cola war 2010
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 channels, suppliers) and the impact of the modern times and globalization on competition and interaction in the industry.
Analysis
There was a “war" between Coca-Cola and PepsiCo, not only have they been rivals for ages but they have always followed each other’s moves. The warfare must be perceived as a continuing battle without blood. Without Pepsi, Coke would have a tough time being an original and lively competitor. Below are the factors that lead to problems.
Barriers to Entry
Courts barred imitations and counterfeit versions of Coca-Cola such as Coca-Kola, Koca-Nola, and Cold-Cola, under trademark infringement. This barrier to entry allowed Coca-Cola to dominate and almost single-handedly develop the CSD industry, and almost excluded Pepsi-Cola from the industry, until Pepsi-Cola won the 1941 trademark infringement suit that Coca-Cola had filed against it.
The second significant barrier to entry was brand loyalty, created largely by Robert Woodruff who began leading Coca-Cola in 1923. Coca-Cola’s efforts to increase brand loyalty were so successful early on that in order to gain market share and develop brand loyalty of its own, Pepsi-Cola had to rely very heavily on price differentiation and sold its 12-ounce bottle for five cents, the same price that Coca-Cola charged for its 6.5-ounce bottle.
The third significant historical barrier to entering the CSD industry was the successful vertical integration of nationwide franchise bottling networks of Coca-Cola
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 channels, suppliers) and the impact of the modern times and globalization on competition and interaction in the industry.
Analysis
There was a “war" between Coca-Cola and PepsiCo, not only have they been rivals for ages but they have always followed each other’s moves. The warfare must be perceived as a continuing battle without blood. Without Pepsi, Coke would have a tough time being an original and lively competitor. Below are the factors that lead to problems.
Barriers to Entry
Courts barred imitations and counterfeit versions of Coca-Cola such as Coca-Kola, Koca-Nola, and Cold-Cola, under trademark infringement. This barrier to entry allowed Coca-Cola to dominate and almost single-handedly develop the CSD industry, and almost excluded Pepsi-Cola from the industry, until Pepsi-Cola won the 1941 trademark infringement suit that Coca-Cola had filed against it.
The second significant barrier to entry was brand loyalty, created largely by Robert Woodruff who began leading Coca-Cola in 1923. Coca-Cola’s efforts to increase brand loyalty were so successful early on that in order to gain market share and develop brand loyalty of its own, Pepsi-Cola had to rely very heavily on price differentiation and sold its 12-ounce bottle for five cents, the same price that Coca-Cola charged for its 6.5-ounce bottle.
The third significant historical barrier to entering the CSD industry was the successful vertical integration of nationwide franchise bottling networks of Coca-Cola