Cola wars
Date Submitted: 09/10/2006 03:50:57
Category: / History / European History
Length: 4 pages (997 words)
Category: / History / European History
Length: 4 pages (997 words)
1. Why is the soft drink industry so profitable?
The soft drink industry is worth $60 billion in the US and its major players Coca-Cola and PepsiCo both achieved an average annual growth of 10% between 1975 and 1995. While per capita consumption of soft drinks seems to have reached its limit in the US and Canada (only 2% annual growth between 1992 and 1999), emerging countries, such as Brazil (12% annual per capita consumption growth) and Philippines (9% annual per capita consumption growth), along …
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…controlled by outsiders.
Obviously, new owners of bottlers may probably deteriorate the well-established relationship between CP and bottlers, which explains why Coke purchased 2 bottlers in 1985.
* Fellow market players follow competitors in order to maintain their own competitiveness.
In the case of Pepsi and Cadbury Schweppes', Coke's control of bottlers highlighted defects of these two in the same regard. Without appropriate reaction, Pepsi and Cadbury Schweppes would inevitably fall behind Coke in the fierce CSD competition
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