The competitive behavior of two companies providing non-alcoholic beverages, Coca-
Cola and Pepsi, is aimed at outdoing each other in multiple markets. Both institutions have
heavily invested in various aspects of the business including advertising, market research,
promotion, and support. The businesses have adopted customer development agreements with
the purpose to increase sales, provide operational improvements, and set ambitious standards of
operations (Yoffie & Kim, 2011). Additionally, Coca-Cola and Pepsi engaged in bottlers’
purchases, with the goal to increase their position and securing shelf space.
Essentially, these companies used the same expansion strategies involved in opening a
franchise bottle network. For example, by 1970, Coca-Cola had over 2,000 of such stores. This
initiative was adopted by its main competitor PepsiCo (Yoffie & Kim, 2011). However, with the
high level of competition, both corporations enacted strict laws that prohibited franchises from
selling their competitors’ products. Another instance of competition took place in 1980, when
Coca-Cola implemented unique marketing strategies, such as lowering prices and the use of high
fructose corn syrup. Pepsi soon applied the same approach. Pepsi decided to diversify its
portfolio by entering into the fast food market. PepsiCo acquired food chains such as Pizza Hut
and Kentucky Fried Chicken. Coca-Cola convinced the other food chains including Burger King
to cooperate with them.
The competition between the two parties was also experienced in the retail market. Pepsi
focused sales in retail outlets, while Coca-Cola controlled fountain sales. With the rise in the
level of rivalry, the two companies decided to use service dispensers that enabled providing point
