cola wars

Keeping Google “Googley”

Submitted by:

Shahiva Tazhnim S. JadraqueAnne Therese D. Magaway

Nurhuda RJ H. ObeidatPia C. Sotto

Rafaella Daye T. Tan

Submitted to:

Mr. Francis Arroyo

Date:

September 14, 2015

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PROBLEM STATEMENT:

OBJECTIVE:

BRIEF DESCRIPTION OF THE CASE:

Coke and Pepsi vied for “throat share” of the world’s beverage market. The most

intense battles of the cola wars were fought over the $74 billion CSD industry in the

United States, In a "carefully waged competitive struggle," from 1975 to the mid-1990s,

both Coke and Pepsi had achieved average annual growth of around 10%, as both U.S.

and worldwide. However, starting in the late 1990s, the soft drink industry encountered

new challenges that suggested a possible long-term shift in the marketplace. Declining

CSD sales, declining cola sales and the rapid emergence of non-carbonated drinks ap-

peared to be changing the game in cola wars.

AREAS OF CONSIDERATION:

Strengths

Coke

• The first concentrate producer to build a nationwide franchised bottling

network.

• It has around 100 plants for nationwide distribution.

• It pioneered open-top coolers for use in grocery stores and other chan-

nels.

• It developed automatic fountain dispensers and introduced vending ma-

chines.

• It commanded the lead in fountain sales.

• It has placed greater emphasis in promoting its brands.

•

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Pepsi

• It focused on sales through retail outlets.

• It was more aggressive in shifting to non-CSD’s

• It has around 100 plants for nationwide distribution.

Weaknesses

Coke

• It struggled to persuade bottlers to cooperate in marketing and promo-

tion programs, to upgrade plant and equipment and to support new

product launches.

• Coke and it franchised bottlers had been strained since contract renego-

tiation of 1978.

• Coke’s bottler acquisitions had increased its long-term debt to approxi-

mately $1 billion.

Pepsi

Opportunities

• Expansion on non-CSD

Threats

• Competition between each other

• CSDs and health issues such as obesity and nutrition

• Government restriction

• “Soda tax” on sugary drinks

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• Achieving pricing power in the take-home channels

• Rapid growth of mass-merchandisers

ALTERNATIVE COURSES OF ACTION:

RECOMMENDATION:

ACTION PLAN:

Programs/Plans Persons Involved Timeframe

CONCLUSION:

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