Cola Wars

Powerful Essays
Topics: Pepsi
9-711-462
REV: MAY 26, 2011

DAVID B. YOFFIE
RENEE KIM

Cola Wars Conti inue: Coke an Peps in 201
C
nd si 10
Fo more than a century, Co and Pepsi vied for “th or oke hroat share” o the world’s beverage m of s market. The most intense battles in the so-called col wars were fought over the $74 billio carbonated soft m b la e on drink (CSD) indus stry in the Un nited States.1 In a “carefu ully waged co ompetitive str ruggle” that l lasted from 1975 through the mid-199 both Cok and Pepsi a h 90s, ke achieved ave erage annual r revenue grow of wth nd oth w
SD
tion rose stead year afte year.2 Acco dily er ording aroun 10%, as bo U.S. and worldwide CS consumpt to Rog Enrico, fo ger ormer CEO of Pepsi: f The warfare must be per e rceived as a continuing ba c attle without blood. Witho Coke, Pep out psi wo ould have a to ough time bei an origina and lively c ing al competitor. T more succ
The
cessful they are, the sharper we have to be. If the Coca-C e e
Cola company didn’t exist we’d pray for someone to y t, inv vent them. And on the ot
A
ther side of the fence, I’m sure the fo t m olks at Coke w would say th hat no othing contrib butes as much to the pres sent-day succ cess of the Co oca-Cola com mpany than . . .
Pe
epsi.3
Th relationsh began to fray in the early 2000s, ho wever, as U.S per-capita CSD consum hat hip f S. mption started to decline. By 2009, the average Ame erican drank 4 gallons of CSDs per year, the lowest CSD
46
t consu umption level since 1989.4 At the same time, the tw companies experienced their own di l wo istinct ups and downs; Coke suffered several operational setba a C d acks while Pepsi charted a new, aggre essive course in alternativ beverages and snack acq ve quisitions.
As the cola wa continued into the 21s century, Co and Peps faced new challenges: C s ars d st oke si
Could
they boost flagging domestic CSD sales? Ho

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