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 the CSD industry began almost as soon as the industry itself, as courts barred imitations and counterfeit versions of Coca-Cola such as Coca-Kola, Koca-Nola, and Cold-Cola, under trademark infringement. In 1916, courts barred 153 of these imitations, demonstrating the prevalence of the desire to enter the CSD industry, as well as the extreme difficulty to do so. This barrier to entry allowed