Essay on Industry Analysis Csd

The interactions between the two major players allows for the creation of a level of competition, where both companies are consistently seeking to improve their businesses processes to remain competitive with the other. Each company also has a set of pricing and output decisions that not only effect their organization but the entire industry in general. One of the most pressing trends for both companies is that consumers are generally becoming more health conscious and beginning to shun carbonated beverages.

Coca Cola and Pepsi vied for "throat share" of the world's beverage market for over a century. The biggest battles of the cola wars were fought over the $60 billion industry in the U.S, where the average American consumed 53 gallons of carbonated soft drinks per years. In a carefully waged competitive struggle, from 1975 to 2000 both Coke and Pepsi achieved annual growth of around 10% as both U.S and worldwide carbonated soft drink consumption consistently rose. This cozy relationship was threatened in the late 1990's , however , when U.S carbonated soft drink 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 growth and broadened their brand portfolios to include non-carbonated beverages like tea, juice , sports drinks and bottled water.

Over the last century, Coke and Pepsi have been waging war over the $74 billion carbonated soft drink industry in the United States. The degree of this competition has changed over the last decade as carbonated soft drink (CSD) consumption in America decreased to 46 gallons per year per person. To investigate these changes and evaluate the reasons why the industry has been so successful over the years, it is important to do an industry analysis looking at the different forces that affect both Coke and Pepsi as well as the changes in these forces and their effects on the industry competition.

However, no matter what the advertisements claim, the statistics concerning the shares and value of each company cannot lie. The Coca-Cola Company dominates the soft-drink market by owning four of the global top five soft-drink brands, which include Coca-Cola, Diet Coke, Fanta, and Sprite. The Coca-Cola Company makes or licenses more than 400 drink products in more than 200 nations. In 2006, Coca Cola’s sales reached 24,088 million dollars and had a net income of about 5,080 million dollars, with 71,000 employees working in the company. PepsiCo, Incorporated is the largest snack maker and second largest soft-drink maker in the world. It sells beverages and snacks in approximately 200 nations as well. In 2006, its sales reached 35,137 million dollars and had a net income of $5,642 dollars with 168,000 employees working in the company. With these numbers, one can assume that Pepsi is earning more profit if wages payouts are not considered, but Pepsi has a large number of workers working for

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.

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 soft drink industry in the United States is a highly profitably, but competitive market. In 2000, carbonated soft drink retail sales were estimated $60.3 billion, however, soft drink consumption growth has slowed in recent years. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the U.S. They are the Coca Cola Company with 44.1% market share, The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/ Seven Up, Inc. with 14.7% market share. These three companies market the top ten brands account for 73% of soft drink sales in the U.S. Dr. Pepper/ Seven Up, Inc. owns two of the top ten brands: Dr.

The Coca-Cola company has been in business since its inventor began selling it in drug stores in 1886 (The Coca-Cola Company, 2009). Pepsi-Cola was invented a short time later in 1898, but at the time it was called “Brad’s drink.” It was later renamed Pepsi-Cola in 1902 (Butler, 2006). Since those early days when the sodas were invented, Coca-Cola and Pepsi have been in competition with each other for the domination of the world’s soda market. Over the course of more than a century, sales have continued to rise for both companies, and they both consistently earn a profit. Both companies

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

The market for carbonated soft drinks is saturated with many brands. The top five are, Coca-Cola, Diet Coke, Pepsi-Cola, Mountain Dew, and Dr. Pepper (Hartlaub, n.d.). Over 90% of the market is dominated by three companies, Coca-Cola, Pepsi, and Dr. Pepper/Snapple (Statista, 2015) Because the soft drink industry manufactures its products in mass amounts, they can produce economies of scale and create a competitive advantage over smaller or new companies trying to

“When it comes to the king of pop, only Michael Jackson tops Coca-Cola. The soda giant is one of the most recognizable companies in the world, with annual sales north of $45 billion” (Tamara Walsh, TMFSocialME). For years, there has been a “cola war” between Coca-Cola and Pepsi Cola. This has urged cola drinkers to test these two products and compare them in many different areas. Coca-Cola and Pepsi Cola may be the most popular soft drinks in the United States, causing the two to be at war, however, they both have many similarities and differences in terms of sales and social media/advertising.

First, to set our boundaries of the industry, I will set the boundaries of the carbonated soft drink industry. The carbonated soft drink industries are companies that are in the production of soda products, sports drinks, and energy drinks. The production and distribution of carbonated soda drinks can be broken down into four separate sections: concentrate producers, bottlers, retail channels, and suppliers. The first section is the producers of concentrate syrups. These are companies like Coca-Cola, Pepsi, and Dr. Pepper who specialize in creating the concentrates. The second groups are the bottlers of soda products. The bottlers, buy concentrate from companies like Coca-Cola, then add carbonated water and other sweeteners, and then bottle the product for delivery to retailers. The third sections are retail channels. Retail channels are supermarkets, fountain outlets, gas stations and other stores where soda is sold to end consumers. The suppliers to the industry make up the last of the major players in the carbonated soft drink industry. The suppliers in the industry supply both the concentrate producers and also the bottling. The soda production industry has a fairly concentrated market with two major companies accounting for 70% of the market share. The Coca-Cola Company is by far the leading company in the industry with over 40% share of the market. Its closest competitor is the PepsiCo

As we all go about our day, we rush to place to place. Around us there are things for sale, people everywhere trying to make money. As we are rushing around, we all tend to get thirsty as we have a thousand things going on. In America we have dozens of choices when it comes to soft drinks, although the two most widely known are Coca-Cola and Pepsi. Many are often stuck between choosing Coke or Pepsi; even though they are slightly different in appearance, taste, and price it makes a world of difference to the customer.

In an industry dominated by two heavyweight contenders, Coke and Pepsi, in fact, between 1996 and 2004 per capita consumption of carbonated soft drinks (CSD) remained between 52 to 54 gallons per year. Consumption grew by an average of 3% per year over the next three decades. Fueling this growth were the increasing availability of CSD, the introduction of diet and flavored varieties, and brand extensions. There is couple of reasons why the industry is so profitable such as market share, availability and diversity and brand name and world class marketing.

Situation Analysis: Soft drinks are a multibillion dollar global commodity in the 21st century Coke alone produces over 400 brands in 250 countries, serving an average of 1.5 billion servings of some type of beverage per day (Warner, 2005). However, in the last decade or so, soft drink sales