The carbonated soft drink (CSD's) industry was dominated by Coca Cola and Pepsi vying for market share. The CSD organizations gained market share in the U.S. and in global markets extending their brands’ recognition and capturing sales from new markets. The shift in consumer beverage preference and the expansion into global markets proved to uncover new opportunities for growth and profitability. In addition the changes in the organizational structure of business for these companies have allowed them to sustain growth beyond CSD’s.
Cola Wars - Coke Vs Pepsi Harvard Business School Case StudyMohan Kanni
A brief presentation on case study Cola Wars where we try to analyse the past history and predict the future of their business and growth opportunities from a Marketing Management Perspective.
Cola Wars - Coke Vs Pepsi Harvard Business School Case StudyMohan Kanni
A brief presentation on case study Cola Wars where we try to analyse the past history and predict the future of their business and growth opportunities from a Marketing Management Perspective.
Presentation on Cola Wars between Coke and Pepsi
(Presented in Marketing Planning and Implementation-1 Course at MDI Gurgaon)
P.S- Please feel free to share your views in comments.
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Probable Solution to HBR Case on Aqualisa Quartz. The Presentation consists of info about Channel Distribution, Development of Quartz Shower Valve, UK Shower Market, Initial Sales Results, 4Ps of Marketing for Aqualisa, A shift in Marketing Strategy.
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There are four main types of pricing strategies from which Atlantic Computers canchoose. First, Atlantic Computers could stay with the status quo and offer software tools for free. Second, it could choose competitive based pricing. Third it could choose from Cost-plus pricing. Finally, it could choose value-in use pricing.In addition to determining which pricing strategy to use, Atlantic
Reliance Baking Soda is Stewart Corporation's oldest and most established product. The new Domestic Brand Director needs to create a 2008 marketing budget that delivers a profit increase of 10% over 2007 levels. She must first evaluate the effectiveness of past consumer and trade promotions and determine if a price increase will have net bottom line benefits. Then she must decide on the optimal allocation of her marketing budget, taking into account the brand's apparent "cash cow" role in the Household Division of Stewart Corporation. Students are expected to complete a quantitative assignment: create and defend a budget.
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Cola Wars have continues till date. This presentation presents an analysis of the case Cola wars continues in 2006.
Find out what we have to say about the classic case of competition.
Presentation on Cola Wars between Coke and Pepsi
(Presented in Marketing Planning and Implementation-1 Course at MDI Gurgaon)
P.S- Please feel free to share your views in comments.
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)Arjun Parekh
Probable Solution to HBR Case on Aqualisa Quartz. The Presentation consists of info about Channel Distribution, Development of Quartz Shower Valve, UK Shower Market, Initial Sales Results, 4Ps of Marketing for Aqualisa, A shift in Marketing Strategy.
In August 2000, P&G introduced one of its kind product Crest Whitestrips, readily available online and through dentist offices
P&G claims that the new products are 10 times more effective than the Colgate Tartar Control Whitening Within two years P&G captured more than 80% of the share market. Colgate made a come back in August 2002 with Simply White. Colgate’s USP was that it focused on convenience and lower price. One month after introduction Simply White captures half the market with Crest Whitestrips losing 50% of its market share.
Clique Pens - Case Study Solution by Kamal Allazov (Essay type)Kamal Allazov (MSc.)
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ATLANTIC COMPUTER: A BUNDLE OF PRICING OPTIONS Akshay Jain
There are four main types of pricing strategies from which Atlantic Computers canchoose. First, Atlantic Computers could stay with the status quo and offer software tools for free. Second, it could choose competitive based pricing. Third it could choose from Cost-plus pricing. Finally, it could choose value-in use pricing.In addition to determining which pricing strategy to use, Atlantic
Reliance Baking Soda is Stewart Corporation's oldest and most established product. The new Domestic Brand Director needs to create a 2008 marketing budget that delivers a profit increase of 10% over 2007 levels. She must first evaluate the effectiveness of past consumer and trade promotions and determine if a price increase will have net bottom line benefits. Then she must decide on the optimal allocation of her marketing budget, taking into account the brand's apparent "cash cow" role in the Household Division of Stewart Corporation. Students are expected to complete a quantitative assignment: create and defend a budget.
Our major goal is to help you achieve your academic goals. We are commited to helping you get top grades in your academic papers.We desire to help you come up with great essays that meet your lecturer's expectations.Contact us now at http://www.premiumessays.net/
Cola Wars have continues till date. This presentation presents an analysis of the case Cola wars continues in 2006.
Find out what we have to say about the classic case of competition.
Fils-Aime 13
Valdirene Fils-Aime
Michael Matvichuk
CMGMT 4140 -- Strategic Management
Project: Five-Step Strategic Management Plan Analysis
Coca-Cola Company in the beverages industry
Step I. Corporate Mission and Goals
Brief history of the background and evolution of the organization
Coca-Cola Company is the manufacturer of Coke or Coca-Cola soft drinks. The company was founded in 1886 by John Pemberton. He was inspired by his curiosity as he stirred up a fragrant, caramel-colored liquid that he brought down to a place called Jacobs’ Pharmacy. There he added carbonated water and let several customers sample the new concoction. Although John Pemberton invented Coca-Cola, which is a carbonated soft drink, he later sold it to businessman Asa Griggs Candler, whose smart marketing tactics made the soft drinks to dominate the world of beverages in the entire 20th century. During the introduction stage into the market, the company used to sell nine drinks in Atlanta per day, but currently it is selling more than 19400 beverages every second around the globe (Moran). Its advertising strategies have changed to reach greater markets. Today Coca-Cola is one of the best-known brands around the world. However, when the company started, it used free coupons to promote its product. When Griggs Candler acquired the company, his budget to promote the product was $11,000. In 2011, the company allocated $4 billion for the marketing of its products (Moran). Also, over the decades the bottling of the beverages has changed to differentiate it from other close substitutes. These changes have also been seen in the company logos.
Mission and Vision
Coca-Cola has aimed to maximize its profit while keeping long-term sustainable growth in the beverage industry. The mission statement of the company states that it aims to refresh the world, inspire the moments of happiness and optimism, and create value and build a difference in the world. The vision of the company is their road map and acts as a guide to every aspect of their business by explaining what ought to be accomplished to achieve sustainable and quality growth around the world. It appears that the vision of Coca-Cola consists of 6 P’s which are people, portfolio, partners, planet, profit, and productivity. The company’s values include integrity, collaboration, accountability, diversity, leadership, passion, and quality (“Mission, Vision & Values”). The winning culture of the company explains its behaviors and attitudes that will make their vision 2020 a reality.
General Structure and Leadership Style
The organizational structure of the company is structured in such a way that it operates smoothly, and the growth of the company is enhanced. The company is composed of fifteen board members who include the CEO of the company James Quincey. The board members are all divided, and each of the board heads several other committees. Currently, the company is now divided into three regional groups, which include ...
An industry analysis by Porters Five Forces reveals that the soft dr.pdfalokkesh1
An industry analysis by Porters Five Forces reveals that the soft drink industry has historically
been favorable for positive profitability, as exemplified by Pepsi and Cokes financial outcomes.
Soft drink industry is very profitable, more so for the concentrate producers than the bottler\'s.
This is surprising considering the fact that product sold is a commodity which can even be
produced easily. There are several reasons for this, using the five forces analysis we can clearly
demonstrate how each force contributes the profitability of the industry.
Threat of new entrants
Entering bottling, meanwhile, would require substantial capital investment, which would deter
entry.
although the CP industry is not very capital intensive, other barriers would prevent entry.
Through their DSD practices, these companies had intimate relationships with their retail
channels and would be able to defend their positions effectively through discounting or other
tactics.
It would be nearly impossible for either a new CP or a new bottler to enter the industry. New CPs
would need to overcome the tremendous marketing muscle and market presence of Coke, Pepsi,
and a few others, who had established brand names that were as much as a century old.
Companies that have a door to door distribution channel in place like snack companies could
choose to diversify into soda industry
Switching costs are low for consumers who risk very little by trying new brands or
Beverages
Barriers to entry are relatively high, though, with large advertising budgets and competitive
brand loyalty to big players like Coca-Cola and Pepsi
The drinks with high growth and high hype are non-carbonated beverages such as juice drinks,
sports drinks, tea-based drinks, dairy-based drinks, and especially bottled water
Bargaining power of buyers
through five principal channels: food stores, convenience and gas, fountain, vending, and mass
merchandisers (primary part of \"Other\" in \"Cola Wars…\" case)
Bottlers own a manufacturing and sales operation in an exclusive geographic territory, with
rights granted in perpetuity by the franchiser, subject to termination only in the event of default
by the bottler
1980 Soft Drink Interbrand Competition Act preserved the right of CPs to grant exclusive
territories to their bottlers, giving less bargaining power to Bottler\'s buyers because there is no
alternative supplier
Bottlers are locked into contracts that grant CPs the right to set prices and other terms of sale
Bottlers are allowed to handle the non-cola brands of other Cps at their discretion
Bottlers are also given freedom in choosing whether or not to carry new beverages introduced by
the CPs but cannot carry directly competitive brands
Competition for brand shelf space in retail channels gives some bargaining power back to buyers
Threat of substitute products
Through the early 1960s, soft drinks were synonymous with \"colas\" in the mind of consumers.
In the 1980s and 1990s Coffee, tea, water, juices.
IntroductionTeam 9 Consulting will be working with Coca-Cola t.docxnormanibarber20063
Introduction
Team 9 Consulting will be working with Coca-Cola to develop an analysis of their marketing strategies. We’ll discuss various facets of the industry and the company and provide a recommendation for their marketing department.
The specific product line that we will be focusing on in our marketing plan is on the Coca-Cola brand drink itself, or Classic Coke. Coca-Cola does have many varieties of Coke, such as Coca-Cola Life, Diet Coke, and Coke Zero that will be touched on throughout this report as well.
Market Profile
Coca-Cola (NYSE: KO) is the world's largest beverage company with over 500 brands and 3,900 beverage choices (Coca-Cola, 2017). They aim to continue their growth and “refresh the world” by starting within and making the company a better, more sustainable one. Their main competitors in the beverage industry are Pepsi and Dr Pepper Snapple Inc. (Reference.com, 2017)
Coca-Cola has strong values that guide their business philosophy: Coke supports ideas such as family, togetherness, happiness, and community. This is strongly reflected in their company vision statements.
Mission Statement (Coca-Cola, 2017):
Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions.
· To refresh the world...
· To inspire moments of optimism and happiness...
· To create value and make a difference.
Coca-Cola mainly manufactures and sells Carbonated Soft Drinks (CSDs). As of December 2016 Coca-Cola led the CSD sector with a market share of 40.7% which resulted in approximate sales of $18,630.8 million (Mintel, 2017).
The CSD market is a multi-billion dollar industry seeing approximately $36 billion dollars in revenues each year (Stivaros, 2016). The industry has been in decline in recent years, with CSD sales forecasted to continue falling. The graphic below (Mintel, 2017) illustrates this decline.
Growth Strategy
Coca-Cola has two main growth strategies: strategic initiatives and product development.
Strategic initiatives:
James Quincey, President and COO of Coca Cola, has spoken recently about Coca-Cola’s growth strategy (Bailey, 2016), which is based on the following five initiatives to restore momentum and transform the business: focus on productivity, streamline organization, make disciplined investments, adapt a segmented approach to driving revenue, and focus on its core business model.
Coca-Cola’s business approach of segmenting its operations, such as outsourcing all of their bottling to partners (Coca-Cola, 2017), helps them keep costs low and increase their overall profits.
Product Development:
During a conference call during their 3rd Quarter in 2016 (Bailey, 2016) their Chief Operating Officer noted the following strategies:
· Expanding their sugar free range of sodas
· Working on reformulating existing products to contain less sugar
· Packing their soda in smaller containers
· Expanding their range.
Running head PEPSI VS. COKE CASE STUDY .docxtoltonkendal
Running head: PEPSI VS. COKE CASE STUDY 1
PEPSI VS. COKE CASE STUDY 2
Pepsi vs. Coke Case Study
Student’s Name
Institutional Affiliation
Pepsi vs. Coke Case Study
Part A
The Worldwide Socioeconomic and Political Environment
Understanding the external environment in which a company operates is crucial for any top management. For instance, the global socio economic and political environment presents many challenges and opportunities for many companies (Wetherly, & Otter, 2014). The demographic and culture of the worldwide market varies. For this reason, the importance of determining what to sell, where, how much, and how to market is increasing. For example, the worldwide market is currently more focused on healthy products. Therefore, companies have to respond to these needs in all aspects. In addition, it has also been noted that social responsibility of a company affects the worldwide image of a brand. The global economic challenges might also affect the liquidity and financial performance of companies, for instance, soft drink and beverage manufacturers such as Coca-Cola Co. and Pepsi Co. In addition, the price of imports, exports, and exchange rates might also affect many industries such as soft drink manufacturers (Wetherly, & Otter, 2014). Finally, the economic environment affects how consumers spending powers, thereby, having an impact in many sectors of the economy. It is also important to note that global political environment presents various risk to many companies. For instance, political instabilities in some parts of the globe and changes in established laws and regulations might prevent companies such as Coca Cola and Pepsi from distributing drinks.
The Domestic Environment
The domestic environment in which Coca Cola Co. and operates presents many challenges and opportunities at the same time. For instance, the strong democratic setup in the US and effective rule of law is considered fair and transparent by most companies. However, the US is also under continuous threat because of the interventionist policies regarding war on terror. In addition, the domestic environment of Pepsi and Coca Cola companies has a well-developed economic system that is supported by many service and manufacturing companies. Like some developed countries, the US is faced with the problem of the aging population. This can contribute to major labor shortage more so for companies operating in the US market. However, with a superior education system, the US has one of most highly trained and skilled employees (Wetherly, & Otter, 2014). However, rising racial bigotry is not only a concern for the government but also for major corporations such as Coca Cola and Pepsi that rely on political stability to sell products. Finally, innovation and technology are considered by m ...
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Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
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1. Running Head: WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS – VINODHINI GUHESAN
Week 7 – Case Study Analysis: The Cola Wars
By Vinodhini Guhesan
University of Maryland University College
AMBA 650 Section 7621
February 18, 2014
Author note: This paper was prepared for AMBA 650: Marketing Management and
Innovation, taught by Professor Chadwick.
2. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 2
Introduction
The carbonated soft drink (CSD) industry was replete with fierce competition
among cola producers led by Coca Cola and Pepsi. The CSD organizations gained
market share in the U.S. and in global markets extending their brands’ recognition and
capturing sales from new markets. The shift in consumer beverage preference and the
expansion into global markets proved to uncover new opportunities for growth and
profitability. In addition the changes in the organizational structure of business for these
companies have allowed them to sustain growth beyond CSD’s.
Presentation of the Facts Surrounding the Case
The infamous Cola Wars have raged on for over a century, fueling innovation
and diversification of the carbonated soft drink (CSD) organizations. The CSD industry
in the U.S. began in the 1890’s with the introduction of Coca Cola followed by Pepsi.
Adding to the competition other CSD’s entering the market included Dr. Pepper, Royal
Crown and 7UP. By the latter part of the 20th century CSD’s were the most widely
purchased beverages in the U.S. Of this colas dominated the CSD’s sales.
In the U.S. the competition between the two main CSD rivals of Coke and Pepsi
proved to demonstrate each carving out their profits through differing sales channels.
Coca Cola dominated the fountain sales via the distribution of its products in retailers
that sold CSD’s by the glass while Pepsi succeeded in grocery store sales where
retailers sold CSD’s by the bottle or can.
3. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 3
A change in Americans’ health conscious attitudes in the 1960’s prompted the
need for lower calorie foods and beverages. CSD’s with their high sweetener calories
therefore did not fit the needs of consumers, thus leading to a decline in CSD sales. In
addition, in the early 2000’s decline in sales of CSD’s occurred after reports of obesity in
children was linked to consumption of sweeteners such as those in CSD’s. Both legal
and political battles eventually led to CSD vending machines being removed and sale of
CSD’s being prohibited entirely from certain public schools in states including New York
and California (Yoffie, 2009, p. 11).
CSD’s are composed of a flavored concentrate, sweetening ingredient and
carbonated water. General practice among the concentrate producers, such as Coca
Cola, was to create the concentrate, engage in advertising and market research as well
as work with the bottling companies to keep operations streamlined and within the
regulatory guidelines (Yoffie, 2009, p. 2). Bottling companies purchased the
concentrate with or without sweetener; added sweetener if the concentrate lacked it and
mixed in carbonated water to produce the saleable CSD. In addition the bottlers
packaged and distributed the CSD’s as well as engaged in marketing and pricing control
with the smaller retail stores.
Coca Cola’s stringent bottling franchise agreement restricted high profitability for
its bottlers when raw materials prices increased and included a non-compete clause
preventing bottlers from packaging and selling competing brands. Both Pepsi and
Cadbury Schweppes also franchised bottling companies but did not take as stringent a
stance on pricing. Pepsi was flexible on renegotiation of prices with bottlers by following
4. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 4
the consumer price index in guiding its pricing strategy. In addition, anti-trust legal
battles ensued for the concentrate producers in restricting territorial rights to bottling
companies leading to noncompetition.
CSD producers expanded their brands into new global markets prior to CSD
market saturation in the U.S. Coke and Pepsi extended their flagship brands globally
during World War II. Although sales of CSD’s was still greater in the U.S. than in global
markets, the extension of their brands into new markets provided brand recognition and
ample opportunity for growth and profitability.
Identification of the Key Issue(s)
The Cola Wars demonstrated the fierce battle over market share in the U.S.
among its CSD producers led by the two main rivals, Coca Cola and Pepsi. The main
issues they confronted included the lack of sustained growth in the U.S. CSD market,
lack of efficiency and flexibility in their packaging and distribution operations through the
bottling franchisees, ability to adapt to changing consumer needs and wants beyond
CSD’s and leveraging expansion into global markets to sustain and increase
profitability.
In the beginning the cola wars entailed the sales of CSD’s and how that impacted
market share and profitability for the major CSD brands including Coca Cola and Pepsi.
The numerous brands of CSD’s including Royal Crown, Dr. Pepper and smaller regional
brands carved away market share and posed a competitive threat to market leaders
5. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 5
Coke and Pepsi. As a result of competing CSD’s causing market saturation in the U.S.
the year to year growth in profits for Coca Cola and Pepsi began to lessen.
Fluctuations in the consumption of CSD’s in the U.S. caused a decline in
profitability for CSD producers. This decline reflected changes in consumers’ wants and
needs for lower calorie CSD’s, non CSD beverages and beverages with health benefits.
Although CSD’s remained the most highly consumed beverage, consumers need for
variety in beverages increased. Beverages including fruit juices, coffees, teas, bottled
water, and energy drinks became popular options in direct competition to CSD’s.
The Cola Wars were not restricted merely to the U.S. Both Coca Cola and
PepsiCo waged battles on a global landscape as they extended their flagship brands
internationally. The saturation of the CSD market in the U.S. led to limited incremental
growth. As Coca Cola and PepsiCo had already extended their flagship brands
overseas into new markets, they increased focus globally. The “cola wars” were no
longer about how much market share Coca Cola and PepsiCo could garner in the U.S.
with CSD’s but about the overall organizations’ market shares internationally and how
this would increase their profitability.
Road blocks prevailed in relationships CSD producers had with their bottling
franchisees. High operational costs, inflexible machine capacity and limited control with
packaging, pricing, marketing and distribution through bottling companies caused CSD
producers, especially Coca Cola, to have stunted opportunity for growth. In addition
bottling companies could not adapt to increased turnover from CSD to non CSD
6. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 6
production. Packaging and pricing adaptability was also limited with the bottling
companies.
Listing Alternative Courses of Action That Could Be Taken
Alternative courses of action could be taken by the CSD producers to regain
market share in the U.S. and sustain growth. Streamlining the business to remain
aligned with organizational strategic goals would allow for reduction in operational costs,
retain more control over marketing, packaging, distribution and pricing and improve
profitability in the U.S. and abroad. Innovation, product differentiation and business
diversification could allow CSD organizations to extend their business into new market
segments in the U.S. and into global markets, to reach underserved market segments
and to augment profitability in CSD saturated markets. Expansion into global markets
could offset loss of sustained growth in the U.S.
Evaluation of Alternative Courses of Action
Focus on the strategic goals of the organization and streamlining the business to
meet those goals could lead to opportunities for greater profitability. Unloading products
that did not have sustained growth or did not align with the company’s strategic goals
provided opportunity for increasing monetary focus on stronger brands. Restructuring
the business model of the bottling companies that the CSD organizations worked with
could give the CSD producer greater control in bottling and distribution operations to
improve the supply chain and reduce operational costs. Marketing and negotiation of
relationships with retailers also could improve with the new business model for bottling
companies. Coca Cola made a pivotal move by buying flailing bottling franchisees,
7. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 7
rebuilding them and either retaining them or selling them to successful bottling
franchisees. In addition it formed a new business entity, Coca Cola Enterprises (CCE)
to segregate the bottling business from its main organization as well as sell CCE stock
to offset the debt. Pepsi and Cadbury Schweppes followed Coca Cola’s lead. With the
three main CSD companies having financial and management control over their bottling
entities, their marketing and distribution processes were strengthened, their packaging
and pricing strategy became more flexible, their supply chain improved, operational
costs were reduced and revenue increased through their respective bottling
subsidiaries.
Modifications to packaging the product in a variety of sizes and accordingly
adjusting pricing to meet the packaging modifications aided the CSD organizations
better target specific market segments. In selling larger sized bottles of CSD’s both
Coca Cola and Pepsi were able to better target the family consumer segment.
Individual cans and bottles provided packaging and pricing suitable for individual sales
via convenience stores, vending machines and gas stations. Profit margins with this
pricing and packaging strategy would therefore be greater. The disadvantage of
producing numerous packaging sizes was the inability of bottlers to manage the
capacity on their machinery in a timely manner and store the pallets prior to distribution.
Innovation, product differentiation and business diversification could provide new
opportunities for sustaining growth in the U.S. and extending reach into new markets.
In the U.S. the issue of CSD market saturation could be overcome if the CSD producers
engaged in innovation to create new non CSD beverages. Consumer needs had
8. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 8
changed alluding to the adaptability of CSD organizations to produce low calorie CSD’s,
juices, energy drinks, bottled water, teas and coffees. These new products could not
only solicit revenue growth in the CSD saturated markets in the U.S. but also reach
underserved market segments in the U.S. and new market segments abroad. The
disadvantage to having an array of non CSD’s was that bottlers could not efficiently
produce both CSD and non CSD beverages simultaneously with their current machinery
and processes.
CSD companies such as Coca Cola and PepsiCo diversified their businesses by
acquiring fast food restaurants and snack food producers, gaining exclusive fountain
rights and purchasing non CSD beverage companies. This allowed them to supplement
their profitability with new revenue streams and distribution channels. It also opened
partnership opportunities with companies internationally to have a stronger foothold in
certain markets. For instance Coca Cola partnered with Danone to market and
distribute its bottled water products in the U.S. (Yoffie, 2009, p. 12). PepsiCo
purchased fast food restaurants KFC, Taco Bell and Pizza Hut to gain exclusive
fountain sales’ rights. Diversification also allowed the CSD organizations to leverage
profitability in other areas to offset the lack of significant growth in the U.S. CSD market.
Recommendation of the Best Course of Action
In evaluation of the best course of action it can be seen that streamlining the
business of CSD organizations to be aligned with the organization’s strategic goals
would prove to be most advantageous in gaining market share and profitability in the
U.S. and abroad. The main factor of this streamlining process is to restructure the
9. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 9
relationship with its bottling franchisees. This will allow for greater control over the
packaging, distribution and marketing as well as reduce operational costs. In turn there
will be more flexibility in increasing the capacity of the bottling companies to facilitate a
greater variety of packaging and pricing to suit different target segments. For instance
larger take home containers can be marketed directly to family segments through the
grocery store/super market distribution channels as these garner 31% of beverage
sales by bottling profitability as seen in Exhibit 6 (Yoffie, 2009, p. 21). In addition it
would also allow the flexibility to utilize vending machines as a profitable distribution
channel as Coca Cola had success via vending machine sales in Japan. The profit
margins are greater with greater flexibility in packaging and pricing as well in the U.S.
and in global markets. Finally efficiency of operations and improvement of machinery
will allow bottling companies the capacity to package more varieties of beverages. With
greater varieties of beverages CSD companies can satisfy needs of consumers in
several different consumer segments in the U.S. and in global markets. For instance
machinery changes at the bottling facilities will improve capacity to package an array of
fruit juices, coffee, tea, bottled water and CSD’s to supply Japanese consumers with
coffee and tea drinks and U.S. consumers with low calorie CSD’s, bottled water and
fruit juices. The marketing capabilities, innovation, product differentiation and reach into
unlimited market segments is unrestricted if the CSD organization’s streamline their
business to align with their organizational strategic goals.
10. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 10
Conclusion
The cola wars are no longer about CSD producers battling for market share
solely with CSD sales. In order to be profitable CSD organizations must show growth
beyond CSD products. By streamlining the organization’s business to be aligned with
its strategic goals especially with respect to its bottling companies, it will produce value
to the consumer within any market segment domestic or international. That value can
best be achieved by the organization’s ability to adapt its products to meet customer
needs and wants. In addition the organization can continuously evolve so that it is not
impacted detrimentally by loss in any one market segment or decline in one product
line. The profitability of the CSD organization will not only be in sales of CSD’s but
other beverages and foods as these organizations expand into new markets.
11. WEEK 7 – CASE STUDY ANALYSIS: THE COLA WARS - VINODHINI GUHESAN 11
References
Yoffie, D.B. (2009, April 16). Cola wars continue: Coke and Pepsi in 2006. Harvard
Business School.