was spending less money and gaining market share‚ what were they doing right? Research is an essential step in advertising because money cannot be wasted‚ there are many other uses within the company which money could be used for. In order for Coca-Cola to improve the above stated problems and improve their marketing research‚ the company could do a number of things. When the flavor changed of Coke‚ many were upset about this‚ even though a study was done to determine if the change should happen.
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Cola Wars Continue: Coke and Pepsi in 2010 Pepsi and Coke fought over the 74 billion CSD (carbonated soft drinks) industry. --> Nothing contribute as much to the success of Pepsi than Coke and vice-versa What had to be done to ensure sustainable growth and profitability? Economics of the U.S CSD Industry 1970 - consumption grew by an average of 3% per year --> increasing availability of CSD + intro of new diet and flavoured variety + Declining real prices --> CSD more affordable -->
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"Cola Wars Continue: Coke and Pepsi in 2010" Read and Apply: Michael E. Porter (2008)‚ “The Five Competitive Forces that Shape Strategy”‚ Harvard Business Review‚ (January 2008)‚ pp. 2-17 Assignment Questions (AQ) (a) Why has the soft drink industry been so profitable for concentrate producers? Compare the economics of the concentrate business to the bottling business: why is the profitability so different? [50% points] The soft drink industry has been extremely profitable for Concentrate
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products that go head to head. Coca Cola and Pepsi are an example of such reveries. There has been many taste test and competitions that involved the soda kings. This reverie has been going on for over a century. (See appendix 1) The start of this long standing soda war began 1886 when creator John S. Pemberton developed the original recipe for Coke. Then 13 years later Pepsi creator pharmacist Caleb Bradham developed his formula. By this time Coca-Cola was already fulfilling order that totaled
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Cola Wars Continue : Coke and Pepsi in 2010 Introduction "Cola Wars Continue: Coke and Pepsi in 2010” explain 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‚ bottlers‚ retail
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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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Q1. Why is the soft drink industry so profitable? OR Why is it not easy for new players to enter the industry? Already a mature market‚ coke & pepsi spent a lot of money‚ time & effort on all things e.g. networking‚ manufacturing Q2. Why CPs are more profitable than bottlers? The concentrate manufacturing process involved little capital investment in machinery‚ overhead‚ or labor. A typical concentrate manufacturing plant cost about $25 million to $50 million to build‚ and one plant could
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Michael Porter’s “5-Forces Analysis” is a comprehensive way of determining organizations profitability as compared to its competitors in the same industry by looking at 5 forces of stress. Coca-Cola deals with a lot of pressure in the concentrate business‚ most specifically with Pepsi. I will analyze the 5 forces model to determine Coca-Colas overall profitability. The 5 forces model begins by looking at rivalry between established competitors. Coca-Cola has a direct rivalry with Pepsi in the
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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 in the market. * Retail Distribution: Significant margins of 15-20% for the shelf space. New entrant finds it hard to convince the retails for this space. * Price Wars: New entrant does not stand a chance
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Cola Wars Continue: Coke and Pepsi in 2010 The software drink industry has been very profitable historically because the manufacturing process requires low cost of overhead. Although this is not the case for bottlers‚ the high volume and demand for CSD allow for the market to be very attractive to incumbents. Since the 1970s‚ the CSD industry has been enjoying an average growth every year of 3% for the last 30 year. Even at the lowest point in 2009‚ CSD sales compose of 87% of all beverage sales
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