Premium Essay

Coke and Pepsi in the Twenty-First Century

In: Business and Management

Submitted By Nautica100
Words 2396
Pages 10
Running head: Cola Wars 1

Coke and Pepsi in the Twenty-First Century
University of Redlands
Deborah Bedgood-Ealy
Professor Richard Doyle
March 12, 2015 Coca-Cola and Pepsi function in the soft drink industry as dominating players and have remained market leaders for a long time. The key competencies of Coke and Pepsi range from the product, supply chain and distribution, marketing and customer loyalty. Each of them has developed operating procedure. The supply chain forms a major component or a competency that helps these companies form a competitive advantage for themselves (Wheelen & Hunger Page Ref: 332-335). Training of human resources also forms an important element as it helps strengthen the human resource. The main objectives of the training and the requirements are to be communicated to the employees along with details about when and where it has been organized. Several arrangements for the tainting session to be conducted, including the overhead projectors and stationary are to be arranged for in the office of Pepsi and Coke which leads to the strengthening of the human resources as an organizational resource (Page Ref: 246-247) The differences between resources important for competitive advantage and those that should be disinvested from industry/positioning perspective. The most important elements in this industry include the economics, market and competitive factors. The economic factors relate to the global economics conditions as the greatly impact the demand and consumption of soft drinks. This leads to there being a need for the marketers of the soft drink industry to ensure that the economics conditions of the markets that they enter or operate in are favorable and provide sufficient scope for them to operate successfully (Page Ref: 7 -10). The next most important elements is the market factors. As

Similar Documents

Premium Essay

Cola Wars Continue: Coke and Pepsi in the Twenty-First Century

...4. ¿Pueden Coke y Pepsi mantener sus ganancias ante una demanda declinante y la creciente popularidad de bebidas no gaseosas?   Este problema lo obtuvieron ambas empresas desde el año de 1990 en el cual llevaban 2 años consecutivos donde el consumo anual por persona había disminuido, fue donde ambas empresas debieron de modificar su estrategia de comunicación en precio, embazado y la estrategia de la marca, así como también incluir en la marca productos de bebidas sin gas, tea, bebidas deportivas y agua embotellada. La estrategia que ellos han tomado en el negocio entero mejorando el proceso de entrega, de productos, de suministros para la producción, ha invertido en promoción y publicidad para impulsar las nuevas bebidas y las ya existentes. Desde el inicio de ambas compañías han luchado por la participación del mercado norteamericano y mundial introduciendo bebidas de sabores para seguir con la tendencia de crecimiento. Sin embargo ambas compañías no se dieron cuenta hasta después de hacer las investigaciones pertinentes que desde el año 1990 los consumidores empezaron a reflejar un cambio en el hábito de beber bebidas con gas y empezaron a tomar otro tipo de bebidas. Lo que paso con esto fue que el crecimiento fuera negativo o muy bajo sin embargo ambas marcas tiene una gran presencia en el mercado por lo cual la diversificación de productos según la tendencia del mercado. Si bien es cierto la competencia ahora es mayor sin embargo la estrategia de comunicación y de la...

Words: 297 - Pages: 2

Premium Essay

Pgdm Mba Material Case Study- Cola Wars Continue Coke and Pepsi in the Twenty-First Century

...9/8/2015 PGDM/MBA Material: Case Study- Cola Wars Continue: Coke and Pepsi in the Twenty-First Century www.mbapgdmstuff.blogspot.com Home Human Resource Marketing Information system management Images You are visitor # Case Study- Cola Wars Continue: Coke and Pepsi in the Twenty-First Century 110,588 Search This Blog Translate Select Language  ▼ Category Assignment Business Communication Business Environment Business Law Case Study Compensation MAnagement E- Business Summary: "Cola Wars Continue: Coke and Pepsi in the 21st Century” explains the economics of the soft drink industry and  its  relation  with  profits,  taking  into  account  all  stages  of  the  value  chain  of  the  soft  drink  industry.  By focusing on the war between Coca‐Cola and PepsiCo as market leaders in this industry – with a 90% market share  in  carbonated  beverages  –  the  study  analyses  the  different  stages  of  the  value  chain  (concentrate producers,  bottlers,  retail  channels,  suppliers)  and  the  impact  of  the  modern  times  and  globalization  on competition and interaction in the industry. Analysis: It is quite clear that there was a “war" between Coca‐Cola and PepsiCo: not only have they been rivals for entrepreneurship For your Information Formates Human Resource Management Human Resource Mangement Human resource Planning Indian Labour Law Industrial Relation Information system Management International Marketing ...

Words: 1069 - Pages: 5

Premium Essay

Cola Wars

...For the exclusive use of R. PONCE 9-702-442 REV: JANUARY 27, 2004 DAVID B. YOFFIE Cola Wars Continue: Coke and Pepsi in the Twenty-First Century For over a century, Coca-Cola and Pepsi-Cola vied for “throat share” of the world’s beverage market. The most intense battles of the cola wars were fought over the $60-billion industry in the United States, where the average American consumed 53 gallons of carbonated soft drinks (CSD) per year. In a “carefully waged competitive struggle,” from 1975 to 1995 both Coke and Pepsi achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. According to Roger Enrico, former CEO of Pepsi-Cola: The warfare must be perceived as a continuing battle without blood. Without Coke, Pepsi would have a tough time being an original and lively competitor. The more successful they are, the sharper we have to be. If the Coca-Cola company didn’t exist, we’d pray for someone to invent them. And on the other side of the fence, I’m sure the folks at Coke would say that nothing contributes as much to the present-day success of the Coca-Cola company than . . . Pepsi.1 This cozy relationship was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. In response, both firms began to modify their bottling, pricing, and brand strategies. They also looked to emerging international markets to fuel...

Words: 13837 - Pages: 56

Premium Essay

Cola Wars

...of Management Technology, Hyderabad (IMT,HYD), 2015 9-702-442 REV: JANUARY 27, 2004 DAVID B. YOFFIE Cola Wars Continue: Coke and Pepsi in the Twenty-First Century For over a century, Coca-Cola and Pepsi-Cola vied for “throat share” of the world’s beverage market. The most intense battles of the cola wars were fought over the $60-billion industry in the United States, where the average American consumed 53 gallons of carbonated soft drinks (CSD) per year. In a “carefully waged competitive struggle,” from 1975 to 1995 both Coke and Pepsi achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. According to Roger Enrico, former CEO of Pepsi-Cola: The warfare must be perceived as a continuing battle without blood. Without Coke, Pepsi would have a tough time being an original and lively competitor. The more successful they are, the sharper we have to be. If the Coca-Cola company didn’t exist, we’d pray for someone to invent them. And on the other side of the fence, I’m sure the folks at Coke would say that nothing contributes as much to the present-day success of the Coca-Cola company than . . . Pepsi.1 This cozy relationship was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. In response, both firms began to modify their bottling, pricing, and brand strategies. They also looked to emerging international...

Words: 14055 - Pages: 57

Premium Essay

Bel Brand

...Cola Wars Continue: Coke and Pepsi in the Twenty-First CenturyI. Case issue: Implications of strategic rivalry on cola industrys structure and performance (See Exhibits 1 & 2 for analysis) A. Implications on structure of cola industry 1. Bottlers have been consolidated by concentrate producers (CP), placing smaller CPs at the mercy of Pepsi and Coca-Colas distribution systems (See Exhibit 3) a. Making it tougher for smaller CPs like Cott Corporation to compete and leaving them open to the threat of acquisition b. Exposing Coca-Cola and Pepsi to the risk of anti-trust legal or regulatory action with bottlers’ exclusive territories and policies that forbid carrying competing cola products 2. Bottlers profitability is in danger with slim margins and declining growth (See Exhibit 4) a. CP should come to bottler’s aide with financial assistance, concentrate price breaks or increased marketing to preserve industry structure b. Bottlers will have to upgrade their technology to handle expanded product lines (See Exhibit 2) c. Bottlers should consider diversifying into snack food distribution through alliances or CP acquisitions like Pepsi’s Frito-Lay division B. Implications on performance of cola industry 1. CSDs made up a substantial share of 2000 US Liquid Consumption (See Exhibit 4), but this doesn’t make them immune to risk a. Declining stock prices show a corrected over-valuation of companies (See Exhibit 4) b. Declining growth rates for carbonated soft drinks and increasing...

Words: 1805 - Pages: 8

Premium Essay

Pepsi Cola War

...Continue: Coke vs. Pepsi in the Twenty-First Century The Soft Drink industry has been assigned as the vehicle for tackling the topic of industry analysis and competitive dynamics. The case covers developments in the soft drink industry through 1993. It describes how the industry evolved into its current structure largely following Coca-Cola’s leadership. What is particularly interesting is determining why the major competitors in the industry have been able to earn above normal returns for close to 100 years, and why the industry is organized the way it is. The case allows us to analyze how the actions and reactions of competitors over time work to create their own industry structure. The case also allows us to examine how prior strategic commitments to particular strategies create competitive positions, which in turn constrain the future competitive moves of firms. Since competitive positioning determines a firm’s long-run performance, we need to thoroughly grasp the essentials of what makes some competitive positions and competitive strategies more viable, and others not, and why. Case Analysis of Cola Wars Continue: Coke vs. Pepsi in the Twenty-First Century 1. Why has the soft drink industry been so profitable? a. Since 1970 consumption grew by an average of 3% b. From 1975 to 1995 both Coke and Pepsi achieve average annual growth of around 10% c. American’s drank more soda than any other beverage d. Head-to-Head Competition between both Coke and Pepsi reinforced...

Words: 1150 - Pages: 5

Premium Essay

Agilent

...Coca-cola and Pepsi over 100 years of rivalry. New challenges of the 21st century included boosting flagging domestic cola sales and finding new revenue streams. Both firms also began to modify their bottling, pricing, and brand strategies. They looked to emerging international markets to fuel growth and broaden their brand portfolios to include noncarbonated beverages like tea, juice, sports drinks, and bottled water. For over a century, Coca-Cola and Pepsi-Cola had vied for the "throat share" of the world's beverage market. The most intense battles of the cola wars were fought over the $60 billion industry in the United States, where the average American consumes 53 gallons of carbonated soft drinks (CSD) per year. In a "carefully waged competitive struggle," from 1975 to 1995 both Coke and Pepsi had achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. This cozy situation was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. The case considers whether Coke's and Pepsi's era of sustained growth and profitability was coming to a close or whether this apparent slowdown was just another blip in the course of a century of enviable performance. A rewritten version of an earlier case by Michael E. Porter and David B. Yoffie. Essay: The case study “Cola Wars Continue: Coke and Pepsi in the Twenty-First Century” focuses on describing...

Words: 3073 - Pages: 13

Free Essay

Social Media Effects on Business

...high quality work and building a massive amount of followers; your audience will share your information with their audience. (Gunelius, Susan. 2013) However, from a marketing stand point business can’t rely on social media alone. “If you spend all your time on the social Web directly promoting your products and services, people will stop listening. You must add value to the conversation. Focus less on conversions and more on creating amazing content and developing relationships with online influencers. In time, those people will become a powerful catalyst for word-of-mouth marketing for your business.” (Gunelius, Susan. 2013) Gaining popularity in the business landscape of the twenty first century is quite different than that of the past century, and adversely more evolved than the nineteenth century. Prior to the industrial revolution consumers learned of new products and services by word of mouth, the occasional publication, and pounding the ground beneath their soles. The everyday Jack and Jill would head to the corner store for most things that could not be obtained by their own hard work and diligence. Occasionally close knit neighborhoods would practice the art of bartering; hence the language of trade. In order to become popular in trade an entrepreneur whether blue or white collar would have to practice what they preached. If any conflict in sales...

Words: 2542 - Pages: 11

Premium Essay

Can Coke and Pepsi Sustain Their Profits in the Wake of Flattening Demand and the Growing Popularity of Non-Carbonated Drinks?

...Despite flattening demand for carbonated beverages such as Coke and Pepsi, the increased popularity of noncarbonated beverages, greater demand from emerging markets, and Coke and Pepsi's absolute and comparative advantages over competition, each continues to produce profits that meet and exceed industry expectations. In 2012, Coke and Pepsi posted profits margins of 18.78% and 9.42% (Cho, 2013), respectively, clearly utilizing their advantages over other players in the sector . Coca-Cola and Pepsi have developed a wide range of products that can be used to penetrate emerging markets. They each sell the classic brands as well as geographically specific beverages. Populations from around the world continue to have more disposable income and are spending that income on luxury items such as Coke and Pepsi products. “Emerging markets are extremely important for Coke and Pepsi. Overseas sales account for roughly half of Pepsi's revenue, and more than 60% of Coke's.” (DuBois, 2013). In attached Exhibits 1 and 2, it is clear that the push into these markets is ensuring continued profitability for Coke and Pepsi. Contributing to continued profitability is the emergence of the product lines for Coke and Pepsi of noncarbonated and healthier alternatives to sugary drinks, and acquisition of complementary products; e.g., Quaker and Lays. This has translated into continued growth in market share and revenues. In the fourth quarter of 2012, Coca Cola’s “profit rose 13 percent as sales...

Words: 612 - Pages: 3

Premium Essay

Coke India Study

...six weeks into his new role as CEO, Gupta was embroiled in a crisis that threatened the momentum gained from a highly successful two-year marketing campaign that had given Coca-Cola market leadership over Pepsi. On August 5th, The Center for Science and Environment (CSE), an activist group in India focused on environmental sustainability issues (specifically the effects of industrialization and economic growth) issued a press release stating: "12 major cold drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues" (See Exhibit 1). According to tests conducted by the Pollution Monitoring Laboratory (PML) of the CSE from April to August, three samples of twelve PepsiCo and Coca-Cola brands from across the city were found to contain pesticide residues surpassing global standards by 30-36 times including lindane, DDT, malathion and chlorpyrifos (See Exhibit 2). These four pesticides were known to cause cancer, damage to the nervous and reproductive systems, birth defects, and severe disruption of the immune system.4 In reaction to this report, the Indian government banned Coke and Pepsi products in Parliament and state governments launched independent investigations, sending soft drink samples to labs for testing. The Coca-Cola Bottling Company (Coke) stock dipped by five dollars on the New York Stock Exchange from $55 to $50 in the six sessions following the August 5 disclosure, as did shares of Coca-Cola...

Words: 9264 - Pages: 38

Premium Essay

Cola War

...Wars Continued: Coke versus Pepsi in the Twenty-First Century Intro: Syllabus Page 16 The Soft Drink industry has been assigned as the vehicle for tackling the topic of industry analysis and competitive dynamics. The case covers developments in the soft drink industry through 1993. It describes how the industry evolved into its current structure largely following Coca-Cola’s leadership. What is particularly interesting is determining why the major competitors in the industry have been able to earn above normal returns for close to 100 years, and why the industry is organized the way it is. The case allows us to analyze how the actions and reactions of competitors over time work to create their own industry structure. The case also allows us to examine how prior strategic commitments to particular strategies create competitive positions, which in turn constrain the future competitive moves of firms. Since competitive positioning determines a firm’s long-run performance, we need to thoroughly grasp the essentials of what makes some competitive positions and competitive strategies more viable, and others not, and why. Discussion Questions: 1. 2. 3. Why has the soft drink industry been so profitable? a. Since 1970 consumption grew by an average of 3% b. From 1975 to 1995 both Coke and Pepsi achieve average annual growth of around 10% c. American’s drank more soda than any other beverage d. Head-to-Head Competition between both Coke and Pepsi reinforced brand ...

Words: 1436 - Pages: 6

Premium Essay

Coke in India

...six weeks into his new role as CEO, Gupta was embroiled in a crisis that threatened the momentum gained from a highly successful two-year marketing campaign that had given Coca-Cola market leadership over Pepsi. On August 5th, The Center for Science and Environment (CSE), an activist group in India focused on environmental sustainability issues (specifically the effects of industrialization and economic growth) issued a press release stating: "12 major cold drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues" (See Exhibit 1). According to tests conducted by the Pollution Monitoring Laboratory (PML) of the CSE from April to August, three samples of twelve PepsiCo and Coca-Cola brands from across the city were found to contain pesticide residues surpassing global standards by 30-36 times including lindane, DDT, malathion and chlorpyrifos (See Exhibit 2). These four pesticides were known to cause cancer, damage to the nervous and reproductive systems, birth defects, and severe disruption of the immune system. 4 In reaction to this report, the Indian government banned Coke and Pepsi products in Parliament and state governments launched independent investigations, sending soft drink samples to labs for testing. The Coca-Cola Bottling Company (Coke) stock dipped by five dollars on the New York Stock Exchange from $55 to $50 in the six sessions following the August 5 disclosure, as did shares of Coca-Cola...

Words: 9241 - Pages: 37

Premium Essay

The Story of Coca Cola

...since, this drink has become famous all over the world. Indeed, tasted by a lot of people, Coke spilt and installed in each house. The advertisement very present contributed to its considerable success. To tell you the coca cola story, we will talk about its invention at first, then its evolution and to finish consequences of its success. I) Invention du coca. It was invented in 1886 (eighteen eighty six) by a pharmacist called John Pemberton, who lived in Atlanta in the South of the USA. The reason why it’s called “coca cola” is that it’s made with “coca” leaves and “cola” nuts. Pemberton liked testing medical formulas and one afternoon he was searching a remedy for headaches, he created a perfumed liquid, its colour was caramel and he shed it in a three-legged container. The mixture was mixed to the sparkling water and tasted by customers of his pharmacy that all, to the unanimity, found it very special, unique and new. Pemberton tried to make his customers buy it as a medicine. He told them it was a remedy for headaches. However he didn’t manage to make them believe him. He didn’t succeed in selling Coke. His customers must thought he was a quack. Indeed, unfortunately, Pemberton was more an inventor that a business man. He didn’t doubt that he invented one of the greatest products of the world. Pemberton died in 1888 eighteen eighty eight) two years after inventing Coke. After his death, a man called Asa Candler bought the recipe for Pemberton’s medicine for...

Words: 906 - Pages: 4

Premium Essay

Marketing

... : XII-E CBSE ROLL NO. : ACADEMIC YEAR : 2012-2013 TEACHER IN CHARGE : MR. JAMES THOMAS INDEX SL. NO. | TITLE | SOURCE OF THE PROJECT | PAGE NO. | SIGN OF THE TEACHER | 1 | Acknowledgement | - | | | 2 | Brand RivalryAn INTRODUCTION | www.wikipedia.org | | | 3 | PepsiAn Introduction | www.wikipedia.org | | | 4 | Pepsi the history | www.wikipedia.orgwww.pepsiarabia.com | | | 5 | Products Of Pepsi | www.wikipedia.org | | | 6 | Coca-Cola An Introduction | www.wikipedia.org | | | 7 | Coca-Colathe history | www.cocacola.com | | | 8 | Products Of Coca-Cola | www.wikipedia.org | | | 9 | Pepsi Vs Coca-Cola A Comparison | www.versus.com | | | 10 | Pepsi Vs Coca-Cola THE COLA WAR | www.slideshare.netwww.scribd.com | | | 11 | Pepsi Vs Coca-Cola Which Cola brand is the Better Investment? | - | | | 12 | Pepsi Vs Coca-Cola PRESENCE IN INDIA | www.infobarrel.com | | | 13 | Pepsi Vs Coca-Cola Marketing | www.google.com | | | 14 | Pepsi Vs Coca-Cola Advertising Strategies | www.google.com | | | 15 | Pepsi Vs Coca-Cola Conclusion | - | | | 16 | BIBLIOGRAPHY | - | | | ACKNOWLEDGEMENT I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I thank my God for providing me with everything that I required in completing this...

Words: 10538 - Pages: 43

Premium Essay

Cola Wars

...favorites and to convert them into potential progress, through the creation of new products, which allowed them to keep their profit margins high. In this case, Coca-Cola and PepsiCo it is essential that this strategy follows an increase in the investment on marketing, with a constant innovation of campaigns, which could lead to a boost in sales and convey a different image of the companies, portraying them as being involved in the whole of the beverage market, rather than just the carbonated drinks market, thus reinforcing its orientation towards non-carbonated drinks. If we think that the introduction of non-carbonated drinks by Pepsi and Coke represent 80% and 100% of their growth, respectively, we can predict the impact of this measure. Despite the need to adapt to consumers, Coca-Cola and Pepsi should maintain their focus on their core products, which is where they hold a strong advantage, as far as competition is concerned. These wars affected the industry’s profits: firstly, the competition for supermarket shelf space led to a decrease in retail prices; also, as a result of intense competition, bottlers saw an increase in capital requirements, followed by a decrease in margins. Sustaining profits in a market which is giving more and more importance to the non-carbonated drinks can be a difficult task to achieve, but through marketing we believe it could help both companies in reaching through marketing. Academic...

Words: 476 - Pages: 2