...life and if not then we see them every day in our comings and goings. Two of these world-wide brands that many of us know are also extremely similar in both product as well as marketing strategy. Those two brands are The Coca-Cola Company and PepsiCo, Inc. On May 8, 1886, a pharmacist named Dr. John Pemberton carried a jug of Coca-Cola syrup to Jacobs’ Pharmacy in downtown Atlanta, where it was mixed with carbonated water and sold for five cents a glass. (Our Heritage, 2012) Three years later in the summer of 1898 a young pharmacist named Caleb Bradham began experimenting with combinations of spices, juices and syrups, trying to create a refreshing new drink to serve to his customers. His success came in the form of the beverage now known around the world as Pepsi-Cola. (Pepsi Legacy, 2005) And from that day forward the rivalry between Coca-Cola and Pepsi would become legendary. These two beverage companies are competing for the top spot in a massive global market. The cola and carbonated beverage industry reaches to nearly every corner of the planet, and the vast majority of the market share belongs to the two giants Coke and Pepsi. With such a huge market and enormous revenue potential in an industry such as this, it is no wonder that the Coke versus Pepsi competition is so fierce. So how does either of these companies create an advantage over the other? We will compare and contrast the business and marketing strategies of these businesses in...
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...Coca Cola Wars Case Analysis July 31, 2010 Executive Summary Coca-Cola was invented and marketed in 1886 by a pharmacist named Dr. John Pemberton he named Coca-Cola after the coca leaves and kola nuts he used in order to create the product. Twelve years later in 1898 Caleb Bradham created Pepsi Cola for the beneficial effects it claimed to have on upset stomachs and indigestion. The enmity between the two soda companies are known as the “Cola Wars”. The war began in the 1960’s when Coca-Cola’s supremacy ruled the market as the beverage of choice above Pepsi Cola. Due to the competition between the two rival cola companies actions became extreme and forced both companies to implement strategic methods in order to keep the competitive edge over the other. Coca Cola Wars Case Analysis I. Current Situation: Coca-Cola's and Pepsi Cola’s marketing strategies has been as impossible to tell apart as the products themselves, both companies rely on vibrant colors, catch phrases, attractive people, and famous entertainers to grab consumer’s attention and to entice them into purchasing their products. In 1941 Coca-Cola officially renamed their product to “Coke” as an official trademark with a series of advertisements informing consumers that “Coke” means Coca-Cola (Coca-Cola, 2011). Pepsi was first introduced as " Drink" in 1898 by Caleb Bradham its inventor who created Pepsi at his home, it was later that Bradham changed the name and officially named the beverage Pepsi...
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...| Coca-Cola Versus Pepsi | The Coke Wars Financial Analysis | | Accounting 557: Financial Accounting Sumadi, Mohammad | | 12/15/2012 | | Possibly one of the biggest rivals in Corporate America today, the battle between Coca-Cola (KO) and PepsiCo (PEP) continues to baffle not only consumers but investors as well in determining which product is a better buy. While both companies have had recent problems in emerging nations such as India by having their products be condemned for improper ingredients, a shakeup like this might be necessary to promote future growth for possibly undersold equities. Coca-Cola Company is the world's leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups, with world headquarters in Atlanta, Georgia. In May, 1886, Coca Cola was invented by Doctor John Pemberton a pharmacist from Atlanta, Georgia. John Pemberton concocted the Coca Cola formula in a three legged brass kettle in his backyard. The soft drink was first sold to the public at the soda fountain in Jacob's Pharmacy in Atlanta on May 8, 1886.About nine servings of the soft drink were sold each day. Sales for that first year added up to a total of about $50. The funny thing was that it cost John Pemberton over $70 in expanses, so the first year of sales were a loss...
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...paper investigates the strategic management of Pepsi Cola and Coca-Cola in an effort to make recommendations on how Pepsi Cola can build strategies in gaining a larger share of the market. The assessment of strategic management begins with the vision and mission of both organizations, which leads into literature review that identifies the consumer preferences of both Pepsi Cola and Coca-Cola. Following the literature review is the teams’ own personal assessment of consumer preferences for the Pepsi Cola and Coca-Cola brand (Please refer to Appendix A for the assessment). Finalizing the investigation are recommendations for Pepsi Cola to gain a larger share of the market. The Cola Wars Research Paper According to an industry report from Hoover’s (2014), the U.S. soft drink industry yields $34 billion annually and continues to grow internationally. The largest markets of consumption for soft drinks outside the U.S. are: Mexico, Chile, Argentina, and Uruguay (Hoover’s, 2014). The constant change of consumer preferences is what drives Pepsi Cola and Coca-Cola to compete for a larger share of the market. The intense rivalry between Coca-Cola and Pepsi Cola have been going on since the late 1800’s (Economy Watch, 2011); when Pepsi Cola was born from a “combination of: carbonated water, kola nuts, vanilla, and rare oils” (Pepsi Legacy Book, p.7. 2005). This paper focuses on the diversified strategies of both Pepsi Cola and Coca-Cola in their efforts to gain the largest share...
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...------------------------------------------------- Subject: Cola War Continues: Coke and Pepsi in 2010 Coke and Pepsi have duopoly the soft drink market for decades. It is a mature market with low growth. For all the years, Coca-Cola and Pepsi have built significant brand identity. When people thinking about buying cola, they cannot tell a third brand’s name. Both of them have built mature distribution channels and their large sales volume archives them economic of scale already. Suppliers to Coke and Pepsi have weak power since there are many suppliers in market due to low entry level. Suppliers have to give Coke and Pepsi lowest price to keep their business with the giants or they will lose business to competitors. Coke and Pepsi corporate with many bottling companies. These regional companies are not capable for developing their own drink and advertising. The barrier of entry is also low so their profitability are restricted by Coke and Pepsi, and distribution channels. They have no power to raise price or competitors will take over their business. As concentrates businesses, Coca-Cola and Pepsi have strong power over bottling business. As long as these bottling companies want to corporate with Coca-Cola or Pepsi, they have to agree to refuse similar products from other new brands. However, Coke and Pepsi always have rights to change to another bottling company with no restrictions. Coke and Pepsi are also buying bottling companies in mature market so increase profitability. Since Coke and Pepsi dominant the soft...
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...Pepsi Project Table of Contents Executive Summary Pepsi (PEP) Background Statement of Cash Flows Analysis of ‘Cash Flow to Net Income’ Analysis of ‘Cash Flow Adequacy Ratio’ Analysis of ‘Free Cash Flow / Operating Cash Flow’ Competition Marketing Campaign Innovation References Pepsi (PEP) Background PepsiCo, Inc. is a global food, snack and beverage company. The Company's brands include Quaker Oats, Tropicana, Gatorade, Lay's, Pepsi, Walkers, Gamesa and Sabritas. Pepsico Inc. is registered on NYSE using the ticker symbol of ‘PEP’. Using the available data from 1978 till now, the PEP ticker symbol has seen the stock price increase of approximate 4400% , which is comparable to its closest competitor Coca-Cola’s (Ticker : KO) growth of 4500% in the same time period. Pepsico’s current Market Cap is approximately 98.83B with a P/E ratio of 15.90. A high P/E ratio suggests investor's confidence in the future growth prospects of the company and Pepsico has the highest P/E ratio as compared to its major competitors in the sparkling soda industry including Coca-Cola and Dr. Pepper. Even though it can be interpreted that PEP has lagged behind Coca-Cola over the years in US market but it is very important to understand that the majority of PepsiCo's revenues do not come from carbonated soft drinks.In fact, beverages account for less than 50% of total revenue. Additionally, over 60% of PepsiCo's beverage sales come from its key non-carbonated brands like Gatorade...
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...12 COLA WARS CASE Table of contents Introduction……………………………………………………………3 Question no. 1…………………………………………………………4 Question no. 2………………………...……………………………….4 Question no. 3………………………………………………………….7 Question no. 4………………………………………………………….9 Bibliography …………………………………………………………10 INTRODUCTION Over the years Coke and Pepsi managed their rivalry in the carbonated soft drinks (CSD) industry by following some of the tactics identified below. Both companies came up on the market with the same product coca-cola, two different recipes. Coca-Cola was discovered in 1886 in Atlanta Georgia, by pharmacist John Pemberton, while Pepsi-Cola was formulated 7 years later, in New Bern, North Carolina, by pharmacist Caleb Bradham. Since then the two giants, Coke and Pepsi are on a continuous “battle without blood” over the $74 billion CDS industry in the United States. One of the first tactics identified is that Coke first introduced its product in grocery stores and other channels through open-top coolers. Also, they developed automatic fountain dispensers and introduced vending machines. Pepsi had a rough start, but they were willing to achieve. In this way after bankruptcies in 1923 and again in 1932, they came back and the business started to pick up. Their first move was to price their 12-oz container to a nickel, same as Coke would charge for a 6.5-oz. After that Pepsi started focusing more on take-home sales to target family consumption. With an aggressive marketing campaign...
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...Cola Wars Case Study DMBA 630 Marketing and Strategy Management in the Global Markeplace Introduction Carbonated Soft Drinks (CSD) have been around for over a century and now accounts for a $60 Billion market with the average American consuming about 53 gallons a year. Coca-Cola was invented in 1886 by John Pemberton as a “potion for mental and physical disorders.” Asa Candler acquired the formula and began marketing it as Coca-Cola. The first bottling franchise was accorded in 1899 for a sum of one dollar. Pepsi-Cola was invented in 1893 by Caleb Bradham a pharmacist from North Carolina. Pepsi also franchised its bottling operations. Pepsi struggled over the years going bankrupt twice within a decade, first in 1923 and again in 1931. Pepsi competed aggressively against coke offering almost twice the amount of Pepsi for the same price in the 1930s. Coca –Cola or Coke on the other hand was the market leader through the early 20th century with numerous imitators popping up trying to clone Coke. Coke fought back in the courts to aggressively deter imitators and counterfeiters. During the 1920s and 1930s, Coke was marketed to multiple market segments making it available to anyone desiring the brand. Eventually Coke sued Pepsi for trademark infringement in 1938 and lost. Pepsi gained market share and became a titan competitor in the market for CSDs beating out all other brands except Coke. Thus began the “Cola Wars” in 1950 with Pepsi’s aggressive “beat Coke”...
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...Cola Wars Continue Coke vs Pepsi in 2010 Submitted by: Dinesh MR (13141) Submitted to: Prof. NR Govinda Sharma Case Description Carbonated soft drinks (CSD’s) are popular drinks constituting very attractive and profitable business for more than a century. This business is capital intensive and was and still dominated for long period by few giants who had patent rights and who gained very high brand recognition over the years. The competition between Coca Cola and Pepsi was very aggressive and caused the industry profitability to fluctuate up and down. The rivalry in this industry was fatal for small concentrate producers as well as small bottlers and lead to merging and acquisitions that left the industry controlled by big players of huge firms. Since the year 2000, the industry is facing a big challenge with the increase in the popularity of the non-CSD drinks especially with the multiple warnings issued by the health organizations against the carbonated soft drinks. With huge market size in US and worldwide, with few giants existing in the market for more than a century mainly Coca and Pepsi controlled more than 70% total of market share and constituted a duopoly market in this industry, with low product price, with perfect setup of the business, with vertical integration pattern and with the huge marketing campaigns that created strong brand names with high customer loyalty. Analysis through Porter’s Five Forces Model Barriers to Entry Barriers to entering...
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...Cola Case Study 1: Attractiveness of the Carbonated Soft Drink Industry By Section 1_8 Paul Ponomaryov (100390461) Gerald-René Goldwater (100491316) Eric Packer (100481757) Course Name: Strategic Management for Professionals BUSI-3700U- 001 Submitted to: Hamid Akbari Due Date: September 30, 2015 Word Count: 798 Introduction The carbonated soft drink industry has been a very competitive industry over the last hundred years. The two main players in the carbonated soft drink (CSD) market, Pepsi and Coca-Cola, have been in a nonstop rivalry to become the market leader. Smaller players also exist, but how attractive is the industry as a field to do business? We will use Porter’s Five Forces to analyze the market’s overall attractiveness. 1. Buyer Bargaining Power Buyer Bargaining Power has always been high in the CSD industry. Although brand loyalty has always been important, it’s very easy for most customers to change products if they don’t like the price or taste. In the case of New Coke, the outcry from Coca-Cola’s consumers caused Coca-Cola to revert their entire formula. The consumers quickly let it be known that they did not like the change, and Coca-Cola had no choice but to acquiesce. By the early 2000s US soft drink consumption began falling, but by as little as 3% - CSDs still held the majority of market share; around half of the total drinks market (Yoffie & Kim, 2011, pg. 13). In response to this slight decline another outbreak in...
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...History The pharmacy of Caleb Bradham, with a Pepsi dispenser, as portrayed in a New Bern exhibition in the Historical Museum of Bern. Pepsi was first introduced as "Brad's Drink" in New Bern, North Carolina in 1898 by Caleb Bradham, who made it at his home where the drink was sold. It was later named Pepsi Cola, possibly due to the digestive enzyme pepsin and kola nuts used in the recipe.[2] Bradham sought to create a fountain drink that was delicious and would aid in digestion and boost energy.[3] In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore to a rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles, and sales increased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield was the first celebrity to endorse Pepsi-Cola, describing it as "A bully drink...refreshing, invigorating, a fine bracer before a race." The advertising theme "Delicious and Healthful" was then used over the next two decades.[4] In 1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo was changed again. In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered bankruptcy - in large part due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark.[5] Eight years later, the company went bankrupt again. Pepsi's assets were then...
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...1. INTRODUCTION 1.1 Brief History History of Pepsi:- Pepsi was first introduced as "Brad's Drink" in New Bern, North Carolina, United States, in 1893 by Caleb Bradham, who made it at his drugstore where the drink was sold. It was later labeled Pepsi Cola, named after the digestive enzyme pepsin and kola nuts used in the recipe. Bradham sought to create a fountain drink that was delicious and would aid in digestion and boost energy. In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore to a rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles, and sales increased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield was the first celebrity to endorse Pepsi-Cola, describing it as "A bully drink...refreshing, invigorating, a fine bracer before a race." The advertising theme "Delicious and Healthful" was then used over the next two decades. In 1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo was changed again. In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered bankruptcy – in large part due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Megargel was unsuccessful, and soon Pepsi's assets were purchased by Charles Guth, the President of Loft Inc. Loft was a candy manufacturer with retail...
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...INNOVATION: THE COCA-COLA CHALLENGE Abstract The Coca-Cola Company fully understands the meaning of innovation as evidenced by their ever-growing brand portfolio and internal processes. In this paper, I discuss Coke's three cola strategy as both a product and service innovation. Such strategy was implemented to widen the market presence of Classic Coke, Diet Coke and Coke Zero. The three cola strategy was developed initially for the purpose of rekindling the growth of the sparkling beverages. The strategy is basically a campaign to boost public confidence wherein an array of marketing, advertising and promotion was implemented. The three cola strategy was backed by Research Council towards the development of consumer-centered innovation. Introduction Overview of the Organization The Coca-Cola Company Founded by Asa Griggs Candler in 1882 in Atlanta, Georgia, a company that fully understands the importance of innovation in business is the Coca-Cola Company. Coca-Cola, or simply Coke, chose to concentrate their operation on production of soft drink syrup while maintaining an intimate relationship with its bottlers and distributors at the retail level. Basically, the company is engaged into blending raw material ingredients (product planning), packaging in plastic canisters (market research) and shipping to bottlers (advertising). In 1886, John Stith Pemberton invented the company’s flagship product Coca-Cola. Today, Coca-Cola Company offers more...
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...The Coca-Cola Company FINANCE Spring 2013 [FNCE 601] February 1st, 2013 | WEMBA38 | Team 17 Mathieu Verbeeck Why has coca cola been so successful in the past? When Douglas Ivester took over the reigns at Coca-Cola in October 1997, he had big shoes to fill – indeed, Goizueta – who passed away earlier in the year – would be remembered as one of the greatest wealth builders of the 20th century: during his tenure as CEO, Coca-Cola’s market value grew from $4.3 billion to $165 billion and an investment of in the Coca-Cola stock would have earned a compounded annual rate return of 33% over the last 10 years. Goizueta’s and Coca-Cola’s success can be attributed to a number of factors. Business Strategy Coca-Cola’s mission is to maximize shareholder value over time. To achieve this mission, The Coca-Cola Company executes a business strategy driven by four key objectives: increase volume, expand Coca-Cola’s share of worldwide nonalcoholic ready-to-drink beverage sales, maximize its long-term cash flows and create economic value added by improving economic profit. Coca-Cola achieves these goals by strategically investing in the high-return beverage business and by optimizing their cost of capital through appropriate financial policies. Marketing To meet its long-term growth objectives, Coca-Cola continues to make significant investments in marketing to support their brands. Marketing investments enhance consumer awareness and increase consumer preference for their...
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...difficult process. This market analysis will help determine the specific factors to help Pepsi evaluate how well the product is received by consumers in the marketplace. This analysis is based on our competitor Coca-Cola as a comparison to our product. A brief history is discussed with a look at the demand, supply, and equilibrium prices in the market. Other elements discussed are price elasticity and cost structure, and recommendations made on how to maximize our profits and successfully compete with Coca-Cola. History The original Coca-Cola product is introduced and developed in 1886 by John S. Pemberton (Bhasin, 2013). In the next 15 years Coca-Cola is purchased and incorporated into a business by Asa Candler, and they had their first celebrity endorser musician Hilda Clark (Bhasin, 2013). Coca-Cola began to move into other foreign markets by 1906 and branched out to athletes for their endorsement of Coca-Cola. Coca-Cola was the first to manufacture a contoured glass bottle for their product, and launch production plants in the Philippines and Europe. Between 1906 and 1938 Coca-Cola had entered into numerous foreign markets including Canada, Cuba, Australia, Norway, and South Africa. By 1950 Coca-Cola was entering homes of consumers through the airwaves broadcasting a commercial on Thanksgiving Day to the radio airwaves to promote their product to consumers. Over the next 60 years Coca-Cola has continued to change their image to consumers and grow their product base to remain...
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