Management

Case Study #2: Cola Wars

Management and Strategy

Coke and Pepsi are two of the most favorite carbonated soft drinks in the soda industry. They have been rivals forever. They have been at war and can contribute much of their success through the battles of their prices, taste challenges, and how well and often their product is advertised.

“The "cola wars, "which describes the on-going battle between Coca-Cola and Pepsi for supremacy in the soft drink industry, date back to the 1950s when Pepsi's corporate focus became "Beat Coke" (Yoffie, 2004). Since then, they have battled domestically and globally for market share and sales, with a tremendous amount at stake. The soft drink industry annually pro-duces approximately 10.1 billion cases of soft drinks domestically, with a total U.S. retail value of $65 billion. Of that annual dollar total, the "cola" flavors represent closet on a 70% market share, followed distantly by the lemon/lime, citrus, pepper, root beer, and orange flavored soft drinks (Yoffie, 2004). Given the amount at stake, the "cola wars" are fought daily between Coca-Cola and Pepsi-Cola”, (McKelvey, S., p.114).

Coca-Cola was invented and first marketed in 1886, followed by Pepsi Cola in 1898. ”Coca-Cola history began in 1886 when the curiosity of an Atlanta pharmacist, Dr. John S. Pemberton, led him to create a distinctive tasting soft drink that could be sold at soda fountains. He created a flavored syrup, took it to his neighborhood pharmacy, where it was mixed with carbonated water and deemed “excellent” by those who sampled it. Dr. Pemberton’s partner and bookkeeper, Frank M. Robinson, is credited with naming the beverage “Coca Cola” as well as designing the trademarked, distinct script, still used today.

Caleb Davis Bradham was born in Chinquapin, North Carolina on May 27, 1867. He named the store “Bradham Drug Company” and, like many other drug stores of the time, housed a soda fountain. In 1893, Bradham invented “Brad’s...