Introduction:

Pepsi Cola is, just like Coca-Cola, a creation of an American pharmacist. In 1893, 5 years after the introduction of Coca-Cola, Caleb Bradham began to serve his customers Brads Drink from his own soda machine. Because of the positive reactions of his samplers he decided to begin advertising in 1898 and he named the drink Pepsi-Cola. He founded the Pepsi-Cola Company in 1902. Pepsi-Cola is a big success in the United States and the Pepsi-Cola Company decides to export the drink to Mexico in 1907, other countries would follow soon. The company invested in sugar and is declared bankrupt in 1923 due to the collapse of sugar prices. After a couple of reorganizations the PepsiCola Company is bought by Loft Inc. in 1931. Because of the popularity of Pepsi, Loft changes its name to Pepsi-Cola Company in 1941. Pepsi-Cola is referred to as the kitchen cola in the 1960s because its much cheaper than competing drinks. The company decides to focus their advertising strategy on the post-war baby boom generation. One of the new slogans is: Now its Pepsi, for those who think young. Diet Pepsi is introduced in 1964 for people who would like to live healthy. The PepsiCo Company was founded in 1965 by the president of the Pepsi-Cola Company and the chairman of Frito-Lay. It produces and sells not only soft drinks like Pepsi, 7Up, Mountain Dew, Miranda and Gatorade but also snacks like Lays, Doritos, Hamkas and Quaker cereals in 192 countries. Famous people like Michael Jackson, Lionel Richie, Tina Turner, Shaquille ONeal, the Spice Girls, David Beckham, Britney Spears and Cindy Crawford appeared in Pepsi commercials in the 1980s and 1990s to emphasize that Pepsi is the drink for the new generation SWOT ANALYSIS FOR PEPSI COLA SWOT stands for Strengths Weakness Opportunities Threats SWOT analysis is a technique much used in many general management as well as marketing scenarios. SWOT consists of examining the current activities of the organisation- its Strengths and Weakness- and then using this and external research data to set out the Opportunities and Threats that exist.

SWOT Analysis for Coca-Cola The following analysis deals only with strengths, opportunities, and threats. Strengths: Coca-Cola has been a complex part of American culture for over a century. The product's image is loaded with over-romanticizing, and this is an image many people have taken deeply to heart. The Coca-Cola image is displayed on T-shirts, hats, and collectible memorabilia. This extremely recognizable branding is one of Coca-Cola's greatest strengths. "Enjoyed more than 685 million times a day around the world Coca-Cola stands as a simple, yet powerful symbol of quality and enjoyment" (Allen, 1995). Additionally, according to Bettman, et. al, (1998) Coca-Cola's bottling system is one of their greatest strengths. It allows them to conduct business on a global scale while at the same time maintain a local approach. The bottling companies are locally owned and operated by independent business people who are authorized to sell products of the Coca-Cola Company. Because Coke does not have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers (Bettman, et. al, 1998). Weaknesses: Although domestic business as well as many international markets are thriving (volumes in Latin America were up 12%), Coca-Cola has recently reported some "declines in unit case volumes in Indonesia and Thailand due to reduced consumer purchasing power." According to an article in Fortune magazine, "In Japan, unit case sales fell 3% in the second quarter [of 1998]...scary because while Japan generates around 5% of worldwide volume, it contributes three times as much to profits. Latin America, Southeast Asia, and Japan account for about 35% of Coke's volume and none of these markets are performing to expectation (Mclean, 1998). Coca-Cola on the other side has effects on the teeth's which is an issue for health care. It also has got sugar by which continuous drinking of Coca-Cola may cause health problems. Being addicted to Coca-Cola also is a health problem, because drinking of Coca-Cola daily has an effect on your body after few years. Opportunities: Brand recognition is the significant factor affecting Coke's competitive position. Coca-Cola's brand name is known well throughout 94% of the world today. The primary concern over the past few years has been to get this name brand to be even better known. Packaging changes have also affected sales and industry positioning, but in general, the public has tended not to be affected by new products (Allen, 1995). Coca-Cola's bottling system also allows the company to take advantage of infinite growth opportunities around the world. This strategy gives Coke the opportunity to service a large geographic, diverse, area (Bettman, et. al, 1998). Threats:

Currently, the threat of new viable competitors in the carbonated soft drink industry is not very substantial. The threat of substitutes, however, is a very real threat. The soft drink industry is very strong, but consumers are not necessarily married to it. Possible substitutes that continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot chocolate ("Cola Wars", 1991). Even though CocaCola and Pepsi control nearly 40% of the entire beverage market, the changing healthconsciousness of the market could have a serious affect. Of course, both Coke and Pepsi have already diversified into these markets, allowing them to have further significant market shares and offset any losses incurred due to fluctuations in the market ("Cola Wars", 1991). Consumer buying power also represents a key threat in the industry. The rivalry between Pepsi and Coke has produce a very slow moving industry in which management must continuously respond to the changing attitudes and demands of their consumers or face losing market share to the competition. Furthermore, consumers can easily switch to other beverages with little cost or consequence ("Cola Wars", 1991).