Coke Versus Pepsi in 2010

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Introduction The « cola wars » between the principal players of the carbonated soft drink (CSD) industry, Pepsi and Coke, has been lasting for more than a century. It is a global war but this rivalry is the most intense in the United States, where the market has been valued at $74 billion and the average American drank 46 gallons of CSD per year. During a century, Coke and Pepsi’s battle to be the first one was driving by differenciation, advertising campaings, martketing actions, innovations and pricing struggle. However, things have changed since 2000’s. Indeed, the CSD consumption have strated to decline, the industry have to face the emergence of non-carbonated drinks and also the awareness of the public about health. The stakes are changing for the market leaders, Pepsi and Coke. In order to understand the reasons why the CSD industry has been massively profitable and also the keys to success and the future of this so-called war, we will analyse it using different tools : the value chain, a SWOT analysis of the two companies and the Porter’s five forces. 1) The value chain - Blending raw materials and package the mixture are made by concentrate producers. - Adding carbonate and bottle and can actions are made by the bottlers. - Marketing promotion actions are financing by both concentrate producers and bottlers. 2) SWOT Analysis The CSD market is evolving, with the sugar alternatives and the new categories of products which are more « natural ». In response of the decline of the CSD consumption and the awareness of the public about health but also the environmental issues, the leaders of this market are focusing on internatization, including the emerging markets such as India or China. Today Coke has a dominant position in the industry, and its advertising investments are nearly twice Pepsi’s ($254 million versus $145

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