Econ Case Analysis Cola Wars Continue – HBR 702442 History of the Cola Wars For decades, Pepsi and Coca Cola fought over the market share of the soft drink industry. Throughout this almost duopolistic competition, Coke’s share grew from 33.4% in the 1960s to 44.5% in the late 90s; while Pepsi’s market share grew from 20.4% to 31.4% in the same time span. Although there are other potential firms in the market with considerable market influence such as Schweppes and Royal Crown, Pepsi and Coca-Cola remains the two most powerful giants in the soft drink industry. The Cola war began in the 1950s when former Coca-Cola marketing executive Alfred Steele made “beat coke” his theme as new CEO of Pepsi. In the early periods, both companies initiated marketing campaigns that differentiated itself from the competitor, such as Pepsi’s “Pepsi Challenge” and Coke’s “America’s Preferred Taste”. Throughout time, both Coca Cola and Pepsi experimented with new cola and non-cola flavors and introduced new lines of products such as Fanta, Mountain Dew, etc. Pepsi even diversified into the non-soft drink industries and merged with Frito-Lay. The merger claimed synergies based on shared customer targets. In the 1960s, Coke’s focus was primarily on the overseas market while Pepsi’s focused its attention on the domestic market which doubled its market share between 1950s and 1970s. The competition heated up in the 1980s when both companies increased their marketing budget and introduced new CSD brands with various sizes and packaging. Non-carb soft drinks’ demand increased dramatically in the 90s, and both Coca Cola and Pepsi introduced more non-carbonated drinks to the market. Low price strategy was employed by both companies in the early 90s, however to avoid driving bottling profits too low, both companies raised their prices of coke in the late 90s. Cola Wars as of Now In