Cola Wars: For Coca-Cola's Perspective
Overview
There is little doubt that the most spirited and intense competition in the beverage world is between Coca-Cola and Pepsi Co., the two main players in the carbonated soft drink (CSD) production market. The competition between the two giants has benefited not only the consumers but also the companies. By checking and challenging each other in the market, the competition has lead to improvement and diversification of products and has forced each company to be creative and innovative. Throughout time, both companies have employed a number of diverse strategies to differentiate their products and to gain market share. Each successful tactic by one company would be copied by the opponent almost in the same manner or countered in a different fashion. As the CSD market has become more consolidated and saturated and as consumer demand and taste has changed, both companies shifted their attention to emerging nations and other major international markets as well as on other areas where they could grow their businesses (e.g. non-cola beverages and snack foods).
The CSD industry involves the concentrate producers selling syrup (and sometimes sweetener) to bottlers, who add carbonated water and high fructose corn syrup to the concentrate, bottle or can, package and ship it food stores, fountain outlets, vending machines, convenience stores, and other outlet. Recently, both Coca-Cola and Pepsi Co. have pursued a strategic plan of backwards integration, consolidating their bottlers into one company. Summarizing on the supply chain and competitive nature of this industry, profitability mainly arises due to the short supply chain, low material costs, low fixed costs, efficient supplier/distributor networks, and high entry barriers for new competitors.
Alternatives and Evaluation
1. Reposition Brand Image Align With Social Values and Attitudes
Brand recognition and identification has proven to be significant factor affecting the competitive position of both Coke and Pepsi. This has proven to be a powerful and influential tool in attracting consumer brand awareness and loyalty. Coke has stuck with one basic slogan for years, without infusing new faces and sounds. Right now they are associated with being the cola for the older generation. With this reputation, they are missing out on the younger generation choosing Coke. To remain strong in the long-term, Coke needs to find a way to appeal more to the younger generation. Coke has successfully come out with new variations and sizes of drinks that have evolved with customer demands, but have not built a strong brand image where their products are identified with evolving social values and attitudes of the younger generation.
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
... objects and customer regions. Do making a clear differentiation image between its soft drinks and bottled water. Because the consumers may believe that bottled water of Nestle sounds healthier than Coca-Cola brand since Nestle tend to emphasize their image on healthy food products. Then do market test for new taste, new packaging, or new innovation according to each regions, and especially for Europe, the company should launch the new one to replace Dasani image in order to seize their market shares. They may renew all nutrients and packaging. Finally Coca-Cola should continue its joint ventures with the regional companies in order to protect their products from barriers to entry both international trade restrictions and distribution channels. Furthermore, joint venture with local brand is a long term contract guarantee to make it easier for HOD to a specific region.
The basic scope of this study is to understand and evolved the possible attractiveness of bottlers business and its profitability in CSD industry using Michael Porter five force analyses. • Power of suppliers, • Power of buyers, • Threat of new entry • Threat of substitutes, and • Rivalry among competitors. 1) Power of suppliers: Concentrate producers (CPs) negotiate directly with bottlers’ major suppliers – particularly sweetener and packaging suppliers – to encourage reliable supply, faster delivery, and lower prices Coca-Cola and Pepsi are among the metal can industry’s largest customers and Maintain relationships with more than one supplier, giving these suppliers less Bargaining power due to the availability of alternative suppliers
One of the most massive feuds to date is the feud between Pepsi and Coca-Cola. Everyone, all over the world, knows these two prominent companies for creating some of the most delicious tasting beverages ever made, but most individuals tend to consume more of the one cola over the other. There are several factors that go into the decision-making process of selecting what beverage they wish to consume. An abundant amount of people, myself included, prefer Coca-Cola for its coca leaf taste, on the other hand, a significant amount of people would disagree. Therefore, an important factor to notice is that Pepsi and Coca-Cola both offer a multitude of different flavors, especially in diet flavors. Diet flavorings are practically half of all soda sales. Nowadays, the ingredients and nutrition of these beverages are a serious concern for many people because people want to know what exactly they are consuming. The deciding factor, hands down, is the taste of these soda pops. Taste is the premier reason individuals tend to pick one company over the other.
Coco-cola has dominated any market anywhere and keeps on maintaining a strong position (). Looking at how Coco-cola achieved their goal brings attention
Brand Image / Loyalty: Coke and Pepsi have a long history of heavy advertising and this has earned them huge amount of...
Up until that time, Pepsi had steadily gained ground on Coke’s market advantage. Coke had been seen as somewhat mello. Some even referred to Coke as a “Grandma Drink.” Pepsi used this public viewpoint to their advantage, marketing Pepsi as “The Choice of a New Generation.” This led to a highly competitive marketing and advertising fight in the 1980’s, known as “The Cola Wars.”
Pepsi and Coca-Cola are both sodas, but they differ in terms of the satisfying flavors, the color and the graphic design that represents their two products, and then how Coke makes more money than Pepsi. With that said, you should have gotten the ideology of what we will go further in discussing about. Everybody loves these two very well-known sodas which can inject caffeine into you, which makes you all jittery in filling you up with an energetic energy. Alright, enough of this, let's go straight in-depth in talking about the two rivals throughout this paper of how Pepsi beats Coke in sales, but Coke is usually ahead when it comes to annual net income (Feigin) or how Pepsi is a sweeter brand compared to Coke, though Coke brand is more valuable
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...
The CSD (carbonated soft drink) industry is one that is very competitive. A few firms dominate this industry, most notably Coca Cola and Pepsi Cola. This is due to substantial barriers to entry. Cadbury-Schweppes, producer of products such as 7up and Dr. Pepper is the third leading company in this industry. Due to the dominance of Coca Cola and Pepsi, Cadbury-Schweppes faces the daunting task of having to fight for market share and survive in this fiercely competitive industry. Using economic analysis for support, Cadbury-Schweppes will need to use its strengths in the non-cola categories to compete in this CSD industry.
There are a variety of beverages available to us today with a wide range of differences, some are flavored, carbonated, low calorie, energy boosters, and just plain water. When it comes down to carbonated drinks there are two major rivalry soda companies dominating the market. Coca Cola and Pepsi are two well know cola distributors with very credible history, but the question still remains one is America’s favorite? With the ongoing competition between Coca-Cola and Pepsi, each company is incorporating new strategies for marketing and advertising there brands. When comparing an advertisement from each of the companies, we will review how they appeal to consumers.
This competitive advantage has been rendered sustainable as other players have found it difficult to catch up with the company's competitive strategy. In spite of this clear advantage, it was noted that the company faces some challenges being the world leader in soft drink distribution. The canning and bottling of the product which is done in many countries have now fallen into the hands of independent companies, thus it becomes hard for a given company to control the quality of the packaging
The case study "Cola Wars Continue: Coke and Pepsi in the Twenty-First Century" focuses on describing Coke and Pepsi within the CSD industry by providing detailed statements about the companies’ accounts and strategies to increase their market share. Furthermore, the case also focuses on the Coke vs. Pepsi products which target similar groups of customers, and how these companies have had and still have great reputation and continue to take risks due to their high capital. This analysis of the Cola Wars Continue case study will focus mainly on the profitability of the industry by carefully considering and analyzing the below questions. Why is the soft drink industry so profitable? Compare the economics of the concentrate business to the bottling business: Why is the profitability so different?
In 1970’s, people and media had noticed the Cola war where the challenge in the soft drink industry was increasing. Pepsi-cola was strongly competing Coca-Cola company with increasing success as Pepsi were launched new larger sizes including family-size bottles to satisfy different preferences and they had started a new challenge marketing campaign by making tasting tests for consumers and the results were that people preferred the taste of P...