Instead, the Cola Wars helped the industry grow. In 2000, for example, 41% of total non-alcoholic beverages sold were CSDs. In the late 1990s and into the 21st century, the drinks with high growth (and media hype) were non-carbonated juices, sports drinks, tea drinks, dairy drinks, and bottled water. Pepsi dominated this market with Gatorade, Lipton and Aquafina. The bottlers were also required to reinvest in more complex equipment to keep up with the market, since they were poised for CSDs which were growing at a far slower pace. Labor costs, equipment costs, and higher retail prices also changed the landscape (Yoffie, 13). Pepsi was more innovative in flavor, acquisition, and most particularly, remarketing its product to a newer generation of consumers (energy drinks, combo drinks, etc.).
Building on SWOT
In July 2006, Coke built a website called "The Coke Show," attempting to get people to build their own profile (mycokerewards.com). This was the first time the company used precision marketing -- collecting data and then giving particular content they've either asked for or visited -- provable by lifting pack size by 15 points over the average customer. This, combined with other sites like designtheworldincoke.com, catches the market in events like the Olympic games, etc. -- the lean and mean Coke marketing machine can now react and interact with the touch of a button -- no month or quarter long tests and print processes -- a simple change and focus (Barone, 2008).
Thus, for Coca-Cola, the Internet has offered several marketing solutions -- enhanced visibility and credibility, providing consumers with an experience they not only desire but become habituated towards, accelerate brand community and finally, provide greater fiscal and measurable efficiency in their marketing model.
Comments on Strategic Vision
Like many other mega brands, Coke has a tradition based on years of being the market leader. Decades of executives have been trained in that culture -- the Coke way, and know nothing else. While not as drastic, this is slightly reminiscent of the late 1980s and early 1990s and the mega giant Ogilvy and Mather. Briefly, O&M were resting on 40 years of tradition and awards. Ultimately the Board appointed Charlotte Beers, who, with no timer to spree, had to develop an integrated company culture based on the future customer, not the past customer. Beers was an outside, not part of the culture, giving her the advantage in seeing paradigm after paradigm shatter while, at the same time, like Coke, managing a successful brand (Sackley, 1985).
Pepsi owns, KFC, Pizza Hut, and Taco Bell, as well as Wilson Sporting Goods. This diversification, merger with Frito-Lay, acquiring Tropicana and Quaker Oaks, etc. allows for a regular cash flow (e.g. each of Pepsi's 19 product lines generated retail sales of more than $1 billion each). The battle continues, and in December 2005, Pepsi finally surpassed Coke in sheer market value; a figure that flows back and forth fairly regularly (Pepsico.com, 2012). Coke is not in a position to catch up, they are in a position in which they must redefine themselves strategically and get rolling tactically.
Global Consumption of Soft Drinks Rising 5% Globally. (December 12, 2003).