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  • January 2002 (Revised January 2004)
  • Case
  • HBS Case Collection

Cola Wars Continue: Coke and Pepsi in the Twenty-First Century

By: David B. Yoffie and Yusi Wang
  • Format:Print
  • | Language:English
  • | Pages:24
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Abstract

Examines the industry structure and competitive strategy of Coca-cola and Pepsi over 100 years of rivalry. New challenges of the 21st century included boosting flagging domestic cola sales and finding new revenue streams. Both firms also began to modify their bottling, pricing, and brand strategies. They looked to emerging international markets to fuel growth and broaden their brand portfolios to include noncarbonated beverages like tea, juice, sports drinks, and bottled water. For over a century, Coca-Cola and Pepsi-Cola had vied for the "throat share" of the world's beverage market. The most intense battles of the cola wars were fought over the $60 billion industry in the United States, where the average American consumes 53 gallons of carbonated soft drinks (CSD) per year. In a "carefully waged competitive struggle," from 1975 to 1995 both Coke and Pepsi had achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. This cozy situation was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. The case considers whether Coke's and Pepsi's era of sustained growth and profitability was coming to a close or whether this apparent slowdown was just another blip in the course of a century of enviable performance. A rewritten version of an earlier case by Michael E. Porter and David B. Yoffie.

Keywords

Price; Growth and Development; Brands and Branding; Emerging Markets; Industry Structures; Performance; Competition; Competitive Strategy; Food and Beverage Industry; United States

Citation

Yoffie, David B., and Yusi Wang. "Cola Wars Continue: Coke and Pepsi in the Twenty-First Century." Harvard Business School Case 702-442, January 2002. (Revised January 2004.)
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About The Author

David B. Yoffie

Strategy
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Related Work

    • May 2006 (Revised April 2009)
    • Faculty Research

    Cola Wars Continue: Coke and Pepsi in 2006

    By: David B. Yoffie and Michael Slind
Related Work
  • Cola Wars Continue: Coke and Pepsi in 2006 By: David B. Yoffie and Michael Slind
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