Coca Cola Strengths
Global Operations
The Coca-Cola Company is the world’s largest marketer, producer, and distributor of
Coca-Cola products. It generates 1.5 billion consumer servings per day, and 7 billion
dollars a year in revenue. 70-80% of the total revenues come from countries outside the
United States. The company sells its product in approximately 200 countries, thus making
it the leader in the non-alcoholic beverage market. In these countries, Coca Cola offers
more than 2,800 products in diet sparkling beverages; regular sparkling beverages; and
still beverages such as 100 percent fruit juices, water, and coffees. It operates on a very
large global scale, producing 1.5 billion consumer servings per day thus allowing it to
obtain the majority of its revenues from outside the United States.
Recipe
The original Coca-Cola recipe is the basis for all new Coca Cola products such as
Coke with Lime, Vanilla Coke, Cherry Coke, etc. The unique recipe makes coke such a
strong competitor because it is unduplicated, and customers must specifically buy CocaCola for the distinct taste. This decreases the threat of competition stemming from
imitation products. The full recipe has never been released to the public, but it has been
established that the beverage contains sugar, caramel coloring, vanilla, coca leaf, and
phosphoric acid. The recipe consistency with great taste over the decades has increased
consumers’ brand loyalty to the Coca Cola brand.
Brand Loyalty
Coca Cola and its products have existed for decades. Being the one of the first of
many companies in the sparkling beverage industry, Coke has been around since 1886.
Generations after generations have grown up with Coke as the icon of the period. Coke
has established itself as a dominant business in the sparkling beverage industry, and has
stayed constant in its customer satisfaction. Its brand name is a guarantee that the
customer will get what he expects. This is due to a combination of brand preference and
taste consistency. Consumers constantly prefer the Coca Cola taste over many of the
company’s competitors. It is a unique, original taste with a recipe that can not fully be
broken down by the public. Each year its revenues from sales to customers are increasing.
From 2007 to 2008, revenues increased from $28,857 million to $31,944 million. Brand
loyalty continues to play a large part in increasing revenues.
Coca Cola Weaknesses
Sluggish Performance in North America
North America is one The Coca-Cola Company’s core market (after Lain
America). It made about 25% of their market in the 2007 fiscal year. The 2007 unit case
volume decreased 1% due to the decline in the food service and hospitality division in
North America (Datamonitor). In Coca-Cola’s 2008 annual report North America had a
growth of only 1% between 2007 and 2008 fiscal year. America market could impact any
future growth prospects and prevent t from maintaining the growth it once had.
(Graph if from The Coca Cola Company's 2008 Annual Report)
Starbucks SWOT
Strengths
Weaknesses
Strong brand image
Declining profits in 2008
Wide geographic presence
High reliance on the US Market
Opportunities
Threats
Closure of underperforming in the US
Stores Rising labor wages
Possible acquisition of The Coffee
Economic slowdown in the US and UK
Investment in new stores
Increasing online sales
Strengths
Strong brand image
Starbucks is a global brand because of their High quality products and positive consumer
experience. Starbucks was ranked 85th in 100 Top Brands 2008 ranking of Business Week. The
Business Week valued the Starbucks brand at $3,099 million in 2006 and $3,879 million in 2007,
an increase of 7% (Datamonitor).
Wide geographic presence
Starbucks has large scale of operations in the US and international (non-US) markets.
The company operates 7,087 company operated stores and 4,081 licensed stores spread across
the US . The company operates in 43 countries outside the US with 1,796 stores, including
company-operated, in Australia, Canada, Chile, China, Germany, Ireland, Puerto Rico,
Singapore, Thailand and the United Kingdom .Also, there are 2,792 joint venture and licensed
stores in Austria , Bahamas , Bahrain , Brazil , Canada, China, Cyprus, Czech Republic,
Denmark, Egypt, France, Greece, Hong Kong, Indonesia, Ireland , Japan , Jordan , Kuwait ,
Lebanon , Macau S.A.R., Malaysia , Mexico , the Netherlands, New Zealand , Oman, Peru,
Philippines, Qatar, Romania, Russia, Saudi Arabia, South Korea, Spain ,Switzerland , Taiwan ,
Turkey , UAE and the UK. Wide geographic presence provides access to new markets and
reduces the company’s business risks (Datamonitor).
Weaknesses
High reliance on the US
Starbucks’ financial performance is highly dependent on its US . 78% of the company’s total
revenues in 2007 can from the US market. In 2008 79% of total retail revenues came from the US
market. Any change in profits could have an adverse effect on the company. Declining profits in
2008 Starbucks, net profits declined from $158.3 million in 2007 to a net loss of $6.7 million in
2008.The decline in profits could limit the company’s investments and future growth opportunities
(Datamonitor).
Opportunities
Closure of underperforming stores
Starbucks planned to close some of its store operations in the US as part of its transformation
Strategy. The company decided to close approximately 600 underperforming stores in the US
market.. These stores are identified as unprofitable at the store level and are also not projected to
provide acceptable returns in the foreseeable future. Store closures would strengthen the US
store portfolio and enable Starbucks to focus on enhancing their customer service (Datamonitor).
Possible acquisition of The Coffee Equipment Company
Starbucks entered an agreement to acquire The Coffee Equipment Company and its proprietary
Clover brewing system in March 2008. The deal would help Starbucks to become the exclusive
provider of the revolutionary Clover brewing system. Some of the Starbucks stores in Seattle and
Boston are currently using Clover brewing systems and through this agreement Starbucks would
further accelerate the rollout of the machines in selected US and international markets. The
acquisition would provide Starbucks an opportunity to expand its customer traffic and accelerate
its revenue growth (Datamonitor).
Investment in new stores
Starbucks plans to open significantly new stores in the US during 2009-11. The company plans to
Open approximately 250 company-operated stores in each of the three years. Also, the company
Plans to continue to accelerate its international unit expansion by new store openings which
include:
Approximately 1,050 in 2009; 1,150 in 2010; and 1,300 in 2011. The company's international
store would grow from approximately 30% to over 40% of the global store portfolio. The new store
openings would help the company to expand its geographic presence (Datamonitor).
Increasing online sales
Increasing online sales online retail spending is increasing extensively. Retail e-commerce
revenue is expected to record $146 billion in 2008, an increase of 14.3% over 2007. Further, from
2007-2012, sales are expected to increase at an 11.3% average annual growth rate.
StarbucksStore.com offers the lineup of Starbucks whole bean and ground coffees, including
seasonal, promotional and the very special Starbucks Black Apron Exclusives coffees. Through
an easy-to-shop and efficient website, StarbucksStore.com offers premium coffee with affordable
delivery. Increasing online retail spending in the US would boost revenues of the company
(Datamonitor).
Threats
Rising labor wages in the US
The increase in minimum wages and a higher proportion of full-time employees are resulting
in
an increase in labor costs. The minimum wage for the US increased from $5.15 (1997) to $5.85
(July 2007). The federal minimum wage rate is further expected to rise to $6.55(July 2008) to
$7.25 (July 2009) (Datamonitor).
Economic slowdown in the US and UK
The US and Europe are the two key markets for the company. The US market is estimated to
decline from 2.02% in 2007 to 0.05% in 2009 in growth. Against the background of recent
financial crisis, very weak housing market indicators and consumer sentiments. The growth in the
UK is also expected to fall from 3.0% in 2007 to 1% in 2008. Economic crisis in the US and UK
impact the performance of the company (Datamonitor
Nestle SWOT
Strengths
Low Cost Operators
Sales
Weaknesses
Exports
Supply Chain
Opportunities
Expansion
Product Offerings
Threats
Competition
Lack of Brand Loyalty
Strengths:
Low Cost Operators
By operating at low costs, Nestlé is able to beat the competition by producing low cost
products. As a result, the company does not have to charge as much for the products,
prompting customers to purchase Nestle Products over higher priced ones. Low operating
costs allow Nestle to edge ahead of their competition and retain higher profits.
Sales
The Nestlé Company is one of the world’s largest food and beverage based companies
in terms of sales. The company’s plethora of products include beverages; milk based
products, nutrition and ice cream; prepared dishes and cooking aids; pet care, and
pharmaceutical products. The company recorded revenues of approximately $89,724.2
million during the fiscal year ended December 2007, an increase of 9.2% over FY2006.
The main cause of the growth in revenues was strong performance of the food, beverages
and nutrition business. The operating profit of the company was approximately $12,533.6
million during FY2007, an increase of 12.9% over FY2006. The net profit for the Nestlé
Company was approximately $9,495.3 million in FY07, an increase of 15.6% over
FY2006.
Weaknesses:
Exports
The Nestlé Company‘s export rate is growing at a decent pace. However, a major
portion of export revenues is comprised of Coffee sales. This is because approximately
67% of Nestlé’s exports were that of Nescafe instant coffee to Russia. As a result, the
main chunk of total exports is in a single location. This is a weakness for two reasons.
First, Nestlé is focused in one main area and is not exporting to as many areas as it could
be. Second, Russia has historically been a volatile market for Nestlé, and Nestlé’s overall
performance often takes a hit due to this factor.
Opportunities:
Expansion
The Nestlé Company has opportunities and potential to expand to smaller towns and
other areas. Only 33% of the company’s exports are to areas other than Russia. Other
existing markets are not fully tapped into and as a result, the company can increase their
global presence by further penetrating those markets.
Product Offerings
Nestlé has many products other than beverages that enable the company to reach a
wider consumer base. It has the opportunity to expand its product portfolio by
incorporating more products such as breakfast cereals, energy drinks, sparkling
beverages, and food products that are not based on milk.
Threats:
Competition
Nestlé is a food and beverage based company. As a result it faces competition from
companies that specialize in each. Major competitors such as Coca-Cola are able to
perform better in terms of beverage sales because beverages are Coca Cola’s main focus.
Other major competitors such as the Yoplait division of the General Mills Company are
able to perform better because they have established a more powerful leadership position
in the food market. Nestle has to compete on both the food side and the beverage side
while maintaining a strong position in both markets.
Lack of Brand Loyalty
With many different types of food, consumers do not always have brand loyalty. In
other words, various situations or conditions such as price, location, or similarity in taste
can cause consumers to easily change from one brand to another. This is specifically true
for Nestlé’s chocolate brands. Brand loyalty does not exist in the chocolate market and
consumers frequently change their brand of choice. This threatens the nestle company
because chocolate is one of Nestlé’s main sources of revenue, and if consumers begin
buying less of Nestlé’s chocolate and more of other brands, then Nestlé will lose a great
deal of revenue.
Dr. Pepper SWOT
Strengths
Weaknesses
Distribution and Bottling System
Key US Soft Drinks Player
Financial Backing
Health and Wellness of Consumers
Opportunities
Tea and Apple Juice Market
Distribution for Third Parties
· International Presence Constraints
Threats
Dependence on few larger retailers for sales
Strengths:

Distribution and Bottling System
The Dr Pepper Snapple Group has the largest independent distribution network in the
US. In 2006 the company launched its own bottling and distribution network, after it had
attained full ownership of Dr Pepper/Seven Up Bottling Group, which is the largest
independent bottling company that can be found in the U.S. Along with such a move the
company also purchased several other major independent bottling businesses such as AllAmerican Bottling Co., 7UP Bottling Co. of San Francisco, and Southeast-Atlantic
Beverage Corp. With these newly acquired bottling companies, DPSG now has control of
nearly 50% of its overall volume. The newly acquired bottling system allows DPSG to
better distribute specific brands that have been previously dependent on Coca-Cola
affiliated and PepsiCo affiliated bottler systems, who have had a large control of DPSG
distribution and have not distributed DPSG brands such as 7UP, Sunkist, A&W and
Snapple as much as DPSG would like. DSPG has been able to reduce their reliance on
Coca-Cola Enterprises and Pepsi Bottling Group for securing their own access to the
market by distributing their products on their own. 2008, their Bottling Group division
had total sales of roughly $3.1 billion.

Key US Soft Drinks Player
Dr. Pepper is the oldest major soft drink brand in America. In 1885 Dr. Pepper was
created as the first soft drink ever to be produced. With over 120 years in the industry
they have had a substantial amount of time to secure their place in the market where they
have expanded and innovated a diverse portfolio. DPSG has 19.7% share of the United
States carbonated soft drink market segment of the total industries retail sales (2008).
DPSG currently has over 50 brands a portfolio that includes Snapple, Dr Pepper, 7UP,
A&W Root Beer, Sunkist soda, Canada Dry, Hawaiian Punch, Schweppes, RC Cola, Diet
Rite, Slush Puppie frozen drinks, Mott's Apple Juice, Clamato, Mr & Mrs T, Holland
House mixers, Rose's, Mistic, Yoo-Hoo, Orangina, IBC, Stewart's, Nantucket Nectars
and a number of other brands. Dr Pepper, is the #2 flavored carbonated soft drink in the
United States (The Nielsen Company). Over 75% of the company’s overall volume is
from brands that are either crowned #1 or #2 in their flavor categories. Mott’s #1 apple
juice and #1 apple sauce brand in the United States.
Weaknesses:

Financial Backing
DPSG left Cadbury Schweppes Group in 2008, this move left DPSG’s with a much
smaller financial backing. Having less financial backing puts DPSG at a disadvantage
when it comes to expanding in new directions. Developing and launching new products is
a very risky and expensive task. Many of its competitors that do have a large financial
backing may be able to better respond to changes in consumer preferences.

Health and Wellness of Consumers-
The United States consumer base is becoming more concerned about health and
wellness. This has increased the demand for non-carbonated drinks that are low calorie
soft drinks. DSPG does have non-carbonated drinks items, but are particular weak in
areas such as sports drinks category. Sales will suffer if DPSG does not adapt to
consumer preferences and expand their non-carbonated drink portfolio.

International Presence Constraints
Is restricted in terms of international expansion. DSPG revenue is very heavenly
relied on America. DPSG also does business with Canada and Mexico but does not do
business outside of North America unlike most of its major competitors. DSPG had 89%
of net sales in 2008 came from the U.S, 4% came from Canada and 7% came from
Mexico and the Caribbean. The abroad segment participates mainly in the carbonated
mineral water, flavored carbonated soft drinks, bottled water and vegetable juice
categories.
Opportunities:

Tea and Apple Juice Market
Company has the ability to benefit from making money from their drinks that are
more health concise. Like Snapple and Mott’s, which are both top leaders in their
categories. Where many of DPSG competitors have not been as successful at producing
similar products, DSPG has an opportunity to stretch their lead and attempt to push other
companies out of the market.

Distribution for Third Parties-
DPSG positioned themselves as one of the leading independent distributors and can
make large amounts from distributing third party brands. Especially in new categories
that can benefit from DSPG strong bottling network. DSPG will be able to provide strong
distributing services while those third party brands while providing DSPG with exposure
to growing segments of the market that have relatively low risk and capital investment.
Threats:

Dependence on few larger retailers for sales
A number of food and beverage retailers found in U.S have been consolidating and
becoming larger. As these companies are becoming larger they are increasing their
buying power. By increasing their buying power they have been able to buy large
quantities at lower prices, resisting DPSG’s price increases. These companies also have
leverage on DPSG that requires DPSG to successfully offer suitable marketing, products,
pricing and services to these retailers. In fact these very same companies often offer their
own private label products that compete with DPSG brands. Specific companies such as
Wal-Mart Stores, Inc., represent roughly 11% of DPSG net sales (2008). DPSG product
availability and sales could suffer if retailers become more and more powerful.
Pepsi SWOT
Strengths
Acquisition of Frito Lay and Quaker Oats
Partnership with Starbucks
Focused Distribution Channel
Weaknesses
Sparkling products inability to expand
Dependant on other companies
Focused Distribution Channel
Under Developed Promotional Efforts
Opportunities
Expanded Distribution channel
Target of growing Hispanic population
Acquisition of more health based snack and beverage Companies
Threats
Slow growth of sparkling products
Changing Perception of audience
High Priced Oil
Strengths: Acquisition of Frito Lay and Quaker Oats
When Pepsi Co. bought both snack companies , Frito Lay and Quaker Oats, the
company became one of the leading snack distributor in the world. In the United States,
Pepsi holds 38% market share of the U.S. total savory snack market due mainly to
Quaker Oats. This market includes various products such as rice cakes, crackers, bagels,
trail mixes, dips, nuts, and pretzels. Frito Lay is the number one producer of chip
products such as Doritos, Ruffles, Fritos Corn Chips, and Cheetos. These major
acquisitions build for a wide product base for Pepsi that targets a wide audience around
the world.
Partnership with Starbucks:
Pepsi’s partnership with Starbucks gives a reinforced dominance in the bottled
coffee market. Starbucks also builds Pepsi’s bargaining power as well as diverse product
base.
Focused Distribution Channel:
Pepsi Co. sells three products through the same distribution channel. For example,
combining the production capabilities of Pepsi, Gatorade and Tropicana is a big
opportunity to reduce costs, improve efficiency and smooth out the impact of seasonal
fluctuations in demand for particular product.
Weaknesses: Sparkling products inability to expand
Pepsi’s stock of various beverage, is limited. It seem to sole base on the original
Pepsi product in various flavors. A brainstorm of other beverage products to venture into
would be beneficial in expansion of their empire. This inability of venture is due to lack
of product out reach to audience.
Dependant on other companies:
A focused dependency on other product ventures is beneficial but should not be
your only source of revenue. Pepsi has bought Frito Lay, the number one chip distributor
today. Also, Pepsi owns Quaker and has a partnership with Starbucks, making them the
number one bottled coffee distributor. If something happens to any of these companies
this could very well mean the downfall of Pepsi.
Focused Distribution Channel:
Pepsi distribution channels are focused in geography and customers, which could
cause a problem. Pepsi Co is concentrated in the U.S., Canada, and Mexico increasing
vulnerability to country based factors such as labor strikes, changes in economic
conditions and more competition from other local players in those markets. The company
obtained 69.5% of its total revenue from U.S., Canada, and Mexico. High Dependency on
a few customers reduces the bargaining power of the company, in addition, resulting in
large customers using their bargaining power to apply incoherent terms on the company.
Under developed promotional efforts:
Pepsi’s main promotional efforts are geared to music and you tube. This says
there audience appeal is 15-35. I believe these efforts could be expanded to appeal to a
wider range of audience appeal.
Opportunities: Expanded Distribution Channel
Pepsi Co should expand their distribution channel to other market areas globally
besides U.S., Canada, and Mexico. This could be most efficiently executed by
capitalizing on the potential breakthrough products of Aquafina. The U.S. bottle water
market is projected to have a volume of 46.6 billion liters by the year 2011. Since
Aquafina is the leading seller of bottled water in the U.S., why not focus this potential
product to a broader health oriented audience such as people in Romania or New
Zealand.
Target of Growing Hispanic Population:
Markets to a growing Hispanic population in the U.S. show great potential for
increase in revenue. Hispanics have a projected purchasing power exceeding $1 trillion
by the year 2010. This should call for an action of capitalizing on the range of snack
products they have focused towards the U.S. Hispanic population such as Sabritas
Adobadas, tomato and chili potato chips. By increasing their marketing they will be able
to raise their revenue as well as target market.
Acquisition of more health based snack and beverage companies:
In the previous years of 2006- 2008 Pepsi Co has bought many new potential
snack and beverage companies such as Star Foods, a snack food manufacturer and
distributor in Romania, Stacy Pita Chip Company an all natural snack company, IZZE
Beverage Company, maker of all natural sparkling fruit juices, and Blue Bird Foods a
New Zealand based snack maker. In addition to the partnership of Pepsi with Unilever in
2007 to market and distribute ready to drink tea products under the Lipton brand. So in
making such acquisitions such as the 2008 buying of Penelepa, a nuts and seeds producer
in Bulgaria, Pepsi Co. will increase revenue, growth, and global presence among its
competitiors.
Threats: Slow Growth in Sparkling products
The consumption of carbonated and other sweetened beverages has decreased
dramatically. In 2006, the U.S. carbonated soft drinks generated total revenues of $63.7
billion representing a negative compound annual growth rate of 0.1% for the 2002-2006
five year period. The future performance is predicted to take a plummit of 0.5%
compound annual growth rate for the 2006-2011 five year period resulting in an ending
market value of $62.1 billion.
Changing Perception of Audience:
Consumers in the U.S. are becoming more health conscious. People are moving
away from eating and drinking products that are very high in sugar and fructose corn
syrup. This turn in taste and preference will not only subject to decrease in total revenue
but also increase competition from other competitors in the carbonated drink industry
such as Coca Cola, who are seen as a current substitute.
High Priced Oil:
Fuel prices continue to be victom issues such as political unrest in various parts of
the world. This high priced oil directly increased the cost of Pepsi’s shipping and
handling from $4.1 billion in 2005 to $5.1 billion in 2007.
Coca Cola Opportunities
Advertising and Promotional Endeavors:
There are certain potential new areas of advertisement that would if not open a
new audience to their product reinforce the audience they already have. For example,
focusing commercials toward ipods sponsored by Coca Cola would expand and reinforce
the teen young adult audience between the ages of 15-35. Also, promotional efforts that
would acknowledge the health benefits to their products to an older audience of 35-50 it
is predicted that it would change the taste and preferences of a health oriented older
audience, setting a chain reaction of increased younger audience fan base due to the
relationship between parent wanting their child to drink Coke products.
Environment connection to Audience:
Coca Cola is a company that has focused to make a difference in water quality,
sustainable packaging, and energy management and climate protection. For example,
Coca Cola has invested $60 million in building the world’s largest plastic bottle to bottle
recycling plant. In addition, to developing an energy management system that produces a
35% energy save. Coca Cola’ s community service are advertised but not what they do
for the environment. Notification of these efforts to their audience would increase Coca
Cola audience outlook locally and globally. This would result in increased revenues from
an environmentalist audience.
New Field Product ventures:
Competing companies have bonded their business with coffee, tea, water, milk,
all natural juices, and various health based snacks. A new product avenue that Coca Cola
should spear head is Yogurt products. Research shows that yogurt contains good bacteria
or probiotics that result in better bodily functions such as digestion and effectiveness of
the immune system. In addition, to getting a 9 gram per 6 oz serving of animal protein
being yogurt comes from milk. Coca Cola should figure out a way to make yogurt
popular and distribute by partnering or buying Dannon Co. or Yoplait, two leading yogurt
producers and distributors.
Acquisition of small local companies:
The Coca Cola Company has made many acquisitions of various beverage
companies all over the world. For example, the 2008 $2.4 billion purchase of China
Huiyuan Juice, a Hong Kong listed company with operations throughout China. In
addition, to acquiring Energy Brands Inc., Fuze beverage company, Leao Junior, a
Brazilian herbal beverage company. Due to other acquisitions in Australia, South Africa,
and Germany in 2006, Coca Cola has and will further establish their global presence and
market share amongst these newly acquired consumers.
Coca Cola Threats

Global and U.S Economy
Coca Cola earns a large portion of its revenue abroad. In fact 75% of the net
revenue is earned out side of the United States (2008). As the economy worsens Coca
Cola will likely see a decrease in its net sales abroad. Along with the worsening
economic situation abroad, unstable political conditions in developing countries could
also have an affect on decreasing Coca Cola’s total revenues.
In North America, revenue is down for the year in comparison to the past. In
grocery stores, people are buying powdered drinks that are more economical. For
example cool-aid mix and other juice mixes. When families are going to restaurants they
are cutting back on purchasing Soda and Coke products in order to save money, many of
these families are asking for cheaper things such as water. Also Oil and corn play a heavy
role for coke bottlers and the prices of these two products have been fluctuating heavenly
in this economy and have been a heavy burden on the Coca Cola bottling companies.

Health Concerns
In America there is a new generation of people who are growing up and don’t
drink soda. Their parents are keeping them from drinking soda because of the negative
connotation with it. People are beginning to cut back from taking in high fructose corn
syrup and excess sugar because of their concern of being more health conscious. Even
public health officials and the U.S government are encouraging consumers to cut back on
soft drink consumption. Possible new taxes and other governmental regulations, may be
implemented that will reduce the availability of Coca Cola products especially in public
schools vending machines and cafeterias.
The US carbonated soft drinks market generated total revenues of $63.9 billion in
2005, this is a compound annual growth rate (CAGR) of 0.2% for the preceding 5 years
(2001-2005). The CAGR is predicted to slow down as time goes on because Americans
are predicted to consume less carbonated soft drinks. In fact in 2007, the US carbonated
soft drinks market generated less total revenues of $63.5 billion in comparison to 2005.
By 2010 the expected market value is estimated to be $62.9 billion (CAGR, -0.2%, 20032007)
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
Reliance on Bottling Partners
A very large portion of operating revenues is made by selling concentrates and
syrups to Coca Cola bottling partners. These bottling partners are not controlled by Coca
Cola, which allow them a great deal of control in deciding how to distribute Coca Cola
products. In 2008, 78% of Coke products throughout the world were distributed by
bottling partners. These bottling companies make their own business decisions that may
not always be aligned with those interests of Coca Cola Company. These same
companies have the right to distribute their own products or products of other drink
companies. They have the ability to make decisions that could be detrimental to Coca
Cola while be conducive to their own products or other drink clients. Coca Cola must
provide low pricing and marketing support to these bottling companies in order to
maintain a cooperative relationship.
 Legal Actions
On April 6 2008, PepsiCo sued Coca Cola for false advertising. PepsiCo said that the
ads for PowerAde Ion4 were false, and PowerAde Ion4 is not a "complete" sports drink
as the commercial claimed. PepsiCo pointed out that Coca Cola PowerAde Ion4 is
missing two electrolytes called magnesium and calcium. Pepsi and Coke have regularly
challenged each other in court. About two years ago in 2006, Pepsi sued Coke over its
television ads for PowerAde Option. This case was settled outside of court. Also in 2007,
a federal judge dismissed a Coke lawsuit that charged PepsiCo with patent infringement.
PepsiCo was being sued for using a patented collapsible bag that was used for dispensing
syrup for fountain drinks. In the sports drink market, Gatorade dominates with a 77.2%,
where PowerAde share of the category's volume was 21.7% last year. The sports drink
category was worth approximately $7.6 billion in 2008.
Feed Back Dexter Harris: