Cola Wars Case Study

Topics: Soft drink, Coca-Cola, Pepsi Pages: 6 (2026 words) Published: June 24, 2013
Cola Wars Continue: Coke vs. Pepsi in the 1990s
Case Study

By Shamika Shoulders
CSUDH -Management 490
May 26, 2013
SWAT Analysis
Company: PEPSI
Strengths
The Brand Name
They appealed to the youth "Pepsi Generation" to help build it consumer base and increase its market share. The youth is a large majority of the population. •Core Strong Competencies in managing the capital-intensive bottling business.Weaknesses •Location- little efforts in the international market.

Spread too thin with other acquired companies outside of the soft drink beverage industry. •Sold a 12 ounce bottle for 5-cent when their competition sold a 6 ounce bottle for 5-cents. Opportunities

Investment in international market- China, Japan, and Mexico tap into Coca-Cola existing market. •Conduct a Pepsi Challenge in Indonesia. They have a high population, the median age is 18 and they consume only four Coca-Cola a year. •Increase the price of their 12 ounce can Threats

Alternatives to soft drinks - natural fruit smoothies, ice teas, water. •Private label soft drinks had a growth trend 9% - provide lower cost than name brand product with similar quality. Questioned national brand profitability. •Cola wars- weaken the independent bottlers and required higher stakes in response to the competition actions Summary:

Pepsi is a good business to work for and invest in because it strengths outweighs it weaknesses. And if the company takes advantage of the opportunities it has will keep them as a front runner in the industry. The threats will be a minor aspect to the business success. Having brand name recognition helps to promote the quality of the product and its focus on youth will help continue to build it customer base. Following through on the opportunity to invest in the suggested international markets will eliminate the location weakness of Pepsi and keep the company on track with its pursuit of a young population. A review and increase in the prices structure of it products will help insure that the company profits are in line with it expenses. Pepsi will have to maintain its focus on the soft drink industry to help build and maintains efficient operations, so that when management look to respond to the challenge of private label growth or key competitors growth or marketing tactics their response will be in line with Pepsi’s true capabilities and business needs at that time. SWAT Analysis

Company: COCA-COLA
Strengths
The Brand Name
Provided bottlers with capital and management expertise to promote growth in the international arena. •International sales and marketing was 80% of their volume
Weaknesses
Spread too thin with other acquired companies outside of the soft drink beverage industry. •Unprofessional management
For ten years management loss focus of the business operation due to focus on negotiation of new contract for bottling franchise and the FTC inquiry on exclusive franchise territories. Opportunities

Allow Bottlers to focus on U.S. cities with more than 50,000 •Select a new ad agency to revamp the Coca-Cola image as hip and trendy to appeal to a younger population. •The use of “anchor bottlers” will help build Coca-Cola presence in the international market through experienced bottlers that are looking to grow locally in their countries. Coca-Cola is backing them with resources. Threats •High level of discounting in industry cause loyal consumers to switch brand and start buying whatever was on sale. •Pepsi ability to take over their U.S. market share because Coca-cola has a high focus on sales outside of the U.S. •Cola wars- weaken the independent bottlers and required higher stakes in response to the competition actions

Summary:
Coca-Cola is a good business to work for and invest in because it strengths and opportunities will help improve its weaknesses and lower its threats. Coca-Cola needs to takes advantage of its opportunities to remain...
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