2nd Degree Murder Essay Example | Topics and Well Written Essays - 1250 words

2nd Degree Murder - Essay Example Some individuals are overly sensitive to some conditions that would be generally harmless to other people. In such a situation, it is easy to deliver justice since accidental cases would be remedied accordingly under the other homicide classifications. In New Jersey, the 62nd State’s General Assembly of 1837 deliberated and passed among other important resolutions that the State would need to be governed, the punishment of death. In the homicide intricacies that the General Assembly had to deal with, as observed above was to distinguish the various classes or degrees of homicide. Three general classifications were found to be definitive of the challenge earlier highlighted of the actual case parameters such as the intent of causing death and general threat to the entire population. Legislation effected later had a considerable reliance on the resolution passed in the General Assembly sitting of 1838. Alternatively, comparisons were made to consolidate the postulates of the American law with the prevalent common law practices. Contained in this discussion is the legislation in New Jersey and the common law position of homicide category of second degree of murder. In light of the elements of the two sets of law and usages, th e changes that have occurred in the circles of legal practice regarding homicide cases of the specified nature are also discussed. According to Lanning and Vroom (2005), general statutes of the State of New Jersey provide that there shall be two degrees of murder distinguished by the intention of the perpetrator at the time of occurrence of the death. The authors provide the Supplement 271 among other General Statutes of the State of New Jersey which provides for the first degree of murder to constitute such death caused by actions of an individual who commits the crime willfully, deliberately and in a premeditated account. The Supplement 271 continues to state that the other forms of murder fall under the second degree of

Siddharta Essay Essay Example for Free

Siddharta Essay Essay Teachers are important figures in everyone’s life: they prepare for future events teaching lessons and giving suggestions. The book Siddhartha, written by the German author Herman Hesse, shows a perfect example of education and understanding given by different types of instructors. The protagonist, Siddhartha, is the son of a Brahmin, and he has an assured future as a religious figure. He is unhappy and unsatisfied in the beginning of the novel: he can’t find the right answer to his questions. He distrusts teachers, because they didn’t teach him the life lessons he wanted. He doesn’t think his actual life can lead him to nirvana, the maximum status of joy and understanding of the self. The following quote proves this statement: Siddhartha had started to nurse discontent in himself; he had started to feel that the love of his father and the love of his mother, and also the love of his friend, Govinda, would not bring him joy for ever and ever, would not nurse him, feed him, satisfy him. (Hesse 5). He decides to embark in a journey to reach enlightenment, and during this spiritual path he learns some life lessons through persons considered nontraditional teachers, people who influenced his life, and taught him indirectly, such as Govinda, Kamala and Kamaswami. The first instructor that Siddhartha acquires knowledge from is Govinda, one of the most influential characters in the novel: Siddhartha’s best friend, companion and disciple. He is unlikely to be a teacher, mostly because of his follower behavior, but despite the reader’s opinion of him in the beginning, he reveals himself as one of the most important nontraditional teachers. The main feature of Govinda is the fact that he doesn’t choose his own path, he always is a follower. Hesse emphasizes Govinda’s status by defining him as a shadow: â€Å"Govinda wanted to follow him as a friend, his companion, his servant, his lance bearer, his shadow† (4-5). Initially he assists Siddhartha in his quest for enlightenment, but when he encounters another master, Buddha (an enlightened person with a group of followers), he decides to apply his philosophy and to become one of his disciples. This character is really important for Siddhartha, because, in the moment of his friend’s worst depression, the climax of his journey, he saves him. A clear evidence of this fact is the  following quote: â€Å"I saw you lying and sleeping in a place where is dangerous to sleep. Therefore I sought to wake you up oh sir† (67). This shows how Govinda cares about his friend and takes the role of a nontraditional teacher. Another quote that proves the fact that Govinda has a savior role is the following one: â€Å"Once, O worthy one, many years ago, you came to this river and found a man sleeping there. You sat beside him to guard him while he slept, but you did not recognize the sleeping man, Govinda† (95). The main teaching he taught to Siddhartha is that he has to find his own path; he has to embark on his own journey to reach the understanding of the self. This character will remain important even in the end of the story, because the novel finishes with his word s, meaning that Siddhartha has become a teacher, the figure he distrusted. The second influent person in the protagonist’s is Kamala: she is an attractive courtesan that makes the protagonist fall in love with her. Before Siddhartha met Kamala all he knew was thinking, waiting, and fasting(46). The main character meets her during a period on his life where he tries to focus on material things; he tries to find a different way to understand the self. Kamala represents Siddhartha’s entering into the world of greed and lust. She is considered a teacher because she teaches him some important life lessons; she shows him the best of what the material world has to offer. This quote proves her status as a teacher: â€Å"If it doesn’t displease you, Kamala, I would like to ask you to be my friend and teacher, for I know nothing yet of that art which you have mastered in the highest degree† (50). Kamala makes Siddhartha realize that the material world isn’t enough to satisfy him, it isn’t the right choice for his path and the right way to reach nirvana. He learned from her that he could not expect to receive love unless he gave it first. She taught him the the value and the meaning of the life in which he was living and the moments he had spent with her are considered good. She instructs Siddhartha in the art of physical love: In addition to being Siddhartha’s lover, Kamala helps him to leave his ascetic life as a Samana behind. When he met her, he had some ideas and principles of his previous ascetic group, in fact he was a simple Samana from the forest(45). Siddhartha, thanks to the beautiful courtesan, understands what love is, and after some time they give birth to a son. Her teachings include also exterior aspect and clothes: â€Å"I am beginning to learn from you. I already  learned something yesterday. Already got rid of my beard, I have combed and oiled my hair. There is not much more that is lacking, most excellent lady: fine clothes, fine shoes and money in my purse† (54). Her goal is to educate him about sex and human passions. Although Siddhartha becomes disillusioned in the end, because of the emptiness of his life in the material world, he cites Kamala as one of his primary teachers on his journey to find nirvana. The third important teacher is Siddhartha’s journey is Kamaswami, an older businessman who represents an instructive figure mainly because he teaches him the art of business. The protagonist, referred by Kamala, puts himself in the old man’s hands. Under his guidance, Siddhartha successfully enters into the society of city-dwellers: â€Å"When Kamaswami came to him to complain about his troubles or to take him to task over some business deal, he would listen with good humor and interest, marveling over him, trying to understand him. He would allow him to think he was right to the extent that he seemed to require and then would move on to the next person who sought his attention† (75). Kamaswami tries to teach Siddhartha about business life. He shows him the accounts, the goods and warehouses (65). While Siddhartha is working for him, he realizes that business doesn’t satisfy him, it doesn’t create any interest; more particularly, it does not stir his heart (66). Another quote that proves the statement is His heart was not indeed in business (69). Material things do not interest Siddhartha, in fact he hears a voice inside him, telling him that business and money are a game: Kamaswami conducted his business with care and often with passion, but Siddhartha regarded it all as a game (66). The old man, as a wealthy merchant, has qualities that Siddhartha refuses as a Samana. The businessman is obsessed with wealth, so there is a noticeable contrast between them. The life lesson he learns from Kamaswami is that material things create unhappiness. He realizes that money and business are not important: they are just temporary things. During his journey, Siddhartha learns some life lessons from different teachers like Govinda, Kamala and Kamaswami. All these instructive figures contribute to his accomplishment, contribute to the achievement of enlightenment and were indispensable to his spiritual mutation. Throughout  Siddhartha condemns and left his teachers, in the end he becomes one. For his whole journey he is the one who learns, and all his past experience leads him to become the one who teaches. Thanks to those teachers, he finally finds what he has been looking for, after all the sacrifices he did and all the difficulties he has been through.

MindTree: A Community Of Communities

MindTree: A Community Of Communities MindTree is a mid-sized 278 million Indian Information Technology firm known for its knowledge management practices, strong culture and values, and collaborative communities. Its strategy is to become a company that is consulting-led in the IT services business and intellectual property led in the RD-services business. Currently the CEO of the firm has set an ambitious goal of becoming a $1 billion company by 2014. This requires that employees innovate and create new businesses. How would you characterize the culture of MindTree? People-Centric: In an industry where all firms are assumed to possess homogenous skills, MindTree knew that, in order to succeed, it had to differentiate itself from its competitors. The company realized that culture and values were key elements that could be used as Soft Differentiators. Also, being a multicultural company, MindTree realized that it could not possibly manage all the different cultures efficiently. Instead, it decided to develop a common set of values which could be shared by people from across different cultures. The company has always strived to become an emotionally bonded organization. In this regard, the culture of MindTree can be characterized as a people-centric culture. Value-Driven: According to the MindTree senior management, Every MindTree mind is driven by CLASS Caring, Learning, Achieving, Sharing, and Social Responsibility. From this, it is evident that MindTree wanted to create a culture rich in innovation and creativity. MindTrees emphasis on aspects such as High achievement orientation and high caring further shows that MindTree aimed to promote a culture of high performance, stakeholder responsibility, cooperation and corporate citizenship. Transparent and Participative: Transparency and rich, frequent communication were cornerstones of the culture. Mindtree incorporated participative decision-making by promoting openness across organizational levels. This resulted in the companys 95-95-95 principle, which stated that 95% of the people should have 95% of the information 95% of the time. How has this culture been created and institutionalized? At MindTree, the managements belief that values drive behaviour and behaviour drives results was at the heart of all decision-making processes. Internalizing CLASS Values: Mindtree sought to internalize the CLASS values by integrating them into its recruitment, recognition, and reward systems. The process started right from hiring of a new employee, whereby the candidates were assessed on whether they would be a good fit in the organizations culture. New employees then participated in extensive sessions with the senior management, which emphasized the importance of these values in the companys culture. The process continued with performance appraisals, where each value had a clear metric and 40% weight was assigned to performance against these values. The success of MindTrees endeavours to internalize the CLASS values can be seen from the fact that 90% of the senior leaders voluntarily asked for 360o feedback on how well they were complying with the company values. Other initiatives like rechristening the HR dept. as the people function and giving stock options to its employees, have also helped MindTree in building and promoting its culture among its employees. Socialization Tactics: MindTree has also employed the use of several socialization tactics to foster and institutionalize its culture among its employees. When a new employee joins MindTree, she is given explicit information about the sequence in which she will perform new activities or occupy new roles (Sequential Role Orientation). As employees gain experience, they are allowed to pursue their interests by joining or initiating a community (Random Role Orientation). Senior employees at MindTree actively engage with new hires and act as role models (Serial Tactics). This not only helps MindTree imbibe its core values in the new employees, but also promotes the participative culture within the organization. Building Knowledge Communities: Knowledge management was another activity that supported and contributed to MindTrees culture and values. MindTree adopted a holistic, encompassing approach to KM, as it believed that KM could play an integral role in helping people perform their jobs better and develop themselves, which again reflected on its goal to be a High Achievement oriented and High Caring organization. To implement KM a work, MindTree encouraged its employees to self-organize and collaborate through communities of practice. MindTree also took a number of steps to build a supportive environment for cultivating KM. The development and contribution of the KM function has been discussed in detail later in this article. What role does culture play in MindTree Consulting? How does it contribute to strategy of the organisation? MindTree has always believed that its values are one of its core competencies and a key factor which differentiates it from its competitors. At MindTree, its values define its culture and are a cornerstone of decisions concerning future strategy. Competitive advantage: Core values such as Learning and Sharing have allowed MindTree to develop an extensive intellectual property base, which gives it a clear advantage over its competitors. MindTrees focus on building a people centric, emotionally bonded organization has allowed it to retain its employees, and has also led to higher job satisfaction levels among the employees. Together these factors have directly contributed to MindTrees success in delivering better service to its clients. Strategic Initiatives: 95-95-95 principle To ensure transparency and rich, frequent communication, two key elements of culture at MindTree, the management realized that it needed to make information available to its employees. Hence was born the 95-95-95 principle which aims at providing 95% information to 95% employees, at 95% of the time. The Gardener program As a part of this program, the leaders at MindTree actively engage with employees to develop them into future leaders of the company. The program stems directly from the companys goal to institutionalize its culture and ensure that the core values are carried forward by the next generation of leaders. The 5*50 program MindTrees participative culture and its integration with the companys strategy is best highlighted by this program. This initiative called on all MindTree Minds to offer innovative ideas for building new $50 million businesses from scratch. Knowledge Management (KM) would help in the ideation process and would provide critical IT systems support. The fact that MindTree entrusts its employees with resources and encourages them to build businesses, demonstrates the importance of culture in the companys growth strategy. What role have knowledge management practices played in developing and instilling culture at MindTree? Knowledge Management (KM) refers to the processes, activities and technologies that are specifically aimed at improving organizational performance, by acquiring, organizing, applying, sharing and renewing both the tacit and explicit knowledge of its employees. KMs role at MindTree, however, is not limited to helping employees perform their jobs better. KM plays a vital role in carrying forward the core values of the firm. KM enables knowledge creation, which leads to innovation KM enables the environment, which leads to knowledge sharing collaboration KM enables processes and practices, which helps build a knowledge culture KM directly enables changes and shifts in mind sets Knowledge Communities: MindTrees communities of practice reflect the companys socio-technical approach to KM, which emphasize social interactions as a means of enabling knowledge sharing and collaboration. A community could have members working in different departments. This ensures that the best practices and expertise of various departments go into creating the knowledge repository. It also ensures holistic development of employees who participate in the communities, through interaction with fellow members of varied expertise. Community Maturity Levels: The first level is a community of interest which is a collection of individuals who share an interest and enjoy talking about it. The main purpose here is sharing. The next level is competency building in which individuals learn from one another in face-to-face meetings. At the third level is capability building which enabled achieving better results in the company by improving existing processes, software and building relationships between communities and other organizational activities. At the highest level was capacity building in which communities would absorb knowledge from external experts and the focus would be on innovation.

Leading and Managing Change :: Organizational Development, Planned Change

Organisational development is both a professional field of social action and an area of scientific inquiry†. (Cummings and Worley, 2009, p.1). Organisational development does not have common definition; however, it has more than one definition that expresses the meaning of organisational development and change. Organisational development can be best described as a â€Å"system wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at enhancing congruence among organisational structure, process, strategy, people, and culture; developing new and creative organisational solution; and developing the organisation’s self-renewing capacity.† (Beer as cited in Cummings and Worley, 2009, p.2). It occurs through the cooperation of organisational members working with a change agent using behavioural science theory, research, and technology (Beer as cited in Cummings and Worley, 2009, p.2). Organisational development and change managem ent deal with the effective implementation of planned change (Cummings and Worley, 2009, p.3). The two terms deal with the leadership issues and the change process (Cummings and Worley, 2009, p.3). Change is very critical process for every organisation and it is a characteristic of organisational development. Change is moving from one state to another; it is the inevitable aspect of life and the essence of any organisation (sharma,2007,p.1);it is the only constant and is moving target as change pace became so rapid so it needs effective management and leadership to be successfully implemented (Cummings and Worley, 2009, p.27). Change Management: Management and change are interrelated. It is impossible to undertake a journey without addressing its purpose (Paton and Mccalman, 2008, p.3). â€Å"Managing change is about handling the complexities of change; it is about evaluating, planning, and implementing operational tactics and strategies† (Paton and Mccalman, 2008, p.3). According to Armenikas and Bedeian organisational change is greatly responsive to management; its possibility remains high as managers strive for successful and perfect change in the organisation (Paton and Mccalman, 2008, p.3). Change management is a complex, and dynamic process; it is about finding best fit for the organisation to get best results (Paton and Mccalman, 2008, p.4). The environment is rapidly changing resulting from changes in technologies, customers’ preferences, alteration in the economy and many other factors (Paton and Mccalman, 2008, p.10) so organisations have to take the journey of change to cope with the external forces facing them and that is done through management. In order to be able to manage change effectively, managers have to look to the faults and problems found in the organisation, putting alternatives and stating its pros and cons, decide on the future state of the organisation and then implement the change process (Paton and Mccalman,2008,p.

Inequalities in our society: gender and sex Essay

Inequalities between men and women had been in struggle I believe as older than I am, as older than my ancestors. Everyday I see simple proofs that although we are in the 21st century, although we are living on the fast lane, we are still shackled with the shadows of the past. According to Gallup Surveys, in 1946 Americans felt by a margin of 54%-19% that women live more difficult lives than men. More than one-half century later that margin had increased to 57%-7% with most of that change swing to increasing agreement among men (from a 47% to 27% margin in 1946 to 52%-19% in 1997. In the 1930s, 26 of 48 states had Laws prohibiting the employment of married women. (It was the midst of the Great Depression and there were not enough jobs to keep the men out of political mischief, so married women had to go. ) As human beings it is only natural for a caged man to seek freedom. Freedom from injustices and realize their rights. One great example will be the foundation of ‘Living the Legacy: The Women’s Rights Movement in 1848’. In her ‘Declaration of Sentiments’ Stanton’s version read, â€Å"the history of mankind is a history of repeated injuries and usurpations on the part of man toward woman, having in direct object the establishment of an absolute tyranny over her. To prove this, let facts be submitted to a candid world†. Then she went into the specifics. †¢ Married women were legally dead in the eyes of the law †¢ Women were not allowed to vote †¢ Women had to submit to the laws when they had no voice in their formation †¢ Married women had no property rights. †¢ Husbands had legal power over and responsibility for their wives to the extent that they could imprison or beat them with impunity †¢ Divorce and child custody laws favored men, giving no rights to women †¢ Women had to pay property taxes although they had no representation in the levying of these taxes †¢ Most occupations were closed to women and when women did work they were paid only a fraction of what men earned †¢ Women were not allowed to enter professions such as medicine or law †¢ Women had no means to gain an education since no college or university would accept women students. †¢ With only a few exceptions, women were not allowed to participate in the affairs of the church †¢ Women were robbed of their self-confidence and self-respect, and were made totally dependent on men Strong words†¦ Large grievances†¦ And remember: This was just seventy years after the Revolutionary War. Doesn’t it seem surprising to you that this unfair treatment of women was the norm in this new, very idealistic democracy? But this Declaration of Sentiments spelled out what was the status quo for European-American women in 1848 America, while it was even worse for enslaved Black women. Elizabeth Cady Stanton’s draft continued: â€Å"Now, in view of this entire disenfranchisement of one-half the people of this country, their social and religious degradation, — in view of the unjust laws above mentioned, and because women do feel themselves aggrieved, oppressed, and fraudulently deprived of their most sacred rights, we insist that they have immediate admission to all the rights and privileges which belong to them as citizens of these United States. † Here some additional aspects that the organization dealt with: help-wanted ads in newspapers were segregated into â€Å"Help wanted – women† and â€Å"Help wanted- men. † Pages and pages of jobs were announced for which women could not even apply. The Equal Employment Opportunity Commission ruled this illegal in 1968, but since the EEOC had little enforcement power, most newspapers ignored the requirement for years. The National Organization for Women (NOW), had to argue the issue all the way to the Supreme Court to make it possible for a woman today to hold any job for which she is qualified. And so now we see women in literally thousands of occupations which would have been almost unthinkable just one generation ago: dentist, bus driver, veterinarian, airline pilot, and phone installer, just to name a few. To site another example, an article was written about a woman prayer leader, an Islamic scholar at Virginia Commonwealth University, Amina Wadud. The organizers who invited her claimed that she is the first woman to have presided over a mixed gender prayer service in public since Islam’s earliest days. The event was held in cavernous hall in the grounds of New York City’s cathedral church of St. John the Divine because no major mosque would play host to it. â€Å"There are still men who believe women are not allowed to be leaders. They’re bullies,† says organizer Asra Nomani, an author. Furthermore she said that it was time that women take their rightful place alongside men. Last fall, at Chicago’s Muslim Community Center, a 6-feet partition that had long divided the genders during prayer was was reduced to 3-feet after several women protested. That enabled the women to see the ‘imam’ in front, and center president Mohammed Kaiseruddin says the change has helped women â€Å"feel like part of the congregation. † Another woman whose a Muslim, Nomanis , according to her fight began on her return to Morgantown, W. Va.from a pilgrimage to Mecca, â€Å"I experienced full and unfettered access to the holy mosque in Mecca,† Back in Morgantown, she decided to defy a ban that forbade women to use the from entrance and pray in the man hall with the men. Mosque leaders are considering banishing her for such disruptive behavior, but she feels she’s making progress. She prays in the main hall now and say,† they just pretend I’m not there. † For a more grave evident in the issue of inequality between men and women, it has been noted that violence against women has been called â€Å"the most pervasive yet least recognized human right abuse in the world. † The Vienna Human Rights Conference and the Fourth World Conference on Women were organizations that gave priority to this issue, which jeopardizes women’s lives, bodies, psychological integrity and freedom. Violence may have profound effects- direct and indirect on a woman’s reproductive health including: †¢ Unwanted pregnancies and restricted access to family planning information and contraceptives †¢ Unsafe abortion or injuries sustained during a legal abortion after an unwanted pregnancy †¢ Complications from frequent, high-risk pregnancies and lack of follow-up care. †¢ Sexually transmitted infections, including HIV/AIDS †¢ Persistent gynaecological problems †¢ Psychological problems The noted violence intentionally or unintentionally perpetuates male power and control. Despite the evidences a culture of silence exists and denial of the seriousness of the health consequences of abuse. Most domestic violence involves male anger directed against their women partners. This gender difference appears to be rooted in the way boys and men are socialized — biological factors do not seem to account for the dramatic differences in behaviour in this regard between men and women. Pregnant women are particularly vulnerable to gender-based violence. Some husbands become more violent during the wife’s pregnancy, even kicking or hitting their wives in the belly. These women run twice the risk of miscarriage and four times the risk of having a low birth-weight baby. Cross-cultural studies of wife abuse have found that nearly a fifth of peasant and small-scale societies are essentially free of family violence. The existence of such cultures proves that male violence against women is not the inevitable result of male biology or sexuality, but more a matter of how society views masculinity. Studies of very young boys and girls show only that, although boys may have a lower tolerance for frustration, and a tendency towards rough-and-tumble play, these tendencies are dwarfed by the importance of male socialization and peer pressure into gender roles. The prevalence of domestic violence in a given society, therefore, is the result of tacit acceptance by that society. The way men view themselves as men, and the way they view women, will determine whether they use violence or coercion against women. UNFPA recognizes that ending gender-based violence will mean changing cultural concepts about masculinity, and that process must actively engage men, whether they be policy makers, parents, spouses or young boys. The majority of sexual assault victims are young. Women in positions of abject dependence on male authorities are also particularly subject to unwanted sexual coercion. Rape in time of war is still common. It has been extensively documented in recent civil conflicts, and has been used systematically as an instrument of torture or ethnic domination. Resulting from the inequalities happening between men and women, Sandra Lipsitz Bem decided to create a book discussing the matter in psychological perception. Her book was entitled ‘The Lenses of Gender: Transforming the debate on sexual inequality’. According to Sandra there were three lenses that were evident: androcentrism, gender polarization, and biological essentialism. Androcentrism, defined as male-centeredness, moreover, these are definitions of male and male experience as a neutral standard or norm, and females and female experience as a sex-specific deviation from that norm. it is thus, not that man is treated as superior and woman as inferior but that man is treated as human and woman as â€Å"other. † Gender polarization is the more subtle and insidious use of the perceived difference as an organizing principle for the social life of the culture. This male-female difference is super imposed in so many aspects of the social world that a cultural connection is thereby forged between sex and virtually every other aspect of human experience, including modes of dress and social roles and even ways of expressing emotion and experiencing sexual desire. The last lens is Biological essentialism, which rationalizes and legitimizes both other lenses by treating them as the natural and inevitable consequences of the intrinsic biological natures of women and men. According to Sandra, the lenses systematically reproduce male power in two ways. First, the discourses and social institutions in which they are embedded automatically channel female and males into different and unequal life situations. Second, during enculturation, the individual gradually internalizes the cultural lenses and thereby becomes motivated to construct identity that is consistent with them. In line with my research, I concluded that our society have still a lot of work to be done to deal with the issue of inequality among men and women. Even in a famous novel like The Da Vinci Code by Dan Brown the plot of the story was about the conspiracy of having a woman be seated at the right hand of Jesus of Nazareth. Abuses of women were told. Fiction as it may seem the whole story had a very astounding effect to anyone who read it challenging their faith intentionally or unintentionally. That was why there had been some instances where the movie of â€Å"Da Vinci Code† were tried to be banned on showing in other countries where Catholicism religion is dominating. I just want to reiterate from my comparison that authors usually based their pieces according to what they see, imagine or deal with everyday life. From my point of view, the author might have not said it literally but I know that he wanted to imply that we need look at how we look and treat women per se. We can never change the world overnight but we it can be done one step at a time, I hope that the first step would be mine. Works Cited Stanton, Elizabeth Cady. Living the Legacy: The Women’s Rights Movement. 1848-1998 Eisenberg, Bonnie. Ruthsdotten, Mary. The National Women’s History Project. 1998 â€Å"Gender Equality: An End in Itself and a Cornerstone of Development. http://www. unfpa. org/gender/index. htm Heise, L. Violence Against Women: the Hidden Health Burden. World Bank Discussion Paper. Washington D. C. The World Bank. 1994 Bem, Sandra Lipsitz. The Lenses of Gender: Transforming the Debate on Sexual Inequality. Yale University Press. 1993 http://www. trinity. edu/rmkearl/gender. html Chu, Jeff. Mustafa, Nadia. Her Turn To Pray. Time Magazine. March 21,2005.

Graphics Communications Industry Essay

Graphics Communications Industry, according to the College of Technology at the University of Houston, is defined as the processes and industries that create, develop, produce, and disseminate products utilizing or incorporating words or pictorial images to convey information, ideas, and feelings. Its products make possible learning, enjoyment, enthusiasm, and business. These products like books, magazine, maps, invitation, etc. are part of people’s daily life. Graphic Communications includes those market sectors that exploit the technologies of printing, publishing, packaging, electronic imaging, and other associated industries. They are often referred to as the graphic arts, print, or imaging industries. Graphic communication companies are entrepreneurial and innovative. Ideas are created on the computer and carried through different stages that can include the Internet as well as printed forms of several types and variations. Due to the emerging technological advances, companies in the business have expanded services such as creative design, e-commerce, web page design and hosting, mailing, fulfillment, and a multitude of services that provide parallel marketing beyond the major printing activity. (Education Summit for the Graphic Arts 1) The field of Graphic Communications is obviously a technology-based system. It includes the developing technologies of computer-age press, image generation, data repurposing, designing and posting internet web pages, interactive multimedia, digital photography, electronic digital imaging, and desktop publishing. Furthermore, it offers a lot of career opportunities. Thus, it contributes a lot to the economy. It needs millions of people in a range of challenging technical, creative, or professional activities. They vary from small companies with a few workers to large plants with several hundred people on multiple shifts. Almost all companies have acquired modern computerized equipment and stay updated with technology changes taking place in the industry. The top ten leading states in total number of graphic communication employees are California, Illinois, New York, Pennsylvania, Texas, Ohio, Wisconsin, Minnesota, New Jersey, and Michigan. (Education Summit for the Graphic Arts 1) REFERENCES: â€Å"Graphic Communications Industry. † (2006). College of Technology, University of Houston. 7 April 2009 †¹http://graphics. tech. uh. edu/industry/industry. php†º â€Å"The GraphicCommunication Industry: A Quick Overview. † (April, 2008). Education Summit for the Graphic Arts. 7 April 2009 †¹http://teched. vt. edu/gcc/HTML/CareerInfo/PDFs/GraphicCommunicationOverview. pdf†º

Consumerism in Cloning the Consumer Culture by Noreene Janus

Consumerism in Cloning the Consumer Culture by Noreene Janus Definition and significance Consumerism refers to the process of creating and retaining the urge to buy goods and services in larger volumes in a socially and economically accepted order. It can be a crucial and vital process in the growth of the economy of a country particularly in developing countries .In his article Consumerism Dr Ashfaque H Khan attributes Pakistan’s sturdy economic growth that span for a period of five years (between 2003 and 2007) to the process of consumerism.Advertising We will write a custom essay sample on Consumerism in â€Å"Cloning the Consumer Culture† by Noreene Janus specifically for you for only $16.05 $11/page Learn More The country’s growth was reportedly at 7% per annum on average for the whole period. This effect is due to the fact that consumerism takes up a share of between seventy and seventy five percent of the Gross Domestic Product (GDP). During this particular period it was close to 72 percent . Sixty percent of India’s GDP also depends on consumption and is projected to increase by the year 2025 (Khan 1). How it works The process by which consumerism increases and retains the growth momentum is a consequence of the linkage between the growth of the economy, increase in the per capita income, raising consuption, increase in retail space and popularization of products. Khan explains that increased economic growth causes an alteration in the consumption pattern through the upsurge in per capita income. Weakening of laws prohibiting entry international products results in flooding of the domestic market with international products. The consumers become more informed and begin experimenting with the different showcased products in the increased retail store spaces. However, in â€Å"Cloning the Consumer Culture: How International Marketing Sells the Western Lifestyle†, Noreene Janus argues that the economic status of the consumers will greatly influence their pu rchasing power or interest. Khan proceeds to say that the growing consumer appetite encourages greater investments in manufacturing equipment and growth of the service industry such as real estate. The increased investments create more job opportunities which in turn increase the amount of disposable income available for the prospective customers. This act of consumption thus propels the private sector to expand in order to satisfy the now enormous demand. Despite criticism the method has been italicized by countries such as Indonesia and Vietnam making them a darling of the international markets (Khan 2). Relation between consumerism and religion In order to understand how to increase consumption of a product we have to know how these brands act as religion. An anonymous article in the Financial Times refers to modern day products as the new religion. Religion refers to what one believes in that influences how they relate with others.Advertising Looking for essay on busines s economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More It is meant to satisfy a psychological want of openly showing one’s self-worth just as brand dependence. Regions where people are more religious and ardent church goers’ products such as Apple which are brand name stores are bound to perform dismally. This is attributed to the fact that religious people tend to shy away from nation-brands of self-expressive goods but purchase tendencies remain the same for functional products. Atheists due to lack of a religion tend to take brand names as their religion whereas the religious people already have something to believe in thus they do not value these products. A perfect instance s is that of the Apple Inc. customers who viewed Steve Jobs as their ‘messiah’ while extending hostility to their ‘evil advisory’, Microsoft’s Bill Gates or HP’s Hewlett Packard. Therefore by understanding its consumers a country can influence the effect of consumerism to its economy’s advantage by selectively liberalizing the different market types or international product brand-names. The advertisements will be viewed as the missionaries of the brand-religion. How to promote consumerism According Andrew Lam assertions in his article, â€Å"Closing of Age in a Changing Nation†, the West has a great influence on Vietnam. People view such places as America as the places with the magical spar in life. Hollywood films are being watched and several people such as Nguyen want to take their loved ones to the United States (103). This is due to what they have seen in adverts on the newspapers and television sets. We can take advantage of these to promote consumerism. Janus says that there exists a transnational culture in the use of products such as automobiles, watching of Hollywood movies, shopping malls that generate the homely feeling irrespective of whichever part of the world one is in. The current global culture is a consequence of slight but spontaneous developments that relied entirely on technological advances, augmented international trade and air travels. Forging customers Transactional culture is based on the consumption of a product and relies on advertising to pass the message of ingestion in a simple but understandable way. According to Janus, an advertiser is supposed to rely on the positives such as excitement, youth, status or fashion while avoiding the resultant social incongruities, class variances or workplace disagreements. Consumer freedom of choice should be offered as an alternative to political democracy. The advertiser should capitalize on the fact that the only means of self-expression for social change available to a great majority of the people is the freedom to choose between varieties of products. Transnational culture will only hold once the local cultural differences are done away with.Advertising We will write a custom essay sample on Consumerism in â€Å"Cloning the Consumer Culture† by Noreene Janus specifically for you for only $16.05 $11/page Learn More Engaging in a global marketing strategy where a similar advertising message is used in all the countries is an effective method. Targeting the poor families in the 3rd world countries in the advertising campaigns is also bound to bear fruit as these people can contribute money amongst themselves to raise the required amounts. Use of global media A crucial factor in the creation of the transnational culture is the swiftness and the scope of transmission of the intended advert through media such as television, newspapers and magazines. A company should therefore ensure these media convey the adverts appropriately particularly in television which is efficient with illiterate people. This is according to Greys Advertising International in Janus’ article advertising using such media may alter the thinking of the customers. For example, when light-skin products are advertised through television they persuade African women to hate their completion and try to be white. These way breaching products are sold to these women. Governments and consumerism The Government of the day plays a vital role in promotion or limitation of consumerism in their country. According to Khan and Lam Vietnam government has promoted the process by allowing sales of international products to its citizens indiscriminately. For India the last decade has seen its GDP grow at an average of 7 percent and the per capita income rise by two points lower. This can be attributed to the increased middle class who have in turn raised the demand higher. Through this, the government has recognized the importance of developing consumerism and brand-awareness as ingredient maintaining high economic growth. To nurture this more, the government came up a retail FDI policy five years ago that has greatly benefited the foreign retail ers such as Rino Greggio (Argentina). This policy does not only boost the consumption rate it also sets India apart from other countries of the world. The steady economic growth of China over the last thirty years has witnessed expansion of the middle class purchasing power making it the leading consumer market in the world. According to Khan China also has the second largest number of luxury goods consumers in the world (2). In order to uphold this, the government has a 5-year plan being one of its priorities. Moreover, other nations are beginning to value the role of consumerism in their economic growth and are putting measures in place in readiness. Conclusion Consumerism can be used as a way of encouraging and supporting economic growth for any nation as discussed above. It can also be used as a measure of the standards of livings of the people while mirroring the resilient middle class in the economy. The aim of any government is to upgrade the standards of living of its people . When used appropriately consumerism can serve as diligent tool for that goal. Were it not for consumerism, India would not be a member of the elite G-20 group (Khan 2).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Professionals who undermine the usefulness of this process end upbringing down the economies of their countries. A good example is Pakistan whose economic growth was diminished due to false advice by ‘professionals’ who undermined its usefulness. Countries such as Vietnam should do more to promote consumerism in order to improve the living standards of their people rather than using its resources to restrict the freedom of speech of its people. Khan, Ashfaque, H. â€Å"Consumerism.† The News. 04 October. 2011. 17 October. 2011. https://www.thenews.com.pk/archive/print/324568-consumerism Lam, Andrew. Perfume Dreams. Berkeley: Heyday Books, 2005. Print.

Tom Joad Essays - U.S. Route 66, Dust Bowl, The Grapes Of Wrath

Tom Joad Essays - U.S. Route 66, Dust Bowl, The Grapes Of Wrath Tom Joad The story starts out by Tom Joad hitchhiking home after being released from the state prison. He's finally on parole. He served four years of his seven year sentence. While walking, he catches a ride with a truck driver who takes him to his old house, on his family's farm. While he walks the rest of the way from where the truck driver dropped him off, he meets Jim Casy, who is a preacher. Jim explains to Tom, that's he's been away from home trying to figure out some important things in his mind, and now that he's figured out all things are holy, he doesn't need to be a preacher anymore, but just to live with the people because they are holy. As they walk down the driveway to Tom's old house, they notice that there is no one there. Someone starts to approach them, and it's Muley Graves, who let's Tom know that his family are at his Uncle Jim's. So Jim and Tom sleep in the fields that night and start the walk the next day to his Uncle's house. Once they arrive, they find Tom's family packing up and getting ready to go on a trip. Tom's father explains to him that the banks and large companies closed out all the small farmers, and now most of them are heading out to California where there is supposed to be work. When everyone was ready to leave Grampa Joad didn't want to go, so they had to drug him to get him into the car to go on their way. When they stop to rest on the first night of the journey, Grampa Joad has a stroke and dies immediately. They bury Grampa along the way to California in a blanket some migrants gave them. The migrants were the Wilson's, who car had broken down. The Joad family offered to help fix their car, and one it was fixed the two families began their trip together. Once they reached California, Mrs. Wilson got really sick, so the Joad family gave the Wilson's some money and food and continued on their way. During the whole trip out west, Granma Joad had been getting sicker and sicker, Ma Joad finally realizes that she's dying. They had to start a long drive through the desert one night, and while they were driving Granma dies early into the night. A guard stops them during their trip and Ma Joad explains to the guard that they need to get to a doctor because Granma is very sick. The guard let's them go, and Ma tells the family to drive on. Once they make it safely across the desert, Ma tells the family that Granma is dead, so they must bury her as a poor person because they don't have enough money for the funeral. They finally arrive at a place, even though dirty and disorderly, where plenty of migrants were living. But the men are unable to find work. The Joad's pack up and leave when a contractor comes and asks if anyone wants work. The first person to ask what the pay was got arrested and was accused "red". A fight started and the sheriff told the whole camp it'll be burned. The Joad's are still unable to find work and soon they ran out of money and food, so they must look quickly. They soon hear of work in a peach orchard. Once they arrived they were escorted by a policeman and they immediately started picking peaches, so they could have something to eat that night. Tom wants to know what's going on with all the yelling and screaming outside in the orchard late that night. So he sticks his head out to find his friend Jim, who was arrested awhile ago, Jim tells Tom about how they are striking because the owner of the peach orchard had cut their wages in half. While they are talking some men come around looking for Jim, and once they found him they immediately killed him. Tom becomes extremely upset and kills one of the men. One of the Joad children goes about bragging on how Tom killed someone, and his mother finds him and tells

5 Coke vs Pepsi 21st Century Case Study

In a â€Å"carefully waged competitive struggle,† from 1975 to 1995 both Coke and Pepsi achieved average annual growth of around 10% as both U. S. nd worldwide CSD consumption consistently rose. According to Roger Enrico, former CEO of Pepsi-Cola: No The warfare must be perceived as a continuing battle without blood. Without Coke, Pepsi would have a tough time being an original and lively competitor. The more successful they are, the sharper we have to be. If the Coca-Cola company didn’t exist, we’d pray for someone to invent them. And on the other side of the fence, I’m sure the folks at Coke would say that nothing contributes as much to the present-day success of the Coca-Cola company than . . . Pepsi. 1 This cozy relationship was threatened in the late 1990s, however, when U. S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. In response, both firms began to modify their bottling, pricing, and brand strategies. They also looked to emerging international markets to fuel growth and broadened their brand portfolios to include non-carbonated beverages like tea, juice, sports drinks, and bottled water. Do As the cola wars continued into the twenty-first century, the cola giants faced new challenges: Could they boost flagging domestic cola sales? Where could they find new revenue streams? Was their era of sustained growth and profitability coming to a close, or was this apparent slowdown just another blip in the course of Coke’s and Pepsi’s enviable performance? 1Roger Enrico, The Other Guy Blinked and Other Dispatches from the Cola Wars (New York: Bantam Books, 1988). ________________________________________________________________________________________________________________ Research Associate Yusi Wang prepared this case from published sources under the supervision of Professor David B. Yoffie. Parts of this case borrow from previous cases prepared by Professors David Yoffie and Michael Porter. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright  © 2002 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www. hbsp. harvard. edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 Economics of the U. S. CSD Industry Americans consumed 23 gallons of CSD annually in 1970 and consumption grew by an average of 3% per year over the next 30 years (see Exhibit 1). This growth was fueled by increasing availability as well as by the introduction and popularity of diet and flavored CSDs. Through the mid-1990s, the real price of CSDs fell, and consumer demand appeared responsive to declining prices. 2 Many alternatives to CSDs existed, including beer, milk, coffee, bottled water, juices, tea, powdered drinks, wine, sports drinks, distilled spirits, and tap water. Yet Americans drank more soda than any other beverage. At 60%-70% market share, the cola segment of the CSD industry maintained its dominance throughout the 1990s, followed by lemon/lime, citrus, pepper, root beer, orange, and other flavors. C CSD consisted of a flavor base, a sweetener, and carbonated water. Four major participants were involved in the production and distribution of CSDs: 1) concentrate producers; 2) bottlers; 3) retail channels; and 4) suppliers. 3 Concentrate Producers The concentrate producer blended raw material ingredients (excluding sugar or high fructose corn syru p), packaged it in plastic canisters, and shipped the blended ingredients to the bottler. The concentrate producer added artificial sweetener to make diet soda concentrate, while bottlers added sugar or high fructose corn syrup themselves. The process involved little capital investment in machinery, overhead, or labor. A typical concentrate manufacturing plant cost approximately $25 million to $50 million to build, and one plant could serve the entire United States. No A concentrate producer’s most significant costs were for advertising, promotion, market research, and bottler relations. Marketing programs were jointly implemented and financed by concentrate producers and bottlers. Concentrate producers usually took the lead in developing the programs, particularly in product planning, market research, and advertising. They invested heavily in their trademarks over time, with innovative and sophisticated marketing campaigns (see Exhibit 2). Bottlers assumed a larger role in developing trade and consumer promotions, and paid an agreed percentage—typically 50% or more—of promotional and advertising costs. Concentrate producers employed extensive sales and marketing support staff to work with and help improve the performance of their bottlers, setting standards and suggesting operating procedures. Concentrate producers also negotiated directly with the bottlers’ major suppliers—particularly sweetener and packaging suppliers—to encourage reliable supply, faster delivery, and lower prices. Do Once a fragmented business with hundreds of local manufacturers, the landscape of the U. S. soft drink industry had changed dramatically over time. Among national concentrate producers, CocaCola and Pepsi-Cola, the soft drink unit of PepsiCo, claimed a combined 76% of the U. S. CSD market in sales volume in 2000, followed by Cadbury Schweppes and Cott Corporation (see Exhibit 3). There were also private label brand manufacturers and several dozen other national and regional producers. Exhibit 4 gives financial data for Coke and Pepsi and their top affiliated bottlers. 2 Robert Tollison et al. , Competition and Concentration (Lexington Books, 1991), p. 11. 3 The production and distribution of non-carbonated soft drinks and bottled water will be discussed in a later section. 2 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century Bottlers Bottlers purchased concentrate, added carbonated water and high fructose corn syrup, bottled or canned the CSD, and delivered it to customer accounts. Coke and Pepsi bottlers offered â€Å"direct store door† (DSD) delivery, which involved route delivery sales people physically placing and managing the CSD brand in the store. Smaller national brands, such as Shasta and Faygo, distributed through food store warehouses. DSD entailed managing the shelf space by stacking the product, positioning the trademarked label, cleaning the packages and shelves, and setting up point-of-purchase displays and end-of-aisle displays. The importance of the bottler’s relationship with the retail trade was crucial to continual brand availability and maintenance. Cooperative merchandising agreements between retailers and bottlers were used to promote soft drink sales. Retailers agreed to specified promotional activity and discount levels in exchange for a payment from the bottler. tC The bottling process was capital-intensive and involved specialized, high-speed lines. Lines were interchangeable only for packages of similar size and construction. Bottling and canning lines cost from $4 million to $10 million each, depending on volume and package type. The minimum cost to build a small bottling plant, with warehouse and office space, was $25million to $35 million. The cost of an efficient large plant, with four lines, automated warehousing, and a capacity of 40 million cases, was $75 million in 1998. 4 Roughly 80-85 plants were required for full distribution across the United States. Among top bottlers in 1998, packaging accounted for approximately half of bottlers’ cost of goods sold, concentrate for one-third, and nutritive sweeteners for one-tenth. Labor accounted for most of the remaining variable costs. Bottlers also invested capital in trucks and distribution networks. Bottlers’ gross profits often exceeded 40%, but operating margins were razor thin. See Exhibit 5 for the cost structures of a typical concentrate producer and bottler. Do No The number of U. S. soft drink bottlers had fallen, from over 2,000 in 1970 to less than 300 in 2000. 6 Historically, Coca-Cola was the first concentrate producer to build nation-wide franchised bottling networks, a move that Pepsi and Cadbury Schweppes followed. The typical franchised bottler owned a manufacturing and sales operation in an exclusive geographic territory, with rights granted in perpetuity by the franchiser. In the case of Coca-Cola, territorial rights did not extend to fountain accounts—Coke delivered to its fountain accounts directly, not through its bottlers. The rights granted to the bottlers were subject to termination only in the event of default by the bottler. The original Coca-Cola franchise contract, written in 1899, was a fixed-price contract that did not provide for contract renegotiation even if ingredient costs changed. With considerable effort, often involving bitter legal disputes, Coca-Cola amended the contract in 1921, 1978, and 1987 to adjust concentrate price. By 1999, over 81% of Coke’s U. S. volume was covered by the 1987 Master Bottler Contract, which granted Coke the right to determine concentrate price and other terms of sale. Under the terms of this contract, Coke was not obligated to share advertising and marketing expenditures with the bottlers; however, the company often did in order to ensure quality and proper distribution of marketing. In 2000, Coke contributed $766 million in marketing support and $223 million in infrastructure support to its top bottler alone. The 1987 contract did not give complete pricing control to Coke, but rather used a pricing formula that adjusted quarterly for changes in sweetener prices and stated a maximum price. This contract differed from Pepsi’s Master Bottling Agreement with its top bottler, which granted the bottler 4 â€Å"Louisiana Coca-Cola Reveals Crown Jewel,† Beverage Industry, January 1999. 5 Calculated from M. Dolan et al. , â€Å"Coca-Cola Beverages,† Merrill Lynch Capital Markets, July 6, 1998. Timothy Muris et al. , Strategy, Structure, and Antitrust in the Carbonated Soft-Drink Industry, (Quorum Books, 1993), p. 63; John C. Maxwell, ed. Beverage Digest Fact Book 2001. 3 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 perpet ual rights to distribute Pepsi cola products while at the same time required it to purchase its raw materials from Pepsi at prices, and on terms and conditions, determined by Pepsi. Pepsi negotiated concentrate prices with its bottling association, and normally based price increases on the CPI. Coke and Pepsi both raised concentrate prices throughout the 1980s and early 1990s, even as the real (inflation-adjusted) retail prices for CSD were down (see Exhibit 6). tC Coca-Cola and Pepsi franchise agreements allowed bottlers to handle the non-cola brands of other concentrate producers. Franchise agreements also allowed bottlers to choose whether or not to market new beverages introduced by the concentrate producer. Some restrictions applied, however, as bottlers could not carry directly competitive brands. For example, a Coca-Cola bottler could not sell Royal Crown Cola, but it could distribute Seven-Up, if it decided not to carry Sprite. Franchised bottlers had the freedom to participate in or reject new package introductions, local advertising campaigns and promotions, and test marketing. The bottlers also had the final say in decisions concerning retail pricing, new packaging, selling, advertising, and promotions in its territory, though they could only use packages authorized by the franchiser. In 1971, the Federal Trade Commission initiated action against eight major CPs, charging that exclusive territories granted to franchised bottlers prevented intrabrand competition (two or more bottlers competing in the same area with the same beverage). The CPs argued that interbrand competition was sufficiently strong to warrant continuation of the existing territorial agreements. After nine years of litigation, Congress enacted the â€Å"Soft Drink Interbrand Competition Act† in 1980, preserving the right of CPs to grant exclusive territories. Retail Channels No In 2000, the distribution of CSDs in the United States took place through food stores (35%), fountain outlets7 (23%), vending machines (14%), convenience stores (9%), and other outlets (20%). Mass merchandisers, warehouse clubs, and drug stores made up most of the last category. Bottlers’ profitability by type of retail outlet is shown in Exhibit 7. Costs were affected by delivery method and frequency, drop size, advertising, and marketing. The main distribution channel for soft drinks was the supermarket. CSDs were among the five largest selling product lines sold by supermarkets, raditionally yielding a 15%-20% gross margin (about average for food products) and accounting for 3%-4% of food store revenues. 8 CSDs represented a large percentage of a supermarket’s business, and were also a big traffic draw. Bottlers fought for retail shelf space to ensure visibility and accessibility for their products, and looked for new locations to increase impulse purchases, such as placing coolers at checkout counters. The proliferation of products and packaging types created intense shelf space pressures. Do Discount retailers, warehouse clubs, and drug stores accounted about 15% of CSD sales in the late 1990s. These firms often had their own private label CSD, or they sold a generic label such as President’s Choice. Private label CSDs were usually delivered to a retailer’s warehouse, while branded CSDs were delivered directly to the store. With the warehouse delivery method, the retailer was responsible for storage, transportation, merchandising, and stocking the shelves, thus incurring additional costs. The word â€Å"fountain outlets† traditionally referred to soda fountains, but was later used also for restaurants, cafeterias, and other establishments that served soft drinks by the glass using fountain dispensers. 8 Progressive Grocer 1998 Sales Manual Databook, July 1998, p. 68. 4 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century tC Hi storically, Pepsi had focused on sales through retail outlets, while Coke had dominated fountain sales. Coca-Cola had a 65% share of the fountain market in 2000, while Pepsi had 21%. Competition for fountain sales was intense. National fountain accounts were essentially â€Å"paid sampling,† with CSD companies earning pretax operating margins of around 2%. For restaurants, by contrast, fountain sales were extremely profitable—about 80 cents out of every dollar spent stayed with the restaurant retailers. In 1999, for example, Burger King franchisees were believed to pay about $6. 20 per gallon for Coke syrup, but they received a substantial rebate on each gallon in the form of a check; one large Midwestern Burger King franchisee said his annual rebate ran $1. 45 per gallon, or about 23%. Coke and Pepsi also invested in the development of fountain equipment, such as service dispensers, and provided their fountain customers with cups, point-of-sale material, advertising, and in-store promotions to increase brand presence. After Pepsi entered the fast-food restaurant business with the acquisitions of Pizza Hut (1978), Taco Bell (1986), and Kentucky Frie d Chicken (1986), Coca-Cola persuaded other chains such as Wendy’s and Burger King to switch to Coke. PepsiCo spun its restaurant business off to the public in 1997 under the name Tricon, while retaining the Frito-Lay snack food business. In 2000, fountain â€Å"pouring rights† remained split along pre-Tricon lines, as Pepsi supplied all of Taco Bell’s and KFC’s, and the overwhelming majority of Pizza Hut restaurants. Coke retained exclusivity deals with McDonald’s and Burger King. No Coke and Cadbury Schweppes handled fountain accounts from their national franchisor companies. Employees of the franchisee companies negotiated and signed pouring rights contracts which, in the case of big restaurant chains, could cover the entire United States or even the world. The accounts were actually serviced by employees of the franchisors’ fountain divisions, local bottlers, or both. Local bottlers, when they were used, were paid service fees for delivering syrup and fixing and placing machines. Historically, PepsiCo could only sell directly to end-user national accounts. By 1999, Pepsi had persuaded most of its bottlers to modify their franchise agreements to allow Pepsi to sell fountain syrup via restaurant commissary companies, which sell a range of supplies to restaurants. Concentrate producers offered bottlers rebates to encourage them to purchase and install vending machines. The owners of the property on which vending equipment was located usually received a sales commission. Coke and Pepsi were the largest suppliers of CSDs to the vending channel. Juice, tea, sports drinks, lemonade, and water were also available through vending machines. Suppliers to Concentrate Producers and Bottlers Do Concentrate producers required few inputs: the concentrate for most regular colas consisted of caramel coloring, phosphoric and/or citric acid, natural flavors, and caffeine. 10 Bottlers purchased two major inputs: packaging, which included $3. 4 billion in cans, $1. 3 billion in plastic bottles, and $0. 6 billion in glass; and sweeteners, which included $1. 1 billion in sugar and high fructose corn syrup, and $1. billion in artificial sweetener (predominantly aspartame). The majority of U. S. CSDs were packaged in metal cans (60%), then plastic bottles (38%), and glass bottles (2%). Cans were an attractive packaging material because they were easily handled, stocked, and displayed, weighed little, and were durable and recyclable. Plastic bottles, introduced in 1978, bo osted home consumption of CSDs because of their larger 1-liter, 2-liter, and 3-liter sizes. Single-serve 20-oz. PET bottles quickly gained popularity and represented 35% of vended drinks and 3% of grocery drinks in 2000. Nikhil Deogun and Richard Gibson, â€Å"Coke Beats Out Pepsi for Contracts With Burger King, Domino’s,† The Wall Street Journal, April 15, 1999. 10 Based on ingredients lists, Coke Classic and Pepsi-Cola, 2001. 5 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 The concentrate producers’ strategy towards can manufacturers was typical of their supplier relationships. Coke and Pepsi negotiated on behalf of their bottling networks, and were among the metal can industry’s largest customers. Since the can constituted about 40% of the total cost of a packaged beverage, bottlers and concentrate producers often maintained relationships with more than one supplier. In the 1960s and 1970s, Coke and Pepsi backward integrated to make some of their own cans, but largely exited the business by 1990. In 1994, Coke and Pepsi instead sought to establish stable long-term relationships with their suppliers. Major can producers included American National Can, Crown Cork Seal, and Reynolds Metals. Metal cans were viewed as commodities, and there was chronic excess supply in the industry. Often two or three can manufacturers competed for a single contract. Early History11 tC The Evolution of the U. S. Soft Drink Industry Coca-Cola was formulated in 1886 by John Pemberton, a pharmacist in Atlanta, Georgia, who sold it at drug store soda fountains as a â€Å"potion for mental and physical disorders. † A few years later, Asa Candler acquired the formula, established a sales force, and began brand advertising of Coca-Cola. Tightly guarded in an Atlanta bank vault, the formula for Coca-Cola syrup, known as â€Å"Merchandise 7X,† remained a well-protected secret. Candler granted Coca-Cola’s first bottling franchise in 1899 for a nominal one dollar, believing that the future of the drink rested with soda fountains. The company’s bottling network grew quickly, however, reaching 370 franchisees by 1910. No In its early years, Coke was constantly plagued by imitations and counterfeits, which the company aggressively fought in court. In 1916 alone, courts barred 153 imitations of Coca-Cola, including the brands Coca-Kola, Koca-Nola, Cold-Cola, and the like. Coke introduced and patented a unique 6. 5ounce â€Å"skirt† bottle to be used by its franchisees that subsequently became an American icon. Robert Woodruff, who became CEO in 1923, began working with franchised bottlers to make Coke available wherever and whenever a consumer might want it. He pushed the bottlers to place the beverage â€Å"in arm’s reach of desire,† and argued that if Coke were not conveniently available when the consumer was thirsty, the sale would be lost forever. During the 1920s and 1930s, Coke pioneered open-top coolers to storekeepers, developed automatic fountain dispensers, and introduced vending machines. Woodruff also initiated â€Å"lifestyle† advertising for Coca-Cola, emphasizing the role of Coke in a consumer’s life. Do Woodruff also developed Coke’s international business. In the onset of World War II, at the request of General Eisenhower, he promised that â€Å"every man in uniform gets a bottle of Coca-Cola for five cents wherever he is and whatever it costs the company. † Beginning in 1942, Coke was exempted from wartime sugar rationing whenever the product was destined for the military or retailers serving soldiers. Coca-Cola bottling plants followed the movements of American troops; 64 bottling plants were set up during the war—largely at government expense. This contributed to Coke’s dominant market shares in most European and Asian countries. Pepsi-Cola was invented in 1893 in New Bern, North Carolina by pharmacist Caleb Bradham. Like Coke, Pepsi adopted a franchise bottling system, and by 1910 it had built a network of 270 11 See J. C. Louis and Harvey Yazijian, The Cola Wars (Everest House, 1980); Mark Pendergrast, For God, Country, and Coca-Cola (Charles Scribner’s, 1993); David Greising, I’d Like the World to Buy a Coke (John Wiley Sons, 1997). 6 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. du or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century franchised bottlers. Pepsi struggled, however, declaring bankruptcy in 1923 and again in 1932. Business began to pick up in the midst of the Great Depression, when Pepsi lowered the price for its 12-ounce bottle to a nickel, the same price Coke charged for its 6. 5-ounce bottle. When Pepsi tried to expand its bottling network in the late 1930s, its choices were small local bottlers striving to compete with wealthy Coke franchisees. 12 Pepsi nevertheless began to gain market share. In 1938, Coke filed suit against Pepsi, claiming that Pepsi-Cola was an infringement on the CocaCola trademark. The court ruled in favor of Pepsi in 1941, ending a series of suits and countersuits between the two companies. With its famous radio jingle, â€Å"Twice as Much, for Nickel Too,† Pepsi’s U. S. sales surpassed those of Royal Crown and Dr Pepper in the 1940s, trailing only Coca-Cola. In 1950, Coke’s share of the U. S. CSD market was 47% and Pepsi’s was 10%; hundreds of regional CSD companies continued to produce a wide assortment of flavors. tC The Cola Wars Begin In 1950, Alfred Steele, a former Coca-Cola marketing executive, became Pepsi’s CEO. Steele made â€Å"Beat Coke† his theme and encouraged bottlers to focus on take-home sales through supermarkets. The company introduced the first 26-ounce bottles to the market, targeting family consumption, while Coke stayed with its 6. 5-ounce bottle. Pepsi’s growth soon began tracking the growth of supermarkets and convenience stores in the United States: There were about 10,000 supermarkets in 1945, 15,000 in 1955, and 32,000 at the peak in 1962. No In 1963, under the leadership of new CEO Donald Kendall, Pepsi launched its â€Å"Pepsi Generation† campaign that targeted the young and â€Å"young at heart. † Pepsi’s ad agency created an intense commercial using sports cars, motorcycles, helicopters, and a catchy slogan. The campaign helped Pepsi narrow Coke’s lead to a 2-to-1 margin. At the same time, Pepsi worked with its bottlers to modernize plants and improve store delivery services. By 1970, Pepsi’s franchise bottlers were generally larger compared to Coke bottlers. Coke’s bottling network remained fragmented, with more than 800 independent franchised bottlers that focused mostly on U. S. cities of 50,000 or less. 13 Throughout this period, Pepsi sold concentrate to its bottlers at a price approximately 20% lower than Coke. In the early 1970s, Pepsi increased the concentrate price to equal that of Coke. To overcome bottlers’ opposition, Pepsi promised to use the extra margin to increase advertising and promotion. Do Coca-Cola and Pepsi-Cola began to experiment with new cola and non-cola flavors and a variety of packaging options in the 1960s. Before then, the two companies had adopted a single product strategy, selling only their flagship brand. Coke introduced Fanta (1960), Sprite (1961), and lowcalorie Tab (1963). Pepsi countered with Teem (1960), Mountain Dew (1964), and Diet Pepsi (1964). Each introduced non-returnable glass bottles and 12-ounce metal cans in various packages. Coke and Pepsi also diversified into non-soft-drink industries. Coke purchased Minute Maid (fruit juice), Duncan Foods (coffee, tea, hot chocolate), and Belmont Springs Water. Pepsi merged with snackfood giant Frito-Lay in 1965 to become PepsiCo, claiming synergies based on shared customer targets, store-door delivery systems, and marketing orientations. In the late 1950s, Coca-Cola, still under Robert Woodruff’s leadership, began using advertising that finally recognized the existence of competitors, such as â€Å"American’s Preferred Taste† (1955) and â€Å"No Wonder Coke Refreshes Best† (1960). In meetings with Coca-Cola bottlers, however, executives only discussed the growth of their own brand and never referred to its closest competitor by name. 2 Louis and Yazijian, p,. 23. 13 Pendergrast, p. 310. 7 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 During the 1960s, Coke primarily focused on overseas markets, apparently believing that domestic soft drink consumption had neared saturation at 22. 7 ga llons per capita in 1970. 14 Pepsi meanwhile battled aggressively in the United States, doubling its share between 1950 and 1970. The Pepsi Challenge In 1974, Pepsi launched the â€Å"Pepsi Challenge† in Dallas, Texas. Coke was the dominant brand in the city and Pepsi ran a distant third behind Dr Pepper. In blind taste tests hosted by Pepsi’s small local bottler, the company tried to demonstrate that consumers in fact preferred Pepsi to Coke. After its sales shot up in Dallas, Pepsi started to roll out the campaign nationwide, although many of its franchise bottlers were initially reluctant to join. tC Coke countered with rebates, rival claims, retail price cuts, and a series of advertisements questioning the tests’ validity. In particular, Coke used retail price discounts selectively in markets where the Coke bottler was company owned and the Pepsi bottler was an independent franchisee. Nonetheless, the Pepsi Challenge successfully eroded Coke’s market share. In 1979, Pepsi passed Coke in food store sales for the first time with a 1. 4 share point lead. Breaking precedent, Brian Dyson, president of Coca-Cola, inadvertently uttered the name â€Å"Pepsi† in front of Coke’s bottlers at the 1979 bottlers conference. No During the same period, Coke was renegotiating its franchise bottling contract to obtain greater flexibility in pricing concentrate and syrups. Bottlers approved the new contract in 1978 only after Coke conceded to link concentrate price changes to the CPI, adjust the price to reflect any cost savings associated with a modification of ingredients, and supply unsweetened concentrate to bottlers who preferred to purchase their own sweetener on the open market. 15 This brought Coke’s policies in line with Pepsi, which traditionally sold its concentrate unsweetened to its bottlers. Immediately after securing bottler approval, Coke announced a significant concentrate price hike. Pepsi followed with a 15% price increase of its own. Cola Wars Heat Up In 1980, Cuban-born Roberto Goizueta was named CEO and Don Keough president of Coca-Cola. In the same year, Coke switched from sugar to the lower-priced high fructose corn syrup, a move Pepsi emulated three years later. Coke also intensified its marketing effort, increasing advertising spending from $74 million to $181 million between 1981 and 1984. Pepsi elevated its advertising expenditure from $66 million to $125 million over the same period. Goizueta sold off most of the non-CSD businesses he had inherited, including wine, coffee, tea, and industrial water treatment, while keeping Minute Maid. Do Diet Coke was introduced in 1982 as the first extension of the â€Å"Coke† brand name. Much of CocaCola management referred to its brand as â€Å"Mother Coke,† and considered it too sacred to be extended to other products. Despite internal opposition from company lawyers over copyright issues, Diet Coke was a phenomenal success. Praised as the â€Å"most successful consumer product launch of the Eighties,† it became within a few years not only the nation’s most popular diet soft drink, but also the third-largest selling soft drink in the United States. 14 Maxwell. 15 Pendergrast, p. 323. 8 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century In April 1985, Coke announced the change of its 99-year-old Coca-Cola formula. Explaining this radical break with tradition, Goizueta saw a sharp depreciation in the value of the Coca-Cola trademark as â€Å"the product had a declining share in a shrinking segment of the market. †16 On the day of Coke’s announcement, Pepsi declared a holiday for its employees, claiming that the new Coke tasted more like Pepsi. The reformulation prompted an outcry from Coke’s most loyal customers. Bottlers joined the clamor. Three months later, the company brought back the original formula under the name Coca-Cola Classic, while retaining the new formula as the flagship brand under the name New Coke. Six months later, Coke announced that Coca-Cola Classic (the original formula) would henceforth be considered its flagship brand. tC New CSD brands proliferated in the 1980s. Coke introduced 11 new products, including Cherry Coke, Caffeine-Free Coke, and Minute-Maid Orange. Pepsi introduced 13 products, including Caffeine-Free Pepsi-Cola, Lemon-Lime Slice, and Cherry Pepsi. The number of packaging types and sizes also increased dramatically, and the battle for shelf space in supermarkets and other food stores grew fierce. By the late 1980s, both Coke and Pepsi offered more than ten major brands, using at least seventeen containers and numerous packaging options. 17 The struggle for market share intensified and the level of retail price discounting increased sharply. Consumers were constantly exposed to cents-off promotions and a host of other supermarket discounts. No Throughout the 1980s, the smaller concentrate producers were increasingly squeezed by Coke and Pepsi. As their shelf-space declined, small brands were shuffled from one owner to another. Over five years, Dr Pepper was sold (all and in part) several times, Canada Dry twice, Sunkist once, Shasta once, and AW Brands once. Some of the deals were made by food companies, but several were leveraged buyouts by investment firms. Philip Morris acquired Seven-Up in 1978 for a big premium, but despite superior brand rankings and established distribution channels, racked up huge losses in the early 1980s and exited in 1985. (Exhibit 8a shows the brand performance of top companies, as ranked by retailers. ) In the 1990s, through a series of strategic acquisitions, Cadbury Schweppes emerged as the clear (albeit distant) third-largest concentrate producer, snapping up the Dr Pepper/Seven-Up Companies (1995) and Snapple Beverage Group (2000). (Appendix A describes Cadbury Schweppes’ operations and financial performance. ) Bottler Consolidation and Spin-Off Do Relations between Coke and its franchised bottlers had been strained since the contract renegotiation of 1978. Coke struggled to persuade bottlers to cooperate in marketing and promotion programs, upgrade plant and equipment, and support new product launches. 8 The cola wars had particularly weakened small independent franchised bottlers. High advertising spending, product and packaging proliferation, and widespread retail price discounting raised capital requirements for bottlers, while lowering their margins. Many bottlers that had been owned by one family for several generations no longer had the resources or the commitment to be competitive. At a July 1980 dinner with Coke’s fifteen largest domestic bottlers, Goizueta announced a plan to refranchise bottling operations. Coke began buying up poorly managed bottlers, infusing capital, 6 The Wall Street Journal, April 24, 1986. 17 Timothy Muris, David Scheffman, and Pablo Spiller, Strategy, Structure, and Antitrust in the Carbonated Soft Drink Industry. (Quorum Books, 1993), p. 73. 18 Greising, p. 88. 9 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 and quickly reselling them to better-performing bottlers. Refranchising allowed Coke’s larger bottlers to expand outside their traditionally exclusive geographic territories. When two of its largest bottling companies came up for sale in 1985, Coke moved swiftly to buy them for $2. 4 billion, preempting outside financial bidders. Together with other bottlers that Coke had recently bought, these acquisitions placed one-third of Coca-Cola’s volume in company-owned bottlers. In 1986, Coke began to replace its 1978 franchise agreement with the Master Bottler Contract that afforded Coke much greater freedom to change concentrate price. tC Coke’s bottler acquisitions had increased its long-term debt to approximately $1 billion. In 1986, on the initiative of Doug Ivester, who later became CEO, the company created an independent bottling subsidiary, Coca-Cola Enterprises (CCE), and sold 51% of its shares to the public, while retaining the rest. The minority equity position enabled Coke to separate its financial statements from CCE. As Coke’s first so-called â€Å"anchor bottler,† CCE consolidated small territories into larger regions, renegotiated with suppliers and retailers, merged redundant distribution and material purchasing, and cut its work force by 20%. CCE moved towards mega-facilities, investing in 50 million-case production lines with high levels of automation. Coke continued to acquire independent franchised bottlers and sell them to CCE. 19 â€Å"We became an investment banking firm specializing in bottler deals,† reflected Don Keough. In 1997 alone, Coke put together more than $7 billion in deals involving bottlers. 20 By 2000, CCE was Coke’s largest bottler with annual sales of more than $14. 7 billion, handling 70% of Coke’s North American volume. Some industry observers questioned Coke’s accounting practice, as Coke retained substantial managerial influence in its arguably independent anchor bottler. 21 No In the late 1980s, Pepsi also acquired MEI Bottling for $591 million, Grand Metropolitan’s bottling operations for $705 million, and General Cinema’s bottling operations for $1. 8 billion. The number of Pepsi bottlers decreased from more than 400 in the mid-1980s to less than 200 in the mid-1990s. Pepsi owned about half of these bottling operations outright and held equity positions in most of the rest. Experience in the snack food and restaurant businesses boosted Pepsi’s confidence in its ability to manage the bottling business. In the late 1990s, Pepsi changed course and also adopted the anchor bottler model. In April 1999, the Pepsi Bottling Group (PBG) went public, with Pepsi retaining a 35% equity stake. By 2000, PBG produced 55% of PepsiCo beverages in North America and 32% worldwide. As Craig Weatherup, PBG’s chairman/CEO, explained, â€Å"Our success is interdependent, with PepsiCo the keeper of the brands and PBG the keeper of the marketplace. In that regard, we’re joined at the hip. †22 Do The bottler consolidation of the 1990s made smaller concentrate producers increasingly dependent on the Pepsi and Coke bottling network to distribute their products. In response, Cadbury Schweppes in 1998 bought and merged two large U. S. bottlers to form its own bottler. In 2000, Coke’s bottling system was the most consolidated, with its top 10 bottlers producing 94% of domestic volume. Pepsi’s and Cadbury Schweppes’ top 10 bottlers produced 85% and 71% of the domestic volume of their respective franchisors. 19 Greising, p. 292. 20 Beverage Industry, January 1999, p. 17. 21 Albert Meyer and Dwight Owsen, â€Å"Coca-Cola’s Accounting,† Accounting Today, September 28, 1998 22 Kent Steinriede, â€Å"PBG Charts Its Own Course,† Beverage Industry, May 1, 1999. 10 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Adapting to the Times 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century In the late 1990s, a variety of problems began to emerge for the soft drink industry as a whole. Although Americans still drank more CSDs than any other beverage, U. S. sales volume registered only a 0. 2% increase in 2000, to just under 10 billion cases (a case was equivalent to 24 eight-ounce containers, or 192 ounces). This slow growth was in contrast to the 5%-7% annual growth in the United States during the 1980s. Concurrently, financial crisis in various parts of the world left Coke and Pepsi bottlers over-invested and under-utilized. tC Coca-Cola was also impacted by difficulties in leadership transition. After the death of the popular CEO Roberto Goizueta in 1997, his successor Douglas Ivestor had two rocky years at the helm, during which Coke faced a high-profile race discrimination suit and a European public relations scandal after hundreds of people became ill from contaminated soft drinks. Douglas Daft assumed leadership in April 2000; one of his first moves was to lay off 5,200 employees, or 20% of worldwide staff. While expressing â€Å"enthusiastic support for the current strategic course of the Company under Doug Daft’s leadership,† Coke’s Board voted against Daft’s eleventh-hour negotiations to acquire Quaker Oats in November 2000. As they had numerous times over the last century, analysts predicted the end of Coke and Pepsi’s stellar growth and profitability. Meanwhile, Coke and Pepsi turned their attention to bolstering domestic markets, diversifying into non-carbonated beverages (non-carbs), and cultivating international markets. Balancing Market Growth, Market Share, and Profitability in the United States No During the early 1990s, Coca-Cola and PepsiCo bottlers employed a low-price strategy in the supermarket channel in order to compete more effectively with high-quality, low-price store brands. As the threat of the low-priced brands lessened, CCE responded in March 1999 with its first major price increase at the retail level after 20 years of flat take-home pricing. Its strategy was to reposition Coke Classic as a premium brand. PBG followed that price increase shortly after. Price wars had driven soda prices down to the point where bottlers couldn’t get a decent return on supermarket sales,† explained a Pepsi executive. 23 Observed one industry analyst, â€Å"Coke’s growth is coming internationally, and Pepsi’s is coming from Frito-Lay. It is in the companies’ mutual best interest not to destroy the domestic market and eat up each other’s share. † 24 Consume rs’ initial reaction to price increases was a reduction in supermarket purchases. When CCE raised prices in supermarkets by 6. 0%-8. 0% in both 1999 and 2000, comparable volumes in North America declined each year (1. % in 1999 and 0. 8% in 2000). In 2001, however, the bottling companies effected more moderate price increases and consumer demand appeared to be on the upswing. Do Both Coke and Pepsi also set about to boost the flagging cola market in other ways, including exclusive marketing agreements with Britney Spears (Pepsi) and Harry Potter (Coke). Pepsi reintroduced the highly effective â€Å"Pepsi Challenge,† which was designed to boost overall cola sales and draw consumers away from private labels as much as it was to plug Pepsi over Coke. In contrast to the supermarket channel, Coke and Pepsi’s rivalry in the fountain channel intensified in the late 1990s. To penetrate Coke’s stronghold, Pepsi aggressively pursued national 23 Lauren R. Rublin, â€Å"Chipping Away: Coca-Cola Could Learn a Thing or Two from the Renaissance at PepsiCo,† Barron’s, June 12, 2000. 24 Rublin. 11 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 accounts, forcing Coke to make costly concessions to retain its biggest customers. Pepsi broke Coke’s stronghold at Disney with a 1998 contract to supply soft drinks at the new DisneyQuest, Club Disney and ESPN Zone chains. After a heated bidding war in 1999 over the 10,000-store chain of Burger King Corporation, Coke again won the fountain contract involving $220 million per year for 40 million gallons of syrup soda, but only after agreeing to double its $25 million in rebates to the food chain. Pepsi also sued Coke over access to the fountain market, charging Coke with â€Å"attempting to monopolize the market for fountain-dispensed soft drinks through independent foodservice distributors throughout the United States. Coke persuaded a Federal court to dismiss the suit in 2000. Despite Pepsi’s efforts, at the end of 2000, Coke still dominated the fountain market with 65% share of national â€Å"pouring rights† to Pepsi’s 21% and Dr Pepper/Seven Up’s 14%. tC The Rise of Non-Cola Beverages As consumer trends shifted from diet soda , to lemon-lime, to tea-based drinks, to other popular non-carbs, Coke and Pepsi vigorously expanded their brand portfolios. Each new product was accompanied by debate on how much each company should stray from its core product: regular cola. On one hand, cola sales consistently dwarfed alternative beverages sales, and cola-defenders expressed concern that over-enthusiastic expansion would distract the company from its flagship product. Also, history had shown that explosions in demand for alternative drinks were regularly followed by slow or negative growth. On the other hand, as domestic cola demand appeared to plateau, alternative beverages could provide a growth engine for the firms. No By the late 1990s, the soft drink industry had seen various alternative beverage categories come and go. From double-digit expansion in the late 1980s, diet CSDs peaked in 1991 at 29. 8% of the CSD segment and then declined to their 1988-level share of 24. 4% in 1999. PepsiCo’s introduction of Pepsi One in late 1998 was partially responsible for the minor recovery of the diet drink segment. Flavored soft drinks such as citrus, lemon-lime, pepper, and root beer were also popular. In 1999, Mountain Dew grew faster than any other CSD brand for the third year in a row, posting 6. 0% volume growth, but in 2000, its growth slowed to 1. 5% due to competing â€Å"new-age† non-carbs. Do At the turn of this century, CSDs accounted for 41. 3% of total non-alcoholic beverage consumption, bottled water accounted for 10. 3%, and other non-carbs accounted for the remainder. 25 When measured in gallons, sales of non-carbs rose by 18% in 1995 and 5% in 2000, compared to 3% and 0. 2% respectively for CSDs. The drinks with high growth and high hype were non-carbs such as juices/juice drinks, sports drinks, tea-based drinks, dairy-based drinks—and especially bottled water. In the 1990s, the bottled water industry grew on average 8. 3% per year, and volume reached more than 5 billion gallons in 2000. Revenue growth outpaced volume growth, with a 9. 3% increase to approximately $5. 6 billion, and per capita consumption gained 5. 1 gallons to 13. 2 gallons per person. Pepsi’s Aquafina went national in 1998. Coke followed in 1999 with Dasani. Though Pepsi and Coke sold reverse-osmosis purified water instead of spring water, they had a distribution advantage over competing water brands. 26 Coke and Pepsi launched other new drinks throughout the 1990s. They also aggressively acquired brands that rounded out their portfolios, including Tropicana (Pepsi, 1998), Gatorade (Pepsi, 5 Maxwell. Does not include â€Å"tap water / hybrids / all others† category. 26 Reverse osmosis is a method of producing pure water by forcing saline or impure water through a semi-permeable membrane across which salts or impurities cannot pass. 12 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in t he Twenty-First Century 2000), and SoBe (Pepsi, 2000). Both companies predicted that future increases in market share would come from beverages other than CSDs. Pepsi pronounced itself a â€Å"total beverage company,† and Coca-Cola appeared to be moving in the same direction, recasting its performance metric from share of the soda market to â€Å"share of stomach. † â€Å"If Americans want to drink tap water, we want it to be Pepsi tap water,† said Pepsi’s vice-president for new business, describing the philosophy behind the new strategy. 27 Coke’s Goizueta had echoed the same view: â€Å"Sometimes I think we even compete with soup. †28 Though cola remained the clear leader in terms of both companies’ volume sales, both Coke and Pepsi relied heavily on non-carbs to stimulate their overall growth in the late 1990s. In 1999, non-carbs accounted for 80% of Pepsi’s and more than 100% of Coke’s growth. 29 tC At the turn of the century, Pepsi had the lion’s share of non-CSD sales. Pepsi led Coke by a wide margin in 2000 volume sales in three key segments: Gatorade (76%) led PowerAde (15%) in the $2. 6billion sports drinks segment, Lipton (38%) led Nestea (27%) in the $3. 5-billion tea-based drinks segment, and Aquafina (13%) led Dasani (8%) in the $6. 0-billion bottled water segment. 30 Including multi-serve juices, Tropicana held an approximate 44% share of the $3-billion chilled orange juice market, more than twice that of Minute Maid. 1 With the acquisition of Quaker and South Beach Beverages, Pepsi raised its non-carb market share to 31%, to Coke’s 19% (see Exhibit 8b). No Non-CSD beverages complicated Coke’s and Pepsi’s traditional production and distribution processes. While bottlers could easily manage some types of alternative beverages (e. g. , cold -filled Lipton Brisk), other types required costly new equipment and changes in production, warehousing, and distribution practices (e. g. , hot-filled Lipton Iced Tea). In many cases, Coke and Pepsi paid more than half the cost of these investments. The few bottlers that invested in these capabilities either purchased concentrate or other additives from Coke and Pepsi (e. g. , Dasani’s mineral packet) or compensated the franchiser through per-unit royalty fees (e. g. , Aquafina). Most bottlers, however, did not invest in hot-fill (for some iced tea), reverse-osmosis (for some bottled water), or other specialized equipment, and instead bought their finished product from a central regional plant or one owned directly by Coca-Cola or PepsiCo. They would then distribute these alongside their own bottled products at a percentage mark-up. More split pallets32 led to slightly higher labor costs, but otherwise did not significantly affect distribution practices. Despite these complicated and evolving arrangements, higher retail prices for alternative beverages meant that margins for the franchiser, bottler, and distributor were consistently higher than on CSDs. Internationalizing the Cola Wars Do As domestic demand appeared to plateau, Coke and Pepsi increasingly looked overseas for new growth. Throughout the 1990s, new access to markets in China, India, and Eastern Europe stimulated some of the most intense battles of the cola wars. In many international markets, per capita consumption levels remained a fraction of those in the United States. For example, while the 27 Marcy Magiera, â€Å"Pepsi Moving Fast To Get Beyond Colas,† Advertising Age, July 5, 1993. 28 Greising, p. 233. 29 Bonnie Herzog, â€Å"PepsiCo, Inc. : The Joy of Growth,† Credit Suisse First Boston Corporation, September 8, 2000. 30 Maxwell, p. 152-3. 31 Betsy McKay, â€Å"Juiced Up: Pepsi Edges Past Coke, and It has Nothing to Do With Cola,† The Wall Street Journal, November 6, 2000. 32 Pallets are hard beds, usually of wood, used to organize, store, and transport products. A split pallet carries more than one product type. 13 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 average American drank 874 eight-ounce cans of CSDs in 1999, the average Chinese drank 22. In 1999, Coke held a world market share of 53%, compared to Pepsi’s 21% and Cadbury Schweppes’ 6%. Among major overseas markets, Coke dominated in Western Europe and much of Latin America, while Pepsi had marked presence in the Middle East and Southeast Asia (see Exhibit 9). C By the end of World War II, Coca-Cola was the largest international producer of soft drinks. Coke steadily expanded its overseas operations in the 1950s, and the name Coca-Cola soon became a synonym for American culture. Coke built brand presence in developing markets where soft drink consumption was low but potential was large, such as Indonesia: With 200 million inhabitants, a med ian age of 18, and per capita consumption of 9 eight-ounce cans of soda a year, one Coke executive noted that â€Å"they sit squarely on the equator and everybody’s young. It’s soft drink heaven. 33 By the early 1990s, Coke’s CEO Roberto Goizueta said, â€Å"Coca-Cola used to be an American company with a large international business. Now we are a large international company with a sizable American business. †34 No Following Coke, Pepsi entered Europe soon after World War II, and—benefiting from Arab and Soviet exclusion of Coke—into the Middle East and Soviet bloc in the early 1970s. However, Pepsi put less emphasis on its international operations during the subsequent decade. In 1980, international sales accounted for 62% of Coke’s soft drink volume, versus 20% for Pepsi. Pepsi rejoined the international battles in the late 1980s, realizing that many of its foreign bottling operations were inefficiently run and â€Å"woefully uncompetitive. †35 In the early 1990s, Pepsi utilized a niche strategy which targeted geographic areas where per capitas were relatively established and the markets presented high volume and profit opportunities. These were often â€Å"Coke fortresses,† and Pepsi put its guerilla tactics to work, noting that â€Å"as big as Coca-Cola is, you certainly don’t want a shootout at high noon,† said Wayne Calloway, then CEO of PepsiCo. 6 Coke struck back; in one high-profile coup in 1996, Pepsi’s longtime bottler in Venezuela defected to Coke, temporarily reducing Pepsi’s 80% share of the cola market to nearly nothing overnight. In the late 1990s, Pepsi moved even further away from head-to-head competition and instead concentrated on emerging markets that were still up for grabs. â€Å"We kept beating our heads in markets that Coke won 20 years ago,† explained Calloway’s successor, Roger Enrico. â€Å"That is a very difficult proposition. 37 In 1999, PepsiCo’s bottler sales were up 5% internationally and its operating profit from overseas was up 37%. Market share gains were reported in most of Pepsi-Cola International’s top 25 markets, including increases of 10% in India, 16% in China, and more than 100% in Russia. By 2000, international sales accounted for 62% of Coke’s and 9% of Pepsi’s revenues. Do Concentrate producers encountered various obstacles in international operations, including cultural differences, political instability, regulations, price controls, advertising restrictions, foreign exchange controls, and lack of infrastructure. When Coke attempted to acquire Cadbury Schweppes’ international practice, for example, it ran into regulatory roadblocks in Europe and in Mexico and Australia, where Coke’s market shares exceed 50%. On the other hand, Japanese domestic-protection price controls in the 1950s greased the skids for Coke’s high concentrate prices and high profitability, and in India, mandatory certification for bottled drinking water caused several local brands to fold. 33 John Huey, â€Å"The World’s Best Brand,† Fortune, May 31, 1993. 34John Huey, â€Å"The World’s Best Brand,† Fortune, May 31, 1993. 5 Larry Jabbonsky, â€Å"Room to Run,† Beverage World, August 1993. 36The Wall Street Journal, June 13, 1991. 37 John Byrne, â€Å"PepsiCo’s New Formula: How Roger Enrico is Remaking the Company†¦ and Himself,† BusinessWeek, April 10, 2000. 14 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617- 783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century To cope with immature distribution networks, Coke and Pepsi created their own ground-up, and often novel, systems. Coke introduced vending machines to Japan, a channel that eventually accounted for more than half of Coke’s Japanese sales. 38 In India, Pepsi found the most prominent businessman in town and gave him exclusive distribution rights, tapping his connections to drive growth. Significantly, both Coke and Pepsi recognized local-market demands for non-cola products. In 2000, Coke carried more than 200 brands in Japan alone, most of which were teas, coffees, juices, and flavored water. In Brazil, Coke offered two brands of guarana, a popular caffeinated carbonated berry drink accounting for one-quarter of that country’s CSD sales, despite rivals’ TV ads ridiculing â€Å"gringo guarana. † tC When the economy foundered in certain parts of the world during the late 1990s, annual consumption declined in many regions. Major financial quakes in East Asia in 1997, Russia in 1998 and Brazil in 1999 shook the cola giants, who had invested heavily in bottler infrastructure. From 1995 to 2000, Coke’s top line slowed to an average annual growth of less than 3%. Profits actually fell from $3. 0 billion in 1995 to $2. 2 billion in 2000. In Russia, where Coke invested more than $700 million from 1991 to 1999, the collapse of the economy caused sales to drop by as much as 60% and left Coke’s seven bottling plants operating at 50% capacity. In Brazil, its third-largest market, Coke lost more than 10% of its 54% market share to low-cost local drinks produced by family-owned bottlers exempt from that country’s punitive soft-drink taxes. In 1998, Coke estimated that a strong dollar cut into net sales by 9%. Pepsi, with its relatively lower overseas presence, was less affected by the crises. Nonetheless, Pepsi also subsidized its bottlers while experiencing a drop in sales. No Despite these financial setbacks, both Coke and Pepsi expressed confidence in the future growth of international consumption and used the downturn as an opportunity to snatch up bottlers, distribution, and even rival brands. To increase sales, they tried to make their products more affordable through measures such as refundable glass packaging (instead of plastic) and cheaper 6. ounce bottles. The End of an Era? At the turn of the century, growth of cola sales in the United States appeared to have plateaued. Coke and Pepsi were investing hundreds of millions of dollars to shore up international bottlers operating at low capacity. The companies’ overall growth in soft drink sales were falling short of precedent and of investors’ expectations. Was the fundamental nature of the cola wars changing? Would the parameters of this new rivalry include reduced profitability and stagnant growth— inconceivable under the old form of rivalry? Do Or, were the troubles of the late 1990s just another step in the evolution of two of America’s most successful companies? In 2001, non-cola, non-carbs, and even convenience foods offered diversification and growth potential. Low international per capita soft drink consumption figures hinted at tremendous opportunity in the competition for worldwide â€Å"throat share. † Noted a Coke executive in 2000, â€Å"the cola wars are going to be played now across a lot of different battlefields. †39 38 June Preston, â€Å"Things May Go Better for Coke amid Asia Crisis, Singapore Bottler Says,† Journal of Commerce, June 29, 1998, . A3. 39 Betsy McKay, â€Å"Juiced Up: Pepsi Edges Past Coke, and It has Nothing to Do With Cola,† The Wall Street Journal, November 6, 2000. 15 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Do Exhibit 1 702-442 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. No U. S. Industry Consumption Statistics 1970 1975 1981 1985 1990 1992 1994 1995 1996 1998 1999 2000 Historical Carbonated Soft Drink Consumption Cases (millions) Gallons/capita As a % of total beverage consumption 3,090 22. 7 2. 4 3,780 26. 3 14. 4 5,180 34. 2 18. 7 6,500 40. 3 22. 4 7,914 46. 9 26. 1 8,160 47. 2 26. 3 8,608 50. 0 27. 2 8,952 50. 9 28. 1 9,489 52. 0 28. 8 9,880 54. 0 30. 0 9,930 53. 6 29. 4 9,950 53. 0 29. 0 22. 7 22. 8 18. 5 35. 7 6. 5 5. 2 1. 3 1. 8 26. 3 21. 8 21. 6 33 1. 2 6. 8 7. 3 4. 8 1. 7 2 34. 2 20. 6 24. 3 27. 2 2. 7 6. 9 7. 3 6 2. 1 2 40. 3 24. 0 25. 0 26. 9 4. 5 7. 8 7. 3 6. 2 2. 4 1. 8 46. 9 24. 3 24. 2 26. 2 8. 1 8. 8 7. 0 5. 4 2. 0 1. 5 47. 2 23. 3 23. 8 26. 5 8. 2 9. 1 6. 8 5. 4 2. 0 0. 6 1. 4 50. 0 22. 8 23. 2 23. 3 9. 6 9. 4 7. 1 4. 8 1. 7 0. 9 1. 3 50. 9 22. 3 22. 8 1. 3 10. 1 9. 5 6. 8 4. 9 1. 8 1. 1 1. 2 52. 0 22. 3 22. 7 20. 2 11. 0 9. 7 6. 9 4. 8 1. 8 1. 1 1. 2 54. 0 22. 1 22. 0 18. 0 11. 8 10. 0 6. 9 4. 7 2. 0 1. 3 1. 3 53. 6 22. 2 21. 9 17. 2 12. 6 10. 2 7. 0 4. 6 2. 0 1. 4 1. 3 53. 0 22. 2 21. 7 16. 8 13. 2 10. 4 7. 0 4. 6 2. 0 1. 5 1. 2 114. 5 126. 5 133. 3 146. 2 154. 4 154. 3 154. 0 152. 6 153. 6 154. 1 153. 8 153. 6 68 56 49. 2 36. 3 28. 1 28. 2 28. 5 29. 9 28. 9 28. 4 28. 7 28. 9 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 U. S. Liquid Consumption Trends (gallons/capita) Carbonated soft drinks Beer Milk Coffeea Bottled Waterb Juices Teaa Powdered drinks Wine Sports Drinksc Distilled spirits Subtotal Tap water/hybrids/all others Totald tC opy Source: John C. Maxwell, Beverage Digest Fact Book 2001, and The Maxwell Consumer Report, Feb. 3, 1994; Adams Liquor Handbook, casewriter estimates. aFrom 1985, coffee and tea data are based on a three-year moving average to counter-balance inventory swings, thereby portraying consumption more realistically. bBottled water includes all packages, single-serve, and bulk. cSports drinks included in â€Å"Tap water/hybids/all others† pre-1992. This analysis assumes that each person consumes on average one-half gallon of liquid per day. -16- Cola Wars Continue: Coke and Pepsi in the Twenty-First Century Advertisement Spending for the Top 10 CSD Brands ($ millions) op y Exhibit 2 Share of market 2000 Total market 20. 4 13. 6 8. 7 7. 2 6. 6 6. 3 5. 3 2. 0 1. 7 1. 1 1999 20. 3 13. 8 8. 5 7. 1 6. 8 3. 6 5. 1 2. 1 1. 8 1. 1 Advertisement Spendinga per 2000 2000 1999 share point 207. 3 130. 0 1. 2 50. 5 84. 0 83. 6 0. 5 44. 5 NA 2. 7 148. 9 91. 1 25. 5 37. 1 68. 4 71. 3 0. 8 39. 2 NA 2. 9 tC Coke Classic Pepsi-Cola Diet Coke Mountain Dew Sprite Dr Pepper Diet Pepsi 7UP Caffeine Free Diet Coke Barq’s root beer Total top 10 702-442 72. 9 72. 9 10. 2 9. 6 0. 1 7. 0 12. 7 13. 3 0. 1 22. 3 NA 2. 4 604. 2 485. 2 8. 3 707. 6 650. 0 NA Source: â€Å"Top 10 Soft-Drink Brands,† Advertising Age, September 24, 2001; casewriter estimates. aAdvertisement spending measured in 11 media channels from CMR. Brands and total market in 192-oz cases from Do No Beverage Digest/Maxwell. Case volume from all channels. 17 Copying or posting is an infringement of copyright. Permissions@hbsp. arvard. edu or 617-783-7860. 702-442 Cola Wars Continue: Coke and Pepsi in the Twenty-First Century U. S. Soft Drink Market Share by Case Volume (percent) 1966 op y Exhibit 3 1970 1975 1980 1985 1990 1995 1998 2000E 27. 7 1. 5 1. 4 2. 8 33. 4 28. 4 1. 8 1. 3 3. 2 34. 7 26. 2 2. 6 2. 6 3. 9 35. 3 2