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Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
Cola Wars   The Final One
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Cola Wars The Final One

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

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

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

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