Coca Cola And The Carbonated Soft Drink

1674 WordsFeb 15, 20167 Pages
Introduction Coca-Cola Company and PepsiCo are two industry leaders in the carbonated soft drink (CSD) industry and are strong rivals of each other in the world’s beverage market. From 1975 to the mid-1990s, both companies achieved a steady growth rate of 10% in terms of revenue. Between 1970 and 2000, CSD consumption grew by an average of 3% due to the fact that there were more varieties of carbonated drinks along with many flavored drinks. There were also many substitutes widely available in portable packaging, but Americans stuck to drinking more soda than the available substitutes. The competition between both companies became weak when CSD consumption diminished to 46 gallons per year at the start of the 21st century, the lowest CSD consumption level in the United States since 1989. This was followed by different internal issues faced by both the companies. In addition to this, the profitability of both companies started reducing as there were fluctuations that could be seen by incomes generated in different years. As for Coca-Cola, the net profits were $6,797, $11,787, and $8,584, all in millions, for the year 2009, 2010, and 2011 respectively. However, for PepsiCo the profits were somewhat stable through the years. The new industry environment created intense competition among CSD businesses which required the need for new strategies to be formulated and implemented to be a top competitor in the environment. Strategic Issue How can Coke gain competitive advantage
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