Coca-Cola Company and PepsiCo are two industry leaders in the carbonated soft drink industry. They are strong rivals of each other in the beverage market of the world. From 1975 to 1990s, both the company achieved a steady growth at the rate of 10% in terms of revenue. The situation became becoming intense when the CSD consumption started diminishing in the start of the 2000 century and reached to 46 gallons of CSD consumption per year in U.S. This was followed by different internal issues faced by both the companies. The situation of the market has changed significantly. Moreover, there are more verities of carbonated drinks along with many flavored drinks. There are also many different substitutes widely available in portable packaging. In addition to this, the profitability of both the countries started reducing as there were fluctuations that could be seen by the incomes generated in different years. As for Coca-Cola, the net profits are $6797, $11787 and $8584, all in millions, for the year 2009, 2010 and 2011 respectively. However, for Pepsi Co the profits were somewhat stable through the years. The new industry environment has created intense competition among CSD businesses. In addition to this, new strategies need to be formulated and implemented to sustain in this highly competitive business environment. The problem is what should be done by CSD companies to maintain their sales, as the consumption of the CSD is declining and the increasing trend in the substitute products in the market. The factors that are to be considered and the changes that are incorporated need to have a sustainable business and growth. Moreover, another issue is that as both companies are now engaging in businesses that is other than Cold and CSD such as juices and flavored drinks and snacks, therefore the question arises as to how they can compete effectively in these market segments.

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1The carbon ated soft drink industry is facing a number of challenges in the current market environment One of the main challenges is declining consum... View the full answer