Two main companies, Pepsi and Coca Cola Company, have dominated the market for soft beverages. The products of these two companies are substitutesand compete for the same market. This prompted coke to develop and adopt strategies to counter attack competition that could oversee loss of business opportunities. It engaged in franchising business in the international and local market. This reduced the operation cost hence increasing profits. Pepsi on the other hand introduced and concentrated on retailing its product through retail outlets all over the world and in the United States market.
The cola wars begun way back in the year 1950: Pepsi attempted to outdo coca cola in the market by supplying their products through supermarkets. Their aim was to capture families as well as the young generation who formed the largest market for soft drinks. This triggered reaction from coke, which devised to offer discounts and cut the prices of its drinks. Suppliers became interested in supplying coke products because of the huge benefits and profit accrued to trading the products.
The health issues coming from the public forced these companies to change their approach in the production of drinks. Healthy drinks were introduced into the lists of products and menu hence creating new areas for disputes for the firms. Shift in consumption rendered the market unattractive because customers refrained from consuming unhealthy products such as the sugary and flavored drinks. Companies had to fight the negative perception that processed drinks cause health problems to the community. To clear the air, these institutions effortlessly contribute towards environment conservation initiatives and social corporate responsibility. The future for the two big companies is unknown.