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  • May 2006 (Revised April 2009)
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Cola Wars Continue: Coke and Pepsi in 2006

By: David B. Yoffie and Michael Slind
  • Format:Print
  • | Pages:28
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Abstract

Examines the industry structure and competitive strategy of Coca-Cola and Pepsi over 100 years of rivalry. New challenges in 2006 include boosting flagging carbonated soft drink (CSD) 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 portfolios of alternate beverages like tea, juice, sports drinks, energy drinks, and bottled water. 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 $66 billion CSD industry in the United States, where the average American consumes 52 gallons of 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 declined slightly before reaching what appeared to be a plateau. 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.

Keywords

History; Competitive Strategy; Industry Structures; Growth and Development Strategy; Food and Beverage Industry; United States

Citation

Yoffie, David B., and Michael Slind. "Cola Wars Continue: Coke and Pepsi in 2006." Harvard Business School Case 706-447, May 2006. (Revised April 2009.)
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About The Author

David B. Yoffie

Strategy
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Related Work

    • December 2010 (Revised May 2011)
    • Faculty Research

    Cola Wars Continue: Coke and Pepsi in 2010

    By: David B. Yoffie and Renee Kim
Related Work
  • Cola Wars Continue: Coke and Pepsi in 2010 By: David B. Yoffie and Renee Kim
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