, and you are on the outs. There is no real way of covering up your digital footprint since the information is always out there. Old Navy and Target were in deep water when it was pointed out on social media (Twitter, Facebook, and Reddit) that they priced Plus-Sized women’s clothing differently than the same clothes in their Regular counterparts, and Wal-Mart faced backlash for having a “Fat Girl” Costume section online last Halloween.
Companies also have to deal with diminishing brand loyalty. The online market has allowed consumers to “search” for similar, and possibly cheaper, alternatives as well as research products they wish to buy and post reviews upon purchasing. An article published in the New Yorker stated, “consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos.” Consumers read more than they did before (apparently nearly 30% more than a decade ago according to the Five Crucibles of Innovation), and they aren’t afraid to express their opinions on social media platforms.
So how does this relate to a Company’s Strategy? For one, you have to know your competitors and your market. Coke and Pepsi know each other. They understand that the explosion of online knowledge has allowed people to look up mysterious ingredients in their products like propylene glycol, which, by the way, is also an ingredient in anti-freeze. This, coupled by the rise in obesity, is changing the market.
So Coke and Pepsi are trying to change. Coke recently released a new line of Milk and started the “Share a Coke” campaign, where soda enthusiasts can search for bottles with their name (catering the “individualization” market), and Pepsi has recently re-launched the “Pepsi Challenge” campaign. Both companies have large presence on social media and are looking into alternatives to the carbonated soda business. The reason why they have stuck around for so long is because they know their competitors. Coke does something and Pepsi follows suit, or vice versa. Coke and Pepsi exist to compete with one another; without one, there wouldn’t be the other.