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PEPSI VS COKE CASELET

STRATIGY MANAGEMENT

The Coca-Cola Company Introduction


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The Coca-Cola Company is a beverage retailer, manufacturer and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product COCA-COLA, invented by pharmacist John Stith Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892 In 1919, went public under control of Robert Woodruff expanded and developed in national and international markets Successful during WWII with the high CSD consumption from the U.S soldiers

PepsiCo, Incorporated Introduction


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Pepsi was created in 1893 in North Carolina by Pharmacist Caleb Bradham. PepsiCo was formed in 1965 with the merger Pepsi-Cola Company and Frito-Lay, Inc. of the

PepsiCo, Incorporated is a Fortune 500, American global corporation headquartered in Purchase, New York, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products.

Industry Profitability: Porters Five Forces (CSD)


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Rivalry
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Substitutes
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Coke Pepsi Cadbury

Alliances Acquisitions Product Innovation

Barriers to Entry
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Power of Suppliers
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Exclusive Territories Substantial Investment Current Market Presence

Sugar Packaging

Power of Buyers
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Super Markets Convenience and Gas Mass Merchandisers Fountain

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Vending Fast Food

Concentrate Business vs. Bottling Business


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Concentrate Producers
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Blend raw material ingredients Packaged Mixture in plastic canisters Shipped to bottlers

Bottler plants decreased in the US


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Diet CSDs
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2000 plants to 300 from 1970-2004 Cokes re franchising bottling operations Buying Poor managed bottlers Infusing with capital Selling to large bottling plants

Added artificial sweeteners

In 1985, Coke purchased two of the largest bottling companies


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Vertical integration

Affects on Industrys Profits


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Coke was the first concentrate producer to build a nationwide franchise bottling network, that Pepsi and Cadbury Schweppes followed suit. Franchise agreements with both Coke and Pepsi allowed bottlers to handle the non-cola brands of other concentrate producers. Bottlers could not carry directly competing brands. Throughout the 1980s, the growth of Coke and Pepsi put a squeeze on smaller concentrate producers Shelf space for small brands declined and were shuffled from one own to another.

In a five year span, Dr Pepper was sold several times, Canada Dry twice, Sunkist once, Shasta one, and A&W once. Phillip Morris acquired Seven-UP in 1978 for a big premium, but racked up huge losses in the early 1980s, and then left the CSD business in 1985. In 1990s, through a series of strategic acquisitions, Cadbury Schweppes became the third-largest concentrate product. Coke has a world market share of 51.4%, Pepsi has 21.8% and Cadbury Schweppes has 6%

MARKETING STRATEGIES
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Pepsi ads often focused on celebrities, choosing Pepsi over Coke, supporting Pepsi's positioning as "The Choice of a New Generation." In 1975, Pepsi began showing people doing blind taste tests called Pepsi Challenge. In the late 1990s, Pepsi launched its most successful long-term strategy of the Cola Wars, Pepsi Stuff

CYBER WARS
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Coca-Cola and Pepsi engaged in a "cyber-war" with the re-introduction of Pepsi Stuff in 2005 & Coca-Cola retaliated with Coke Rewards. This cola war has now concluded, with Pepsi Stuff ending its services and Coke Rewards still offering prizes on their website

COLA WARS IN POPULAR CULTURE


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A satirical look at the cola war can be found in the 1985 film The Coca-Cola Kid, starring Eric Roberts. Rock musician Neil Young's song This Note's for You off of his 1988 album This Note's for You contains the lyrics; Ain't singin for Pepsi & Ain't singin' for Coke Rock musician Billy Joel mentions the "Cola Wars" in his number-one hit "We Didn't Start the Fire."

Sustaining Profits
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Shift to non-carbonated beverages (keep up with demand of health conscious society) Continue on current path and see where it leads

60 50 40 30 20 10 0 CSD lc l Milk NCSD

CONCLUSION
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In my point of view, Coca-Cola has better long-term prospects for success India: There are mainly three reasons. One is due to the Coca-Colas lifestyle advertising, with the strategy building a connect using the relevant local idioms and it worked hard to build up a brand preference for its flagship brand, Coke. In addition, it did segment the target customers to India A and India B. Its quite a efficient and effective segmentation. coke is the first to reduce the price in order to encourage the consumption. Pepsi was forced to match these price reductions, which is quite passive.