Cola Wars Continue: Coke and Pepsi in 2010
Examines the industry structure and competitive strategy of Coca-Cola and Pepsi over 100 years of rivalry. The most intense battles of the cola wars were fought over the $74 billion CSD industry in the United States, where the average American consumes 46 gallons of CSD per year. In a "carefully waged competitive struggle," from 1975 to the mid-1990s, both Coke and Pepsi had achieved average annual growth of around 10%, as both U.S. and worldwide CSD consumption consistently rose. However, starting in the late 1990s, U.S. CSD consumption started to decline and new non-sparkling beverages become popular, threatening to alter the companies' brand, bottling, and pricing strategies. The case considers what has to be done for Coke and Pepsi to ensure sustainable growth and profitability. A rewritten version of an earlier case.