Coca-Cola And Pepsi Cola Wars
Inside the chairman’s office on the 25th floor of Coca-Cola’s stately headquarters in Atlanta, in the top left drawer of his desk, Robert Goizueta (Coca-Cola’s CEO) has for many years kept two charts. One describes Coca Cola’s fundamental business: selling the concentrate that transforms fizzy water into Coke. The other illustrates PepsiCo’s all together different strategy, which has involved pouring billions of dollars into capital-intensive business like restaurants.
One day recently coca cola’s celeberal chairman and CEO was asked to pull out the second chart. Goizueta slides open the drawer and riffles through the papers. “I threw it out,” he says nonchalantly. Raising his eyebrow, he dismisses the world’s most famous No. 2 with trade mark dispassion. “As they have become less relevant,” Goizuetta says, “I, don’t need to look at them very much any more.”
Poor Roger Enrico (PepsiCo’s CEO). He certainly can’t say the same about Coke. Since he has become PepsiCo’s chief executive in April’ 93 Enrico has been seeing a world lot more red- Coca-Cola red- than he ever had expected. Not to mention red as in ink, as in blood. PepsiCo has been badly wounded in the cola wars. It has been a defining moment in the world’s most ruthless corporate war. Yes they both sell sugar water, but Coca-Cola and PepsiCo never were as similar as most people thought.
On one hand Roberto Goizueta has created more wealth for shareholders than any CEO in history. He doesn’t give a hoot about Coke’s overall sales growth. On the other hand for PepsiCo’s Roger Enrico the conundrum is that as to how do you compete with a singular focused, increasingly belligerent No. 1 when you are preoccupied with fixing a conglomerate?
“What do you do when your competitor
is drowning?” asks Coke’s President Doug Ivester.
“Get a live hose and stick it in its mouth.”
“Coke Achilles’ heel is their own arrogance, and it will eventually be the downfall. I hope I’m not around to see it”
says Pepsi’s Craig Weatherup.
It’s the bloodiest clash yet of the cola titans. Coke, with its relentless focus- and a surprise attack- has stolen enough of Pepsi’s market share to ask, If the war finally over? We’ll just have to wait and see.
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