Steep Analysis The social issues in this contemporary world tend to cause adults to begin worrying about their health at around age 37. This shift in the views of the adult population has forced Coca-Cola to expand into the sport drink market by producing Powerade. Along the same line of thought there are many people that are diagnosed with diabetes. This causes them to need to stay away from sugary drinks such as Coca-Cola. They have faced this challenge by creating of Diet Version of their ever so popular soda. These reactions to the social needs of its customers has aided Coca-Cola in maintaining its business and offsetting decreases in revenue from these two large groups of consumers. Technology and its fast advances help Coca-Cola to …show more content…
The largest competitors in this market are Coca-Cola and Pepsi. The fact that they spend approximately 2.5 billion dollars a year in the marketing campaign, which makes it hard for a new competitor to enter the market and gain visibility. Another factor that inhibits new competitors is the fact that both Coke and Pepsi have built a high level of customer loyalty and brand image. Both Coca-Cola and Pepsi are generous with their retailers giving them margins of 15-30%. These relationships, build loyal retailer groups. One other strength of these top soda producers is the fact that they have non-compete agreements with their bottlers which would require new competitors to find or create their own …show more content…
These buyers basically fall into four segments or groups that have varying amounts of profitability or revenue. They show their bargaining power by the prices that they pay. Fast Food Fountain buyers are basically the slightest profitable for Coca-Cola and Pepsi. Those buyers buy in bulk have high bargaining power. Vending Machines provide products to customers directly. There is no buyer power whatsoever. Convenience stores are a fragmented group which buys and sells in smaller quantities and wields no bargaining power and pays high premium prices for the products. Food Stores are as a whole are merged into numerous chain stores with a few local supermarkets. These stores have much more shelf space devoted to the soda products and buy in highest lower prices. The bargaining power of Coca-Cola’s finish suppliers is low due to several reasons. Most of the ingredients needed to make soft drinks are basic items that can be purchased almost anywhere. Flavor, color, caffeine, sugar and packaging, etc. are easily available and have low cost. The standard ingredients of raw materials which do not have substitutes. The supplier industry must maintain a good relationship with the buyers in order to continue to have their
Coke continuously out-stands Pepsi, even though they share a very similar taste and colour, however Coke should not be the drink that receives all the love and attention for what it offers. Despite their similar soda colour, the drinks actually contain some different ingredients, which produce a different taste, and affect the body differently. Furthermore, the way the companies markets their drinks makes a huge contribution to how successful their products will become. The major element for success however stems from their impact on society and how the companies utilize their social power to evolve. The two major soda companies are constantly head to head with one another, yet it is what they do that sets them apart.
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
Our American market when it comes to snack foods and soda have ballooned into a billion dollar business with more choices than there are consumers. The problem is it is only a few different manufacturers who are making all of these different brands and flavors. Throughout the 80’s we had a very entertaining marketing ploy where Pepsi and Coke slugged it out in what was called the cola wars. Although these two soft drink giants have claimed most of this market there are other smaller companies who pop up every now and then with new products and unique marketing strategies. New drinks such as Fanta, Gatorade, and Snapple showed promise only to have them scooped up by Coca-Cola, PepsiCo, and Dr. Pepper respectively which pretty much speaks for itself.
Analysis of the Coca-Cola Company The Coca-Cola Company is the world's leading manufacturer, marketer and distributor of soft-drink concentrates and syrups. The Coca-Cola Company is the world's leading manufacturer, marketer and distributor of soft-drink concentrates and syrups. The Company markets many of the world's top soft drink brands, including Coca-Cola, Diet Coke, Sprite and Fanta. Through the world's largest and most pervasive distribution system, consumers in nearly 200 countries enjoy the Company's products at a rate of more than one billion serving a day.
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
... objects and customer regions. Do making a clear differentiation image between its soft drinks and bottled water. Because the consumers may believe that bottled water of Nestle sounds healthier than Coca-Cola brand since Nestle tend to emphasize their image on healthy food products. Then do market test for new taste, new packaging, or new innovation according to each regions, and especially for Europe, the company should launch the new one to replace Dasani image in order to seize their market shares. They may renew all nutrients and packaging. Finally Coca-Cola should continue its joint ventures with the regional companies in order to protect their products from barriers to entry both international trade restrictions and distribution channels. Furthermore, joint venture with local brand is a long term contract guarantee to make it easier for HOD to a specific region.
Bottling Network: Both Coke and PepsiCo have franchisee agreements with their existing bottler’s who have rights in a certain geographic area in perpetuity. These agreements prohibit bottler’s from taking on new competing brands for similar products. Also with the recent consolidation among the bottler’s and the backward integration with both Coke and Pepsi buying significant percent of bottling companies, it is very difficult for a firm entering to find bottler’s willing to distribute their product.
Coke and Pepsi have been raging war for over a century now, turning their sodas into a multi-billion-dollar industry. Coke has been able to drive more earnings for its bottom line, and while Coke’s net income has been trending downward in recent years, it manages to stay ahead thanks to superior margins. Pepsi, on the other hand, has produced consistent net profit margins of around 10%, while Coke margins have been in the 15-18% range for the past several years (O’Brien). Every company has a Market Cap, which is basically a fancy way of saying how much the company is worth, and Coca-Cola’s market cap is a whopping $180 billion. Pepsi’s Market Cap is $150 billion, which may not seem like a big difference, but $30 billion is a lot of cheddar. Therefore, Coca-Cola owns 51% of the soft drink market, whereas Pepsi only owns 22% of it. Coke claims to own a total of 35 different brands, including Fanta, Sprite, Powerade, Vitaminwater, and many others. Pepsi owns 22 different brands, including 7up, Gatorade, and Mountain Dew “Coke (Coca-Cola) vs Pepsi - Soda
Without a doubt, no beverage company compares to Coca-Cola’s social popularity or brand notoriety. Some people buy coke, not only because of its taste, but because it is also the most socially accepted brand. Another strength that is very important to Coca-Cola is customer loyalty. For instance, in a household where parents are avid Coke drinkers, this will be passed down to their children. Customers will continuously but Coke.
Coca –Cola (KO) is one of the world’s largest beverage companies. Company was incorporated in September 1919 under the State of Delaware law and headquarters is located in Atlanta Georgia. But from 1886, company established its brand in US (Coca-Cola, 2012, p. 1). Currently company is providing for more than 500 varieties of non-alcoholic sparkles to the customers around the world. Apart from this, company also serve for still beverages that includes enhanced water, water, ready-to-drink, juices, energy drink, sport drinks and so on.
Learning from experience Coca-Cola has had some fierce competition over the years but nothing in the form of an entire health market shift like now. As well as mounting political persecution of its products like they are facing today. They must rely on past experiences to get through but likely will need to start studying the new trends to stay relevant.
Coca - Cola : Claims, Values and Polices Coca-Cola is a well-known and cherished brand name. When people think of this name, memories tend to overflow in their heads. Why do you need to be a member? Because, not only does Coke taste great and refresh your own personal memories, it also fills you with memories of the Coca-Cola like "Always Coca-Cola", the antics of the Coke polar bears, and all of the different ads that have represented Coke over the years. Just about every ad you see, as a consumer, has tons of hidden meanings.
Although produced by main market players, soft carbonated drinks cost more than similar products from local and private label manufacturers, consumers are willing to pay an extra price for the name, particular taste, and image. Fierce competition in the CSD industry forces Coca-Cola and PepsiCo to expand into new and emerging markets which present high potential for the company’s development. However, some foreign markets proved to be highly competitive. Coca-Cola Company’s operations in China faced antitrust regulations, advertising restrictions, and foreign exchange controls. iii.
The case study "Cola Wars Continue: Coke and Pepsi in the Twenty-First Century" focuses on describing Coke and Pepsi within the CSD industry by providing detailed statements about the companies’ accounts and strategies to increase their market share. Furthermore, the case also focuses on the Coke vs. Pepsi products which target similar groups of customers, and how these companies have had and still have great reputation and continue to take risks due to their high capital. This analysis of the Cola Wars Continue case study will focus mainly on the profitability of the industry by carefully considering and analyzing the below questions. Why is the soft drink industry so profitable? Compare the economics of the concentrate business to the bottling business: Why is the profitability so different?
One ownership trend in the soda industry is in Coca Cola. Starting in 2004 Coca-Cola has been the leader in the industry. In a close second is Pepsi. Most people know Coca-Cola and Pepsi which are found everywhere. When you go to a restaurant they usually have Coca-Cola products. A lot of people will ask for Pepsi and they do not have them. Coca-Cola has the most sales and revenue out of all the soft drinks and sodas. Coca-Cola is the most sold soda around the