Why and how can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated drinks? The ‘Cola Wars’ have through the years shown the intense competition between Coca-Cola and PepsiCo. While the competition to gain new market share may no longer be as intense‚ the two companies are still fighting to remain relevant with a continued demand of their products. As the U.S. has shown an interest in non-carbonated drinks‚ domestic demand for carbonated
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Cola Wars: Coca-Cola vs. PepsiCo The Coca-Cola Company has enjoyed a long and successful history; however‚ it has made mistakes. Though success has not always come easy or cheap‚ Coca-Cola has maintained a large loyal consumer base. As an icon in America and around the world‚ the company can be credited for listening to and catering to the requests and needs of its consumers. This is why its attempt to launch new flavors must be carefully considered to ensure not only acceptance by the target
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http://www.dea.unipi.it/staff/e.giuliani/downloads/CocaPepsi.pdf Cola wars continue: coke and pepsi in 2012 $74B carbonated soft drink industry in the US 1975-1990s‚ coke and pepsi both earned average annual revanue growth of around 10%. In 2000‚ us per capita CSD consumption declined. 2009‚ average American drank 46 gallons of CSD per year‚ loest since 1989. Coke suffered from operational setbacks Pepsi charterd new‚ aggressive course in altnerative beverage and snack Challenges Boost
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Cola Wars (Porter’s Five Forces) Barriers to entry The barriers to entry are high for new companies; therefore‚ the threats of new entrants are low. For example‚ retailers enjoy significant margins for their bottom-line. This makes it tough for the new entrants to convince retailers to substitute their new products for Coke and Pepsi. There are an economy of scale‚ high required investment‚ high costs for advertising and marketing promotion‚ high channels of distribution‚ and high products differentiation
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Cola Wars Case Analysis 1. The main way in which my case notes would be different for Cola Wars if I were to have a second try at writing them would be to include a breakdown of how they are able to apply to Porter’s five forces. For example‚ it is evident after reading this case that the soft drink industry is an extremely profitable one (especially for Coke and Pepsi). The reasons for this were discussed in class‚ and I will quickly explain each: There are great barriers to entry when trying
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packaging and sweeteners and it accounts for high portion of sales. However‚ the bottlers are allowed to handle the non-cola brands as well and they have the right to decide on final retail pricing; and top bottlers get contribution from the main companies such as Coca-Cola. 2. How has the competition between Coke and Pepsi affected the industry’s profits? In the 1980s‚ Cola Wars between Coke and Pepsi started to heat up. To get more profits than the other‚ they tried in doing so many things
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MKTS 7303 - PRINCIPLE OF STRATEGIC MANAGEMENT Cola Wars (Coke and Pepsi 2010) Case Study - Week 4 (S42166755) 1. Compare the competitive dynamics of the concentrate business to that of the bottling business? Why is the profitability so different? By using Five Forces Model by Michael Porter‚ it will shows competitive dynamics in the industry. Therefore‚ to define everything further this model will be used to do the comparison between concentrate business (CB) and bottling business (BB).
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Cola War Soft drinks are profitable because it is a $60 billion industry in the United States alone. Not only is it profitable in the United States‚ but both Pepsi and Coca-Cola have expanded their franchises internationally and both have become competitive brands. It is estimated that the average American can consume about 53 gallons of carbonated soft drinks a year. According to the article‚ Americans drink more soda than any other beverages on the market today‚ such as sports drinks‚ juices
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HTM 4101 Strategic Management Cola Wars case study – Five forces analyses Concentrate producers: Bargaining power of buyers: Refer to the case‚ direct buyer is the bottler and indirect buyers are the end consumer and suppliers such as supermarkets and other outlets. Bargaining power of buyers for concentrate producers refers to the bargaining power of the bottlers. From the industry perspective‚ it is true that bottler could choose to switch their concentrate producers. Bargaining power
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and competition are ultimately responsible for industry profitability‚ an analysis of the five competitive forces offers an explanation for the success of the soft drink (CP) industry. The soft drink industry benefits from generally benign forces. Colas characterized the first 50+ years of the soft drink industry‚ with Coke and Pepsi accounting for the top brand names. While substitutes for soft drinks certainly exist‚ the major players in the CP industry have successfully shaped this competitive
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