Coke Pepsi Case Study

This essay introduces the carbonated soft drinks in the world beverage market, and Coca-Cola and Pepsi Co, the two companies that have been competing and fighting to control profits and market share in this segment. First, this essay explains the reasons that the carbonated soft drink industry is so profitable and lucrative. Second, this essay compares the economics of the concentrate business to the bottling business, and explains the reasons that the profitability metrics are different. Third, this essay explains how the competition between Coke and Pepsi have affected the world beverage markets profits with carbonated soft drinks. Fourth, this essay forecasts the feasibility of Coke and Pepsi being able to sustain their profits as a result of demand decreasing and the emergence of non-carbonated drinks.

COLA WARS

Context:

A free market is conceived and maintained as multiple firms decide to bring a product to the market with the express purpose of satisfying the needs and wants of consumers and with making a profit for the company. The context of this essay is the interaction between Coca-Cola and Pepsi Co as they compete in the beverage market in the US with carbonated soft drinks for the biggest market share and profit margins in the $60 billion dollar industry. Through and through this essay is concerned primarily with the actions of Coca-Cola & Pepsi Co and their corresponding implications for the micro-cosm of the profits of these firms and the profits in the macro-cosm of the beverage segment with sales of carbonated soft drinks. The first section of this essay examines the macro-cosm of the beverage market with respect to the profitability of carbonated soft drink.

Why is the soft drink industry so profitable?

First, this essay explains the reasons that the carbonated soft drink industry is so profitable and lucrative. In the carbonated soft drink industry, there are a few major players that produce...