The Pepsi Of Coca Cola

The soft-drink industry capitalizing on creating the best product. Each product has a different taste, formula, and color to entice the consumer. It is important for the product to remain innovative in order to keep the consumers interested. The suppliers can easily differ, because they do not hold much value or put

The soft drink industry is one of the most highly profitable industries in the USA. Also, the competitive market is a very large market. Americans consumed about 53 gallons of soft drinks per person a year in 2000 by $ 60.3 billion!! Comparing with the market in 1990, since it was 47 gallons. In recent years, the market growth has slowed.

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.

and Pepsi Co dominate the industry with their strong brand name and great distribution channels. In addition, the soft-drink industry is fully saturated and growth is small. This makes it very difficult for new, unknown entrants to start competing against the existing firms. Another barrier to entry is the high fixed costs for warehouses, trucks, and labor, and economies of scale. New entrants cannot compete in price without economies of scale. These high capital requirements and market saturation make it extremely difficult for companies to enter the soft drink industry; therefore new entrants are not a strong competitive force.

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

The Coca-Cola Company is the world's largest beverage company, refreshing consumers with more than 500 sparkling and still brands.

Coca Cola and Pepsi are the brands with the highest brand equities. Both, Coca Cola and Pepsi have gone through the highs and lows of their business to reach that position. Coca Cola’s marketing has been changing over time with more and more products being added every day, while Pepsi has implemented several smart marketing strategies to improve its turnover and profits. So, let’s see what were the marketing strategies implemented by Coca Cola and Pepsi.

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.

Soft drink industry is very profitable, more so for the concentrate producers than the bottler’s. This is surprising considering the fact that product sold is a commodity which can even be produced easily. There are several reasons for this, using the five forces analysis we can clearly demonstrate how each force contributes the profitability of the industry.

Coca Cola has differentiated its product and services that are valued by its customer. Its product are based on customer’s preferences, with affordable price and made easily accessible.

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.

Coca-Cola is the result of a patent medicine formulated in a small southern pharmacy over a hundred years ago. It has grown into a multibillion dollar international company. It also owns one of the most valuable brands in the world. Their Coca-Cola banner has won the world’s top brand 13 times on brand c-consulting firm Interbrand’s annual list (Fraser, 2012). In addition to its main product, Coke, the company owns over 3500 beverages. One of its core competencies is brand building. They have built their brand to have respectability and dependability. Their brand and logo are recognized all around the globe. It has actually become a new known on almost all households worldwide (RNWILKIN, 2009).

The case explains the economics of the soft drink industry. There activities that add value to consumer at nearly every stage of the value chain of the soft drink industry. The war is primarily fought between Coca-Cola and PepsiCo as market leaders in this industry; who combined have roughly a ninety percent market share in their industry. The impact of globalization on competition has allowed both of these major players to find new markets to tap which has allowed each continued growth potential.

Soft drink is one of the most common beverages in our lives; however, most of us do not know its market structure and the variables determining the price of soft drinks. To know more about the soft drink industry, this brief research project deals with the soft drink and ice manufacturing in Canada. Moreover, its main purpose is to discuss and summarize the different economic aspects of the soft drink industry by using the economic concepts and theories, therefore it analyzes and understands the economic facts, current conduction and possible problems in the selected industry.

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-.