How can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-CSDs

                 Due to the well-being environment which strongly believe the healthy food, carbonated soft drink consumption is now decreasing. Coca-Cola, once occupied the U.S. soft drink market about 30% now hold 17% of market shares and Pepsi-Cola, once 17%, now they only hold 9.9% of market shares.[1] So, both Coke and Pepsi should correspond to this situation. And the answer will be diversifying their items from original-coke to non-CSDs like Minute Maid in Coke and Diet Mountain Dew in Pepsi.

                  For Coca-Cola Company, this situation will be challenging because not only concentrated on their original coke, but also they have to follow changing environment. And for the coke-zealot, Coca-Cola Company`s change can be seen as a betrayal for themselves. So, harmonize between historical-carbonated soft drink market and non-CSDs market is important for the Coca-Cola Company. And this equilibrium question can be solved through making the Coca-Cola Company`s subsidiary which concentrates on non-CSDs market. From now, they already integrated the bottlers and so they can easily enter the non-CSDs market with the greenfield strategy. Through this subsidiary strategy, they can both protect the original Coca-Cola brand and participate in the non-CSDs market with efficient manufacturing cycle.

                  For Pepsi-Cola Company, they already declared themselves to be a total beverage company. And compared to the Coca-Cola Company, they have lower Pepsi-zealots who have a high loyalty to their brand. But their brand is well known not just in the U.S. but the whole world. The best way to follow the changing situation is diversify their items in line with their pepsi. The reason why they don`t make the subsidiary is they don`t need to do that. Actually, the current situation is good for the Pepsi-Cola Company because they have the competitive advantage in non-CSDs. So, this situation will be the chance for them to override the Coca-Cola Company. So, it`ll be better for the Pepsi-Cola company to keep and more concentrate on non-CSDs market.

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[1] Source : Compiled from Beverage Digest Fact Book 2001, 2005, and 2010; The Maxwell Consumer Report, February. 3, 1994; the Beverage Marketing Corporation, cited in Beverage World, March 1996 and March 1999.