The Cola Wars: Coca-Cola vs. Pepsi

The Cola Wars case raises the key question of what Coke and Pepsi must do to sustain their spectacular historical successes. Analyze the question.

Why historically has the soft drink industry been so profitable? Compare and Contrast the economics of the concentrate business to that of the bottling business. Why is the profitability so different? How has the fierce competition between Coke and Pepsi affected the industry’s profits and its own operational strategies? How can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-CSDs?