Value Chain of Coca Cola and Pepsi

Value Chain of Coca Cola and Pepsi

Inbound logistics for the Pepsi and Coca Cola consisted of largely the same operations. Both companies purchase their own ingredients through use of future contracts (to avoid market volatility) and produce their concentrate from their own facilities. Once this is done, these companies send their concentrate out to bottlers upon approval of contract for bottling company. Once the bottling company receives the shipment of concentration, it is diluted to the correct concentration by adding the correct amount of carbonated water, and sugar, and bottled for sale. This is done for two reasons. One reason is so that Pepsi and Coca Cola can maintain their exact mix of ingredients as a well-kept secret, and not let the bottling companies know what exactly goes into their product. This affects the image of the product, and preserves it as something of higher value, and actually applies a sense of prestige to the Pepsi and Coca Cola products that are kept such excellent secrets.

Pepsi and Coke operate by sending concentrate to bottlers, who then take the necessary actions, and ship out their products to consumers and vendors. One huge trend by both Pepsi and coke was to begin to contract from less and less bottling company. This is largely due to a decrease in shipping prices, and a better ability for bottlers to meet the concentrate producers demand.

Automation in technology in cash registers allows Pepsi, Coke, and the bottling companies who bottle and ship the contents of each bottle to know exactly how much of their product the merchant is carrying. This allows for a quick delivery of more products for the merchant to sell in a nice and timely procedure.

Marketing and Sales for Pepsi and Coke are huge. These companies spend upwards of $200USD each to advertise specifically on their "Pepsi," and "Coca Cola" products. Pepsi and Coca Cola sold $6.6billion, and $8.3billion in the world market.

Pepsi and Coca Cola have both established themselves as market giants in all sectors of beverage service. Although trends in Pepsi at and around 2001 tended to veer more in the direction of expansion into different kind of drinks (water, teas, coffees, etc), rather than to market and sell more of its product