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Cola War in China

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  • April 19, 2013
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COLA WARS IN CHINA: THE FUTURE IS HERE

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Nancy Dai prepared this case under the supervision of Professor Niraj Dawar solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. This material is not covered under authorization from CanCopy or any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2003, Ivey Management Services Version: (A) 2003-08-21

On July 7, 2002, Zong Qinghou, the general manager of the Wahaha Group (Wahaha), China’s largest soft drink producer, was reviewing market data on Wahaha’s Future Cola in his office in Hangzhou, Zhejiang Province. Wahaha Future Cola had been launched four years earlier to compete with products from Coca Cola and PepsiCo, the dominant players in the category. At the launch, Zong and his management team had been tremendously energized by the opportunity to compete with some of the world’s best companies. Four years later, despite the failure of several other domestic colas, Wahaha Future Cola and other Future Series carbonated drinks had achieved an impressive 18 per cent of the carbonated drinks market in the first half of 2002. However, as Future Cola’s share grew, Zong was preoccupied with how his multinational competitors would respond, how Wahaha should prepare for these responses, and how it should continue to increase its market share. Competition for share in the high-stakes market of the world’s most...