Case Analysis Of Coke And Pepsi

The existing concentrate business is largely controlled by Coca-Cola Company (Coca-Cola) and PepsiCo (Pepsi), together claiming a combined 72% of the U.S. carbonated soft drink (CSD) market sales volume in 2009. Refer to Exhibit 1 for an illustration of the CSD industry value chain. For more than a century, Coca-Cola and Pepsi have maintained growth and large market shares through mastering five competitive forces, shown in Exhibit 2, that drive profitability and shape the industry structure.

The competition between Coke and Pepsi reached its peak to become a real war battle by the year 1980. This war had affected the industry profit for both concentrate producers and bottlers, while the effect of bottlers was much higher. After the successful “Pepsi Challenge” (blind taste tests: sales shot up) in 1974, Coke countered with rebates, retail price cuts and significant concentrate price increases. Pepsi followed of a 15% price increase of its own. During the early 1990’s bottlers of Coke and Pepsi employed low price strategies in the supermarket channel in order to compete with store brands. The concentrate producers were always able to increase their profits by increasing the concentrate price, while the bottlers, especially the

For more than a century, Coca Cola and PepsiCo have been the major competitors within the soft drink market. By employing various advertising tactics, strategies such as blind taste tests, and reward initiatives for the consumer, they have grown to become oligopolistic rivals. In the soft-drink business, “The Coca-Cola Company” and “PepsiCo, Incorporated” hold most of the market shares in virtually every region of the world. They have brands that the consumers want, whether it be soft-drink brands or in PepsioCo’s case, snacks. With only one soft-drink market, the two competitors have no choice but to increase sales by stealing the other competitor’s clients. This led to the term, the “cola wars” which was first used

For over a century, Coca-Cola and Pepsi-Cola vied for “throat share” of the world’s beverage

stores counted on soft drinks to generate consumer traffic, so they needed Coke and Pepsi products. But due

In carbonated soft drink market since 80s to till coca-cola and Pepsi are rival company and trying to dominating each other via advertising war through printing media, video advertising, campaigns, event and doing experiential marketing.

The Concentrate Producer industry can be classified as a Duopoly with Pepsi and Coke as the firms competing. The market share of the rest of the competition is too small to cause any upheaval of pricing or industry structure. Pepsi and Coke mainly over the years competed on differentiation and advertising rather than on pricing except for a period in the 1990’s. This prevented a huge dent in profits. Pricing wars are however a feature in their international expansion strategies.

Comparing financial data from statements can help determine whether or not it is a sound decision to invest in a company. This information can also help determine if a company is operating successfully and areas of risk within the company. This analyzing can help one company compare itself to another company and ensure that they are able to compete with other companies in their respective industries. PepsiCo and Coca-Cola are two major companies that make a majority of their money from producing and selling soft drinks. To compare these companies we are going to use vertical and horizontal analyses to see if these

The economics of the concentrate business and bottling is different from each other in terms of number and size of rivals and cost structure etc. Concentrate business has few buyers and through its value chain compare to bottling business has many buyer and mid-way player in the soft drink industry. The concentrate manufacturing process involved a little capital investment in machinery, overhead, or labour to reduce the risks whereas bottlers involving high capital investment. Franchise agreements with soft drink industry allowed bottlers to handle the non-cola brand of other concentrate producers. It also allowed bottlers to choose whether to market new beverages introduced by a concentrate producer. Concentrate producers product cost structure is mostly based on variable costs such as advertising, promotion, market research, and bottler support however, bottler products cost constitution is mostly based on fixed costs and have higher cost leverage. Concentrate producers also took charge of negotiating customer development agreements with nationwide retailers such as Wal-Mart. Concentrate producers collaborated to make more profitable control with bottlers, for example, raw material negotiation with suppliers and sales price

These two-company’s economic characteristic include their market size and growth rate from the early 2000’s to 2010. Coke and Pepsi have struggled for years in the carbonated and non-alcoholic sector. According to Barbara Murray (2006c) "But as the pop fight has topped out, the industry 's giants have begun relying on new product flavors and looking to noncarbonated beverages for growth.” (Murry, 2006). For instance, Coke boasts in the advertisement as the king of the soft drink; as a consumer of both products, I agree. About 15 years ago, I was selected to participate in a critiquing of Coke and Pepsi products. Additionally, my travel to Africa in 2007 and 2010 provided the same raving review for the Coke Cola products. Apparently, Coke and Pepsi have been rivals for ages locally, regionally, nationally, multinational, and globally, therefore, one expects them to have an on-going rivalry when marketing the high-energy beverages.

Coca-Cola is the number one non-alcoholic beverage in the world and is also the golden standard in the beverage industry. Over the pass decade carbonated beverage sales has decrease which has lead Coca-Cola to seek for new opportunity and investor. Contribution of US soda sales in Coca-Cola’s revenue could decline to less than 15% by 2020. By the end of 2017 Coca-Cola is looking to refranchise two-thirds of its bottling territories in North America. The outcome of Coca-Cola refranchise two-third of its bottling territories will reduce the revenue to Coca-Cola sales of its products, however the operating margin will increase. Also, this could reduce the percentage contribution by the U.S to Coca-Cola overall revenue.

In this memo, we will examine comprehensive research on some of the ethical issues that occurred as Pepsi published a commercial that harmed many people. Further, we will discuss how it had a substantial impact on a variety of stakeholders. The issue that occurred was regarding the “black lives matter” and how Pepsi did not take the issues that it still going on in our society into account.

The industry of Carbonated Soft Drinks (CSD) is highly concentrated. The three major companies, Coca Cola, PepsiCo, and Cadbury Schweppes accounted in 1998 for more than 90% of market share by case volume –Exhibit 1-.

Pepsi, one of the major soft drink company, has been always compete directly with another major company which is Coca-Cola. In terms of market share in US, ‘Table 1’ in appendix shows that Pepsi comes a close second with a market share of 33 percent compared to the 40-41 percent of Coke (Arijit, pp.1702). It is no doubt that Coke is the main competitor of Pepsi and both companies make an effort in order to expand their market share not only in local market but also the global market. Moreover, the general market trend is toward to “healthy life style” that prevalent view on carbonated soft drink is turning to be negative. Those issues resulted that companies seek a business strategy to increase innovation, industry growth and shareholder value (David 2014). In 2009, Pepsi had started an innovative project called Pepsi Refresh Project (PRP) under the slogan of “Every Pepsi Refreshes The World”. According to Pepsico website (2010), they define the project as “The Pepsi Refresh Project is an evolution of the Refresh Everything initiative Pepsi launched in 2009, which showed the brand as an optimistic catalyst for idea creation, leading to an ever-refreshing world”. The project started asking a simple question ‘Could a soda really make the world a better place?’ In a way of bring this project, Pepsi used crowdsourcing platform, taking the advantages of its platform for both requestor and contributor. Pepsi, as a requestor, launched the online

1.) Why do companies like Pepsi need to globalize? What are the various ways in which foreign companies can enter a foreign market? What hurdles and problems did Pepsi Face when it tried to enter India during the 1980s?