Cola Wars
Stephen Brennan
Accounting II
Tue/Thur. 3-4:30
The Wall Street Journal recently did an article on how the soft-drink
battleground has now turned toward new overseas markets. While once the United
States, Australia, Japan, and Western Europe were the dominant soft-drink
markets, the growth has slowed down dramatically, but they are still important
markets for Coca-Cola and Pepsi. However, Eastern Europe, Mexico, China, Saudi
Arabia, and India have become the new "hot spots." Both Coca-Cola and Pepsi are
forming joint bottling ventures in these nations and in other areas where they
see growth potential. As we have seen, international marketing can be very
complex. Many issues have to be resolved before a company can even consider
entering uncharted foreign waters. This becomes very evident as one begins to
study the international cola wars. The domestic cola war between Coca-Cola and
Pepsi is still raging. However, the two soft-drink giants also recognize that
opportunities for growth in many of the mature markets have slowed. Both Coca-
Cola, which sold 10 billion cases of soft-drinks in 1992, and Pepsi now find
themselves asking, "Where will sales of the next 10 billion cases come from?"
The answer lies in the developing world, where income levels and appetites for
Western products are at an all time high.
Often, the company that gets into a foreign market first usually dominates that
country's market. Coke patriarch Robert Woodruff realized this 50 years ago and
unleashed a brilliant ploy to make Coke the early bird in many of the major
foreign markets. At the height of World War II, Woodruff proclaimed that
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