COLA WARS

VS
Abhishek Bhatnagar
Arti Jain
Sameer Jain
Siddharth Gupta
Varun Baxi

15P003
15P011
15P045
15P051
15P055

1938

Coke sues Pepsi

Decreased price became
popular
Declared bankruptcy
twice.
Network of about 270
bottlers
Pharmacist Caleb
Bradham

Great
depression

Struggle

1910

1893

Pepsi

Success owing to high

consumption of CSD by
soldiers
Went public
CEO Robert Woodruff
Expanded to international markets

Candler acquired the

formula
Brand advertising

Pharmacist John
Pemperton

WWII
1919
1891
1886

Coca Cola

A Brief History

THE SUPPLY CHAIN

Concentrate
producer

Supplier

Bottler

Retailer

THE SUPPLY CHAIN

Supplier
Supplies raw
material
Metal cans and
bottles

Concentrate
producer
Production facilities
Advertising cost
CDA
Low Capital investment

Bottler
Purchases CSD
Adds sweeteners and
carbonated water
Packing and delivery
Capital intensive

Retailer
Super markets
Fountain outlets
Vending machines
Convenience
stores
Mass

PORTERS FIVE FORCES

RIVALRY

Coke
Pepsi
Cadbury

SUBSTITUTES

Alliances
Acquisitions
Product Innovation

BARRIERS TO
ENTRY

Exclusive Territories
Substantial Investment
Current Market Presence

SUPPLIERS
BUYERS

Sugar
Packaging

Super Markets
Convenience and Gas
Mass Merchandisers
Fountain

CONCENTRATE INDUSTRY
Little Capital
Investment
Cost of $25 million - $50
BOTTLER INDUSTRY
million
One plant to serve US Capital Intensive
High-speed production lines
Significant costadvertising, promotion, Bottling costs $4 million to
$10 million
market research and
Capacity of $40 million
bottler support

warehouse cost $75 million

Coke and Pepsi each require
100 plants
Pressure from Coke/Pepsi

THE RIVALRY
PEPSI
COLA

COCA
COLA

NON-COLA FLAVOURS
Fanata, Sprite, Tab
Tem, Mountain Dew, Diet Pepsi
NON-CSD INDUSTRIES
Minue Maid, Ducan Foods,
Spring Water

Merger with Frito-Lay

PEPSI CHALLENGE
Erodes Cokes market share
Pepsi passes Coke in food store sale
Coke responds by renogiatiating Franchise Bottling Contract

THE RIVALRY
Marketing Campaigns
Beat Coke

Americans preferred taste

Pepsi Generation

No wonder Coke refreshes

best

Young At Heart

Expansions
Acquired Pizza hut (1978),
Toco Bell (1986), KFC (1986)

Exclusive deals with Burger

king, McDonalds

Pepsi purchased Quaker Oats

(Gatorade) in 2000

Acquired Planet Java coffee

drink brand (2001)

SWOT Analysis : COKE

Strengths
1.Global Presence
2. 4th largest food and
beverage company
3. Broad based bottling
strategy
4. 47% global sales
volume

Weakness
1. Carbonates Market in
decline
2. Over complexity of
relationship with
bottlers in North
America

Opportunity
1. Growth in Asia-Pacific
region
2. Non CsD targeted
segments minute maid
light and premium

Threats
1. Federal nutritional
guidelines-Obesity risk
2. Contamination scare
in Belgium and India
might lead to boycott
3. work force strength
needs to be augmented
4. Legal framework
Strengthened

SWOT Analysis : PEPSI

Strengths
1.Global Presence
2. Product
Innovation and
Diversification
3. Larger portfolio of
Products
4. Aggressive
Marketing Strategies

Weakness
1. Carbonates
Market in decline
2. Target audience is
only youth

Opportunity
1. Growth in Health
beverage segment
2. Tea and Asian
beverage segments

Threats
1. Federal
nutritional
guidelines-Obesity
risk
2. Increased market
competition by Coke

 70% of Coke
sakes and 80% of
its profits came
from outside USA

Importa
nt
Markets

1/3rd of Pepsis
beverages took
place overseas

Coke enjoys
market share of
51.4 %

Market
Area

Coke enjoys
market share of
51.4 %

Market
Share

Coke dominated
Western Europe
and Latin
America

Importa
nt
Markets

Major
Markets

Pepsi dominated
Middle east and
South East Asia

Major
Markets

INTERNATIONALIZATION OF COLA
WARS

PROBLEMS IN INTERNATIONAL
MARKETS
Antitrust Regulations

Advertising Restrictions

Price Controls

Cultural Differences

Lack of Infrastructure

Political Instability

Local Competition

Market Stagnation

Foreign Exchange

Immature Distribution

Control

Network

BATTLE

They have to
enter in
unchartered
territories

GROUN
D

Rising global
health
concerns

Creating
country and
culture specific
product

CSD v/s non

CSD drinks

Utilization of
local resources
for creating a
strong brand
value
Retain market
share in
existing
markets