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Case study Coca Cola vs Pepsi: historical rivalry

Written by Drew's editorial team Published at Jan 25, 2022 2:34:12 PM

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The historical rivalry of Coca-Cola and Pepsi has its origin since both brands entered the market, at the end of the 19th century , and since then they have had their commercial plateaus among the audience . But the important thing is that, regardless of which of the two maintains its leadership, they r emain very present today as the ideal options to accompany a fast meal at a meeting with friends.
<<< Case study Apple: Keeping on top >>>
Coca-Cola is a company founded a few years before Pepsi , and it could be said that it was the pioneer in incorporating the refreshing drink with coca extracts and caffeine , which has stimulating or energizing effects for the body, in addition to a large amount of not-so-healthy sugar , but curiously addictive, in combination with the rest of the other properties.
In the case of Pepsi , it is a drink created by PepsiCo with characteristics similar to Coca , with a similar flavor but slightly less sweet and with more gas. Emerging after Coca-Cola was his biggest challenge because it was not easy for it to be at the same place on the podium of consumer preferences.
However, there is a very loyal public of Pepsi , and to this day it is a beverage that people continue to choose, perhaps not as massively as its historic rival, but it manages to maintain a comfortable second place , which at times takes away the first place.
In today's case study , we'll be breaking down the historical rivalry between Coca-Cola and Pepsi , who came first, which of the two brands has achieved greater success over time, and what we can expect from these two giants in the future.
Case Coca Cola vs. Pepsi: the origin of the two companies.
Both Coca-Cola and Pepsi are sugary soft drinks sold worldwide , whose formulas were created by pharmacists and distributed as energy drinks for a public that wanted to consume strong non-alcoholic beverages that were pleasant to the palate. Over time, both beverages achieved a large market share and became highly social drinks .
John Pemberton was the inventor of the Coca-Cola beverage in 1886, in a formula based on coca leaves and cola nuts , which i n the early years contained cocaine and, from 1903, was replaced by caffeine. The pharmacist began to distribute t he drink as syrup to combat digestive problems and also provide a little energy to the body.
Pemberton realized that his drink could become a big business , so he commissioned a logo and in 1891 The Coca-Cola Company was founded. From then on, the company expanded to the world with great success , even reaching the Asian market with a name adapted to Chinese ideograms meaning "delicious happiness".
On the other hand, Pepsi emerged in 1893 and was created by the pharmaceutical chemist Caleb Bradham , who just five years later baptized it with the name of Pepsi Cola . Like Coca-Cola, Pepsi began to gain relevance among consumers, especially among car racers , who considered it a very tasty, refreshing, and stimulating drink.
However, in 1927 the company declared bankruptcy after the sharp decline in the price of sugar , when its founder and other manufacturers bought the ingredient in large quantities, although the price did not stop constantly rising.
After the bankruptcy, Roy Megargel formed the Pepsi Cola company and bought all the assets and the trademark from the creditors, for a sum of 35,000 USD. Although Coca-Cola had the opportunity to buy Pepsi Cola three times, in the end, it declined the offer.
Charles Guth , president of Loft Inc, took over the company from that moment on, and it was from then on that the company began to compete vigorously against Coca, even seeking to partially modify the formula so that it would be more similar to its rival Coca-Cola.
The beginning of the eternal rivalry: Coca-Cola vs. Pepsi.
While Coca-Cola developed its famous curvy bottle, expanded to Europe, and signed contracts with big celebrities, Pepsi went bankrupt because of the First World War . In 1931, it went bankrupt again but managed to quickly get back on its feet . So much so that, during the Second World War the number of advertising actions increased , which allowed it to sell soft drinks in cans.
Starting in the 1950s , Coca-Cola began to promote itself on television, while Pepsi decided to bet on rebranding , to keep up with its rival.
In 1962, Coca-Cola launched Sprite, one of the company's largest soft drink brands. For its part, Pepsi merged with Frito Lay to create Pepsico . This merger brought great economic benefits to Pepsi, surpassing its rival in profitability, due to the wide range of snack products that the company came to market. Instead, Coca-Cola did not go beyond the soft drink industry.
While Coke's catalog of brands is broader than Pepsi's, the latter makes up for it with huge global sales of its snacks. In addition, although Coca continues to be the undisputed leader in the beverage and soft drinks market, Pepsi obtained higher revenues thanks to the great diversity of products.
<<<Case study Lays: Towards the conquest of the Asian market>>>
The advertising battles of Coca-Cola and Pepsi throughout history.
Coca-Cola , perhaps due to its comfortable leadership, used more stereotypical symbols , such as the polar bear and Santa Claus for Christmas advertisements, which pointed to illusion, magic, and family unity . Instead, Pepsi's campaigns were aimed at discrediting Coca and its symbols , trying to show that it does not deserve its leadership position.
During the 1940s, Walter Mack was at the helm of Pepsi-Cola , and at that time he stood out for supporting progressive causes , during an era marked by racism. Therefore, he considered that the advertising strategy was aimed at the general public, but that excluded or denigrated African Americans.
Thus, the company decided to invest in campaigns aimed at this racial sector to expand its market share . Despite the sugar crisis, Mack came to form a sales team solely to attract the public of color, for which they suffered a lot of discrimination , both from Pepsi employees themselves and from entities such as the Ku Klux Klan and the laws of racial segregation in force in the country.
Even so, the company increased its market share considerably and was able to take advantage of its inclusive policy to denounce the racism of Coca-Cola for promoting a drink for whites only.
It also outsold its rival in sales during that time in Chicago , but the company was concerned that it would increase that racial market segment among customers . Therefore, after repeated pressure, Walter Mack left Pepsi-Cola , and his sales team to attract the African-American collective was dissolved.
Already in the 1970s, the clearest example of making a marketing strategy against its main competitor is the controversial campaign launched in 1975, called " Pepsi challenge ", where the firm defeated its competitor with a test of the two flavors of soda , totally blind, in which people had to try two unlabeled cups with each of the brand's contents inside.
Only in this way, he appealed to an honest test in which people, without knowing what they were drinking, chose the drink they liked. Thus, many people chose the taste of Pepsi over that of Coca-Cola , so PepsiCo invested large sums of money in advertising, hiring celebrities such as Michael Jackson, Tina Turner, and Michael J. Fox, among others, to promote the drink among young consumers.
Of course, Coca also carried out campaigns in response to Pepsi's hints, which sought to ridicule its constant siege to gain positioning. So it is that to this day Coca Cola remains the number one brand of beverages, while Pepsi remains in second place following in its footsteps, lurking and waiting for the moment to take the big leap that will take away the leadership.
<<< Case study Adobe: collaborative work culture>>>
To conclude, in this case study Coca Cola vs. Pepsi , we've seen that these two companies fight since time immemorial and that few rivals have attacked each other so much throughout history to gain first place in the market of their industry.
For being the first to launch the drink and for incorporating that characteristic flavor, Coca is more popular and known among people worldwide, but we can't forecast anything in the brand war.
So, what beverage do you prefer, Coke or Pepsi?
Do you want to share?
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Cola Wars - Coke Vs Pepsi Harvard Business School Case Study

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- 1. Case Study Analysis on Cola Wars Continue : Coke and Pepsi in 2010 Presented by : Mohan Kanni Dhanunjay Naidu Thentu Vivek Lalam
- 2. History Of Coca-Cola • Coca-Cola was formulated in 1886 by John Pemberton (pharmacist). • It was served at Jacobs Pharmacy. • Frank Robinson named it as Coca-Cola. • In 1891, Asa Candler acquired the formula of Coca-Cola. • In 1919 Company was sold to a group of investors and four years later, Robert Woodruff became the Leader.
- 3. History Of Pepsi-Cola • Pepsi-Cola was invented in 1893 by Caleb Bradham (Pharmacist). • During the Great depression (1929-1939),Pepsi lowered the price to a nickel. • PepsiCo was established through the merger of Pepsi-Cola and Frito-Lay in 1965.
- 4. Cola Wars • In 1959, Alfred Steele became CEO of Pepsi and his motto was “Beat Coke”. • To target family consumption through supermarkets. • In 1970, marketing campaign “Pepsi Generation” was launched. • In late 1950’s, Coca-Cola advertised as “Americans Preferred Taste” • Other Advertisements included “No Wonder Coke Refreshes Best”
- 5. Cola Wars • Pepsi launched Teem (1960), Mountain Dew (1964) and Diet Pepsi (1964). Non CSD Pepsi merged with Frito-lay • Coke launched Fanta (1960), Sprite (1961) and Cola Tab (1963). Non CSD Coke purchased Minute maid, Duncan foods and Belmont Springs Water.
- 6. The Pepsi Challenge • In 1974 Pepsi launched “Pepsi Challenge” in Dallas. • Blind taste tests. • Coke countered with rebates, retail price cuts.
- 7. Cola Wars Heat Up • Pepsi doubled its advertising expenses. • Pepsi introduced Lemon-Lime Slice (1984) and Caffeine Free Pepsi (1987) • In 1980 Coke switched from sugar to high-fructose corn syrup. • Doubled the advertising expenses. • Diet Coke was introduced in 1982. • Coke introduced Caffeine Free Coke (1983) and Cherry Coke (1985)
- 8. PRODUCTION AND DISTRIBUTION • CONCENTRATE PRODUCERS : The concentrate producer blended raw material ingredients, packaged the mixture in plastic canisters and shipped those containers to bottler. • BOTTLERS : Bottlers purchased concentrate ,added carbonated water and high- fructose corn syrup, bottled and canned the resulting CSD product to the consumers.
- 9. • RETAIL CHANNELS :The distribution of CSD’S took place through Super Markets, Fountain Outlets, Vending Machines, Mass merchandizers, Convienience stores and gas stations and other outlets. • SUPPLIERS to concentrate producers and Bottlers : Concentrate producers required inputs like caramel colouring, phosphoric or citric acid, natural flavours and caffeine. Bottlers purchased two major inputs : Packaging (including cans, plastic bottles and glass bottles) Sweeteners (including high fructose corn syrup, sugar and artificial sweeteners such as aspartame)
- 10. • The Franchised bottler owned a manufacturing and sales operation in an exclusive geographical territory, with rights granted in and other terms of sale by the franchiser. • The 1987 Master Bottler contract granted coke the right to determine the concentrate price. • Under this contract coke could assist bottlers with advertising or marketing • In case of Pepsi, the agreement granted the bottler perpetual rights to distribute Pepsis CSD products but required it to purchase raw materials from pepsi at prices determined by Pepsi.
- 11. SWOT Analysis Weakness Threats Strengths Opportunities Most Valuable Brand for 13 years Worlds largest in beverages : $15 Billion Diversification:500+brands;200 countries Extensive Global Dist. Network Leader in Fountain Accounts Strong in emerging markets : China, Brazil, Eastern Europe Declining market share since 2000 Negative publicity CSD focus : only32% non-CSD share Price Pressure from mass retailers(Wal-Mart):40% of US packaged sales Expand non CSD Products Expand and Mostly CSD line ;Sprite Green(coke) Global Expansion in emerging markets: India ,China, Brazil(coke) Innovative Offerings tailored to local taxes Growing "health-conscience" society Changing Consumer tastes and preferences PepsiCo’s Gatorade, Tropicana and Aquafina are stronger brands Boycott in the Middle East Protest against Coke in India Negative publicity in Western Europe
- 12. SWOT Analysis Weakness Threats Strengths Opportunities 22nd Most Valuable Brand 2nd Largest in F & B in world : $22 Billion Leader in Non CSD Diversification : “The power of One” Extensive Global Dist. Network Successful marketing Campaigns and celebrity endorsements. Declining market share in beverages Negative publicity Overdependence on US markets ; 50%of total sales Low market share in fountain accounts: 20% vs Coke's 69% Price pressure from mass retailers: 12% of revenue(Wal mart) Expand non CSD juice sport energy bottled water Gatorade, Naked(Pepsi) Expand and Mostly CSD line ;Pepsi Next,Trop50(Pepsi) Global Expansion in emerging markets: India ,China & Russia(Pepsi) Innovative Offerings tailored to local taxes Herb drinks (Pepsi) Growing nutritious snacks product markets Obesity and Health Concerns Changing Consumer tastes and preferences Coca-Cola Increases Marketing and Innovation Spending to $400M Globally Relying on North America only is Bad Decline in Demand for Carbonated Drinks. Negative publicity during 2003 World cup incident of Pepsi Blue.
- 13. BCG Matrix – Coca Cola Thumbs up Kinley Limca Fanta Coca Cola Diet Coke Gold Spot(India) Root Beer Sprite Maaza Minute maid
- 14. BCG Matrix - Pepsi Aquafina Miranda Mountain Dew Pepsi Diet Pepsi 7 UP Tropicana Pepsi Max Pepsi Blue, Pepsi Gold Mist Twist
- 15. Bottler Consolidation and Spin-Off • Coke started refranchise bottling operation by buying up poorly managed bottlers, infusing them with capital and quickly reselling them to better performing bottlers. • Coke created an independent bottling subsidiary called Coca-Cola Enterprises. • Pepsi did the same through Pepsi Bottling Group.
- 16. The Quest for Alternatives • Pepsi replaced high fructose corn syrup with natural sugar. • Coke and Pepsi both developed their own versions of Stevia (herb with zero calorie sweetener). • Pepsi developed non-CSD products like Gatorade and Tea based drinks (Lipton). • Coke acquired maker of Vitamin water drinks and also entered business of supplying coffee and tea to food service customers.
- 17. Internationalizing the Beverage Wars • India and China emerged as future battlegrounds. • Coke relied on International market (80% of sales) • Pepsi chose to focus on emerging markets
- 18. Who has been wining the war? 1950: Coke have 47% and Pepsi have 10% 1970: Coke have 35% and Pepsi have 29% 1990: Coke have 41% and Pepsi have 32% 2000:Coke have 44%Pepsi have31.4% other beverage Cadbury Schweppes 14.7% 2006:Coke have 43.1% Pepsi have 31.7% Cadbury Schweppes 14.5%
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Cola Wars Continue: Pepsi and Coke Harvard Case Solution & Analysis
Home >> Harvard Case Study Analysis Solutions >> Cola Wars Continue: Pepsi and Coke
Cola Wars Continue: Pepsi and Coke Case Study Solution
Introduction
This case is about the war between the Cola brands in United States. There are two Cola companies who are in this battlement. Coca- Cola Company is one the biggest company in United States, and it has greater market share in Cola industry than other brands. Pepsi cola was introduced in 1893, initially they started selling their drink in bottles, due to competition they were facing difficulties to capture the market but they came up with low pricing strategy then Coca-Cola which helped Pepsi Cola to enter in the market till 1950 the market share of the Coca Cola was increased to 46% which was higher than any other brand in United States.
Beginning of the War
The war between the Coca Cola and Pepsi started in 1950 when Pepsi came up with new strategy to target the families through convenient stores, after this strategy they observed super growth in their market share, and then they started targeting young generation of United States through their promotional activity which increased their share in the cola market. To capture the market Coca -Cola introduced new flavor and change in packaging through which they could attract more customers. In United States, Pepsi was giving high competition to Coca Cola company,in challenge to this situation Coca Cola brought changes in their strategy and introduced different soft drink brands like Minute Mint which was a fruit juice another brand Duncan which was for the Coffee and chocolate brand. Pepsi responded to this change in Coca Cola strategy byentering the food industry, Pepsi joined hands with the food company name Frito-Lay they adopted diversified strategies and changed their name from Pepsi to PepsiCo.
Intensification in War
Pepsi was giving high competition to Coca Cola in the soft drink market. Coca Cola started thinking about minimizing the cost and increasing marketing strategy they changed the ingredients to fructose, it was basically a syrup in the replacement for sugar because fructose was cheaper than sugar, they increased their promotional activities, invested double in marketing and promotions,and introduced diet Coke which was the biggest hit of the Coca Cola company and became one the top diet soft drinks in a shorter time period.
Coca Cola market share was declining in United States Market which led them to change their formula recipe, after a few months they introduced a new brand named“Classic” and further introduced more products without caffeine and a different flavored soft drink and called it Cherry Coke. After few years, Pepsi increased their product line by launching 13 different soft drink products. Due to high competition each company focused on giving more benefits to customers and giving more discounted prices to their major customers.
Shift in Market
The shift in the market occurred in 1990s affected the growth in United States and changed the company direction.The growth of the company started to decline due to some health issues in the country. The American government issued guidelines for those products which contained sugar in it. They government laid restrictions on the supply of soft drinks for children. Most of the people in United States started believing that Coca Cole wash arming their health because it contained fructose which was not good for the health. Coca Cola believed that health issue can create a bad impression in their business. In 2009, Coke and Pepsi considered for bringing innovation in their products, Coke launched a machine which created a software according to the customer’s requirements and promoted that machine in restaurants in United States and invested huge amount of money in it so customers could perceive the importance of the new product. In response of down scales Pepsi changed their logo and increased their promotion activities for their portfolio.
Strategy in International and Domestic market
Increasing population in the international and domestic markets, both company believed that they have to change their strategy from traditional infrastructure to avoid complications in the market. They have to bring small changes in their production. To respond to this change Coke and Pepsi sold their distribution to third parties and also provided distribution for few retailers.
Cola Wars Continue Pepsi and Coke Harvard Case Solution & Analysis
The energy drink is a more proficient business because it has more profit margin and secondly the customers are limited so they can target and reach their customer easily. The super stores like Wal-Mart helped the company to generate high growth by selling large quantity of products at a single place. In 2009 Coke started following a pricing strategy to charge the price of the product based on the types of the distribution.................
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Coca-Cola vs. Pepsi's Business Models: What's the Difference?
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Coca-Cola vs. Pepsi's Business Models: An Overview
Coca-Cola Co. ( KO ) and PepsiCo, Inc. ( PEP ) are very similar businesses in terms of industry, ideal consumers, and flagship products. Both Coca-Cola and PepsiCo are global leaders in the beverage industry, offering consumers hundreds of beverage brands. In addition, both companies offer ancillary products such as consumer packaged goods .
On the surface, Coca-Cola and PepsiCo have similar business models . However, there are also key differences between how the two businesses operate. Coca-Cola and PepsiCo are fierce competitors that have slightly different approaches to how they attempt to capture market share.
Key Takeaways
- PepsiCo has a diversified product portfolio encompassing the food, snack, and beverage industries.
- PepsiCo typically prices its goods based on consumer demand and demographics.
- Coca-Cola has a centralized focus on the beverage industry, though they've emerged in numerous different beverage categories.
- Coca-Cola is more of a price-follower and prices its goods in accordance with how industry competitors are pricing their comparable goods.
- Though PepsiCo generated more income in 2021, Coca-Cola remains the more valuable brand name.
PepsiCo has created a diverse product line of complementary goods across the food and beverage industries. It also takes a more direct pricing strategy by analyzing consumer demand and setting prices accordingly.
Product Line
With roots dating back to 1898, PepsiCo has built a highly-diversified product portfolio . In 2020, PepsiCo had 23 different brands with over $1 billion of annual sales. Instead of focusing specifically on the beverage market, PepsiCo has specifically and intentionally expanded into other consumable markets:
- Soda: Pepsi, Diet Pepsi, Pepsi Max, 7Up, Sierra Mist, Mountain Dew
- Alternative Drinks: Tropicana, Sodastream, Aquafina, Gatorade
- Snacks: Ruffles, Tostitos, Lays, Doritos, Fritos, Cheetos
- Other: Ready-to-drink Starbucks products, Quaker
Though historically associated as a beverage/soda company, more than 50% of PepsiCo's business revenue is generated through its snack product.
Market Presence
PepsiCo sells beverages, snacks, and food all around the world through its seven global divisions.
- Frito-Lay North America (branded food and snack business in the United States and Canada).
- Quaker Foods North America (cereal, rice, pasta in the United States and Canada).
- PepsiCo Beverages North America (beverages in the United States and Canada).
- Latina America (all products in Latin America).
- Europe (all products in Europe).
- Africa, Middle East, and South Asia (all products in Africa, Middle East, and South Asia).
- Asia Pacific, Australia, New Zealand, and China (all products in Asia, Australia, New Zealand, and China).
In PepsiCo's fiscal year ending 12/25/2021, 60% of net company revenue was generated by the three North America division lines, and the Frito-Lay North America division was responsible for approximately half of the company's operating profit for the year.
Pricing Strategy
Pepsi is an industry price maker, setting its own product rates in accordance with customer demand. Pepsi offers various sizes of bottled at various rates priced according to the number of drinks supplied and consumed for a given area. For example, though Doritos and Tostitos are comparable products, Doritos is a more globally-recognizable brand that may be priced differently based on its popularity. Similar to Coca-Cola, PepsiCo prices are also based on targeted customer demographics. Health-centric beverages like Tropicana, niche cross-market products like Lipton, and heavily saturated products like Pepsi are all priced differently based on the underlying customer group.
The Coca-Cola Company is a total beverage company, boasting over 200 different brands of drinks. It has a similar international reach as PepsiCo, though it operates with different market segment groupings. It also approaches pricing its good differently.
Over 1.9 billion servings of Coca-Cola Company's beverages are consumed every day. Instead of diversifying across the food, snack, and beverage industries, Coca-Cola has concentrated on building out an empire of drinks. Their product lines include:
- Soda: Coca-Cola, Barqs Root Beer, Sprite
- Water: Dasani, Glaceau SmartWater, and Vitaminwater
- Tea: FUZE, Gold Peak Tea, Honest Tea
- Juices: Minute Maid, Hubert's Lemonade
- Other: Body Armor, Monster Energy, Dunkin' Donuts
Coca-Cola measures operations by dividing its products between sparking beverages (carbonated beverages) and still beverages (non-carbonated products). In Coca-Cola's fiscal year ending in 2020, sparkling beverages represented almost 63% of the company's total bottle/can sales, and 70.6% of bottles/cans sold by volume were sparkling beverages.
Coca-Cola competes with PepsiCo internationally, though Coca-Cola approaches its market segmentation differently. Coca-Cola's operational structure divides operational markets into the four following divisions:
- North America
- Europe, the Middle East, and Africa
- Latina America
- Asia Pacific
Coca-Cola also created a Global Ventures segment to help new brands scale and identify ways to maximize the scale of select products around the world. This segment contrasts with Pepsi's more segmented approach of geographical divisions.
In addition, Coca-Cola also created the Bottling Investment Group segment to strategically assess how products are bottled, shipped, and stored. While PepsiCo has bottling divisions as well, Coca-Cola's organizational structure varies from PepsiCo by including the bottling division as a top-level segment group.
Coca-Cola has referred to their pricing strategy as "meet-the-competition pricing". The company analyzes the pricing strategies of its competitors, sees where comparable products have been priced, and strives to set their own prices around the same level as their competitors. Pricing to the competition strategies often relies heavier on production excellence, better service, or other marketing elements that attract customers to their products (since pricing will be comparable to the competition).
Which Tastes Better?
Everyone has their own taste. If you like the taste of Pepsi over Coca-Cola, you're in the minority. In a 2021 worldwide study, about two-thirds of consumers think that Coca-Cola is better than Pepsi.
Both Coca-Cola and PepsiCo continue to see tremendous market demand. Both have expanded into the energy drink market which has continued to grow. As Americans become more concerned with sugar, chemicals, and the sustainability of packaging, the operations, product lines, and pricing of both companies will be impacted.
Regarding marketing, Coca-Cola was ranked as the #6 ranked brand on Forbes World's Most Value Brands in 2020, while Pepsi was ranked #36. Both companies engage customers by expanding existing product lines with new flavors or health consideration alternatives for their products.
With impacts to restaurants, dining out, consumer preferences, and distribution capabilities, both companies are also emerging from the COVID-19 pandemic. The operating profit of PepsiCo Beverages North America increased 26% from 2020 to 2021, reflecting the resurgence of the post-pandemic environment.
Does Coca-Cola or Pepsi Have a Better Brand?
Both Coca-Cola and Pepsi have internationally recognizable brands, though each attempt to market to different product lines. Coca-Cola is the international leader in beverages, while PepsiCo has a stronger brand presence in the snack and food industry.
Is Coca-Cola Larger Than Pepsi?
Looking at total company revenue, Pepsi is larger. Coca-Cola's 2021 net revenue grew to $38.7 billion, while PepsiCo's 2021 net revenue grew to $79.47 billion.
What Brands Does Coca-Cola Own vs. Pepsi?
Coca-Cola brands include Sprite, Fanta, Powerade, Dasani, and Minute Maid. PepsiCo owns brands including Gatorade, Frito-Lay, Quaker Oats, and Rockstar Energy.
Who Won the Cola Wars?
Coca-Cola commands a larger market presence in the carbonated soft drink area. Though the rivalry still exists, Coca-Cola has emerged as the more dominant beverage provider today.
Coca-Cola Company. " Coca-Cola Reports Fourth Quarter and Full-Year 2021 Results ."
Forbes. " The World's Most Value Brands ."
PepsiCo. " PepsiCo Reports Fourth Quarter and Full-Year 2021 Results; Provides 2022 Financial Outlook; Announces Annual Dividend Increase and New Share Repurchase Program ."
Sure Dividend. " PepsiCo Brands: All 23 Billion Dollar Brands Explained ."
PepsiCo. " PepsiCo Annual Report 2020 ," Page iii.
PepsiCo. " Annual Report 2020 ."
PepsiCo. "PepsiCo Reports Fourth Quarter and Full-Year 2021 Results; Provides 2022 Financial Outlook; Announces Annual Dividend Increase and New Share Repurchase Program ."
Coca-Cola Company. " What brands does The Coca-Cola Company offer? ."
Coca-Cola Company. " More Than a Beverage Company ."
Coca-Cola Company. " 2020 Annual Report ," Page 39.
Coca-Cola Company. " Global Ventures (GV) ."
Coca-Cola Company. " Bottling Investment Group (BIG) ."
Mashed. " Only About 1 in 3 People Actually Prefer Pepsi To Coke ."
Beverage Industry. " 2021 State of the Beverage Industry: Energy Drinks Flourish as Consumers Seek Functionality ."
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A Case Study about coca-cola & pepsi

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Coke vs Pepsi Case Study Solution
Coke vs pepsi cola wars case study solution.
This Market Model Coke vs Pepsi case study solution follows the more than 100-year “Cola War” between Coke and Pepsi .
When first starting to use the Market Model for market simulation, it is easier to think about this famous competitive battle when there were only two competitive products (the 6.5 oz Coke in their famous bottle, versus Pepsi’s product). When Coke and Pepsi first started competition head-to-head, Coke had about an 80% market share, and Pepsi had a 20% market share – we can ignore the other competition which has since evaporated.
The Market Map at the beginning of the Cola Wars looked like this:
Data from the market already gives us a lot of information that we can use to tune the Market Model. We know the Price for Coke and Pepsi , we know their Market Share, and we have a pretty good idea of the Profit Margin (or Marginal Cost) of both from their public financial reports. With these 6 data points we can start to tune our model.
If we also have data for another point, say at a time that Pepsi was offering a substantial discount on their product or from another geography, then we would have more than enough data to completely tune a model as simple as the one we are starting with.
Because the Market Model uses a proprietary statistical algorithm to impute customer distribution data, the data collection problem becomes much easier and cost effective. Unlike with other statistical techniques, the user does not have to commission an expensive market research report just to tell them what they already know about the existing market. The Market Model allows the user to integrate their own knowledge, and then focus on understanding just those new changes relative to the existing state of the market. For example, after setting up an initial Market Model, the user can run very targeted Conjoint Analysis study to better inform them about what is new to the market (like a new feature). The new data can then be integrated into the Market Map.
Once the base model has been constructed and tuned the user can think about how they might change the conditions in the market. Here are some strategic ideas for Pepsi :
- They might try and add an additional feature, such as a different sized bottle
- They might try to improve the Pepsi brand
- They might target a different geography
- They may try and improve the taste of the cola
- They might add a product line extension
This is how Pepsi would use the Market Model to simulate the market outcome from each of these possible strategies.
Adding an Additional Benefit
To test whether adding the additional benefit of a larger bottle would be a successful strategy, Pepsi could make this adjustment to the Market Map:
In fact, Pepsi did introduce a large 12 oz bottle early on in the Cola Wars to compete with Coke’s 6.5 oz bottle. They accompanied the new product feature with the advertising jingle “ Pepsi-Cola hits the spot / Twelve full ounces, that’s a lot / Twice as much for a nickel, too / Pepsi-Cola is the drink for you”. The campaign was a huge success at the time and allowed Pepsi to double their profits.
Coke , which also sold for a nickel (5 cents), had difficulty matching Pepsi’s new product. Not only would it require changing the size of the Coke bottle, but it would also require changing the size of all of the Coke refrigerators which were built to only accommodate the smaller 6.5 oz bottle.
Target Marketing
To test whether targeting a particular market demographic would be a successful strategy, Pepsi could make this adjustment to the Market Map:
In fact, Pepsi were pioneers for niche and segmented marketing. In the 1940’s they targeted their marketing directly towards African Americans. Later they defined the “Pepsi Generation” and took a stand with the young side of the 1960’s generation gap. They described Pepsi drinkers as people who saw the “young view of things”. The “Pepsi Generation” was one of the first and best known instances of what came to be known as “lifestyle marketing”.
Geographic Distribution
To test whether adjusting their product distribution strategy would be successful, Pepsi could make this adjustment to the Market Map:
Improved Taste
To test whether improving the perceived taste of Pepsi would be successful, Pepsi could make this adjustment to the Market Map:
In fact the “Pepsi Challenge”, which was a market strategy centered on improving the customer’s perception of the taste of Pepsi , was another enormously successful strategy. In these televised blind-taste challenges, a Coke drinker was asked to determine whether they actually preferred the taste of Pepsi. It turns out that a statistically significant majority of Coke drinkers did, in fact, prefer the taste of Pepsi . This genuine finding, in part, led Coke to launch its unsuccessful “New Coke” strategy.
Product Line Extension
To test whether making a product line extension to the Pepsi product would be a successful strategy, Pepsi could make this adjustment to the Market Map:
In fact, Pepsi did launch Diet Pepsi. And today Diet Pepsi is considered to be Pepsi’s flagship product, with regular Pepsi being considered to be the product line extension.
Increasingly Complex Environment
Market Models can evolve to be increasingly complex. And they can be used to simulate very specific market phenomenon. For Pepsi, the Market Model could evolve to look something like this:
Pepsi could then evaluate whether creating a very broad product portfolio, and launching each of these products into the market over time, would be a successful strategy. A dynamic timeline might look something like this:
Coke vs Pepsi Case Study Solution – Recommendation
“According to the case study of coke and pepsi both of the companies have great brand in market but this survey tells us that pepsi has a great market demand and high market shares because of its taste and market developing plans but if they follow these steps they can become more effective in markets “.
- One solution to increasing market share is to carefully follow consumer wants in each country.
- The next step is to take fast action to develop a product that meets the requirements for that particular region. Both companies cannot just sell one product; if they do they will not succeed. They have to always be creating and updating their marketing plans and products .
- According to me more important in every market, include color, product attractiveness visibility, and display quality. In addition, availability (meeting local demand by increasing production locally), acceptability (building brand equity), and affordability(pricing higher than local brands, but adapting to local conditions) are the key factors for both the companies.
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Case Study Of Coca Cola And Pepsi
Case study coke and pepsi.
This case study observes the industry structure and competitive strategy of Coca-cola and Pepsi over 100 years of rivalry. It gives insight about how these two company was literally into an extreme fights in the so-called “cola war”. Firsthand challenges of the 21st century included improving weakening internal cola sales and finding new income streams. Coke as well as Pepsi started to change their bottling, pricing, and brand strategies. They viewed the developing global markets to enhance growth and expand their brand sets to include noncarbonated
Coca Cola Internal Growth Case Study
When founded, Coca-Cola developped internal for some time. For general speaking, internal growth is producing more of the same products or services, or improving the production lines by creating new products. It basically means that company grows within inside and gets stronger to the core. It is achieved by without incorporating other companies. The main advantage of internal growth for companies in general is that the company grows within the existing structure, so there will be no problems of structure or management systems.
Coca Cola Perfect Competition Industry
This is because the barriers to entry into the industry are relatively high for new firms and that the Average Total Cost (ATC) and Average Variable Cost (AVC) for new firms are relatively high compared to the two large soft drink manufacturers because of economies of scale. Additionally, not many firms in their industry produced the same or identical product to make the industry competitive and the information is not freely available because the recipe in Coke’s case is not public record. Therefore, the assumption that Coca-Cola and Pepsi are most likely not to be produced in a perfectly competitive industry is
Case Study Coke Vs Pepsi
Provide a short background on each company, the industry and the market (growing, declining, etc?) in which they operate. (This should be no more than 1- 1.5 pages for both companies in total and can be a part of your introduction.)
Pepsico Political Factors
Political factors can often give a big impact on the business of a company. Often this factor is not in the hand of the organization. Several aspects of government policies can make a huge difference. However, all firls are required to follow the law. It is the responsibility of the organization to find how upcoming legislations can affect their activities.
Microeconomic Project: Case Study Of Pepsico
As of January 26, 2012, 22 of PepsiCo 's brands generated retail sales of more than $1 billion apiece, and the company 's products were distributed across more than 200 countries, resulting in annual net revenues of $43.3 billion Based on net revenue, PepsiCo is the second largest food and beverage business in the world. Within North America, PepsiCo is the largest food and beverage business by net revenue. Indra
Pepsico Case Study Model
Danielle Walker, an American female is the president and CEO of Training Management Corporation (TMC). Founded in 1985, the company was built to deliver practical consulting and solutions that meet and have the ability to turn multicultural business environment to be able to overcome operational challenges. TMCorp help companies worldwide distinguish similarities and differences in its work environment and help to maximize performance to reduce risk, with this done, innovations then can be enhanced with the most effective way.
Coca Cola Market Structure Analysis
Coca-Cola controlled the market structure and maintained its competitive advantage over its competitors. The company therefore managed to have a large share in the soft drinks market that was characterized with few and weak competitors. However, the introduction of Pepsi was worrying. Coca-Cola enjoyed the advantages of a monopoly until the resurgence of Pepsi. Pepsi proved to be a potential competitor. Coca-Cola strives to utilize every strategy available to become successful whenever it launches its business in overseas markets. Pepsi seemed to have discovered Coca-Cola’s disadvantages and it was using them to check Coke’s dominance. The new market structure brought about cut throat competition between the two cola giants. However, the competition ate into a large chunk of the two companies’
Coke And Pepsi Case Study
In the carbonated soft drinks industry, Coke Cola and Pepsi Co are the biggest players in the market for aerated beverages. Both the companies have been competing strongly against each other for decades. The market is dominated by these two industry leaders with a total market share of 72%; Coke’s market share is 42% and Pepsi’s 30%. This is known as an oligopoly market; where there are few large firms competing with each other in the industry. Since both the company’s market share so large, the market is very close to a duopoly (other players having a very small impact on the market). Hence we assume this to be a situation of duopoly.
Advertising Effectiveness Of Coca Cola
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Sustainability Report: Pepsico
Many companies produce annual sustainability reports in order to showcase the company's efforts, and reflect on how to improve or what needs to be changed. PepsiCo is a company with a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Tropicana and a wide range of other foods and beverages, providing many choices for consumers. Managing such a wide portfolio of food brands and products requires a large amount of resources to produce and manufacture the products to a large number of consumers.
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Strategic Analysis Of Pepsi (Pakistan
Special thanks to my Business Policy professor, Fareed Fareedy for everything. He motivated and guided me. Special mention to the TA Business Policy, Ms Haadiah. I would also like to thank the employees at Pepsi who gave me the required information.
More about Case Study Of Coca Cola And Pepsi
Related topics.
- The Coca-Cola Company

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COMMENTS
In the case of Pepsi, it is a drink created by PepsiCo with characteristics similar to Coca, with a similar flavor but slightly less sweet and
Provides a teaching vehicle for analysis of competitors and strategic rivalry. An updated and revised version of an earlier case. Keywords. Competition;
Coke and Pepsi both developed their own versions of Stevia (herb with zero calorie sweetener). ... Pepsi developed non-CSD products like Gatorade
Cola Wars Continue: Pepsi and Coke Case Study Solution ... This case is about the war between the Cola brands in United States. There are two Cola companies who
PepsiCo has a diversified product portfolio encompassing the food, snack, and beverage industries. · PepsiCo typically prices its goods based on consumer demand
Case Study on Coca Cola and Pepsi coke and pepsi how they fared in india the beverage battlefield in 2007, the president and ceo of asserted that coke has
Coke was accused of luring away three of Pepsi's key sales personnel from Kanpur, going as far as to offer Rs 10 lakh a year in pay and perks to one of them
“According to the case study of coke and pepsi both of the companies have great brand in market but this survey tells us that pepsi has a great market demand
The case study is about the two famous soft drinks Coca-Cola And Pepsi, which have been competing and fighting in order to dominate the market share on the
tive to Pepsi was a study done by Coca-Cola's own marketing research department. ... Some 14 million cases of Coke products eventually were.