Cola Wars: For Coca-Cola's Perspective
Overview
There is little doubt that the most spirited and intense competition in the beverage world is between Coca-Cola and Pepsi Co., the two main players in the carbonated soft drink (CSD) production market. The competition between the two giants has benefited not only the consumers but also the companies. By checking and challenging each other in the market, the competition has lead to improvement and diversification of products and has forced each company to be creative and innovative. Throughout time, both companies have employed a number of diverse strategies to differentiate their products and to gain market share. Each successful tactic by one company would be copied by the opponent almost in the same manner or countered in a different fashion. As the CSD market has become more consolidated and saturated and as consumer demand and taste has changed, both companies shifted their attention to emerging nations and other major international markets as well as on other areas where they could grow their businesses (e.g. non-cola beverages and snack foods).
The CSD industry involves the concentrate producers selling syrup (and sometimes sweetener) to bottlers, who add carbonated water and high fructose corn syrup to the concentrate, bottle or can, package and ship it food stores, fountain outlets, vending machines, convenience stores, and other outlet. Recently, both Coca-Cola and Pepsi Co. have pursued a strategic plan of backwards integration, consolidating their bottlers into one company. Summarizing on the supply chain and competitive nature of this industry, profitability mainly arises due to the short supply chain, low material costs, low fixed costs, efficient supplier/distributor network ...