cola wars
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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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