Post #1 – Hang Tran
In the early days, Coca-Cola believed that they could win Pepsi. Coke has known for the world most widely distribution. It advertised its image everywhere. The company shareholders-built luxury homes. There was a little cocaine in the Coke because the first distribution of Coke was in a drug store. Coke became the symbol of America and the most famous brand name in economic. During WW2, the troops were fighting to have a Coca-Cola when they go back home. It was an image of patriotic. Workers with Coca-Cola uniform would take out a loan easily because they were believed by bankers. Coco-Cola kept Pepsi out of Hong Kong for 3 years because they got spied from Pepsi.
Pepsi sold its drink with cheaper price. It diversified against Coke by processing fast foods. It passed the Pure Food and Drug Act, which you could not put dangerous substance in the soft drinks. They made this choice to advertise on public that Pepsi is safe to drink even children could drink. However, Pepsi was considered the worst advertisement in soft drinks because it targeted the wrong audience. There were no young people and old people drink Pepsi in a fancy restaurant. Later, a new campaign worked well for Pepsi which they focused on the baby boom generation. The ads were on young people and they said Pepsi was a drink of Pepsi generation. The message meant that if you like the people in the ad and feel that they are like you, you should drink Pepsi. Moreover, Pepsi got exclusive rights to participate in Russia for 20 years while Coke refused to participate.
5 forces analysis:
– Rivalry: high because both companies compete each other for price, customers, products
– Buyer Power: high because Pepsi and Coca-Cola can substitute each other. Both are carbonated drink and taste the same
– Supplier Power: moderate because both companies are targeting people with different message
– Entrants: low because both companies had reputation and well-known image
– Substitutes: high because 2 industries compete for the same product and targeting the young generation
I think the Pepsi won the Cold war because it was introducing a diet soda. A blind taste test told that Pepsi tasted better than Coca-Cola with cheaper price. And people preferred the taste of Pepsi. People admitted that Coke was not a real thing. Moreover, Pepsi was found to be the best deal for the city of San Diego which it created revenue for the city.
Post #2 – Lily Lind
In the early days, Coca-Cola treated Pepsi as their main competitor. At the beginning, Coke was not very threatened by Pepsi, for instance, Coke sold 6oz of their beverage for a nickel and Pepsi came out selling 12oz for a nickel. Coke was not worried and then Pepsi became known as the “drink for the poor people” so Coke gained the advantage as being a drink for the wealthy and upper class, it was a boost for Coke’s brand. Coke also continued to attack Pepsi after every move they made or try to beat them to it. When Coke heard that Pepsi was trying to move into China, they took drastic actions to make a deal before Pepsi’s went through and keep them out of the market in China. In Brazil, Coke also blocked Pepsi from selling through the supermarkets and caused Pepsi to lose a lot of money. Coke had an advantage of owning about 50% of the market while Pepsi only had about 7%. Coke continuously tried to drive Pepsi out of different countries and regions. Some disadvantages Coke faced from their competition with Pepsi was that they lost some market share since lower class people were buying Pepsi over Coke and they also ran into some legal trouble as Pepsi questioned some of their actions.
Pepsi, in the early days, treated Coca-Cola as their biggest competition as well. Pepsi had always compared itself to Coke since it was their main rival and they never gave up in their fight. Pepsi tried to target areas and gaps that Coke had missed and move in quickly in these markets. Pepsi started the “Pepsi Challenge” which was a blind taste test between Coke and Pepsi. The results from this challenge leaned in favor or Pepsi and started to take away more of Coke’s market share. Pepsi also had spies and people that would try to buy information off Coke employees so that they could try to learn about Coke’s projects and strategies.
5 Forces Analysis of the Industry:
Rivalry: High – Rivalry is high in this industry because there is a major competition between Coke and Pepsi for market share.
Buyer Power: High – Buyer power is high because there are more buyers than companies and buyers can easily play the companies off each other.
Supplier Power: Low – Supplier power is low because most of these companies make their products in-house.
Entrants: Moderate – New entrants is moderate because other companies could come in and try to take market share away, but they would also have a difficult time battling with Coke and Pepsi.
Substitutes: High – Substitutes is high because there are many different soft drinks in the market that people could choose to drink over Coke or Pepsi.
I think that Coca Cola won the “cola wars” because overall they seemed to be able to have control over most of the market throughout the years. Coke had a good strategy in place where they began to try and sell a concept (or their brand) rather than just their product itself. They were selling the “American dream” to people and wanted Coke to symbolize good times, family, etc. Coke demonstrated ideas from Simon Sinek’s Golden Circle concept, they made people believe in the “why” rather than the “what”. Coke also used categories of differentiation such as convenience and brand image. They made cokes extremely convenient so that almost anywhere you went you could get your hands on a coke. They also used many types of advertising and marketing strategies to promote their brand image. Pepsi definitely put up a solid fight and continues to battle with Coke, but overall, I still think that Coke has won the “cola wars”.
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