Cola Wars

1. COLA WARS Krishanu Kr. Chakravarty Pawan Srivastava Devendra Sachora Shikhar Sharma Saurab Das Prabhakar Gupta Uttam Kr. Pat Vs.

2. Introduction Coke started to focus on the over seas markets (1960) Coke assumed American consumption was reaching saturation point. Pepsi doubled its consumers in the US in the same period (more bottlers and reduced price of concentrate) Thus Pepsi decided to attack Coke on the home turf.

3. In the international market Coke flourished in international market and also relied upon them far more than Pepsi. About 70% of the revenue of Coke came from non US markets compared to 33% of Pepsi. Coke’s share of global beverages market stood at 51.4% followed by Pepsi at 21.8% Some of the reasons behind Coca Cola’s success in the international markets was due to its ability to understand and defend its positions really well.

4. S.W.O.T. Analysis of STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

5. S.W.O.T. Analysis of STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

6. Intensity of competitive rivalry Combative advertising Acquiring bottlers globally Change in formula of Aspartame and corn syrup Customer campaigns and tests Pricing Product l ine extension

7. Corporate Level strategies COCA COLA Product Development and line extension ---- introduction of 21 new products Divestiture ---- Non Canteen Store Department (CSD) businesses were sold off Forward Integration ---- Coca Cola Enterprises (CCE), independent bottling subsidiary of Coke PEPSI Product Development and line extension ---- Introduction of 24 new products Forward Integration ---- Pepsi Bottling Group (PBG) established Concentric Diversification ---- Acquired tie-ups with Pizza Hut, Taco Bell and KFC

8. Soft drink market share by volume (%)

9. Porter’s five forces of the soft drink industry Threat of new entrants : Huge Capital Requirements Strong Bottling Networks Brand Loyalty Strong Distribution Links Market Saturation

10. Buyers’ bargaining power : Bottlers High switching costs Tied by contracts Retail channels Supermarkets and Fountain outlets High bargaining power Low for vending machines and Convenience stores

11. Suppliers’ bargaining power : Few inputs required for concentrate producers Inputs for bottlers-packaging and sweeteners Coke and Pepsi are the largest customers of metal can industry

12. Threat of Substitutes : Shift in demand towards non-CSD products in early 2000s on health-related concerns Main substitutes included juices, sports drinks, energy drinks, tea-based drinks and bottled water Pepsi more aggressive in shifting to non CSDs Low switching costs for consumers

13. Strategies adopted by coca cola 21st century Product Development and Line Extension– 11 new products rolled out • Forward Integration- Coca Cola company invested in stakes of the bottling partners l ow–pricing strategy and increase in advertising expenditure. • Packaging Innovation– Fridge Pack (2001 ) • Introduction of Diet Coke (2005) and Coke Zero (2005) to tackle obesity issue.

14. Strategies adopted by Pepsi in 21st century Product Development and Line Extension– 13 new products • Low–pricing strategy and increase on advertising expenditure. • Expansion in bottling by major acquisitions. Product Development– Aquafina (1998 ), Pepsi Blue (2006), Pepsi Gold (2007) • Market Development– Sierra Mist (2000) and Mountain Dew Code Red (2001) • Pepsi declared itself as a total beverage company and move more aggressively in non CSD’s segment. • Treating Diet Pepsi as its flagship brand .

15. New Strategies to be adopted by coca cola in 2016 One brand unification strategy- It’s a major rebranding strategy where Coca-Cola, Diet Coke, Coke Zero, and Coke Life will share a single branded aesthetic around the world, unified by a red disc, and advertised together in a new wave of shared commercials . Closing down "Open Happiness“. A new global campaign called "Taste the Feeling" will put the product at the centre of every advertisement.

16. Pepsi to Reintroduce Aspartame-Sweetened Diet Pepsi Pepsi to reintroduce Crystal Pepsi Relaunching of 7up Nimboo Masala Soda and introduction of Tropicana Mini bottled drinks. Introduction of 400 ml pet bottle of the mother product as well as of Mountain Dew. Promotions featuring Emojis as per consumer choices. Development of Mountain Dew with new ‘Game Fuel’ edition. New strategies adopted by Pepsi in 2016

17. Conclusion Coca Cola and PepsiCo have created a Duopoly in the market with their dominant performance in the soft drinks segment. Their mission is to “make available a bottle of soft drinks wherever a person is thirsty” or else they would lose out on sales. Their main focus has shifted from their mother brands to more diversified products and are targeting newer segments. Their advertisements have been filled with adrenaline and adventure even in Indian markets with tag lines like “Aaj kuch toofaani karte hai” and “Darr ke aage jeet hai”. The cola wars will continue to last as one always needs the other to sustain in developing new strategies and making newer products available.

18. Cheers… Thank You!