Case Study Presentation on coke and pepsi war

Presented By:
Click to edit Master subtitle style Priya Murmu Gunjan Agarwal Aditya Srivastava Gaurav Gupta Jhankar Rathore Naved Sarfaraz

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Introduction of coke and pepsi isJohnStith Pembertonin 1886.The Coca-Cola formula and The company best known for its flagshipproduct COCA-COLA, invented bypharmacist
The Coca-Cola Company is headquartered in

brandwas bought in 1889 byAsa Candler who incorporatedThe Coca-Cola Company in 1892.

Atlanta, Georgia.

PepsiCo was formed in 1965 with themergerofthePepsi-ColaCompanyand Frito-Lay, Inc. PepsiCo, Incorporated is a Fortune500 , American globalcorporation headquartered inPurchase, NewYork , with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and Click to edit Master subtitle style otherproducts. Pepsi is a carbonated soft drink that is producedand manufactured by Pepsi Co. Invented in1893 and introduced as "Brad's Drink", it waslater renamed as Pepsi-Cola on June 16, 1903.

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New Challenges
Cola wars continued into the 21st century with new challenges Was their era of sustained growth and profitability coming to a close? Could they boost flagging domestic CSD sales? Would newly popular beverages provide them with new (and profitable) revenue streams?

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Production & distribution of CSD -concentrate producers.

-Bottlers . -Retail channels . -suppliers.

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Concentrate Producer
-Blended raw material ingredients , packaged the mixture, shipped those container to the bottler. Key production investment areas - machinery, overhead and labor. -A typical manufacturing plant cost - $25 million to $50 million - Significant costs were for advertising, promotion, market research. -Coca-Cola and Pepsi-Cola claimed a combined 74.8% of the U.S. CSD market in sales volume in 2004. Click to edit Master subtitle style

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Bottler
-Bottled or canned the resulting CSD product. -Delivered it to customer account . -Bottling process is capital intensive. -Packaging accounted for 40% to 45% of sales, same for -concentrate and sweeteners for 5% to 10%. -Coke and Pepsi bottlers offered direct store door delivery.

Profitability
Cost of sale is more in bottler.

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Concentrate producer earn more profit than bottler.

Concentrate producer earn more profit than bottler. Cost of sale is more in bottler. 5/22/12

Retail channel
-Super markets. -Vending machines. -Convenience stores. -Gas stations.

Suppliers to Bottlers

-Coke and Pepsi were among the metal can industrys largest customers. -Major can producers- Ball, Rexam, Crown Cork & Seal.

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Challenges
-Flat demand during 1998 to 2004. -Contamination scare at India. -Obesity Issue. -Challenges of Internationalization.

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Challenges to Coca-Cola
Performance & execution:
-on providing alternative beverages -on adjusting key strategic relationships, -on cultivating international markets.

-Currency crisis in Asia and Russia -Recall in Belgium (public relations disaster) -Series of legal problems

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Market share
CSD- 80%(2000) to 73.1%(2004) . Diet soda- 24.6%(1997) to 29.1%(2004). Bottled water 6.6%(2000) to 13.2%(2004). Non-carbs 12.6%(2000) to 13.7%(2004). Non-carbs & bottled water contribution to volume growth coke 100% & Pepsi 75%.

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Internationalisation
Next largest market: Mexico, Brazil, Germany, China, and the United Kingdom Asia and Eastern Europe 837 eight ounce cans: 21 eight ounce cans Cokes dominance : Western Europe, much of Latin America, while Pepsi :Middle East and Southeast Asia. Coca-Cola became synonymous with American culture. About 70% of Cokes sales and about 80% of its profits came from outside the United States; only about one-third of Pepsis beverage sales took place overseas. Arab and Soviet exclusion of Coke Click to edit Master subtitle style

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SWOT : Strengths

Pepsi

Coke

PepsiCo Brands Enjoy a HighProfile Global Presence

Coke Brands Enjoy a High-Profile Global Presence Four of the top five leading brands Broad-based bottling strategy 47% of global volume sales in

Pepsi Owns the Worlds 2nd BestSelling Soft Drinks Brand 5/22/12 Constant Product

SWOT : Weaknesses

Carbonates Market is in Decline Over-complexity of relationship with Pepsi is Strongest in North America bottlers in North America They Only Target Young People Execution ability

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SWOT :: Opportunities

Soft drinks volumes Concerns with Increased Consumerin the AsiaPacific to Drinking Water Regardregion forecast to increase by over 45%

Brands like Minute Maid Light and Growth in Healthier Beverages Minute Maid Premium Heart Wise are positioned well with the Health concerned marketand Asian Growth in RTD Tea Beverages Use distribution strengths in Eastern Europe and Latin America 5/22/12 Growth in the Functional Drinks

SWOT : Threats

Growing "health-conscience" Obesity and Health Concerns society PepsiCos Gatorade, Tropicana and Coca-Cola Increases Marketing Aquafina are stronger brands and InnovationMiddle East Spending to$400M Boycott in the Globally Protest against Coke in India Relying on North America onlyis Bad
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Thank you
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