Abide Masaraure Cola Case Analysis Autosaved 
Abide Masaraure MBE
Internationalizing the "Cola Wars" : A case study
1. Four industry competitor challenges facing Coke and Pepsi in the mid- to late-1990s
Consolidation of bottlers
Coke on owned a smaller percentage of the bottler’s market share (about one third as illustrated on Page 4). This meant it lacked control over the independent bottlers who did not have long term commitment in satisfying its corporate goals. Also the bottling process was capital intensive.
Change of distribution channels and increase in private label
Low costs, privately labeled sodas would be preferred by consumers making Coca -Cola and Pepsi lose potential revenues in sales.
The emergent of a substitute product
New rival products, tea products entered the market and were gaining numbers in sales.
(sales increased by 17%). This meant both Coca Cola and Pepsi were losing some of their customers. Coke sales crashed from 44% to 9%.while Pepsi sales plummeted from 21% to 10%
Difficulty in penetrating the international markets
Coke and Pepsi were trying to expand into new territories in Europe, China and India where business has been limited in the past.
Abide Masaraure MBE
2. How did Coke and Pepsi aim to address those challenges (i.e. provide examples of their competitive reactions)?
Strategy
1. Upgrading and expanding
Production and distribution capacity 2. Investing into international trademark development 3.Flanking their international brands with local trademarks
4. Positioning to wider service categories
Coca Cola Examples
Pepsi Examples
Coke formed joint
Pepsi also had joint ventures between key venture plants with bottlers and the local government
Chinese government agencies. Coke increased the number of inland plants Coke sourced most of its product locally in foreign establishments
The three China’s
Strategy. Coke allowed a wholly owned Chinese concentrate plant
Pepsi introduced fountains in fast food restaurants. Pepsi formed links with local
Internationalizing the "Cola Wars" : A case study
1. Four industry competitor challenges facing Coke and Pepsi in the mid- to late-1990s
Consolidation of bottlers
Coke on owned a smaller percentage of the bottler’s market share (about one third as illustrated on Page 4). This meant it lacked control over the independent bottlers who did not have long term commitment in satisfying its corporate goals. Also the bottling process was capital intensive.
Change of distribution channels and increase in private label
Low costs, privately labeled sodas would be preferred by consumers making Coca -Cola and Pepsi lose potential revenues in sales.
The emergent of a substitute product
New rival products, tea products entered the market and were gaining numbers in sales.
(sales increased by 17%). This meant both Coca Cola and Pepsi were losing some of their customers. Coke sales crashed from 44% to 9%.while Pepsi sales plummeted from 21% to 10%
Difficulty in penetrating the international markets
Coke and Pepsi were trying to expand into new territories in Europe, China and India where business has been limited in the past.
Abide Masaraure MBE
2. How did Coke and Pepsi aim to address those challenges (i.e. provide examples of their competitive reactions)?
Strategy
1. Upgrading and expanding
Production and distribution capacity 2. Investing into international trademark development 3.Flanking their international brands with local trademarks
4. Positioning to wider service categories
Coca Cola Examples
Pepsi Examples
Coke formed joint
Pepsi also had joint ventures between key venture plants with bottlers and the local government
Chinese government agencies. Coke increased the number of inland plants Coke sourced most of its product locally in foreign establishments
The three China’s
Strategy. Coke allowed a wholly owned Chinese concentrate plant
Pepsi introduced fountains in fast food restaurants. Pepsi formed links with local