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Cola Wars Essay

3401 words - 14 pages

Coca Cola Wars Case Analysis
July 31, 2010

Executive Summary

Coca-Cola was invented and marketed in 1886 by a pharmacist named Dr. John Pemberton he named Coca-Cola after the coca leaves and kola nuts he used in order to create the product. Twelve years later in 1898 Caleb Bradham created Pepsi Cola for the beneficial effects it claimed to have on upset stomachs and indigestion. The enmity between the two soda companies are known as the “Cola Wars”. The war began in the 1960’s when Coca-Cola’s supremacy ruled the market as the beverage of choice above Pepsi Cola. Due to the competition between the two rival cola companies actions became extreme and forced both companies to ...view middle of the document...

This strategy would in some way or another have a connection to the changing of social values of that particular period. Coca-Cola’s advertisement is always up to par by staying in touch with the new generation, era, and trends. While Coca-Cola slogans have always centered on the product, Pepsi's advertisement focused more on the users of the product and its demographic setting rather that the product itself like Coke. Pepsi foresaw the mass demand of the youthful generation for soft drinks, and changed the way they marketed their product. The marketing strategies began to take a broader scale as the soft drink industry continued to expand and become more multifaceted.
In 1976, Pepsi introduced the Pepsi Challenge in its campaign ads, which in turn directly challenged Coca-Cola's longstanding dominance (Wikipedia, 2011). The competition between the two soda companies became known as the Cola Wars (Wikipedia, 2011). During that time Coca-Cola's dominance was being increasingly challenged by Pepsi Cola. The competitive environment between the rivals was intense and well-publicized forcing both companies to continuously establish and implement strategic variations as a means to create a competitive advantage. In 1985, responding to the strain of the taste tests, in which Pepsi always out performed Coke, in retaliation to Pepsi’s victory Coke decided to change its formula which resulted in a shock wave across America (Wikipedia, 2011). Avid Coke fans disliked the new formula and demanded that the formula be changed back to its original recipe, which resulted in Classic Coke (Coca-Cola, 2011).
II. Business Strategy:
Muhtar Kent, Chairman and Chief Executive Officer of the Coca-Cola Company joined the Coca-Cola Company in Atlanta in 1978 and have held a variety of marketing and operation roles throughout his career (Coca-Cola, 2011). In 1985 Muhtar Kenth was appointed General Manager of Coca-Cola(Wikipedia, 2011). At this present time Coca-Cola employs 139,600 associates around the world that live and work in the markets that Coca-Cola serves, Coca-Cola is sold in over 200 countries, and with more than 3,500 products(Coca-Cola, 2010).
Indra Nooyi is Chairman and Chief Executive Officer of PepsiCo, In 2007 she became the fifth CEO in PepsiCo's 44-year history (Wikipedia, 2011).
III. Corporate Governance:
The Coca-Cola Company is committed to sound principles of corporate governance. The board is elected by the shareholders to oversee their interest in the long-term health and the overall success of the business and its financial strength (Coca-Cola, 2011). The board serves as the ultimate decision making body of the company, except for those matters reserved to or shared with the shareholders. The board selects and oversees the members of senior management, who are charged by the board with conducting the business of the company (Coca-Cola, 2011).
The Corporate Governance Guidelines, along with the charters of each of the...

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