Business Warfare: The Language of Conflict and Competition
Business Warfare: The Language of Conflict and Competition
Issue #6 🧩 The long-standing battle between Coca-Cola and Pepsi 🧩 The business-war metaphor explained 🧩 Why liking business to war is a problem 🧩 A better way to think about business
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Imagine you’re attending the company all-hands meeting and your CEO starts with the following speech:
“I gathered you today to reinforce the message that we're here to fight back. We aim to defend our position in the market and capture an even larger slice. Therefore, we have to attack the opposition. To win this battle, and ultimately the war, we need a strategy for disruption. Being on the defensive is not an option. Sometimes, aggressive moves are required…”
Have you realized that you participate in war? Because, sadly, business is approached the same way as war.
But it doesn’t have to be that way.
Read on 👇
📑 NOTE: Treat my posts like mini-guides: choose what’s relevant or interesting.
🥤 Cola Wars
In 1886, John Stith Pemberton, a pharmacist from Atlanta, Georgia, developed the original recipe for Coca-Cola. By 1888, the recipe was acquired by Asa Griggs Candler, an American businessman and politician, who founded The Coca-Cola Company in 1896.
Meanwhile, in 1893, another pharmacist, Caleb Bradham, from New Bern, North Carolina, created the Pepsi drink. Originally, he called it “Brad's Drink” and renamed it to Pepsi-Cola in 1898. In 1902 he founded The Pepsi-Cola Company, thus prompting the beginning of the “cola wars”.
Coca-Cola has seen remarkable growth since its inception, now distributing close to 4.5 billion cases annually across its nearly 400 brands in over 200 countries. Holding a dominant 44% market share globally, Coca-Cola's flagship product, Coca-Cola Classic, remains the world's most popular beverage. With a robust R&D program and strategic acquisitions, Coca-Cola has diversified its product line to include many different drinks. In 2003, the company allocated approximately $1.9 billion to marketing and advertising, with plans for further investment.
Pepsi-Cola has historically positioned itself as the strongest competitor of Coca-Cola, establishing an extensive franchise bottling network and broadening its product range through acquisitions. With a market share of 31.8% and annual sales of 3.2 billion cases in 2003, Pepsi-Cola holds the second-largest share in the soft drink industry. Embracing a “Beat Coke!” mentality since the 1950s, Pepsi continues to invest significantly in marketing and advertising, allocating $1.6 billion in 2003 to reinforce its competitive stance against Coca-Cola.
The rivalry between the two soft drink producers has been fierce. With the industry's annual retail value in the U.S. reaching $65 billion, and “cola” flavors representing nearly 70% of market share, the stakes are high. Both companies continuously innovate and introduce new products, engage in strategic marketing, and even compete in product packaging to gain an edge over each other in this ongoing battle for industry dominance.
Their mutually-targeted marketing campaigns have been especially entertaining for the general public. Some memorable battles that deserve mention include:
⚖️ In 1975, Pepsi started running the so-called “Pepsi Challenge.” It involved participants doing blind taste tests between Pepsi and Coca-Cola, with Pepsi being chosen as the winner. Coca-Cola thus ran its own taste tests, only to confirm that many participants, including possibly some Coca-Cola executives, indeed preferred Pepsi.
🧪 In response to the “Pepsi Challenge,” Coca-Cola started playing with the formula and in 1985 introduced its “New Coke.” However, due to consumer backlash, it had to return to its original formula under the name of “Coca-Cola Classic.” Pepsi didn’t miss the chance to capitalize on the situation with ads poking fun at Coca-Cola's misstep.
🛩 In 1995, the “Pepsi Stuff” promotion featured a humorous ad where one could supposedly redeem 7 million Pepsi Points for a Harrier Jet. That led to an unexpected legal dispute when a young man tried to claim the jet, arguing the commercial was a binding contract. In 2022, Netflix premiered its original docuseries, “Pepsi, Where's My Jet,” describing the event.
🍕 During the Academy Awards in 2014, despite Pepsi being the exclusive soft drink sponsor, Coca-Cola unexpectedly gained exposure when its logos appeared on pizza boxes featured in a comedic bit by host Ellen DeGeneres. Coca-Cola's unplanned placement during the high-profile event sparked attention, speculation, and concerns, with television network ABC having to investigate the incident.
🏉 In 2019, during Super Bowl LIII held in Atlanta, Coca-Cola's hometown, Pepsi, being a major sponsor of the NFL for years, capitalized on the situation with advertising slogans like “Pepsi in Atlanta. How Refreshing,” “Hey Atlanta, Thanks For Hosting. We'll Bring The Drinks,” and “Look Who's in Town for Super Bowl LIII.” Both companies aired TV ads during the game, with the tagline “A Coke is a Coke” by Coca-Cola and “Is Pepsi OK?” by Pepsi.
For more details on Coca-Cola vs. Pepsi, check out the Business Wars podcast.
⚔️ “Business Is War”
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