Cola Wars One-Page Written Brief David Weigel Cohort 67 Define the Problem: Throughout the long history

y of competition, both brands battled in a war that, as a former CEO called it, was a continuing battle without blood (p. 1). From 1975 throughout the mid 1990s, the brands were competing fiercely and yet were also both growing at a steady rate due to the overall growth of the carbonated soft drink industry (CSD.) 2009 saw the lowest average CSD consumption per capita since 1989, forcing both Pepsi and Coke to think creatively. Both companies had questions to answer: how can they sustain growth and profitability in an industry that was now shrinking as well as how can they capitalize on an industry that was new to them the non-CSD beverage market which presented its own challenges. List any outside concepts that can be applied: Economies of scale, differentiation strategy, and localization are all concepts involved in this case. List relevant qualitative data: Beginning in the late 1990s, soft drink consumption fell (see data below) due to increased awareness of and public reaction negative health associations of consuming soft drinks. More information came out continually during these years, linking nutritional deficiencies such as obesity and diabetes to over consumption of soft drinks. Coke also did very well to List relevant quantitative data: CSD consumption dropped to lowest level in 20 years in 2009 (p. 13). Case volume of CSD also dropped in 2009 to pre 2000 low (p. 13). Describe the results of your analysis: Both Coke and Pepsi have shifted their strategy to incorporate their large bottling partners something they have both done in the past but were not doing during the recent extended period of growth. This strategy is interesting as it may negate some of the previous strategies such as strategic partnerships with bottlers as well as allow both companies to further exert economies of scale. Describe alternative actions: Similar to the Nestle division of health foods, Coke and Pepsi could have invested aggressively into additional healthy, non-carbonated, and even organic juices. This could open up distribution to some chains they may not already be in, such as Whole Foods or other health food grocers. This would allow them to get additional traction in the high growth market of natural food and beverages. Describe your preferred action plan: Coke and Pepsis current path of consolidation makes sense. Instead of making a profit solely as a supplier to bottling companies, the concentrate producing business units of the companies will make money and in addition so will the bottling business units. This allows the companies to realize additional profits compared to their old strategy. Source: Cola wars continue: Coke and Pepsi in 2010. Yoffie and Kim, 2011.