Cola wars

Coca & Pepsi

Group 4

Zhang Yuanyuan : 70381@student.hhs.se

Zhong Wei :70382@student.hhs.se

Chi Mingli :70365@student.hhs.se

Guo Xing :70368@student.hhs.se

Introduction The 5 forces analysis Today’ challenges

Agenda

For over a century, Coca-Cola and Pepsi-Cola vied for “throat share” of the world’s beverage market. From 1975 to 1995, Coke and Pepsi achieved average annual growth of around 10%. However, in the late 1990s, CSD consumption dropped and worldwide shipments slowed for both Coke and Pepsi.

As the cola wars continued into the 21st century, the cola giants faced a large number of challenges but biggest of them were to modify their bottling, pricing, and brand strategies.

Introduction

The Concentrate business

the industry incumbent/rivals The soft drink produc

ers

Power of suppliers

Low

Power of buyers

High （低）

Barriers of entry

High

Threats of substitutes

High( 中，在升 )

Coca Cola and Pepsi Cola hold the most market share.

They compete with each other and the competition was fierce.

Rivalry Condition

Substitutes

Existence of Substitute Products Coffee, Juice, Tea, Beer, Milk and so forth

Substitute Products become more popular which considered as a threat for CSD companies.

Coke and Pepsi are established brands. Good relationship with their retail channels Defending their positions through discounting or

other tactics.

New Entrants

Bargaining power is low due to -Many sources on the open market

-Creation power of suppliers is low

-Lots of major suppliers

Power of supplier

Bargaining power is high for fountain supermarkets and mass merchandising

Supermarkets are the main distribution channel

Power of Buyers

The soft drink industry is profitable due to the five forces analysis.

Conclusion

The Bottler business

Power of suppliers

Low 高

the industry incumbent/rivals The soft drink produc

ers

Barriers of entry

Low 高

Power of buyers

High

Threats of substitutes

High 低

Compared with the concentrate business, the barrier of entry is low. Consequently, the profitability s not high

The bottling business profitability

As Coca and Pepsi’s fierce competition, the soft drink will profitability decline due to the promotion and discount competition.

Nowadays, there exist so many substitute products, the Coca Cola and Pepsi Cola’s market share and profitability might be affected.

Today’s challenges

Cola Wars Continue: Coke and Pepsi in the Twenty-First Century: DAVID B. YOFFIE

Cola Wars Continue: Coke & Pepsi in the 21th century: http://www.slideshare.net/adhirock/cola-wars-case

www.coca-cola.com www.pepsiamericans.com The Five Competitive Forces that Shape Competitive Strategy, Porter, ME

References