Independent Research Paper Competitive Battle Between Coke Cola and Pepsi Cola

Prepared for: Dr. Lawrence Gulley Business Administration 660

As Partial Fulfillment of Master of Business Administration Program Course of Study: Business Administration 660 November 29, 2011
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TABLE OF CONTENT
ABSTRACT .................................................................................................................................................................3 PRODUCTS AND SERVICES...................................................................................................................................6 COKE - PRODUCT .......................................................................................................................................................6 PEPSI - PRODUCT .......................................................................................................................................................8 COCA-COKE FINANCIAL STATEMENT.............................................................................................................9 PEPSI COLA FINANCIAL STATEMENT............................................................................................................10 SIDE-BY-SIDE PRODUCT COMPARISON .........................................................................................................11 COKE PRICES..........................................................................................................................................................15 PEPSI PRICES ..........................................................................................................................................................15 PROMOTION & MARKETING .............................................................................................................................15 TASTE TEST COMPARISON .......................................................................................................................................16 ENVIRONMENTAL SUSTAINABILITY .........................................................................................................................17 TARGET MARKET .................................................................................................................................................18 MAJOR SEGMENTS ...................................................................................................................................................18 Marketing and Advertising.................................................................................................................................18 Strategic Plan.....................................................................................................................................................19 COCA COLA SWOT ANALYSIS...........................................................................................................................20 STRENGTHS .............................................................................................................................................................20 WEAKNESSES ..........................................................................................................................................................21 OPPORTUNITIES .......................................................................................................................................................21 THREATS .................................................................................................................................................................22 PEPSI COLA SWOT ANALYSIS ...........................................................................................................................23 STRENGTHS .............................................................................................................................................................23 WEAKNESSES ..........................................................................................................................................................23 OPPORTUNITIES .......................................................................................................................................................24 THREATS: ................................................................................................................................................................24 SWOT ANALYSIS COMPARISON .......................................................................................................................25 SUMMARY OF FINDING .......................................................................................................................................25 BIBLIOGRAPHY......................................................................................................................................................27

Abstract
This research paper provides overview of the beverage industry, with emphasis on market positions of Coca-Cola & Pepsi. Also examines future prospects of Coke & Pepsi. The battle for your cola choice has been going on for years and it isnt about to slow down. Its a huge market with customers spanning the entire globe and from all age groups and economic classes. Of all the corporate battles for market share in various industries, Coke vs. Pepsi is probably the main draw. From which one tastes better to whose television commercials are more entertaining, almost everyone has an opinion. And its not just strictly to do with cola either. Both companies feature a wide range of competing products from diet cola to flavored sodas to sport and energy drinks. I would choose to drink Coke over Pepsi. Because Coke has fair marketing strategy that attracts all generation of people of all ages, whereas Pepsi targets mostly younger generation, and tries to make an image of Coke as an un-cool drink, and Coke has made more people to appreciate its value and product than Pepsi.

Lawrence Gulley, Ph.D. Independent Research Paper

The Competitiveness between two leading Cola Companies Doctor John Pemberton an Atlanta, Georgia pharmacist discovered this formula in an old three legged kettle. He invented this in May of 1886, while mixing ingredients in his backyard in what we call a black caldron. However, he did not give Coca Cola its name. Frank Robinson his bookkeeper was the actually was the gentleman that provide the name Coca Cola. Not only did Mr. Robinson provide the name, but the script to Coca Cola as well. This logo is still being used the company today. However the bottling business began in 1899 when two Chattanooga businessmen, Benjamin F. Thomas and Joseph B. Whitehead, secured the exclusive rights to bottle and sell Coca-Cola for most of the United States from The Coca-Cola Company. (LONNIE, 2003) Coca-Cola website is www.cocacola.com and employs 139,600 (2010). This bottling system has continued to operate as independent, local businesses until the early 1980s until franchises decide to consolidate. In mid 1980s, Coca-Cola Company merged some of its company-owned operations with two large ownership groups that were for sale, the John T. Lupton franchises and BCI Holding Corporation's bottling holdings, to form Coca-Cola Enterprises Inc. The Company offered its stock to the public in November of 1986, at a splitadjusted price of $5.50 a share. On an annual basis, total unit case sales were 880,000 in 1986. (LONNIE, 2003) Another pharmacist, Caleb Bradham of New Bern, North Carolina, like many pharmacists during the turn of the century he had a soda fountain in their drugstores. He served his customers

refreshing drinks, that he created himself. His most popular beverage was something he called "Brad's drink" made of carbonated water, sugar, vanilla, rare oils, pepsin and cola nuts. In the summer of 1893 the "Brad's drink" was created, however, later renamed Pepsi Cola in 1898 after the pepsin and cola nuts used in the recipe. In 1898, Caleb Bradham wisely bought the trade name "Pep Cola" for $100 from a competitor from Newark, New Jersey that had gone broke. The new name was trademarked on June 16th, 1903. Bradham's neighbor, an artist designed the first Pepsi logo and ninety-seven shares of stock for Bradham's new company were issued. Pepsi Cola SIC public website is www.pepsi.com and they employs 285,000 employees (2009). Caleb Bradham knew that to keep people returning to his pharmacy, he would have to turn it into a gathering place. Like many pharmacists at the turn of the century, he had a soda fountain in his drugstore, where he served his customers refreshing drinks that he created himself. His most popular creation was a unique mixture of carbonated water, kola nuts, vanilla and rare oils, named Brads Drink by his customers. Caleb decided to rename it Pepsi-Cola, and advertised his new soft drink to enthusiastic customers. Sales of Pepsi-Cola started to grow, convincing him to form a company and market the new beverage. In 1902, he launched the Pepsi-Cola Company in the back room of his pharmacy, and applied to the U.S. Patent Office for a trademark. An official patent was awarded on June 16, 1903. During his first trials, he mixed the syrup himself and sold it exclusively through soda fountains. He soon recognized that a greater opportunity existedto bottle Pepsi-Cola so that people everywhere could enjoy it. (Harvey, 1980)

Products and Services

In marketing, a product considered as anything that can be offered to a market that might satisfy a wants and/or needs. It is of two types: Tangible and Intangible. Since services have been at the forefront of all modern marketing strategies, some intangibility has become essential part of marketing offers. It is therefore the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product. A product is similar to goods. In accounting, goods are physical objects that are available in the marketplace. This distinctively differentiates them from a service, which is a non-material product. When referring to the term goods, it is primarily used by those that wish to abstract from the details of a given product. Products, however, are primarily by those that wish to examine the details and richness of a specific market offering. A service is a non-material or intangible product - such as an attorney providing legal advice, serving, or an entertainment experience.

Coke - Product
The Coca-Cola formula is The Coca-Cola Company's secret recipe for Coca-Cola. As a publicity marketing strategy started by Robert W. Woodruff, the company presents the formula as one of the most closely held trade secrets ever and only a few employees know or have access to. This Coca-Cola formula appears to be the original formula to Coca-Cola. It is from the book For God, Country and Coca-Cola. Coca-cola is a multinational and it is not limited to one product. Through the years they have invented and introduced many products than their main cola drinks. The Coca-Cola Company is the world's leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups, with world headquarters in Atlanta, Georgia. Coca-Cola, the Company's flagship brand, and over 230 other soft-drink brands are manufactured and sold by the Coca-Cola 6

Company and its subsidiaries in nearly 200 countries around the world. The list of Coca-cola brands are as follows: Appletiser Aquarius BPM Energy Barq's Beat soda Beverly Cannings Cheers Ciel Coca-Cola Black Cherry Vanilla Coca-Cola Blak Coca-Cola C2 Coca-Cola Cherry Coca-Cola Citra Coca-Cola M5 Coca-Cola Zero Coca-Cola Coca-Cola with Lemon Coca-Cola with Lime Dasani Delaware Punch Diet Coke Fanta Fanta Citrus Fioravanti Fresca Frisco Fruitopia Frutonic Full Throttle Georgia Hi-C Hit Kia-Ora Kinley Lemon & Paeroa Lift Lift plus Lilt Manzana Lift Mare Rosso Mello Yello Mezzo Mix Minute Maid Nestea New Coke Nordic Mist OK Soda Pibb Xtra Powerade Qoo Raspberry Coke Relentless Sarsi Senzao Simply Orange Smart Sparkle Sprite Sprite Ice Sprite Remix Sprite Zero Surge Swerve Tab Tab Clear Tab Energy Tab X-Tra Tiky Vault 72 Total Items Listed

Pepsi - Product
The Pepsi-Cola drink contains basic ingredients found in most other similar drinks including carbonated water, high fructose corn syrup, sugar, colorings, phosphoric acid, caffeine, citric acid and natural flavors. The caffeine free Pepsi-Cola contains the same ingredients but no caffeine. Pepsi-Cola Bottling Company, headquartered in Purchase, New York, is the global beverage division of PepsiCo, Inc. Today, Brand Pepsi, Diet Pepsi, Pepsi-One, Mountain Dew, Slice, and Mug account for nearly one-third of total soft drink sales in the United States, a consumer market totaling about $56 billion. The Pepsi-Cola Company is the world second largest beverage company. Pepsi-Cola beverages are available in about 170 countries. They also make and markets ready-to-drink iced teas and coffees via joint ventures with Lipton and Starbucks. PepsiCo, Inc. consists of: Pepsi-Cola Company, Frito-Lay Company, and Tropicana Products, Inc., the world's largest marketer and producer of branded juices. Mr. Donald M. Kendell, President and CEO of Pepsi-Cola, and Herman W. Lay, Chairman and CEO of FritoLay founded PepsiCo, Inc. in 1965 through the merger of the two companies. They futher expanded their business venture by acquiring Tropicana in 1998. Some of the different and varied brands of Pepsi are as follows: All Sport Aquafina Caffeine-Free Pepsi Crystal Pepsi Diet Pepsi Gatorade Izze Jazz Josta Kas Manzanita Sol Pepsi Pepsi Blue Pepsi Cappuccino Pepsi Max Pepsi ONE Pepsi Samba Pepsi Tarik Pepsi Twist Propel Fitness Water Sierra Mist Slice

Mirinda Mountain Dew Mountain Dew AMP Mountain Dew LiveWire Mountain Dew MDX Mug Root Beer

SoBe Storm Teem Tropicana Products Tropicana Twister 33 Total Items Listed

In comparison of the distribution companies, Pepsi produces nearly 50% of less than Coca-Cola, but they are highly competitive in the market.

Coca-Coke Financial Statement

2010
Period End Date Period Length Stmt Source Stmt Source Date Stmt Update Type 12/31/2010 12 Months 10-K 02/28/2011 Updated

2009
12/31/2009 12 Months 10-K 02/28/2011 Reclassified

2008
12/31/2008 12 Months 10-K 02/28/2011 Reclassified

2007
12/31/2007 12 Months 10-K 02/26/2010 Reclassified

2006
12/31/2006 12 Months 10-K 02/21/2007 Updated

Revenue Total Revenue

35,119.0 35,119.0

30,990.0 30,990.0

31,944.0 31,944.0

28,857.0 28,857.0

24,088.0 24,088.0

Cost of Revenue, Total Gross Profit

12,693.0 22,426.0

11,088.0 19,902.0

11,374.0 20,570.0

10,406.0 18,451.0

8,164.0 15,924.0

Selling/General/Administrative Expenses, Total Research & Development Depreciation/Amortization Interest Expense (Income), Net Operating Unusual Expense (Income) Other Operating Expenses, Total Operating Income

7,199.0 0.0 0.0 0.0 559.0 6,219.0 8,449.0

5,659.0 0.0 0.0 0.0 313.0 5,699.0 8,231.0

6,079.0 0.0 0.0 0.0 350.0 5,695.0 8,446.0

10,945.0 0.0 0.0 0.0 0.0 254.0 7,252.0

9,431.0 0.0 0.0 0.0 185.0 0.0 6,308.0

Interest Income (Expense), Net Non-Operating Gain (Loss) on Sale of Assets Other, Net

0.0 0.0 5,185.0

0.0 0.0 40.0

0.0 0.0 39.0

0.0 0.0 219.0

0.0 0.0 195.0

Income Before Tax

14,243.0

8,946.0

7,506.0

7,919.0

6,578.0

Income Tax - Total Income After Tax

2,384.0 11,859.0

2,040.0 6,906.0

1,632.0 5,874.0

1,892.0 6,027.0

1,498.0 5,080.0

Minority Interest Equity In Affiliates U.S. GAAP Adjustment Net Income Before Extra. Items

-50.0 0.0 0.0 11,809.0

-82.0 0.0 0.0 6,824.0

-67.0 0.0 0.0 5,807.0

-46.0 0.0 0.0 5,981.0

0.0 0.0 0.0 5,080.0

Total Extraordinary Items Net Income

0.0 11,809.0

0.0 6,824.0

0.0 5,807.0

0.0 5,981.0

0.0 5,080.0

Pepsi Cola Financial Statement

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Side-by-side Product Comparison

As seen above both the companies Coke and Pepsi have a number of products. Many of these products are innovations but there are also many products which are brought out just as a competitive product for the other companies. Some of these products that are brought in the market by both the companies to compete against each other are as follows: Coke Pepsi

The main dark cola drink of the company which started the rivalry between these companies.

Pepsi version of dark cola which is the major primary competitor to Coke.

Full Throttle is an energy drink brand produced by The Coca-Cola Company. It debuted in late 2004 in North America.

AMP is an energy drink produced and distributed by PepsiCo under the Mountain Dew soft drink brand.

Vault is a carbonated beverage that was released by The Coca-Cola Company in June 2005.

Mountain Dew MDX is an energy drink manufactured and distributed by PepsiCo under the Mountain Dew brand. It was introduced in 2005.

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Powerade is a sports drink by The CocaCola Company and currently number two in the sports drink market worldwide.

Gatorade is a non-carbonated sports drink marketed by Quaker Oats Company, a division of PepsiCo. Originally made for athletes, it is now often consumed as a snack beverage.

Sprite is a clear, lemon-lime flavored, noncaffeinated soft drink, produced by the Coca-Cola Company. It was introduced to the United States in 1961.

7 Up is a brand of a lemon-lime flavored soft drink.

Minute Maid is a product line of beverages, usually associated with orange juice, but now extends to soft drinks of many kinds. The Minute Maid company is now owned by Coca-Cola, and is the world's largest marketer of fruit juices and drinks. It is headquartered in Houston, Texas.

Tropicana Products is an American company based in Bradenton, Florida, USA, which is one of the world's largest producers and marketers of orange juice. It has been owned by PepsiCo, Inc. since 1998.

Nestea is a brand of iced tea manufactured and distributed by the Nestle company's beverage department in the United States,

Lipton Original Iced Tea is a ready-todrink iced tea brand sold by Lipton through

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and by Coca-Cola in several European countries, Brazil and Venezuela.

a worldwide partnership with Pepsi.

Barq's is a brand of root beer notable for being the only major North American root beer to contain caffeine. It has been bottled since the start of the 20th century and is currently sold by the Coca-Cola Company.

Mug Root Beer is a brand name of root beer made by the Pepsi company.

Diet Coke or Diet Coca-Cola is a sugarfree soft drink produced and distributed by The Coca-Cola Company. It was introduced in the United States in July 1982.

Diet Pepsi is a low-calorie carbonated cola. It was introduced in 1964 as a variant of Pepsi-Cola with no sugar.

DaSani is a brand of still non-carbonated water owned by The Coca-Cola Company.

Aquafina is a non-carbonated bottled water produced by PepsiCo.

Aquarius is a mineral sports drink All Sport was a sports drink. It is produced manufactured by The Coca-Cola Company. by PepsiCo. It was first introduced in 1983.

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Fanta is a soft drink brand owned by The Coca-Cola Company. It is produced and distributed by The Coca-Cola Company's bottlers.

Mirinda is a brand of soft drink. Mirinda is owned by PepsiCo.

Sprite Ice was the first flavor extension for The Coca-Cola Company's Sprite brand soft drink.

Pepsi Blue is a soft drink made by PepsiCo and launched in mid-2002.

Price Pricing is a major part of the marketing mix. Choosing the right price and the right pricing strategy is crucial to the marketing process. The price of the product is not something that is fixed. On the other hand the price of the product depends on many other factors. Some times the price of the product has got nothing to do with the actual product itself. The price may act as a way to attract target customers. The price of the product is decided keeping many things in mind. These things include factors like cost incurred on the product, target market, competitors, consumer buying capacity etc.

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Coke Prices
Coke was ruling carbonated beverage market before Pepsi entered. Earlier the price of coke was cost based on the cost which was spent on making the product plus the profit and other expenses. But after the emergence of other companies especially the likes of Pepsi, Coca-cola started with a pricing strategy based on the basis of competition. Nowadays more expenses are spent on advertising my soft-drink companies rather than on manufacturing. Even today most prices of Coke are decided on the basis of the competition in the market.

Pepsi Prices
Pepsi, however, decides it price on the basis of competition. The best think about the company Pepsi is that it is very flexible and it can come down with the price very quickly. The company is renowned to bring the price down even up to half if needed. But this risk taking attitude has also earned Pepsi losses. Though lowering the price would attract the customers but it would not help them cover up the cost incurred in production hence causing them losses. This was the situation earlier but now Pepsi is a full-fledged and growing company. It has covered all its losses and is now growing at a rapid rate.

Promotion & Marketing

Promotion is one of the four aspects of marketing. Promotion comprises four subcategories:

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1. 2. 3. 4.

Advertising Personal selling Sales promotion Publicity and public relations

The specification of these four variables creates a promotional mix or as in our Marketing Management class promotional plan. A promotional mix specifies how much attention to pay to each of the four subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. Both the companies Pepsi and coke are famous for their promotions.

Taste Test Comparison

The rivalry was first started when Pepsi started with its blind taste tests known as the Pepsi Challenge. The challenge was designed to be a direct response to critics who allege that Coca-Cola and Pepsi-Cola are identical drinks, with no substantial differences. The challenge took on the form of a taste test. These tests were conducted at malls, shopping centers and other public locations, a Pepsi representative sets up a table with two blank cups, one containing Pepsi and one with Coke. Shoppers are encouraged to taste both colas, and then select which drink they prefer. Then the representative reveals the two bottles so the taster can see whether they preferred Coke or Pepsi. If Pepsi is revealed, the shopper is given a small prize. The implication is that Pepsi tastes better than Coke, and thus consumers should purchase Pepsi. In blind taste tests, more consumers prefer the taste of Pepsi to that of Coca-Cola. Because Coke was the historical leader, more people expected that they'd prefer and select Coke. Their surprise at picking Pepsi in the blind taste test (products were served in unmarked cups) helped change their minds about which product they prefer. Capturing this on film, Pepsi turned

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this into a memorable TV campaign that lasted many years. Also ad-campaigns are put up on the television by both the players.

Environmental Sustainability
Environmental sustainability is our promise to protect the Earths natural resources. We are investing in a healthier planet by reducing water usage, increasing recycling levels and minimizing our carbon footprint. We are engaging in sustainable farming and helping communities in which we operate in the areas of water conservation, efficient agricultural methods and increasing access to safe water. In doing so, we are ensuring PepsiCo can continue long into the future. But in the here and now, we are reducing our energy and waste costs, and gaining real credibility with consumers and policymakers alike as we prove ourselves to be a company which takes its responsibilities seriously. In 2010, we advanced our land and packaging commitments by launching the Dream Machine recycling partnership with Waste Management, Greenopolis and Keep America Beautiful, with a goal of increasing the U.S. beverage container recycling rate from 38 percent in 2009 to 50 percent by 2018. We made progress on our commitment to reduce our carbon footprint, opening Leadership in Energy and Environmental Design (LEED) certified plants in China in both 2009 and 2010, while managing the largest private-delivery fleet of electric vehicles in North America. Coca Cola is making a move that it hopes will trigger a domino effect, inspiring other Coca Cola bottlers to take its lead. They announced its plan to increase environmental sustainability at a most fitting time the forty first birthday of Earth Day.

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Some of the bottling plants are no longer use propane fueled forklift trucks starting this June. While propane is cleaner in comparison with other fossil fuels, it still lacks renewability and leaves a larger carbon footprint with its delivery process. The Coca-Cola system's environmental commitments say they are focused on the areas in which we have the most significant impacts -- water stewardship, sustainable packaging, and energy & climate protection.

Target Market
Cokes commercials basically based on younger generations, because this is the target market of Coke because they want to represent Coke with the youth and energy but they also consider about the old people they take then as a co-target market.(RONALD,1998) Pepsis commercials target customers mostly young groups between the ages of 14 to 30 and also schools, colleges, university, restaurants and stores.

Major Segments
There major segments are basically those who partake daily and those areas where the demands are higher then the other areas. There are so many people who take this drink daily and those people who take weekly and those who take less often are always there as well. So, their basic segments are those people who take this drink regularly. (RONALD, 1998)

Marketing and Advertising

In other words, who are the representatives in both commercial ads? In Coco-Cola company the two famous representatives are the two fiction characters the Cola Bear and the Cola Santa. In addition, in his commercial ads, the mangers try to make the ads related to our environment and culture. They try to establish an image to the public is that Coke is closely related to our living. We need it anytime and anywhere.

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On the contrary, Pepsi-Cola Co. uses a lot of super stars or famous figures such as Kiss, Dinger, Sisqo, Einstein, Faith Hill, etc. This commercial method of using the super stars or famous personage in Pepsi commercial ads is not only happen in America but aboard. The Pepsi commercial ads in Asia also use a lot of Asian super stars to representative their products. Both are good business strategies to raise the profit. However, because of Pepsi hires the super stars performing in the ads, it must spend lots of money so that it must have raised the company s cost which reduces the profit. On the other hand, Coco-Cola could reduce the cost by not hiring those super stars and famous actors and actresses.

Strategic Plan
Everyone that has a television has seen the commercials for Coke and Pepsi. They bombard us with images of youth and beauty, fun and pleasure, family togetherness, and patriotism. Oh, and by the way, they make soft drinks too! Clearly, the cola wars have little to do with colas. They are seemly wars of marketing and advertising. If you notice, in the beginning Coca-Cola wanted three things: A Coke sign on every corner, bottles of Coke in every store, and put a Coke within an arms reach of every possible customer. However, Coca-Cola has shifted their focus on more than just the beverage; they needed to sell an image or a way of life. The image that management first focused on was the essence of all that America stands for, hence The Real Thing the American dream. They are also considered an All-American drink. For those are old enough to remember baseball during the 1970s walking up the concession asking for a Coke and hotdog. However, during the Vietnam War, our country was in turmoil and the American dream was slowly dying.

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Coca-Cola introduced the Id Like to Buy the World a Coke . . . campaign to transfuse (pour out into another vessel) the consumer into a world of peace and harmony. On the other hand, Pepsi-Cola really did not launch until the times of the Great Depression. Their key concept was the 12-ounce bottle that would sell for the same nickel that would buy 6-ounces of Coke. This was an excellent marketing strategy on Pepsi behalf. Customer could double the quantity for the same price the same nickel. This more for less strategy hit the mark of those who went for quantity rather than quality. In 2010 Coke reported earning per share was $3.52 and their net sales of more than $22 billions at the end of 2010. While Pepsi Cola earning per share was $4.13 (2010) and their net sales of more than $6,892 billions at the end of 2010.

COCA COLA SWOT ANALYSIS

Strengths
I think one of Coca-Colas greatest strength is its brand name. People are willing to buy Coke regardless of their choices in blind taste tests, simply because of its reputation. Coca-Cola is considered to be the worlds number one soft drinks company and is the worlds most recognized trademark. This strong reputation helps the company when competing with others in the soft drink market. Recently, Douglas Daft became the companys CEO, which has added great strength to the company. Daft started out as a sales person and was a marketer overseeing operations in the Middle East and Asia. This is an excellent advantage for the company because Dafts experience within Coca-Cola will help guide the companys future.

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Weaknesses
Another past CEO, Douglas Ivester created a huge weakness within Coca-Cola. When he took over in 1997 after the previous CEO Robert Goizueta passed. Ivester did not have the experienced nor was he well prepared for this position. Ivester, on the other hand, had experience as an accountant and little or no experience in marketing. In a major marketing company such a Coca-Cola, having a leader that understands marketing concepts is required in order to produce optimal results. During Ivesters term, the companys strong reputation has suffered insufficiently. At this time, PepsiCo sprang into action and began realizing Cokes strengths. PepsiCo started adopting Cokes advertising tactics and developed bottling operations similar to Coke. Coca-Cola has been very exposed during these trying times.

Opportunities
Many alternatives drink companies are open to the possibility of making a deal with a major soft drink maker like Coke. Such companies include Nantucket Nectars and Arizona Beverage Co. Should Coke make a deal with one of these companies, Coke will be exposed to a rapid growth market that could help achieve long-term growth targets. Coke also has great opportunities awaiting it in the global industry. As the company continues to grow in the global market, the companys sustainable profit continues to grow. This strength in the global market has led to relationships between other companies to help Coke grow. Pepsi has very little invested in the global market compared to Coke, therefore, less protection is offered to Pepsi. Coke has more protection for gaining a stronger hold in the global market.

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Threats
While waiting for bank negotiations, Coke lost a deal with Sobe to Pepsi. This loss could be a major one for Coke because Pepsi now has a part of beverage sales experiencing phenomenal growth compared to carbonated drinks. Coke currently does not have a share in the market of non-carbonated drinks, which could cause Coke to lose some of its competitive edge against its biggest competitor, Pepsi. Having such a large share of the global market has threats as well as opportunities for Coke. The company is vulnerable to economic and political conditions in international markets. Any increase in taxes or other negative impacts on the foreign economy could cause harm to Cokes profitability and competitiveness.

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PEPSI COLA SWOT ANALYSIS

Strengths
I think one of the primary strength of Pepsi has is its brand name. Pepsi is known all across the world by its name and red, white, and blue circle. When a consumer is looking for a drink they look for something familiar, and Pepsi has the name that most people recognize. The structure of the company is another key asset for Pepsi. When president of Pepsi introduced a new policy it is clearly defined and becomes the foundation of Pepsis efforts. This is a huge success for Pepsi because having statements and policies that are clear, consistent, and reliable are the stepping-stones for achieving the goals set forth for the company. Pepsi knows that establishing goals and measures for success is necessary to achieve any objective, and that is why the goals that are set within this company are measurable. But it does not stop there; strategic management styles within the organization make sure that after implementing a new objective there are still significant areas that must be covered. Monitoring progress and ensuring success is a crucial goal and Pepsis management has designed its style to make sure that reporting on the progress of the goal is just as important as implementing it.

Weaknesses
The weakness that Pepsi has had since its introduction is that it must compete with the most recognized brand name in history, Coca-Cola. Pepsi had to try and offer something better than Coca-Cola had offered its customers and then get people to switch. Coca-Cola has many loyal customers and through assertive global expansion and marketing Coca-Cola has held on to its dominant share in the market with Pepsi constantly trying to find a way to overcome them.

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Opportunities
Pepsi supports Global expansion because it produces more revenue, recognition, opportunity, and keeps the brand young. Today Pepsi is sold in more than 190 countries and provides Pepsi with a new market and a chance for more people to fall in love with its products. The environment plays a crucial role in the way that Pepsi views in light preservation and responsibility. Pepsi believes that being a premier company also involves having corporate social responsibility. Pepsi encourages conservation, recycling, and programs that clean the air and reduce landfill waste. Being a huge supplier to the grocery industry, Pepsi became an active supporter of recovery and recycling programs in the United States. Sponsorship of local programs and the support of employee volunteer activities are also major activities that PepsiCo and its employees are proud to be a part of to improve the surrounding communities they work in.

Threats:
Currently, the threat of new viable competitors in the carbonated soft drink industry is not very substantial. The threat of substitutes, however, is a very real threat. The soft drink industry is very strong, but consumers are not necessarily married to it. Possible substitutes that continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot chocolate ("Cola Wars", 1991). Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the changing health-consciousness of the market could have a serious affect. Of course, both Coke and Pepsi have already diversified into these markets, allowing them to have further significant market shares and offset any losses incurred due to fluctuations in the market ("Cola Wars", 1991).

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Consumer buying power also represents a key threat in the industry. The rivalry between Pepsi and Coke has produce a very slow moving industry in which management must continuously respond to the changing attitudes and demands of their consumers or face losing market share to the competition. Furthermore, consumers can easily switch to other beverages with little cost or consequence ("Cola Wars", 1991).

SWOT Analysis Comparison

After a detailed look into Pepsi and Cokes tactics for managing and successfully running their businesses, a summary of how each company manages its resources ties the research together and compares the overall management of the two companies. In order to gain a better understanding of each company, I determined some strengths, weaknesses, opportunities, and threats of each company. Each company has brand recognition on their sides and threats such as foreign, political, and economic situations in countries that Coke and Pepsi are established in. Comparing these aspects of each company will provide a good idea of future successes. Over the years, companies like Pepsi and Coca-Cola have spent a great deal of time and energy encouraging people to choose soft drinks more than any other beverage because soft drinks have become part of American life. Coca-Cola is a 100-year old soft drink that started out as anything but soft. It was, first and foremost, a medicine concocted by a pharmacist. However, as a result of Robert Woodruffs brilliant perception, Coca-Cola evolved into an experience that captured the spirit of America.

Summary of Finding
Around the world, the history of the Coca-Cola Company is one of great brands; it is the Real Thing. Management has been dynamic, always moving to anticipate and meet the present 25

and future desires of customers and consumers. Because the world is so dynamic place with blinding speed in countless ways, executives continually think about such changes and what modifications and adjustments will be needed to assure Coca-Cola is optimally positioned for continued success. Like Coca-Cola, Pepsi was invented in the South and was originally heralded as a cure for dyspepsia (go figure). Coca-Colas thirteen-year head start, some intelligent decisions by Coca-Cola executives, and some bad ones by Pepsis owners, gave Coca-Cola such a commanding lead. Pepsi executives believed they had to be smarter, shrewder, faster and more attuned than Coca-Cola. Both Pepsi and Coca-Cola have actively participated in their local communities and are committed to corporate social responsibility. Throughout the 1990s, the two soft drink giants have tried to expand more internationally. They have also been exploring a new facet of campus domination since youth continues to be the colas vital market. As the World Wide Webs accessibility has increased, both cola companies have taken their marketing attempts online, each site featuring multimedia interaction and splash page graphics. Although Coca-Cola is the big company that regards itself as bigger than life while Pepsi is the big company that acts like a little company, to be sure, the pressure is still on. The stakes may be higher, but the battle for supremacy Cola beverage world continues. Who will win the cola wars? No one really knows?

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Bibliography
http://inventors.about.com/library/inventors/blpepsi.htm http://www.hoovers.com/company/The_Coca-Cola_Company/rfyhsi-1.html http://www.cocacola.com http://www.pepsicola.com http://www.pepsico.com/index.html http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=KO:US http://web.ics.purdue.edu http://www.theatlantic.com/life/archive/2011/03/cola-wars-pepsi-is-number-three-and-thats-agood-thing/73155/ Fortune 500; http://www.fortune.com Global 500; http://www.fortune.com http://www.delhibusinessreview.org http://www.pepsico.com/Download/PepsiCo_Annual_Report_2010_Full_Annual_Report.pdf KOTLER, P., 1980.Principles Of Marketing, Englewood Cliffs. London: Prentice-Hali. KOTLER, P., 2003.A Framework For Marketing Management. Harlow: Pearson Prentice

S. Taylor

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