Strategy, Structure, and Antitrust in the Carbonated Soft-Drink Industry

Strategy, Structure, and Antitrust in the Carbonated Soft-Drink Industry

Strategy, Structure, and Antitrust in the Carbonated Soft-Drink Industry

Strategy, Structure, and Antitrust in the Carbonated Soft-Drink Industry

Synopsis

The Cola Wars have long fascinated students of American business. Until 30 years ago, Coca-Cola clearly dominated the carbonated soft-drink industry, but with Pepsi-Cola's challenge in the 1960s, the market environment became fiercely competitive. Rivalry was well publicized and intense. Now recognized as two of the premier marketing companies in the world, Coke and Pepsi created and implemented management strategies to deal aggressively, not reactively, with the competition between them. How they have changed their product and marketing strategies, and altered their corporate structures to reflect them, is explored here in detail. More than a case study, this book will be a valuable how-to for corporate management in other highly competitive arenas and an informative inside look for their marketing and sales teams.

Excerpt

Just three decades ago, the competitive environment of the carbonated soft- drink (CSD) industry was based on a recognition of and implicit acquiescence to the dominance of the Coca-Cola Company. Beginning in the 1960s, however, Coca-Cola's dominance has been increasingly challenged, particularly by Pepsi-Cola. the new competitive environment is well publicized and intense. the "Cola Wars" were declared and the battle continues. Pepsi-Cola and Coca-Cola are widely recognized as being two of the premier marketing companies in the world. a great variety of new products and package types have been introduced. Celebrity advertising has been raised to a new level. Coca- Cola even changed the formula for Coke. These and other developments in the csd industry came about from major changes in strategy by Pepsi-Cola and Coca-Cola. To some extent these strategic changes arose from Pepsi's challenge to Coke's dominance of the industry. in addition, several factors external and internal to the industry have been important catalysts for these changes. Rather than simply reacting to a changing competitive environment, PepsiCo and the Coca-Cola Company have created and implemented strategies that turned the new environment to their advantage. Although Pepsi- Cola attacked Coca-Cola's dominance and achieved near parity with Coke in bottled soft drinks, both Coke and Pepsi have benefited from fighting the Cola Wars--because the battle between them has stimulated continuing growth in an industry regularly pronounced by the experts for many years to be on the verge of maturity.

As the industry existed in the early 1970s, the reasons for predictions of impending maturity were not difficult to see. the apparent limits of the . . .

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