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Homework answers / question archive / Why has the carbonated soft drink concentrate market been so profitable for Coke and Pepsi for decades?

Why has the carbonated soft drink concentrate market been so profitable for Coke and Pepsi for decades?

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Why has the carbonated soft drink concentrate market been so profitable for Coke and Pepsi for decades?

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The companies, Coca-Cola and Pepsi, that deal in carbonated soft drinks, have been more profitable than other beverage companies because of the following reasons:

  • Effective market strategy. The two companies have been in the market longer than most of the other beverage companies. They have built their brands for a long time by coming up with suitable market strategies. Effective business expansion strategies have enabled the two companies to increase their market share compared to other companies.
  • Cost and quality of the products. The products that the two companies offer are of high quality and therefore meet the expectations of most customers. Due to high-quality products that are original and not easy to substitute, the companies have been able to remain productive for decades. On top of that, the cost of the products is readily affordable and available to many of the customers.
  • Long life of the products. The products of the two companies, such as Coke and Pepsi, can stay for a longer period without going bad. This implies that the products would be purchased before getting spoilt. Other companies produce products that go bad quickly and this inconveniences them in the market as some of the products go bad before being purchased.
  • Price competition. Coke and Pepsi offer their products at cheaper prices than other companies. Price competition has driven other beverage companies that have small market shares out of the market. The two companies have put measures in place to ensure that they remain competitive always.

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