-
Essay / Cola War Case - 1270
During the 1980s, Coca-Cola and Pepsi-Cola launched a growing campaign of mutually targeted television advertisements, known as ColaWars. This summary is based on the findings regarding the following key aspects: the structure of the carbonated soft drinks industry, the assessment of the driving change factors in this industry and finally the analysis of the key strategic factors facing it. Value Chain Analysis Analysis of the Carbonated Non-Alcoholic Drink (CSD) industry shows that there are 2 important players, namely concentrate producers and bottlers. Focusing on the downstream of the supply chain, it is worth emphasizing that concentrate producers incur relatively low fixed costs with respect to production plant, personnel, equipment and R&D, as the concentrate is produced using a formula that is over 100 years old and a relatively inexpensive raw material. material (e.g. caffeine). The concentrate is shipped to bottlers who incur relatively high fixed costs for facilities, equipment and personnel and who add soda water and high fructose corn syrup to the concentrate, at bottle or can, package it and send it to the retailer concerned. Additionally, CDS has a significant stake in direct delivery of concentrates to various fountain accounts like McDonalds, Burger King, etc. Taking this costly bottling business into account, Coca Cola and Pepsi have founded their own bottling spin-offs which operate according to the rules of the art. called Anchor Bottler Model or are linked to the respective CSD company via master bottler contracts. In both cases, companies under this contract are not allowed to manage a direct competing brand, for example no possibility of bottling Pepsi and Cola at the same time. In 2000, Coca-Cola's bottling system was the most concentrated, with its top 10 bottlers producing 94% of the national volume, followed by Pepsi with 85% and Schweppes with 71% of their respective franchisees. Focusing on the upstream part of the supply chain, it must be said that bottlers must contribute to the marketing costs of soft drinks companies but on the other hand have the right to refuse to contribute to promotional activities, i.e. i.e. the requested marketing tests. Bottlers also play an important role in negotiating cooperative merchandising agreements with retailers, that is, retailers agree to specified promotional activities and discount levels in exchange for payment from the bottler. Bottlers therefore have the final say in decisions regarding retail prices, new packaging, advertising sales, etc. In 2000, the distribution of soft drinks in the United States was carried out in food stores (35%), in fountains (23%), in vending machines (14%), in convenience stores (9%) and in other points of sale. (20%).