...the buyers who place huge orders for soft drinks are strong, while the threat of new entry and the threat of substitutes are mild. And, bargaining power of the suppliers is conditional. Threat of Entry: New Entrants to an industry bring new capacity and a desire to gain market share that puts pressure on prices, costs, and the rate of investment necessary to compete. Threat of a new entry is considerably low in today’s soft drink market. In the initial stages of the industry, Coca-cola was the dominant leader of the market, and then new entrant Pepsi made a huge impact on sales and profits of Coke. But, today Cola-Wars between Coke and Pepsi are so dominant, that possible threat of a new entrant is relatively low. The several factors that make it difficult for the new companies to enter the soft drink market include: 1. Role of bottlers: * Bottlers purchase concentrate, add carbonated water and high-fructose corn syrup, bottle the resulting CSD product and deliver it to customer accounts. The bottling process is a capital-intensive and involve high-speed production line that are interchangeable only for products of similar type and packages of similar size. * Companies like Coke and Pepsi have franchisee agreements with their existing bottlers which prohibit them from taking on new competing brands for similar products. A bottler involved in bottling a...
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...Table of Contents 1 Overview 2 General environmental analysis 3 Industry Analysis 3.1 Industry Structure - U.S. soft drink market share of concentrate producers - Suppliers within the carbonated soft drink industry 3.2 Market Structure - U.S. Liquid Consumption Trend (gallons/capita) - U.S. non-alcoholic refreshment beverage volume 2009 - U.S. soft drink market share – soft drink brands 3.3 Marketing Channels 3.4 Porter’s five forces 4 5 4 2 2 2 2 4 Competitive / corporate strategies of Coke and Pepsi 5 SWOT Analysis 6 Questions 6.1 How has the competition between Coke and Pepsi affected the industry’s profit? 6.2 If it has been such a profitable industry, why have so few firms successfully entered this business over the last century? What are the barriers? Why have Coke and been so successful in launching their products? 6.3 Why, historically, has the soft drink industry been so profitable? 6.4 Compare the economics of the concentrate business to that of the bottling business: Why is the profitability so different? 6.5 How can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-CSDs? 7 9 11 Exam Case Study Cola Wars Continue: Coke and Pepsi in 2010 1 Overview (Power Point Page (PPP) 2) For more than a century, Coke and Pepsi compete for market share within the world’s beverage market. The most intense battles were fought over the $74 billion carbonated soft drink (CSD) industry in the United States...
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...Cola Wars Continue: Coke and Pepsi in 2010 Table of Contents 1 Overview 2 General environmental analysis 3 Industry Analysis 3.1 Industry Structure - U.S. soft drink market share of concentrate producers - Suppliers within the carbonated soft drink industry 3.2 Market Structure - U.S. Liquid Consumption Trend (gallons/capita) - U.S. non-alcoholic refreshment beverage volume 2009 - U.S. soft drink market share – soft drink brands 3.3 Marketing Channels 3.4 Porter’s five forces 4 5 4 2 2 2 2 4 Competitive / corporate strategies of Coke and Pepsi 5 SWOT Analysis 6 Questions 6.1 How has the competition between Coke and Pepsi affected the industry’s profit? 6.2 If it has been such a profitable industry, why have so few firms successfully entered this business over the last century? What are the barriers? Why have Coke and been so successful in launching their products? 6.3 Why, historically, has the soft drink industry been so profitable? 6.4 Compare the economics of the concentrate business to that of the bottling business: Why is the profitability so different? 6.5 How can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-CSDs? 7 9 11 Exam Case Study Cola Wars Continue: Coke and Pepsi in 2010 1 Overview (Power Point Page (PPP) 2) For more than a century, Coke and Pepsi compete for market share within the world’s beverage market. The most intense battles were fought over the $74 billion carbonated soft drink (CSD)...
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...caffeine and coca leaves. Unfortunately, the current Coca-Cola formula still remains a trade secret. Coca-Cola is currently not targeting specific groups of customers but rather adapting to the market by creating and developing new products. Coca-Cola targets all ages of customers, but the mainly targeted customers are specifically from age 12-30. On the other hand for the age range of below 12 and above 30, although there is no specific product that satisfies them, the company compensates it by creating partnerships with restaurants and fast food chains. Coca Cola can be differentiated in few collections: the Coca-Cola classic, Oasis Juice, Diet Coke, Coca-Cola Zero and Coca-Cola Life. However, Coca-Cola made its success in the industry with its original sales of classic Coca-Cola, through the ‘share a coke’ campaign, selling all coke products with customized customer’s name on the cans or bottles. The Coca-Cola classic will be mainly discussed in this paper with the help of its official website http://www.coca-colacompany.com/. 2.0 Target Market For the selection of target markets of Coca-Cola, the company targets different segments of the market by offering various products for each segment using differentiated marketing. Coca-Cola offers product for different age-group customers. Not only so, the drinks under Coca-Cola is welcomed by any genders (gender) since drinks are unisexual (appendix 28). For instance, the Oasis Juice. The Oasis...
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...Coke vs. Pepsi Case Study Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year (98). Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share. The creativity and effectiveness of each company's marketing strategy will ultimately determine the winner with respect to sales, profits, and customer loyalty (98). Not only are these two companies constructing new ways to sell Coke and Pepsi, but they are also thinking of ways in which to increase market share in other beverage categories. Although the goals of both companies are exactly the same, the two companies rely on somewhat different marketing strategies (98). Pepsi has always taken the lead in developing new products, but Coke soon learned their lesson and started to do the same. Coke hired marketing executives with good track records (98). Coke also implemented cross training of managers so it would be more difficult for cliques to form within the company (98). On the other hand, Pepsi has always taken more risks, acted rapidly, and was always developing new advertising ideas. Both companies have also relied on finding new markets, especially in foreign countries. In the foreign markets, Coke has been more successful than Pepsi. For example, in Eastern...
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...Cola Wars Continue: Coke and Pepsi in 2010 1. Briefly describe the basic structure of the CSD industry and how it has evolved. The production and distribution of CSDs involves four major participants: producers, bottlers, retail channels and suppliers. a. Concentrate Producers blended raw materials for the soft drinks, package it and sell mixture to the bottlers. Though they require little capital investment, their significant costs were from advertising, promotion, market research and bottler support. Concentrate producers not only had influence in their own function but also greatly influenced in the process and decision of other three participants. E.g. they negotiated directly with their bottlers' major suppliers to achieve reliable supply, fast delivery and low prices, they were instrumental in the consolidation of the bottlers, they retained the relationship with mass merchandisers and negotiated pricing directly. By 2009 72% of the U.S. CSD market was covered by Coke and Pepsi only. b. Bottler buy the concentrate from concentrate producers and package them for end users. They require much higher capital investment and have much higher overhead for running their highly sophisticate and automated manufacturing plants. By 2009 number of bottlers have fallen from 2000 to fewer than 300 due to consolidated franchised bottling strategy. Pricing for the concentrate was controlled by the concentrate producers. While bottlers operating margin is usually around 8%...
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...Coca-Cola’s “Share A Coke” Social Media Campaign Analysis Corey Jackson JWMI: Marketing In A Global Environment Professor Karen Barnes 8/30/2015 The Coca-Cola Company, founded in 1886, is the world leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups. Today, the company markets more than 500 beverage brands in 200 countries, with around 70% of the company volume and 80% of the company profit coming from outside the United States. While Coke is probably the only product that is universally appealing in every corner of the globe, the company feels that its responsibility is to ensure that with every single can of Coca-Cola sold and enjoyed, individual connections are made with consumers. This can only be achieved locally. Coca-Cola’s strategy is noted to be an effective combination of global and international communications strategies. A right balance between standardization and adaptation makes the brands stand out from its competitors by focusing on consistent image and quality in a global scale, but at the same time being specifically relevant to local culture and customs. Coca-Cola recent global campaign “Share a Coke” vividly exemplifies this principle and brings the brand’s popularity to a new high level. The “Share a Coke” program was first introduced in Australia in 2012. 150 of the most popular names among young people are taking the place of Coke’s iconic logo. Customers with less common...
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...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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...PROJECT REPORT On MARKETING STRATEGIES OF COCA COLA Submitted By – Name : Pinak Paul MANAV RACHNA INTERNATIONAL UNIVERSITY ACKNOWLEDGEMENTS I am sincerely thankful to Miss Kanupriya (Project Faculty Guide), under whose guidance I have successfully completed this project and time spent with her had been a great learning experience. I think her constant encouragement, warm responses and for filling every gap with valuable ideas has made this project successful. She made it possible for me to put all my theoretical knowledge to work out on the topic: “MARKETING STRATEGIES OF COCA COLA. A mammoth project of this nature calls for intellectual nourishment, professional help and encouragement from many people. We are highly thankful to all of them for their help and encouragement. We wish to acknowledge our great debt to all of them whose ideas and contribution influenced me to complete the project work. TABLE OF CONTENT 1. TITLE PAGE 2. ACKNOWLEDGEMENT 3. INTRODUCTION 4. INDUSTRY PROFILE 5. COMPANY PROFILE 6. PORTER'S FIVE FORCES 7. PEST ANALYSIS 8. RESEARCH OBJECTIVES & METHODOLOGY 9. REVIEW OF LITERATURE 10. PRIMARY FINDINGS & ANALYSIS 11. CONCLUSION & RECOMMENDATION 12. BIBLIOGRAPHY 13. ANNEXURE INTRODUCTION This project is focused on studying the various marketing strategies of Coca-Cola and the scenario of Indian soft drink industry in the 1990’s. Coca-Cola Co., the global soft...
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... 14 Goal of coca cola 14 History of Coca Cola 15 Coca Cola in Pakistan 16 Today of coca cola 17 Market Conduction 18 Market Position 19 Organizational Hierarchy 20 Board of directors 21 Financial data 23 Business Portfolio and Growth Strategies of Coke Portfolio 24 Portfolio analysis 27 SWOT analysis 29 Five forces applied on coca cola 32(a,b) Growth strategy 33 Marketing Environments Microenvironment 36 Macro environment 40 Competitive environment...
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...noncarbonated beverages like tea, juice, sports drinks, and bottled water. For over a century, Coca-Cola and Pepsi-Cola had vied for the "throat share" of the world's beverage market. The most intense battles of the cola wars were fought over the $60 billion industry in the United States, where the average American consumes 53 gallons of carbonated soft drinks (CSD) per year. In a "carefully waged competitive struggle," from 1975 to 1995 both Coke and Pepsi had achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. This cozy situation was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. The case considers whether Coke's and Pepsi's era of sustained growth and profitability was coming to a close or whether this apparent slowdown was just another blip in the course of a century of enviable performance. A rewritten version of an earlier case by Michael E. Porter and David B. Yoffie. Essay: The case study “Cola Wars Continue: Coke and Pepsi in the Twenty-First Century” focuses on describing Coke and Pepsi within the CSD industry by providing detailed statements about the companies’ accounts and strategies to increase their market share. Furthermore, the case also focuses on the Coke vs. Pepsi goods which target similar groups of costumers, and how these companies have had and still have great...
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...a strategic quandary for the carbonated soft drink (CSD) giants, Coke and Pepsi: how to regain lost market share of their premier products and return to high annual growth rates seen previously? Although consumer craving for CSDs is not to be underestimated, the growing market demand for alternatives must not be ignored. The strategy going forward should be multifold. 1. Both Coke and Pepsi must actively try to capture market share in the non-carb drinks market. In order to remain nimble and respond expeditiously and with agility to changing market demands, both firms must continue to reconsolidate their concentrate producing and bottling facilities under a single operation; & 2. Pepsi and Coke must accelerate efforts to identify a low-cost, low-calorie sugar substitute that retains the flavor of their flagship products. The winner of this race is likely to have a huge advantage and could commandeer a significant portion of the soft drink market. 3. A rapidly growing middle class in developing nations provides an untapped market for both Pepsi and Coke. While Coke is already an established name in many of these countries, Pepsi is yet to take hold and should actively attempt to expand its global operations through strategic acquisitions and joint ventures. Analysis Industry Analysis: For decades, a strategically inspired pas de deux between Coke and Pepsi has waged on as each firm jockeyed for market share in the beverage market. During this time, the breadth and focus of...
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...President and CEO of Coca-Cola India (Coke India) Sanjiv Gupta is faced with this question: Should he act further on the Center for Science and Environment’s (CSE) allegations that cold drinks contain too much pesticides or should he remain silent and let the information fade from public view? Section 1: Assumptions and Stakeholder Analysis The first assumption taken in this case is Coke India is not breaking any laws and telling the truth when it comes to the level of pesticides in its products and its routine testing for chemicals. This case is not about concealing illegal activity or lying to the public, rather, it discusses the question whether or not corporations have a right to influence government to regulate various systems. If the analysis takes lying and cheating into consideration, this interesting discussion would appear convoluted. The second assumption taken in this case is the definition of “acting further” means for Coke India. Because Coke India and Pepsi already called the study “baseless” in a press conference launched independent marketing campaigns and published open letters referring to fact/myth websites, this analysis assumes acting further means more than public relations (Coke India, 12). Pepsi has already “filed a petition with the high court questioning the credibility of the CSE’s claims” and Coke India has threatened legal recourse meaning acting further means more than legal recourse against the CSE (Coke India, 1). The case also states “the Delhi...
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...ASSIGNEMENT 5 financial perspective of pepsico and coca cola business 508: THE BUSINESS ENTERPRISE strayer university by 12/05/10 Coke and Pepsi are the two major soft drink companies in the whole world; both companies have an international footprint. However, they also face substantial competition, as the market for non-alcoholic drinks is highly fragmented. In order to understand the investment characteristics of these two companies, it is worthwhile to take a look at these companies from the financial perspective, comparing their different financial ratios. Some of the important ratios that should be analyzed are the liquidity ratios, profitability ratios, cash flow indicators and investment valuation ratios. By analyzing the financial ratios this paper will help determine which of these two companies the better investment is. Ratios computation and analysis 1) Using the current ratio, discuss what conclusions you can make about each company’s ability to pay current liabilities (debt). A common liquidity ratio is the current ratio. This is calculated as the current assets / current liabilities. The current ratio reflects the ability of the company to meets its financial obligations for the next year. The current assets reflect assets that can be liquidated quickly, for example cash, inventories and receivables. The current ratio for Pepsi is $12,571 / $8756 = 1.44. The current ratio for Coca-Cola is $17,551 / $13,721 = 1.28....
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...For the exclusive use of R. PONCE 9-702-442 REV: JANUARY 27, 2004 DAVID B. YOFFIE Cola Wars Continue: Coke and Pepsi in the Twenty-First Century For over a century, Coca-Cola and Pepsi-Cola vied for “throat share” of the world’s beverage market. The most intense battles of the cola wars were fought over the $60-billion industry in the United States, where the average American consumed 53 gallons of carbonated soft drinks (CSD) per year. In a “carefully waged competitive struggle,” from 1975 to 1995 both Coke and Pepsi achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. According to Roger Enrico, former CEO of Pepsi-Cola: The warfare must be perceived as a continuing battle without blood. Without Coke, Pepsi would have a tough time being an original and lively competitor. The more successful they are, the sharper we have to be. If the Coca-Cola company didn’t exist, we’d pray for someone to invent them. And on the other side of the fence, I’m sure the folks at Coke would say that nothing contributes as much to the present-day success of the Coca-Cola company than . . . Pepsi.1 This cozy relationship was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. In response, both firms began to modify their bottling, pricing, and brand strategies. They also looked to emerging international markets to fuel...
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