The consumption of Pepsi and Coke increased 3% per year from 1970 to 2000. The growth was due to many factors but the main reason was the introduction of diet and other flavors. The growing economy and pricing strategies.
b. Update the profitability....what has happened to Coke and Pepsi since 2006? Use evidence from their annual reports dated 2012. (10 points)
Coke and Pepsi has continued to see growth over all. Coke has increased their market share over Pepsi in the beverage market. Coke is only in the beverage business while Pepsi is also in the snack food business (Lays chips). (pepsico, 2012)
The increase in the Coca Cola international market was 51% for 2012 which has offset the decrease to 41% for 2012 in the domestic markets. They have also sold the norweigen division. Coca cola purchased Dr. Pepper Snapple and bottling companies so they can have more control over their products. (Coca Cola, 2012)
Pepsi Co receives 52% of its revenue from the beverage division the other 48% comes from their food division. (Pepsico, 2012)
c. Coke and Pepsi have been the dominant players in this market. Today, what market share does each one have? Globally, and in the US.
d. Is this industry an oligopoly?
Yes the beverage industry is an oligopoly. The industry is dominated by Coca Cola and Pepsi based on the information above.
e.What are the concerns about high-fructose corn syrup and has it affected the industry? WIll it affect the profits of Coke and Pepsi?
Consumers tastes and priordies have changed over the last 30 years. I like most consumers have become more health conscience. Pepsi CEO Indra Nooya has taken a healthful approach and has developed a strategy of healthy snacks and drinks. (PepsiCo, 2012)
I am sure both companies will develop strategies to offer healthy alternatives and change ingredients in current product to meet the need of the consumers.
e. What Kentucky companies make flavorings, colorings, or additives used in producing carbonated beverages? Note this question is not about bottling companies. Provide a description of the company and what they make. Who do they market to?
Ddw, Inc (Manta.com, 2012)
• Colors and confectionaries
• Sales to Soft drink industry
Wynn Starr Foods of