Coca-Cola Versus Pepsi Essay Example

Introduction There are few markets in the world as clearly dominated by two companies as it is the soft-drinks one. In this business, “The Coca-Cola Company” and “PepsiCo, Incorporated” hold most of the market share in virtually every region of the world. This is why a big rivalry between them has been growing throughout time. In the present essay I am going to develop the main characteristics of this global battle. For a better understanding, let's take first a look to the principal features of both companies. The Coca-Cola Company dominates the market by owning four of the global top five soft-drink brands: Coca-Cola, Diet Coke, Fanta and Sprite. Its main activity consists on producing syrup concentrate which is then sold to various bottlers throughout the world who hold a Coca-Cola franchise. The firm makes or licenses more than 400 drink products in more than 200 nations. In 2006, sales hit $24,088 million and net income $5,080 million. 71,000 employees work in the company. PepsiCo, Incorporated is the biggest snack maker and the second biggest soft-drinks maker in the world. The company manufactures, markets and sells beverages and snacks in approximately 200 countries. In 2006, sales hit $35,137 million and net income $5,642 million. 168,000 employees work in the company.
Historical rivalry In a hypothetical 0% growth market with only two competitors, the only way to increase sales is to go after competitor's clients. Reality, although different, doesn't differ very much in some national soft-drinks markets (particularly the United States, Canada and the United Kingdom). This is the main cause of the rivalry between Coca-Cola and Pepsi: head-to-head battle is not only habitual in many markets, but also unavoidable in the desire for growth of the companies. The term “cola wars” was first used to describe the mutually-targeted marketing campaigns in the 1980s and 1990s between Coca-Cola and Pepsi. One famous chapter of these campaigns was the “Pepsi