Cola Wars Case Study

Case Study #1

Is this a good business? if so for whom?

The soft drink industry can be a good business. This industry has been taking over the hot drinks year by year. As stated by the records and statistics of consumption it has been proven the growth of profitability and inclination of customers around the world to consume more soft drinks every year. The soft drink industry has became very popular over the years and the obtainability of its consumption is everywhere. This industry is a very challenging and competitive field that requires the understanding of many factors to create a profitability industry. Companies that are willing to be innovative, sophisticated and have aggressive advertisers have a higher percentage of survival. Back in the days, we have been aware of the battle between coke and pepsi for the lead position among consumers worldwide. In my opinion, Coke has bee better competitor. Their idea of going international gave them the lead foot in the competition. This allowed them to be more profitable and space themselves from pepsi. Now they are not an american company, but internationally known. Once pepsi saw this move on Coke, they finally decided to go international and obtained some countries that coke wasn’t able to dominate. In 1993 some statistics reported that Coke global market had a total of 45% in comparison to Pepsi who had 14%. In my opinion, Coke is a better than Pepsi, not only because of their “pioneer” tittle but also their competitive strategies and international recognition.

Where is the money being made?

The money is made thru the sales of the product. The manufacture increase its profits by the amount of sales mades. The soft drink distributors make its profit from making a fair price appealing to customers that will increase the volume of sales and can make an appealing environment for the customers to purchase. This is a cycle of collaboration between manufacturing, wholesale “wall” and retail in order to make the customer satisfied.For Coke, money was made more internationally , once it decided to do this they grew in volume. Pepsi on the other hand used “guerrilla tactics to gain ground on coke. Coke was also more profitable in Germany, and leading the market on western Europe, Japan and Mexico. On the other hand, Pepsi was leading on the middle east, Eastern Europe and Russia.

Why is the soft drink industry so profitable?

The leading factor that has made the soft drink industry so profitable is the availability of international