Colas Wars Continue: Coke and pepsi in the Twenty-First Century

Colas Wars Continue: Coke and pepsi in the Twenty-First Century

1. Why is the soft drink industry so profitable?

- American consumed 53 Gallons of carbonated soft drink (CSD) per year

Concentrated producers:

- little capital investment in machinery overhead, or labor

2. Compare the economics of the concentrate business to the bottling business: Why is the profitability so different?

It exists plenty of difference between concentrate business and bottler. First of all,

Concentrate business:

As the market of soft drink in US is concentrated, producers depend on Pespsi and cokebottling network to distribut their

• The process involved little capital investment in machinery, overhead, or labor (one plant can serve entire U.S

• A concentrated producer’s most significant cost were for advertising, promotion, market research and bottler relations

The bottling business:

3. How has the competition between Coke and Pepsi affected the industry's profits?

Globalization provides Coke and Pepsi with both unique challenges as well as opportunities at the same time. To certain extent globalization has changed the industry structure because of the following factors.

Bottlers are in charge to the negotiating cooperative merchandising agreements with retailers ,and promitional activity ,bottlers have a final say in decisions concerning retail pricing, new packaging, selling

4. Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated drinks?

COKE PEPSI

Owns 43% of market share in the United States. Owns 31% of US market share

Owns 23% of the global market share for non-carbonated beverages. Owns 50% of the global market share for non-carbonated beverages

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