Gatorade vs. Powerade

Topics: PepsiCo, Coca-Cola, Gatorade Pages: 9 (2776 words) Published: November 3, 2008
Gatorade is a flavored non-carbonated sports drink manufactured by the Quaker Oats Company, now a division of PepsiCo. Intended for consumption during physically active occasions, Gatorade is formulated to rehydrate and replenish fluid, carbohydrates and electrolytes. Robert Cade, Dick Malonis, Harry James Free, and Dana Shires were the medical researchers at the University of Florida who created Gatorade in 1965. The Gators football coach, Ray Graves, was frustrated with the performance of his players during the hot summer football practices, and asked the team doctor, one of Cade’s associates, for his insight. Cade and his research team came across the unique mix of water, sodium, sugar, potassium, phosphate, and lemon juice that is now known as Gatorade in honor of the football team, the Gators. The football team credited Gatorade with their first Orange Bowl win over the Georgia Tech Yellow Jackets in 1967, and the drink became an instant phenomenon. The Yellow Jackets coach Bud Carson, when asked why they lost, replied: "We didn’t have Gatorade. That made the difference. Shortly after, Cade partnered with Stokely-Van Camp, Inc. (S-VC) to produce and distribute the product. A year after its commercial introduction Gatorade was reformulated, as its initial recipe contained the sweetener cyclamate, which was banned by the FDA. The Quaker Oats Company bought S-VC in 1983, after a bidding war with rival Pillsbury. Quaker licensed manufacturing of Gatorade in some worldwide markets to PepsiCo, but sued Pepsi in Australia in 1998, alleging Pepsi had misappropriated Gatorade trade secrets to manufacture its own sports drink, All Sport. Quaker won the Australian case.[2] In the meantime, the University of Florida has received royalties for Gatorade each year, since their settlement with Cade in 1973.[3]

Gatorade is the official sports drink of the National Football League, Major League Baseball, National Basketball Association, Women's National Basketball Association, USA Basketball, National Hockey League, Association of Volleyball Professionals, US Soccer Federation, Major League Soccer, and many other pro and collegiate organizations, providing supplies of the drinks to the teams in all flavors available. Gatorade extended their market to the U.K. in 2008 and promoted this in part by becoming the sports drink provider for Chelsea F.C.


POWERade is a sports drink manufactured by The Coca-Cola Company. It was first introduced in 1988, starting in Emma McLaughlin's house in DARWIN. By 1992, the beverage was launched nationally in the Australia Capital Territory. Powerade's primary competitor is Gatorade. As of July 2007, Powerade has grown to take 14.5 percent of the United States market in its category. Gatorade remains the market leader with about 83.1 percent market share.

Porter’s Five Forces Model

1) Rivalry:

The soft drink industry is very competitive for all corporations involved, with the greatest Competition being that from rival sellers within the industry. All soft drink companies have to think about the pressures; that from rival sellers within the industry, new entrants to the industry, substitute products, suppliers, and buyers. Coca-Cola, Pepsi Co., and Cadbury Schweppes are the largest competitors in this industry, and they are all globally established which creates a great amount of competition. Though Coca-Cola owns four of the top five soft drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite), it had lower sales in 2005 than did PepsiCo. However, Coca-Cola has higher sales in the global market than PepsiCo. In 2004, PepsiCo dominated North America with sales of $22 billion, whereas Coca-Cola only had about $6.6 billion, with more of their sales coming from overseas, PepsiCo is the main competitor for Coca-Cola and these two brands have been in a power struggle for years.

2) Potential Competitors:

Brand name loyalty is another competitive pressure. The Brand Keys’...
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