Stratford University Chapter

Product differentiation is a  strategy that relies on differences in products or processes affecting  perceived customer value. For this discussion forum, define the product  difference between two similar yet competitive brands (e.g. Coca-Cola  and Pepsi, Kleenex and Puffs, Heinz Ketchup and Hunts Ketchup). Discuss  what makes your product choice different to include product image, price  premium, technology, and generic brands.


Product differentiation relies on customers’ attention to some or more significant advantages that make it a better option for a product or brand than similar goods or brands (Davcik & Sharma, 2015). Since their beginnings correspondingly in 1886 and 1893, Coca-Cola and Pepsi have been fierce opponents in the soft drink business.

By creating the creative design, reinforcing the brand image, offering fantastic service, and leveraging technical capabilities, Coco-Cola adopts a differentiated strategy. Coca-Cola has packed its drinks in an ecologically responsible method that is portable, safe, and current. Depending on the demand and relying on their research and manufacturing, for the intended audience, Coca-Cola has created cans, plastic containers, and glass bottles, all at varying prices (Kayabas et al., 2018).

Both corporations are predisposed to promote various ideologies and target audiences. Pepsi creates a notion about the firm’s history, emphasizing creative and responsible manufacturing techniques (Kayabas et al., 2018). The majority of Pepsi’s ads have addressed a youthful audience with a strong focus on sports, enjoyment, and music. With these unique and eye-catching publicities, people would want to taste the worth of the drive.

Looking at Coke and Pepsi, it is evident that not just in their drink, as well as in their publicity and presentation, they differ. The message given to their customers in all the ads is another distinction between Pepsi and Coke. Coca-Cola stresses connections, whereas Pepsi concentrates on music and sports (Saxena, 2019). In addition, Coke packages its goods in varying amounts in bottles of plastic and glass, whereas Pepsi packages its beverages mostly in limited quantities in bottles of cans and plastic.


Companies employ different strategies to improve their competitive advantage over their competitors. In the monopolistic market, they have to invest in product differentiation to intentionally raise the value of their commodities. One of the organizations that have succeeded in this strategy is Coca-Cola. I prefer its commodities since they appear to possess more quality than its closest competitor, Pepsi. Moreover, the management strategizes its marketing to improve product penetration. One can identify its new commodities from media adverts or delivery trucks.

According to Townes (2020), the management applies different innovative strategies. For instance, it allows customers present their feedbacks on the commodities’ quality. The data collected assists in developing more valuable products to satisfy customer tastes and preferences. It also offers inferences on the factors that make Coca-Cola a force to reckon with in the beverage industry (Townes, 2020). Therefore, it creates enjoyment and fun symbols that lower the appeal of Pepsi products.

Life is about family and friendship, a fact that Coca-Cola has taken into considerations. Therefore, it ensures the ads contain slogans like “Share a Coke, Open Happiness” to promotion relationships. Saxena (2018) argues that the companies produces different commodities that are unique. As opposed to Pepsi, I can purchase different quantities of Lemon Coke depending on my budget and needs. Diet Coke comes in quantities like 1 liter, 0.5 liters, and 0.3 liters with different prices. The company also offers plastic and glass bottles to avoid limiting my consumption pattern. I can also choose between classic Coke, Diet Coca-Cola, and Cherry (Saxena, 2018). The product diversity increases my choices and maintains company loyalty. On the contrary, the packaging strategies in Pepsi are unappealing and hard to access in the market.

Stratford University Chapter

1) How do investors measure the risk of individual common stocks?  Please describe one of these methods in detail.  


Investors can experience either systematic or unsystematic risks when investing into individual common stocks. The risks should not exceed the expected returns from an investment (CN Bank, n.d). The investors have to realize that all stocks have some form of risks, but degree of risks differ. They should also strive to learn the different strategies applied in assessing risks (CN Bank, n.d). They can utilize financial reports from the organizations or market analysts to compute the risks.

The study shows that risk analysis faces a lot of challenges. Investors rely on past performance to forecast the common stock risk (CN Bank, n.d). However, the past performance might be unrelated with future performance. A common stock could be very profitable today but experience negative earnings into the future (CN Bank, n.d). The other challenge lies in understanding the methods of risk analysis.

Some of the risk analysis methods include standard deviation, Bond risks, and Beta. “Beta is a measure of an investment’s risk against an index of the overall market such as the Standard & Poor’s 500 Index” (CN Bank, n.d). the investor could be investing in Amazon Company with a Beta of 0.4. The investor should interpret that the company’s risks changes by 0.4 units after the S & P 500 index varies by 1 unit. On the other hand, another company could be a Beta of 0.6 (CN Bank, n.d). The company’s risk varies by 0.6 units after the market’s risk varies by 1 unit. Therefore, the investor should choose Amazon as opposed to its rival since Amazon has a lower risk factor.


Common stock is a type of equity share issued by a corporation or entity. The buyers of common stock are referred to as shareholders. Common stocks are fractional shares or a percentage equity ownership of an entity. Shares represent a proportional stake in the company’s net worth, income, cash flow, dividend. Shareholder privileges usually include voting rights on issues requiring shareholder approval and electing the entity’s directors.

Individual stocks will have bare minimum commissions, and even trading them would not be a complicated process. If they take mutual funds, we usually do not pay any commissions, but there will be a management fee. Of course, some of them will be less than 1%, and others may be around 3%. Individual stocks investments need essential homework on how the company is performing, their quarterly/annual reports. If they do not have time to go through one-company reports, then individual stocks are not a good choice (Boons, 2016).

Imagine one person investing his 25% income in Macy’s stocks in 2015 when the stock price was trading around $70; today, it is hardly $5. One good example of why a person should have diversification in investments if a person invests in the same retail industry 10% in each company that does not come under diverse investments. It has to be a different segment/area. Risk will be almost identical in the same market, but other factors such as sales, revenue, and future expansions. Will differ from one segment to another. Understanding the market trends is not going to be easy for the ordinary person. I would suggest investing in a company you know well; there is an old saying, “Invest in what you know.”

Risk management is critical in any decision-making process. Once risk is identified, either we need to mitigate or accept risk. Some regular measures are risk include standard deviation, value at risk (VaR), conditional value at risk (CVaR), and beta.

Standard deviation measures how much a variable tends to vary. Variables that are stable with small and infrequent fluctuations have a low standard deviation. Variables that move wildly, either up or down, have a high standard deviation. For example, the number of umbrellas sold in a convenience store will depend on weather and exhibit a significant standard deviation. However, the amount of milk sold will likely vary less and be more stable from day to day. Therefore, the standard deviation of milk sales will be smaller than the standard deviation of umbrella sales (Pederzoli, 2017).

Standard deviation measures the dispersion of data from its expected value. The standard deviation used in making an investment decision to measure the amount of historical volatility associated with an investment relative to its annual rate of return. It indicates how much the current return is deviating from its expected historical average returns. For example, a stock that has high standard deviation experiences higher volatility, and therefore, a higher level of risk is associated with the stock.

SD = ??(Ri – Ravg ) / n -1

Ri – Return observed in one period (one observation in the data set)

Ravg – Arithmetic mean of the returns observed

n – Number of observations in the dataset

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