...Cola Wars Strategy Case Analysis Executive Summary: Together, Pepsi and Coke have historically dominated the carbonated soft drink (CSD) market while competing fiercely with each other for market share in the U.S. Until the late 1990s, CSD consumption in the U.S. grew at a healthy annual rate of 3% - 7%, and both Coke and Pepsi were able to prosper. However, largely due to health issues related to the consumption of soft drinks, consumption of CSDs in the U.S. has been declining since the late 1990s. A five forces analysis of the soft drink industry (Exhibit 1) shows that focusing on the CSD market is not likely to be a highly profitable strategy going forward. I recommend that Pepsi focus on continued innovation and expansion into “non carbs” in both the U.S. and in emerging markets where Coke does not already have a dominant presence. Key Questions/Issues: Pepsi and Coke focused on producing concentrate, or flavor base, for the beverages while leaving the bottling function to nationwide networks of franchisees. The concentrate business was much more profitable than bottling due to lower fixed costs, lower operating costs, and the well-known brands of the concentrate producers. The concentrate industry had a low threat of entry, low bargaining power for suppliers and low to moderate bargaining power for buyers (whereas bottlers faced very high bargaining power from their suppliers—Coke and Pepsi), and a market with healthy levels of growth. In the 1980s...
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...Although the concentrate business and the bottling business both work together to ensure that the finished products are delivered to the retailers and then the consumers, their economic responsibilities are very much separate from one another. Firstly the concentrate producers are responsible for blending the raw materials and packaging the blended mixtures into containers that will later be shipped to the bottlers for more processing. Much of the concentrate business deals with very little machinery and overhead costs compared to the bottlers associated costs. A normal concentrate manufacturing plant would cost roughly $50 to $100 million and could handle a population the size of the U.S. Most of Concentrate expenses come from advertising, promotion, market research, and bottler support. This causes the gross profits for the concentrate business to be at 32% margin for their operating expenses. Besides their production responsibilities, the concentrate business is also the one who builds relationships and negotiates with large retail corporations, while the bottlers take over small regional accounts in restaurants or cooler freezers. The concentrate business is also always looking for ways to improve the bottlers operations to make it more efficient, sometimes even negotiating with the bottlers’ suppliers. This is why the concentrate manufacturers have more influence over the economics of the business. On the other hand, bottlers are responsible for purchasing the concentrate...
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...still brands 15 billion dollar portfolio 200 countries 1.7 billion servings a day. Coca Cola Advertising Story 1900 Coca Cola strategy LOVEBRAND 3 A’s AVAILABILITY Distribution network AFFORDABILITY Product pricing ACCEPTABILITY convincing the customer to buy OUR ANALYSIS USA RUSSIA CHINA KENYA 1. TYPES OF MEDIA • MASS MEDIA • NON MEDIA 2. COPY STRATEGY • Values • Messages • Casting Coca Cola in the USA Symbol of America Medias for advertising ? • Mass media Advertising – Television – Billboard – Web • Non media advertising – Sponsoring – Event promotion • • ADVERTISING 1886 “Drink Coca-Cola” 1900 “Deliciously refreshing” 1904 “Coca-Cola is a delightful, palatable, healthful beverage” 1982 “The antidote for civilization” – Coke slogans for the past 100+ years SLOGANS • 1993 “Taste it all.” • 1998 “Thirsty for life? Drink Coca-Cola!” • 2000 “Coca-Cola Enjoy” • 2001 “Life tastes good” • 2009 “Open Happiness” • 2010 “Twist The Cap To Refreshment” • • • 1986 –“Like a Rock” (Inspired by the Bob Seger song “Like a Rock”) • 2011 “Life Begins Here” The advertising messages. Billboarding The american way of life… TV commercials • The opposition between good and evil http://www.cultur epub.fr/videos/c oca-colavideogame TV commercials • Happiness, peace, enjoy http://www.culturepub.fr/vi deos/coca-cola-friendlyman The advertising messages Sponsoring • Va l u e s o f s p o r t ( te a m s...
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...Investment Analysis for Pepsi versus Coca Cola ACC557 – Financial Accounting December 13, 2012 Company Synopsis Pepsi Cola | Coca-Cola | The Pepsi Bottling Group, Inc. (PBG) is the world's largest manufacturer, seller, and distributor of Pepsi-Cola beverages. Separated from parent PepsiCo, Inc. in 1999, it accounted that year for 55 percent of Pepsi-Cola beverages sold in the United States and 32 percent worldwide. The company delivers its products directly to stores without using wholesalers or other middlemen. In addition to its extensive production and distribution facilities, PBG leases and operates about 20,000 vehicles and owns more than 1.1 million soft drink dispensing and vending machines. PepsiCo holds a controlling interest in the firm. | The Coca Cola history extends back to 1885, when John Pemberton invented the original recipe for a new cocawine. Pemberton developed Coca-Cola, a non-alcoholic version of his original cocawine, when Fulton County passed prohibition legislation. Carbonated water was added later by accident when Pemberton was mixing drinks for a friend and incidentally included it. His friends loved the new taste, so he altered the original formula to incorporate it. | Pepsi - International Directory of Company Histories, Vol. 40. St. James Press, 2001. (http://www.fundinguniverse.com/company-histories/the-pepsi-bottling-group-inc-history/). Major Suppliers Pepsi Cola | Coca-Cola | PolandEgyptUnited Arab EmiratesCanada | Poland...
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...Marketing: Investors adapt to consumer trends By Jenny Wiggins When the world’s biggest soft drink company starts changing its marketing tactics, investors would be foolish not to ask why. Coca-Cola, which has traditionally promoted itself via its iconic Coke brand, using slogans such as “Coke is it,” now wants to make it clear to consumers that Coke is not the only drink it sells. Its most recent campaign, called “Make every drop count,” says: “You’ve always known us as Coca-Cola, the soft drink. Now it’s time you knew us as Coca-Cola the company.” The television, print and internet advertisements – which started in February in the US and in April in the UK – come as consumers ditch foods and drinks that are perceived as unhealthy (such as sugary fizzy drinks and salty crisps) for products that appear to offer some kind of health benefit, such as probiotic yoghurts that claim to regulate the digestive system. Coke, which also recently launched “Coke Zero” (a diet version of Coke aimed at men), is using the new campaign to impress upon consumers the fact that it sells all kinds of drinks, including bottled water, juices and teas. The campaign is important for the company, because it risks losing money if it does not sell the kinds of drinks consumers now want to buy. Analysts say that growing demand for healthier kinds of foods and drinks is not a fad, but a long term trend that increasingly affects corporate profits. Arnaud Langlois, equity analyst at JPMorgan, says:...
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...Justin Richardson November 16, 2013 Rip-Off Nowadays television and the advertising displayed in it is a part of everyday life in most households. What many people do not know is that television in many ways is bad. Many newspaper articles have been written on this. Many surveys and books have been written on this subject as well. The ads in television are what are especially bad. Some television ads are very misleading to the public. Many companies use false advertisement to catch the audience’s attention. In this case, they use it in many ways such as billboards, posters, etc. The way the product is shown in the advertisement makes the customer want to buy the product because of the way it catches the customer’s eye. Companies use this because it is a very effective way for them to get high amounts of money. The food industry is mostly known for having these types of advertisements. A certain food industry named McDonald’s is known for this type of advertisement on the famous burger, The Big Mac. The meal that they would serve you at any ordinary McDonald’s would not be the same as the burgers on the posters or the billboards. This is caused by either the laziness or the speed of the employees at the McDonald’s. Also, on TV commercials, they make sure that their burgers are made to perfection so that it attracts the costumer, but when it comes to reality, the employees at the fast food restaurant put no effort into making their burgers at good as they look on the Television...
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...Further, a scientific study requested by the court found that while the plant had "aggravated the water scarcity situation," the "most significant factor" was a lack of rainfall. Critics respond that Coke shouldn't be locating bottling plants in drought-stricken areas. In Plachimada, Coca-Cola is allegedly responsible for creating problems for communities by creating severe water shortages and polluting the groundwater and soil, destroying farms by draining them out completely. The plant here used about 900,000 liters of water in 2004, about a third of it for the soft drinks, the rest to clean bottles and machinery. It is drawn from wells at the plant but also from aquifers Coca-Cola shares with neighboring farmers. The water is virtually free to all users. These farmers who have been protesting say their problems began after the Coca-Cola factory arrived in 1999. In addition, in Mexico, citizens are indirectly forced to drink Coca-Cola because of the lack of water supply due to Coca-Cola's use of it. Mexico ranks second in the world for obesity among countries. Millions of people have no access to drinkable water and 80% of schools have no access, so children drink what they can get and Coca-Cola makes sure plenty of their addictive sugar, caffeine laden soft drinks are readily available. That is a main reason why so many...
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...lifestyle. Over the years, Red Bull hits foreign market and expanded from the U.S. markets to the southern hemisphere via South Africa and Brazil. And in 2002, Red Bull opened a regional headquarters in Dubai. Red Bull’s worldwide sales were estimated at Eur. 1.4 billion ($1.32billion) in 2002. The company expanded into the neighboring countries like Hungary and Slovania in 1992. And in 1994 it was introduced in Germany and it’s claiming a quarter of the sports drink market there, putting ahead of Gatorade. It was priced as much as a can of coca-cola. Then it entered the U.K. where it marketed there as Red Bull stimulation after 1996. Background In 1984 Mateschitz founded Red Bull. Red Bull Energy Drink was first sold on the Austrian market in 1987. Red Bull reached its first foreign markets in 1989 in Singapore and in 1992 in Hungary. In 2008 Red Bull created its own cola, Red Bull Simply Cola. It created a market segment unlike traditional colas, by using only 100% natural ingredients. In 2009, Red Bull extended its product line with Red Bull Energy Shots. Red Bull headquarters are based in Fuschl am See, near Salzburg Austria. Approximately 4 billion cans of Red Bull are consumed each year; the product is available in 160 countries. Marketing Goals Increase interest in Red Bull among males and females age 35 to 65. Increase revenue growth. Position Red Bull as...
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...[pic] London College Of Business Subject : Managing Change in Organisations Behaviour Assignment : Individual Assignment Subimtted by : Muhammad Ahsan Riaz Submitted to : E.N. Wanki College ID: 130479MAR Class : MBA (Finance) Group : A Module : CM 703 Session : April 2011-April 2012 Submission Date : 25th Oct 2011 Word Count : 2559 1 Q1) The report should look into identifying the reasons and importance of change to the organisation (25 marks). Ans1) “It is not the strongest species that survive, nor the most intelligent, but the ones who are most responsive to change” - Charles Darwin Change is the only constant. – Heraclitus, Greek philosopher Ironically, it’s very much true today as it was about 2000 years ago. We live in a world where change is the only thing that’s happening every moment and we have to adjust with change in order to survive. There are lots of reasons behind change namely new initiatives, technology improvements, , project-based working, Entrance of new competator,acquisitions, staying ahead of the competition, joint ventures .Emergence of new competitor, arrival of substitute product etc. The entity I have selected for my Assignment is Marks & Spencer’s. There was a personal reason for selecting M & S as I have worked with Marks & Spencer’s so I have experienced some of the changes. Marks & Spencer’s is a reputable high street retailor with more...
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...Page 1 The Broadway Café One first things I would do in order to create a Competive Advantage for my café would be to have Lattes for the Lactose Intolerant. The Lattes would consist of Soy, 2 percent, or any Lactose based products. Furthermore, I would utilize the most focused differentiation business strategy in the hopes of tapping into potential forgotten or overlooked segment of society. Hopefully, this first-mover advantage would draw in so many new customers which impacted the market share, that I was able to use Environmental Scanning - the acquisition and analysis of events and trends in the environment outside of the Café. The Café would benefit from customers’ low Buyer Power but they would be rewarded with our lactose intolerate friendly products. Frappachinos, Expressos, and Smoothies would be mainly exclusive to our shop and ours alone. Our buy one get one free promotion deals would garner enough interest to develop a strong customer base. Once our customer base has been established, we would offer more deals like free coupons on other menu items and coupons to get into Six Flags for half price. The Café’s Supplier Power would be favorable due to the fact that we would be one of the few shops offering such a diverse menu. Even our Ham and Cheese sandwiches and the Roasted Tomato & Mozzarella Panini will have specially blended cheeses for our lactose intolarant customers. Our Café would see to it that none of our suppliers attempt...
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...Environmental Scan Paper Environmental Scan Paper According to BusinessDictionary.com, “an environmental scan is the vigilant monitoring and evaluation of a firm’s external and internal environments for detecting early signs of opportunities and threats that may influence current and future plans” (BusinessDictionary.com, 2011). In strategic planning, an environmental scan can help an organization increase understanding of the internal and external environmental factors that are required to reach the long-term goals of the company. This paper’s purpose is recognizing and exploring the external and internal situations of two successful organizations, Apple and Coca Cola. Also, to examine the competitive advantages and strategies used by these organizations, as well as sustaining value in an increasingly competitive market through creative strategic business plans. Another area being explored is the measurement guidelines used to substantiate the strategic effectiveness for these organizations and the effectiveness of these measurement guidelines. Internal and External Environments The whole process can be seen as beneficial knowledge for managers wishing to increase the long-term efficiency and develop strategic plans for the business. An organization’s environment can be broken into two separate divisions. First, the internal environment which is generally compiled of the factors or elements directly involved within the company. This would basically include the managers...
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...Coca-Cola India On August 20, 2003 Sanjiv Gupta, President and CEO of Coca-Cola India, sat in his office contemplating the events of the last two weeks and debating his next move. Sales had dropped by 30-40%1 in only two weeks. On August 5th, The Center for Science and Environment (CSE), an activist group in India focused on environmental sustainability issues (specifically the effects of industrialization and economic growth) issued a press release stating: "12 major cold drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues" (See Exhibit 1). According to tests conducted by the Pollution Monitoring Laboratory (PML) of the CSE from April to August, three samples of twelve PepsiCo and Coca-Cola brands from across the city were found to contain pesticide residues surpassing global standards by 30-36 times including lindane, DDT, malathion and chlorpyrifos (See Exhibit 2). These four pesticides were known to cause cancer, damage to the nervous and reproductive systems, birth defects, and severe disruption of the immune system. After this incidence the brand image of Coca Cola was tarnished and people started avoiding coca cola consumption. Since 2003 following the various allegations and issues such as presence of pesticide residues in its beverages and water resource contamination issues that the soft drink giant faced in India, their community-focused initiatives were further accelerated. To address these issues and to rebuild its tarnished...
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...Cola Wars : Five Forces Analysis October 18, 2007 Posted by goutham in case studies. trackback 1. Soft Drink Industry Five Forces Analysis: Soft drink industry is very profitable, more so for the concentrate producers than the bottler’s. This is surprising considering the fact that product sold is a commodity which can even be produced easily. There are several reasons for this, using the five forces analysis we can clearly demonstrate how each force contributes the profitability of the industry. Barriers to Entry: The several factors that make it very difficult for the competition to enter the soft drink market include: * Bottling Network: Both Coke and PepsiCo have franchisee agreements with their existing bottler’s who have rights in a certain geographic area in perpetuity. These agreements prohibit bottler’s from taking on new competing brands for similar products. Also with the recent consolidation among the bottler’s and the backward integration with both Coke and Pepsi buying significant percent of bottling companies, it is very difficult for a firm entering to find bottler’s willing to distribute their product. The other approach to try and build their bottling plants would be very capital-intensive effort with new efficient plant capital requirements in 1998 being $75 million. * Advertising Spend: The advertising and marketing spend (Case Exhibit 5 & 6) in the industry is in 2000 was around $ 2.6 billion (0.40 per case * 6.6 billion cases) mainly...
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...The Coca-Cola Company; and specifically the advertising and promotion of the Coke brand. Table of Contents Overview & Background…………………………………………………………...3 Product Information ………………………………………………...….…………...4 Competitive Review ………………………………………….……………...……...5 Audience Analysis…………………………………………………………………5 Promotional and Media Vehicles Used……………………………………………6 Conclusion ………………………………………………………………….…..…. 7 References…………………………………………………………………………8 Appendix …………………………………………………….………..…………….9 The Coca-Cola Company® originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. Founded over 125 years ago, the company has evolved from one product, Coca-Cola to more than 500 brands in 2011. They’ve grown from selling a modest 9 drinks a day in 1886 to 1.8 billion a day. The most recognizable world-wide brand has expanded from one city in one country to availability in more than 200 countries around the world. Coca-Cola is one of the world famous and largest brands in beverages industry. Coke is a multinational company and it has its market around the entire world. The company was established Doctor John Pemberton who was a pharmacist in 1886 in Atlanta, Georgia USA. The brand has since become household drink in over 200 countries across the globe. Carbonate drinks are the single largest component...
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...February 21, 2012 Abstract Pepsi is a popular cola brand that is available for purchase at many convenient stores, grocery stores, department store, vending machines and restaurants. It is in an Oligopoly industry. One market place can have a stronger market share than another market place. There are several determinants of demand which can influence the shift in the demand curve left or right or decrease or increase in the demand. Demand of Pepsi Pepsi cola is a cola/soda-pop beverage brand from PepsiCo. PepisCo is known as an Oligopolistic industry. There aren’t that many firms the market that Pepsi cola is in. Pepsi cola first made a public appearance in the 1890s as “Brad’s Drink”. It later became known as Pepsi. It was trademarked on June 16, 1903 and its first logo in 1905. Pepsi made a world appearance in 1909 with the first celebrity endorser, Barney Oldfield. Due to the high price of sugar, which was in high demand, during WW1, Pepsi Cola Company went into bankruptcy. It bounced back in 1936 and started to sell a 12-ounce bottle for 10 cents. Because price is a main determinant of demand, the price was then drop to 5 cents. This price boosted the sales for the company. The company started to market to African Americans. The strategy was done to help market to others who can enjoy and contribute to the brand and the new popularity of Pepsi. In 1975, Pepsi was voted most favorite beating out its rival Coca-Cola (lifestyle.iloveindia.com). There are many determinants...
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