industry‚ smaller national producers‚ such as Seven-Up and Dr Pepper‚ are relatively trivial. There are a lot of players of same size in the bottling industry. Unlike the furious competition between Pepsi and Coke‚ no sense of competition can be felt in bottling industry. Reasons are that‚ first‚ Pepsi and Coke control the majority of bottlers in 1990s; second‚ intrabrand competition is restricted by the franchise agreement‚ which is protected by ’Soft Drink Interbrand Competition Act’. From the view
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and Strategy Assignment week two: “Cola Wars Continue: Coke vs. Pepsi in the 1990s” Professor: Orlando Rivero D.B.A. April‚ 3‚ 2008 Cola Wars Continue: Coke vs. Pepsi in the 1990s Overview This paper will explore Porter’s Five Forces ( Porte 6) and Branderburger and Nalebuff’s Value Net to answer this questionnaire and describe soft drinks industry characteristics. The soft drink industry is concentrated with the three major players‚ Coca-Cola‚ Pepsi‚ and Cadbury Schweppes Plc.‚ making
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Strategy – NCC 5090 Cola Wars Continue: Coke and Pepsi in 2006 Case Part 1: Why was concentrate manufacturing profitable until the late ‘90s? Porter’s Five Forces provides an in-depth understanding as to how the interconnected relationship between Entrants‚ Buyers‚ Suppliers‚ Substitutes‚ and Rivals allowed concentrate producers to increase profitability. Entrants: Existing Concentrate Producers create high barriers to entry Despite low capital requirements to enter the
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Cola Wars Continue: Coke and Pepsi in the Twenty- First Century As given in exhibit 1. Per capita consumption of carbonated soft drinks has rose from 1970 to 1999 but in year 2000 there has been a slight drop in per capita consumption. However if we see the similar data for other drinks‚ there has either been a slight rise or fall in per capita consumption in the year 2000. So the per capita consumption data reveals that other drinks are not necessarily eating up the market share of carbonated
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Coke has been leading the competition from 1998-2002 in terms of higher market capitalization‚ gross margin and net income. However‚ Pepsi was leading the fight in terms of growth in revenue and net income. However‚ Pepsi’s stock performed 45% better than Coke’s stock. Overall‚ Pepsi was a smaller company but it was growing faster than Coke. Coke had a strong foundation‚ however‚ their revenue during this period increased due to summer months artificially increasing the demand. Pepsi‚ on the other
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COLA WARS : COKE AND PEPSI IN THE 21ST CENTURY” INTRODUCTION "Cola Wars Continue: Coke and Pepsi in the 21st Century” explains the economics of the soft drink industry and its relation with profits‚ taking into account all stages of the value chain of the soft drink industry. By focusing on the war between Coca-Cola and PepsiCo as market leaders in this industry – with a 90% market share in carbonated beverages – the study analyses the different stages of the value chain (concentrate producers
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Cola Wars Continue: Coke and Pepsi in 2010 1. Why‚ historically‚ has the soft drink industry been so profitable? Soft drink industry is profitable because the industry has concentrated revenues between 2 major players and it is virtually impossible for a new player to compete with the key players. The industry giant’s wield power over the retail outlets. Convenience stores‚ vending machines‚ fountains are widely distributed and hence they don’t have the power to bargain over pricing issues and
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Coca-Cola was originally formulated in 1886 by John Pemberton in Atlanta‚ Georgia and then later acquired by Asa Candler. One of the most influential people in Coca-Cola ’s history was Robert Woodruff‚ who became CEO of the company in 1923‚ and later developed Coca-Cola ’s international business and was instrumental in cooperation with U.S. Armed Forces during WWII. Caleb Bradham‚ a North Carolina pharmacist‚ invented Pepsi in 1893. Like Coca-Cola‚ Pepsi developed a franchised bottling system in
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Cola wars continue: Coke and Pepsi in 2010 (HBS 9-711-462) a. Use the 5-forces framework to explain why the soft drink concentrate industry has been so profitable. The soft drink concentrate industry has been very profitable for over 100 years. The reason can easily be found by analyzing the concentrate industry using the 5-forces model. According to the 5-forces model‚ each industry’s profitability can be assessed considering the five forces that influence the market – The rivalry among existing
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generates positive economic profits. The other reason why the soft drink industry is profitable is: * Bottling Network: Coke and Pepsi have agreements with existing bottlers which prevents it from taking on new competing brands. So no scope for future competitors due to high capital costs in setting up a new plant. * Advertising: Huge advertising costs by Pepsi and Coke which cannot be matched up to. * Brand Image/Loyalty: It is virtually impossible for a new entrant to match this scale
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