What is Competition

A beverage containing a day’s nutritional requirements is feasible in the future. Occasionally, a competitor comes out with an improved product, as Seiko did in the 1970s by introducing quartz watches.An example of a product to satisfy latent demand would be a liquid that promises weight loss; a liquid to prevent aging would be an example of a product to satisfy incipient demand. This is the competitive arena where our company will have to fight if it enters the soft drink business.Quartz watches were a little fancier and supposedly more accurate than other watches. The companies that currently compete in the regular cola market are Coca- Cola, PepsiCo, Seven-Up, Dr. For example, General Mills may not worry if a regional chain of Italian eateries is established to compete against its Olive Garden chain of Italian restaurants. There has been a breakthrough in the form of low-calorie, caffeine-free drinks.

Currently, the thrust of the market is to satisfy existing demand. Among new industry entrants, General Foods Corporation and Nestle Company are likely candidates (an assumption). However, if McDonald’s were to start offering Italian food, General Mills would be concerned at the entry of such a strong and seasoned competitor. The industries that currently offer products to quench customer thirst are the liquor, beer, wine, soft drink, milk, coffee, tea, drinking water, and fruit juice industries.

The digital watch and the color television set were once breakthrough products.Among these, however, the first two have a major share of the cola market. Texas Instruments, however, entered the watch business via a breakthrough product, the digital watch. Pepper, and a few others.In the watch business, companies have traditionally competed by offering me-too products.Arelatively new entrant is mineral and sparkling water. The two principal competitors, Coca-Cola Company and PepsiCo, are large multinational, multibusiness firms. Finally, the scope of a competing firm’s activities may be limited or extensive.A breakthrough product is an innovation and is usually technical in nature.However, caffeine- free cola has been introduced by two major competitors, Coca-Cola Company and PepsiCo and direct maketing.

An improved product is one that, while not unique, is generally superior to many existing brands. Looking just at the soft drink industry, assuming that this is the field that most interests our company, we see that the majority of competitors offer me-too products.