Cola Wars

 

Fall 2009 - Semester II
 

 

BUS 4035

 

Cola Wars:
   

 

Coke and Pepsi in the 21st Century
The Case study by Harvard Business School describes a century of rivalry of Coca Cola and Pepsi and the new challenges faced by the companies in the 21st century. The case study covers aspects of the beginning of the cola industry, the cola growth, the new market strategy anddynamics of development used by the two mega companies - Coke and Pepsi. It also charts their diversification into the emerging international markets to fuel growth and broaden their brand portfolios to include noncarbonated beverages like tea, juice, sports drinks, and bottled water.

Contents  Part I
Introduction Case Synopsis and

2 

 

Part II
In-Depth Analysis of the case study andanswers to issues with reference to Porters Five Forces, Value Chain and Statistical Exhibits.

3-12

Prepared By: Aulakh,Jaspreet-100640830 Krohmal, Alex - 100647263 Puri,Dildeep - 100646523 Kaur, Sanjeet - 100674919 Ma, Yu-fan - 100673079 Singh, Dapinder- 100684523 Xiaoljun, Tao - 100596341

 

Part III
Conclusions 

13

  Bibliography

14

 
 

Vig, Amit Raj - 100679976

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PART I Introduction & Case Synopsis The Case study describes more than a century of rivalry of Coca Cola and Pepsi and its impact on organizational structure and competition. It also describes new challenges of the 21st century included boosting flagging domestic cola sales and finding new revenue streams and how both companies began to modify their bottling, pricing, andbrand strategies and looked towards emerging international markets to fuel growth and broaden their brand portfolios to include non-carbonated beverages like tea, juice, sports drinks, and bottled water. The case also considers whether Coke's and Pepsi's era of sustained growth and profitability was coming to a close or whether this apparent slowdown was just another blip in the course of a centuryof enviable performance. The case study charts out in detail the developments in the carbonated soft drink industry over the period spanning from 1886 to the present day. It also analyzes the role of two major players; Coke v Pepsi in the US and International Market more specifically, in tackling the topic of industry leadership and competitive dynamics. The major issue in this case study is theprocess adopting new products and ideas, by which both Coke and Pepsi tried to gain control of market share. The case details CocaCola’s initial leadership and its contribution toward evolving the industry and Pepsi’s entry and risk taking ability to give Coke a cut-throat competition in the US and the international market over the years. It also sheds light on the failures as well as successes onthe strategies implemented by the companies.

 

 

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PART II Detailed Case Study, Issues & Analysis. History & Time Line: Coke was found in 1886 by John Pemberton in Atlanta. The brand advertisement of the company came in 1891 and the first bottling franchise was opened in 1899. The company went public in 1919. In 1923, Robert Woodruff became the leader and expanded thecompany in the national and international markets. Pepsi-Cola was invented in 1893 in North Carolina by a pharmacist, Caleb Bradham. In 1923 and in 1932, Pepsi declared bankruptcy. Pepsi began to gain business during great depression by reducing prices as compared to Coca Cola. Cola war begins: 1950s: In 1950, Alfred Steele of Pepsi made “beat coke” as the motto of his company. This is what ledto the beginning of this war. 1960s: In the 1960s both companies expanded to new flavours: Pepsi-Team, Mountain Dew and Diet Pepsi.Coke—Fanta, Sprite, Low calorie Cola Tab. Non -Carbonated Soft Drinks included Minute Maid, Duncan Foodscoke purchased Minute-Made, Dunkan Foods (Wang2006, pg 7). Till 1950’s Coke was not fighting directly with Pepsi, whereas Pepsi was fighting aggressively and...