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Cola Wars
continues.
Vs

Presented by:
Group 5
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Group members

Usman Ehsan Shams-ur-rehman Naveed Siddique Sumra Anwar

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Introduction
This case study, gives a brief overview about industry structure and competitive strategy of Coca-Cola and Pepsi over 100 years of rivalry. They have a true competition right from beginning.

Both firms faced a large number of challenges but biggest of them were to modify their bottling, pricing, and
brand strategies.

Competition Starts.
First they were trying to capture the market share through CSD only. To be the leader of industry coke and Pepsi concentrated on the four major participants in production and distribution of CSD.

Concentrate bottlers, Bottlers, Retail channels Suppliers

Competition was also in their retail channels and suppliers.

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COCA COLA
First it was the coke to be franchised under a contract. That franchising contract was repeated a lot of time mostly for re-analyzing pricing strategies. Coca cola was not so successful in the validity or its acceptance because of no experience.
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Acquisitions
Coke started acquisitions of bottlers. Boosted the competition. A lot of improvements in the industry like plastic bottles, cans, shelf placing. Innovative ideas in the marketing strategies.
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WAR in 21st century

Competition was on two major basis which are as follows: Emerging international markets to fuel growth Broaden their portfolios of alternate beverages like
tea, juice, sports drinks, energy drinks, and bottled water.
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Next challenges were related to:

Performance execution Providing alternative beverages Increased health conscious customers Cultivating of international markets. Health conscious products were diet, sprite zero and others.
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Dramatic competition
System profitability
In 1990s, a price war was in the super-market. Focus was on low-rice strategies. As this side saying to reduce price. Offering different products increases cost. As different products require different infrastructure and labor.

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Global Market Share

Cola war is not stopped here just in US market. Coke flourished more than that of Pepsi.

World market shares were as:

Coca cola Pepsi Cadbury Schweppes 51.4% 21.8% 6%.
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Core Problem
Coke was falling a short of precedent and of investors expectations. What would be the reason of that down fall?
What would be its effect on coke's growth and profitability?
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Good brand elements Larger bottling System Innovative competitive advantage Quick Recovery Global Success Emotional attachment Marketing Strategy

Execution Failure Reliance on traditional strategy Weak Succession Planning Operational setbacks Not good relation with suppliers Not good handling of legal issues

Economic Slowdown: International expansion through Brand recognition Coke is not so willing to business in non-CSDs. Health-consciousness coke Pricing to CPI consumer buying Expansion into third world countries. Middle East boycotting US brands. Western attitude against capitalism New cheaper brands of cola Series of legal obligations So many discounts may not cut the sales but always cuts profit

More target customers

New innovative brands Introduce coca cola in growing countries economically.

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Coke's crucial relationships with bottlers

Strengths
Emotional attachment Good brand elements Larger bottling System Innovative competitive advantage Quick Recovery Global Success Marketing Strategy
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Weaknesses
Operational setbacks Execution Failure Reliance on traditional strategy Weak Succession Planning Not good relation with suppliers Not good handling of legal issues

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Opportunities
International expansion through Brand recognition More target customers New innovative brands Introduce coca cola in growing countries economically.

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Threats
Bottling Partners: Cokes crucial relationships with bottling partners are at risk Economic Slowdown: Coke is not so willing to business in non-CSD. Health-consciousness coke Pricing to CPI consumer buying Expansion into third world countries where there is no current presence. Middle East boycotting US brands. Western attitude against capitalism New cheaper brands of cola Series of legal obligations So many discounts may not cut the sales but always cuts profit. 17

BCG MATRIX
Stars Question Marks

Cash Cows

Dogs

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Problems
Operational set back
Franchising contracts. Internal conflicts. Many other functional problems.

Solution Management of coca-cola should first resolve their internal issues. Because they can compete only if they are strong internally

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Change in Bottling
Coca Cola Company is continuously changing styles, sizes, colors and bottling materials. Such kind of activities cost more than the success. It increase the cost at every step and limits the profit in that field. Solution They should change but not So consistently that its effects Profitability and brand image.
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Change in pricing
Problem
Continuous change in price of its products create doubts in the customers mind Company is making so much profits Some may take that they are selling the old stock. Price change also affects settings of manufacturing, marketing, and selling.

Solution
They have to position at stable price with good quality and greater value. They should focus on quality, service quality, lifestyles and other capabilities rather than only focus on price competition.

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Coca cola process

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Change in brand strategy

As coke offered diversified products among them most of the brands are contra to each other. Examples are coke and coke diet. Solution Diversity products always get benefits. Handling them is very tricky. Coca cola should try maximum efforts to handle so much diversity products. Minimize the confusions and eliminate the bad performing products.
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Legal issues

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Intra brand competition

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Scarifies profitability

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Franchise contract

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Bad brand reinforcement

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Not good executions

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Not good succession planning

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