Cola Wars Continue: Coke

and Pepsi in 2006

Apurv Gupta,
Keshav Bajaj,
Kriti Chowdhary,
Rohit Jain,
Vishal Kumar,

15P069
15P088
15P089
15P103
15P119

Issues to be Addressed

Boost domestic CSD Sales

Opportunities for new beverages
Is shift in focus from CSD to Non-CSD
required?

Concentra
te
Producer

Bottlers

Coke blended raw materials including sugar

syrup; Pepsi blended raw materials
excluding the sugar syrup
In Coke, significant costs were allocated for
promotion and market research; Pepsi
initially did not allocate costs but later
allocated it
Coke had contracts with bottlers which
lasted for many years but however it wanted
to revoke a few contacts; Pepsi however
had a consistent contracts

Coke had a mixed relationship with the

bottlers throughout the history whereas
Pepsi had a stable contractual relationship

Retail
Channe
ls

Pepsi focused on retail

sales whereas Coke
dominated fountain sales
Coke followed Pepsi in
entering the fast food
retail business

Supplie
rs

Majority of US CSDs
packaged in metal
cans(56%)
Coke and Pepsi, the
largest customers in
metal can industry

Sustainable Competitive
Advantage

Cok
e
Pepsi

Focus through
innovation
Innovative
Marketing
Quick response
Aggressive
campaigning

SWOT of Coke
First mover advantage;
Adapts to consumer
behaviour
Innovation based
More loyal customer base
Large market share
Huge distribution network
Efficient global operations

Coke did not realize its

competitor for a very long
time
Loss in trust by consumers
Clumbsy execution of
acquisitions
Rebranding failure (failure
of new coke formula)

Strength

Weakness
es

Threats

Opportuniti
es

Growing health consciousness

in society
Pepsi Cos Tropicana and
Aquafina brands are stronger
compared with Cokes.

Reduce deficit in
comparison with
competitors in non-CSD
area.
Can diversify into food and
snacks portfolio

SWOT of Pepsi Co
Better contracual relationship with
bottlers
Stronger portfolio of non-CSD
products
Aggressive and innovative marketing
campaigns

Little emphasis on overseas operations

Skirmish with long time bottlers
caused heavy damage to sales

Strength

Weakness
es

Threats

Opportuniti
es

Increase in marketing expenditure of

Coke to $400 million globally

More focus on sales through fountain

and vending machines (higher
profitability)

The Road Ahead

Health conscious consumers Increased
demand for sports drinks, bottled water etc
New geographies are being added and
expanding to international markets
Further innovation and greater expenditure on
marketing and advertisement.
Growing non CSD market share