Essay on Cola Wars

9-711-462

REV: MAY 26, 2011

DAVID N. YOFFIE

RENEE KIM

Cola Wars Conti

inue: Softdrink an Fougue in 201

C

nd

si

twelve

Fo a hundred forty years, Co and Pepsi vied for " th

or perhaps

oke

hroat share” um the planet's beverage meters

of

s i9000

market.

One of the most intense battles in the alleged col wars were battled over the $74 billio soft soft meters

b

la

e

about

drink (CSD) indus

stry in the Este

nited States. 1 In a " carefu

ully fought co

ompetitive str

ruggle” that d

lasted

by 1975 throughout the mid-199 equally Cok and Pepsi a

h

90s,

ke

obtained ave

erage annual l

revenue expand of

wth

nd

oth

w

SD

tion increased stead yr afte 12 months. 2 Acco

dily

er

ording

aroun 10%, while bo U. S. and worldwide CS consumpt

to Rog Enrico, fo

lamnar

ormer CEO of Pepsi:

f

The warfare has to be per

elizabeth

rceived as being a continuing handbag

c

attle without bloodstream. Witho Coke, Pep

away

psi

wo

ould have a to

ough period bei a great origina and lively c

ing

approach

competitor. To more succ

The

cessful they are,

the sharper we need to be. If the Coca-C

elizabeth

e

Cola company did not exist we would pray somebody to

con

t,

inv

vent these people. And on the ot

A

ther part of the fence, I'm sure the fo

to

m

olks at Cola w

would say a

hat

simply no

othing contrib

butes as much to the pres

sent-day succ

cess from the Co

oca-Cola com

mpany than...

Premature ejaculation rapid ejaculation, rapid climax, premature climax,

epsi. a few

Th relationsh began to mix in the early 2000s, ho wever, because U. S per-capita CSD consum head wear

hip

f

S.

mption

started to decline. By 2009, the average Ame

erican drank 4 gallons of CSDs per year, the lowest CSD

46

t

consu

umption level since 1989. four At the same time, the tw firms experienced their particular di d

wo

istinct

ups and downs; Coke suffered several operational setba

a

C

d

acks while Pepsi charted a brand new, aggre

essive

course in alternativ refreshments and snack acq

ve

quisitions.

As the cola wa extended into the 21s century, Co and Dynamisme faced fresh challenges: C s

ars

d

street

oke

dans le cas ou

Could

they will boost flagging domestic CSD sales? Ho could that they compete in the growing non-CSD cat b

g

ow

y

tegory

that required di

deb

ifferent bottli

ing, costs, and company s

tactics? W

What had to m done to e

be

ensure

sustai

inable growth and profitab

h

bility?

Econ

nomics of the U. H. CSD Indus

C

stry

Am

mericans cons

sumed 23 gal

llons of CSDs yearly in 1970, and co

h

onsumption g

grew simply by an audio-video

verage

of 3% per year ove another th

%

er

hree decades (see Exhibit 1). Fueling th growth watts

his

had been the incre

easing

availa

ability of CSD and the in

Ds

ntroduction of diet and f

u

flavored vari

ieties. Declini

ing real (inflationadjust

ted) prices a made CSD more find the money for

hat

Ds

dable played out a significant role as well. 5 There were many

_______

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________________

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Professo David M. Yoffie and Research Asso

or

a

ociate Michael Slind well prepared the orig

d

ginal version on this case, " Cola Wars Continue: Cola an Soft drink s

nd

in 2006, ” HBS No . 706-447. This kind of version was prepared by Professor David M. Yoffi and Research Because ”

fie

ssociate Renee Kim This situatio was de

m.

eveloped

from pu

ublished resources. HBS circumstances are dev

H

veloped solely because th basis for discussion in the classroom. Cases are not intended to function as endors he

sements,

options for primary info, or designs of eff

r

fective or ineffectiv management.

ve

Copyrig В© 2010, 2011 President and Fellow of Harvard Question

ght

ws

ege. To order copi or request perm

ies

mission to reproduc supplies, call 1ce

-800-5457685, create Harvard Busin

ness Institution Publish

hing, Boston, MOTHER 02163, or perhaps go to ww

ww. hbsp. harvard. electronic

edu/educators. Th publication will not be

his

con

digitized photocopied, or otherwise reprodu

d,

uced, posted, or tran

nsmitted, without to permission of H

the

Harvard Business S

School.

711-462

Soda Wars Continue: Coke and Pepsi completely

alternatives to CSDs, which include beer,...