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Essay / Research Paper Abstract
This 16 page paper looks at a case study supplied by the student, using it to assess the cola industry and the positions of Coca-Cola and Pepsi. The paper includes a consideration of why the soft drink industry, including carbonated soft drinks, has been so profitable. The paper then compares the economics impacting on the profitability of the concentrate manufacturers and the bottlers. The impact of competition on profitability is then discussed and the paper ends by looking at how the cola firms may survive in an environment where there is a declining demand for carbonated soft drinks. The bibliography cites 7 sources.
Page Count:
16 pages (~225 words per page)
File: TS14_TEcolawar11.doc
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Unformatted sample text from the term paper:
Where There Is a Stagnating Demand 15 References 17 1. Executive Summary Coca-Cola and Pepsi dominate not only the cola industry, but the soft
drinks industry in both the United States and global markets. They are operating in an industry which has been traditionally highly profitable, with large organizations able to benefit from economies
of scale and leverage their market power in a way that products are sold and distribution. In addition to this both companies have been able to develop a significant core
competence in aggressive marketing, and no decisions have been supported by product expansion strategies utilizing brand extensions as well as a market penetration strategy, achieved through increasing the range of
different packaging options available, to satisfy individual beverage drinkers, those who want convenience as well as the take-home market. However, there has been a disparity between the profit levels for
the bottlers and the concentrate providers, with the concentrate suppliers having superior profits and greater control over the supply contract. The bottlers have suffered from higher capital set up costs
and higher operating costs. Today, in an increasingly competitive market, the companies have had to continue to advertise, a move which is help to increase the overall market size, which
has had significant costs. But as consumer tastes change and market demand shift aggressive marketing for core products alone will not be sufficient to save the companies from a downturn
in revenues and profits. Concerns over health and increasing choices seen markets for products such as water, energy drinks and produces increase, while the carbonated soft drinks market remains flat.
Therefore, both companies have already started, must continue, a strategy of related diversification where they are able to utilize existing resources and offer these alternatives of drinks. 2. Introduction Coca-Cola
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