clearly specify Coke and Pepsi’s market in the value chain of the industry‚ their main suppliers and main buyers. Both concentrate producers (CP) and bottlers are profitable. These two parts of the industry are extremely interdependent‚ sharing costs in procurement‚ production‚ marketing and distribution. Many of their functions overlap; for instance‚ CPs do some bottling‚ and bottlers conduct many promotional activities. The industry is already vertically integrated to some extent. They also
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gradually it became a part of their life style also the manufacturing process for concentrate was simple and required small investment‚ significant cost were to advertise‚ promotion‚ market research etc‚ while bottling process was extremely capital-intensive and involved specialized‚ high speed lines‚ but there was no considerable investments required on Advertisements‚ promotions and market research etc. This way Concentrate Manufacturers and Bottlers complemented each other for higher profit margins
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of the bottling network‚ figuring out brand equity‚ and develop new positioning. Lastly‚ there are numerous opportunities available for Crush to take advantage of that which will be discussed in this case that deal with new positioning towards a different segment and a much needed rejuvenation of the bottling network. Industry Structure There are three major players which are all very important in the production and distribution of carbonated soft drinks. They are concentrate producers‚ bottlers
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Cola Wars Continue: Coke and Pepsi in the 21st Century Concentrate Producers and Bottlers were two of the four major participants that were involved in the production and distribution of Carbonated Soft Drinks (CSDs) in the United States. The Concentrate Producers (CPs) were responsible for blending raw material ingredients‚ packaging the blend in plastic canisters‚ and shipping it to the Bottler. Using Porter’s Five Forces analysis for the CPs industry‚ we determined that
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companies experienced their own distinct ups and downs‚ as Coke suffered several operational setbacks and as Pepsi charted a new‚ aggressive course in alternative beverages. Although their paths diverged‚ however‚ both companies began to modify their bottling‚ pricing‚ and brand strategies. As the cola wars continued into the 21st century‚ Coke and Pepsi faced new challenges: Could they boost flagging domestic CSD sales? Would newly popular beverages provide them with new (and profitable) revenue streams
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bottlers to concentrate on take home sales through supermarkets and Pepsi introduced new 26 ounce bottle at the same time for family consumption. Later in 1963‚ new CEO Donald Kendall launched a new campaign for the young generation and the people who think themselves as ‘young at heart’‚ named “Pepsi generation”. Intense promotion were held to reach to the customers mind and thus Pepsi were able to narrow coke’s lead to 2-to-1 margin at that time. In this period‚ Pepsi sold concentrate to its bottlers
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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 domestic CSD sales? Compete how in growing non CSD category that demanded bottling‚ pricing‚ and brad strategies What has to be doen to ensure sustainable growth and profitability? Economies of the US CSD Industry Consumed 23 gallons of CSD annually in 1970‚ consumption grew by 3% per year over next 3 decades. Availability
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also both had a very high market share. Coke and Pepsi had an average of 10% net profit in sales. The profitability of the concentrate business is so different to that of the bottling business because the concentrate producers are not responsible for distribution. Coke and Pepsi are to distribute their products. It also takes little capital investment for the concentrate producers. They need only one factory to serve all of the U.S. Bottlers deal with merchandising and have high fixed operation costs
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value chain of the soft drink industry. By focusing on the war between Coca-Cola and PepsiCo as market leaders in this industry – with a 90% market share in carbonated beverages – the study analyses the different stages of the value chain (concentrate producers‚ bottlers‚ retail channels‚ suppliers) and the impact of the modern times and globalisation on competition and interaction in the industry. Throughout this analysis‚ I will assess how the strategic interaction between the two players allowed
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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 of suppliers: The direct suppliers for concentrate producers are the suppliers
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