Cola Wars The Final One

9,249 views

Published on

Prepared for academic purpose only based on various open sources & group discussions

0 Comments
9 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
9,249
On SlideShare
0
From Embeds
0
Number of Embeds
4
Actions
Shares
0
Downloads
0
Comments
0
Likes
9
Embeds 0
No embeds

No notes for slide

Cola Wars The Final One

  1. 1. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study External Analysis – Industry Structure Analysis Chapter - 2 Case Study Cola wars continue : Coke vs. Pepsi in the 1990s <ul><li>Presented by </li></ul><ul><ul><li>Debi Prasad </li></ul></ul><ul><ul><li>Kishor </li></ul></ul><ul><ul><li>Mrinmoy </li></ul></ul><ul><ul><li>Nandini </li></ul></ul><ul><ul><li>Rahul </li></ul></ul><ul><ul><li>Ritesh </li></ul></ul>
  2. 2. The External Environment – Its composition General Environment 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study <ul><li>Scanning </li></ul><ul><li>Monitoring </li></ul><ul><li>Fore casting </li></ul><ul><li>Assessing </li></ul>Global <ul><li>Industry Environment </li></ul><ul><li>Threat to new entrants </li></ul><ul><li>Power of Suppliers </li></ul><ul><li>Power of Buyers </li></ul><ul><li>Product Substitution </li></ul><ul><li>Intensity of rivalry </li></ul><ul><li>Competitor Environment </li></ul>Demographic Economic Socio-cultural Political/Legal Technological
  3. 3. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study Michael Porter's Five Forces Model - Industrial Environment Analysis <ul><li>No significant player except Coke & Pepsi </li></ul><ul><li>Capital Intensive, High Economies of Scale ---- High Entry & Exit Barriers </li></ul><ul><li>Price Sensitive </li></ul><ul><li>Brand conscious </li></ul><ul><li>High – even water, tea etc </li></ul><ul><li>But mental substitute is switching within brands of self & competitor </li></ul><ul><li>Restricted bargaining power as ingredients are sweetener and packaging materials only </li></ul><ul><li>Power of Buyer </li></ul>Mainly Coke & Pepsi - High Intensity of Rivalry
  4. 4. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study Soft Drink industry ..building Duopoly? Coke Pepsi <ul><li>Market Leader </li></ul><ul><li>Govt. Patronage in WW-II </li></ul><ul><li>Cleaner Balance Sheet </li></ul><ul><li>Larger Global presence </li></ul><ul><li>Lead Brand: </li></ul><ul><ul><li>Coca Cola Classic </li></ul></ul><ul><li>Market Challenger </li></ul><ul><li>Initial ups & down </li></ul><ul><li>Capital Intensive Balance Sheet </li></ul><ul><li>Niche Global Player </li></ul><ul><li>Lead Brand: </li></ul><ul><ul><li>Pepsi Cola </li></ul></ul>
  5. 5. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study <ul><li>Likely Issues… </li></ul><ul><li>Is the rapid growth of Pepsi and Coke sustainable ? </li></ul><ul><li>Won’t their margins deplete with cutthroat rivalry? </li></ul><ul><li>Competition from alternates (water, coffee, milk, juices…) </li></ul>
  6. 6. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study Marketing focus Coke - fountain sales Pepsi - retail Fronts of cola-wars Advertising, packaging, new products Mantra of COMPETITIVE EDGE Brand recognition
  7. 7. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study <ul><li>COLA WARS </li></ul><ul><li>Began with 1974 “Pepsi Challenge” </li></ul><ul><li>Fueled erosion of Coke’s market share </li></ul><ul><li>Things heated up with change in management at Coke in 1980 </li></ul><ul><li>New and alternate brands introduced by both </li></ul><ul><li>Aggressive Advertising – Counter Advertising </li></ul>
  8. 8. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study <ul><li>Industry re-org </li></ul><ul><li>Structure of the franchise system altered - purchase of bottlers </li></ul><ul><li>Change in distribution channels </li></ul><ul><li>Emergence of private labels (by food stores) </li></ul><ul><li>New-age beverages (bottled water and tea-based drinks) pose challenge </li></ul><ul><li>Coke’s strategy to change its image- changed ad agency </li></ul>
  9. 9. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study <ul><li>War IN </li></ul><ul><li>International markets </li></ul><ul><ul><li>Began in early 1990s with Coca Cola going outside US - unit case growth and profits were prime movers </li></ul></ul><ul><ul><li>Different long-term strategies </li></ul></ul><ul><ul><li>Pepsi - company owned bottlers in many international territories </li></ul></ul><ul><ul><li>Coke - made equity investments in franchisees </li></ul></ul><ul><ul><li>Coke - an initial edge (80% profit outside US in 1992 as compared to Pepsi’s 20%) </li></ul></ul><ul><ul><li>Pepsi - guerilla tactics – with niche strategy - targeted “coke territories” </li></ul></ul>
  10. 10. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study <ul><li>Other side of the war </li></ul><ul><li>War on market share…….. </li></ul><ul><li>War through Media ….. Product Differentiation ……. Brand recognitions ….. Creating values …… alternatives </li></ul><ul><li>But PRICES….no…no… </li></ul>
  11. 11. Cola Wars …… Duopoly wins…. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study
  12. 12. 27/06/11 IIML-NC/WMP10/2008 :: Cola Wars - A Case Study

×