Pepsi vs. Coke

            Why is the soft-drink concentrate industry so profitable?.
             - Huge Market- 60 Billion in the US alone.
            
             - High Gross Margin (Low packaging and production costs).
             - Strong Branding.
             - Inelastic demand.
             - Customer Loyalty.
             - Gone abroad (international market).
             Analyze Industry Structure.
             - Barriers to Entry.
             o Coke and Pepsi control a large portion of the bottling/distribution market.
             o Since Coke and Pepsi have a diversified portfolio of brands (including many other beverages), even substitutes are profitable for them.
             o Limited Shelf space in supermarket.
             o Need a lot of capital to enter the national or global market due to high cost for building a concentrate factory- probably would have to sustain negative cash flows for a few years .
             - Competition.
             o Warehouse brands (eg. Safeway brand for cheaper).
             o Cadbury Schwepps-3rd largest.
             Retailers and Suppliers are dependent on Coke and Pepsi.
             Identify Key Success Factors.
             - Good recipe (secret and hard to imitate).
             - Good marketing and branding (for example- coke- harry potter, pepsi- Britney Spears in order to better target the pre teen market).
             - Huge target market- everybody buys coke (affordability).
             - Solid relationship between suppliers, bottlers, and retailers.
             - Immense resources/ cash flow.
             - Continuing innovation- r&d.
             - Good distribution network/ channels.
             o Contracts with restaurants, franchisees where there are complementary products.
             - Having a diverse portfolio of brands (including non carbonated- the whole beverage market).
             - Resources to buy out new entrants into the market.
             Who has been winning and losing the Cola wars since the Pepsi Challenge was launched? .
             - Pepsi (need numbers).
             o Targeting the younger generation demographic- historically has consumed more cola products than any other demographic.
             o Used identifiable celebrities to advertise their product .
             .
             COLA WARS: PEPSI VS. COCA-COLA.
             Pepsi and Coca-Cola are two organizations, which have been in direct competition with each other for the past century in the "Soft Drink Concentrate Industry.