Thursday, September 6, 2012

Cola Wars in Europe, Pepsi Vs. Coke and how David wins over Goliath!


Global Cola market is more or less an Oligopoly market with two major players, Coca Cola and the other Pepsi. Smaller players have either surrendered to these juggernauts or have been simply ousted from their respective markets.

But what happens when these  giants clash for defending their respective turfs from each other? Precisely that happened in a big way in Europe with some quirkiness beforehand in Latin America. Here our main focus would be the battle in Europe.



Pepsi's rising status in late 1970s and 1980s: 


By 1976 Coca Cola was faltering because of increased clout of Pepsi in US market when growth rate of Coke dropped from 13 percent to a meager 2 percent. Adding to Coca Cola's woes came the Pepsi challenge tests that showed a clear preference to Pepsi taste over Coke taste. Coca Cola in defense conducted it's own taste tests but alas it produced the same results of preference to Pepsi over Coke. By 1979, Pepsi was closing on the gaps faster by Coke leading with only 2.9 Percent over Pepsi whereas it was leading over Pepsi by 14 percent a decade before. What was baffling and worrisome to Coca Cola was it was outspending Pepsi in advertisement expenditures by $100 Million more while it's share was dwindling.
In this time of upheaval by 1980's Coca Cola was getting ready to welcome it's new head on board, Roberto Goizueta. Goizueta son a of a wealthy Cuban sugarcane plantation owner had studied at Yale university who mastered English by watching Hollywood movies in short span of time. With Fidel Castro seizing power in Cuba and advent of communism, Goizueta fled cuba with $20 in his pocket to the US in search of better fortune and found his niche in Coca Cola. He was to be the man who ushered in a new era for Coca Cola with his business acumen and proved a tough nut for Pepsi to deal with.


Introducing a New Flavor for Coke in 1980s: 


Despite superior advertising and distribution, Coca Cola's diminishing market share was intriguing. Taste was suspected to be the culprit and Coke was relaunched in the market in a much sweeter flavor to regain its hallowed lead over Pepsi. But such a desperate business decision backfired on Coca Cola with nationwide protests over such a Coca Cola decision with thousands of new protestors joining each day echoing similar sentiments of Coke ditching them and hurting the national sentiments with Coke sales plummeting further and cheering Pepsi all the way through. But Pepsi's gloat was short lived when Coca Cola alarmed with it's blunder made a smart turn around by launching the original Coke alongside the new flavour which helped it regain its popularity and it's sales soon soared! Coca Cola kept making heady progress till 1997 in international markets with Pepsi's market getting constantly eroded by a hard driving Coca Cola.




1998 and Troubling times for Coca Cola: 


By 1997 the era of legendary Goizuerta was over and new chairman Douglas Ivester had taken over. In June health scares started spreading after Belgian children became sick after consuming contaminated Coke. Soon after hundreds of sick people in France were blaming their illnesses on Coke consumption. France imposed ban on Coke cans from Dunkirk plant in Belgium. Soon Germany and Luxembourg also imposed selective bans on Coca Cola products in their countries until health scare subsided. Some 14 million cases of Coke products eventually were recalled in the five countries, and estimates were that Coke was losing $3.4 million per day in revenues.
Finally Coca Cola swung into action for an uphill task of clearing it's name of the contamination scares and rebuilding trust in European markets that involved a personal apology message from the new Chairman, a special consumer hotline, free 1.5 liter Coke distribution in 4.37 million households. By the time Coca Cola was getting over it's crisis a new problem started staring over it from Pepsi's side.

 Pepsi had less than 10 percent share whereas Coca Cola was omnipresent with more than 50 percent share in Europe with the rest 40 percent share fragmented among many smaller players. Coca Cola was anyways ahead of Pepsi across the globe, not just Europe but here the difference was phenomenal and most importantly due to Coca Cola's interference in twisting consumer's tastes with its tactics.


Having stated that, the question arises how did Coca Cola manage to pull off this behemoth task at all? Well the answer lies in Pepsi's business diversification into snacks along with it's beverages, something that would make Pepsi bleed in the hands of Coca Cola in future.


Big fast food chains such as McDonalds, Burger King and Dominos offer Coca Cola exclusively. Whereas Pepsi's strong hold lied with it's formerly owned companies Pizza Hut, Taco Bell and KFC.. Pepsi alleges that Coca Cola got Pepsi comletely eliminated through independent food service distributors to the former chains that by offering Pepsi they would only be helping their competitor. This gave Coca Cola unprecedented power to control prices and even eliminate competition all together.  In past Coca Cola hadn't enforced such exclusive contracts but in 1997 owing to increased competition from Pepsi it asked these distributors to adhere to its terms or else they would be entirely cut off from Coca Cola supply. By then Coca Cola had been such a success with cult following that not obliging to Coca Cola's conditions would have proved detrimental to these fast food chains business. So they relented.

This sent jitters in Pepsi's top level management. As 90% of fountain business came from dispensers in fast food business, loosing out entirely to Coke didn't make much of a sense. Apart from this in bottled Cola market, Coke was way ahead of Pepsi in all but most markets. Therefore loosing out to Coke in fountain dispensing business sounded like death knell to Pepsi. 


1999 and filing of Anti Trust Laws by Pepsi against Coca Cola in Europe:


In late July 1999, European Union officials raided offices of Coca-Cola and its bottlers in four countries in Europe—Germany, Austria, Denmark, and Britain—on suspicions that the company used its dominant market position to shut out competitors. According to Pepsi, Coca Cola had adopted unfair trade practices to restrict reach of Pepsi to consumers through soda fountains and food chains. 


This allegation from Pepsi came at a time when Coca-Cola was still trying to recover from the contamination problems, which was a cruel blow.

The major suspicion was that Coke was illegally using rebates to enhance its market share.

The several types of rebates under investigation were rebates on sales that boosted
Coke’s market share at the expense of rivals, and rebates given to distributors who
agreed to sell the full range of Coke products or to stop buying from competitors.
Coca-Cola’s huge market share in most countries of Europe fed the concern.



Pepsi also filed a complaint with Italian regulators who were soon to act and discovered Coca Cola had violated anti trust laws by abusing its dominant position through rebates, bonus and discounts with retailers to entirely get rid of Pepsi in Italian market.



Coke in the New Millennium:


Coke cheered with growth rate of 18 percent between 1990 and 1997 till its growth rate fell to just 4 percent while Pepsi outperformed its ace rival in overall growth if not in Cola business!
The following comparative statistics show the slipping performance of Coca-Cola to
PepsiCo over the five years to 2004.




With the dawn of the new century and increased health awareness, popularity of carbonated beverages were fizzling out. Pepsi so to say kept abreast with changing times with non carb drinks such as Tropicana juice, Gatorade sports drink, and Aquafina water which were billion-dollar beverage brands plus had its Frito-Lay Division with snack foods such as Lays, Doritos, and Baked Crunchy Cheetoswhile while Coca Cola was still firmly entrenched in Coke.


The following shows the breakdown of sales and profits for Pepsi’s four major businesses as of 2004:





October,2004 and Pepsi wins over: 


Finally after 5 years of probe the European Union arrived at a settlement that would result in Coca Cola change it's sales practices, end exlusivity agreements with food service distributors and allow competitors products in Coca Cola's refrigerators for up to 20% space, all of which had made  Coca Cola acquire 50% of the gigantic 17 Billion Euro carbonated drinks market in Europe.
Adherence to these reforms would spare Coca Cola of any fines and further legal wranglings, that Coca Cola willingly accepted.

And Finally David wins over Golliath!


I would also love to have my visitors in my facebook network. 
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Thanks,

Satyajeet.

Tuesday, August 28, 2012

Menace of Over Population


Menace of over population has always bothered me. On top of that religious encouragement by preaching children are gifts and messengers of a holy god, that population control is a sin plus government inaction irks me a lot.

The statistics are alarming. In just 200 Years there has been a phenomenal increase in population from 1 Billion in Year 1801 to more than 7 Billion in 2011. If that is not serious enough to ring alarm bells, then we are into some deep and very serious trouble!
Governments and Religious institutions have their agenda to propagate if the earth is over populated.

Lets have a closer look:

RELIGION: Now this is the greatest shit of all time. As man evolved from being a hunter gatherer to a social animal with the invention of agriculture 10,000 years ago, he started settling down. This gave birth to the monster of ORGANISED religion. Stray practices that had always existed dating back to the lower paleolithic era of archaic homo sapiens started getting more organised and monstrous since within last 5000 years. Religious scripts from Egyptian pyramids are among the oldest ones discovered dating back to 2400 BCE.

All said, each religion competes with the other for world domination with population expansion of their stupid  followers. There are 2 ways to accomplish this 1) Conversion 2) Procreation.
ISLAM follows the 2nd approach mostly and the former through brute force (at least a few hundred years ago in India/Asia) and CHRISTIANITY is more into conversion through financial incentives and also to an extent uses the 2nd approach.
But both are against birth control. I remember a funny statement of the Pope sometime back during his visit to South Africa that Condoms are the real reasons for AIDS epidemic in South Africa. Can a man sound more hilarious and stupid??

Surprisingly the second most populated country India where I reside is a predominantly HINDU nation but Indians just love procreating at the slightest sexual recreation.Here HUMANS breed like MOSQUITOES. People swarm everywhere in this densely populated country.                                         

Fertility rate world map (Source: Wikipedia):




GOVERNMENTS: Agenda is simple and short. More number of people meaning more poverty and illiteracy in third world. This would perpetuate more of social strife creating a fertile ground for politicians to deceive masses and earning votes would be much easy and cheap.(Sad that electoral politics is succeeding in a prosperous country like America and  that explains why  an environmentalist like Al Gore lost to a rogue oil tycoon Bush).


Corruption index in densely populated countries barring very few exception(Source: Wikipedia):






MEDICAL SCIENCE: It's simple to understand that advancements in medical sciences along with being a BOON are also proving a BANE for mankind by completely eradicating many epidemics/pandemics that used to get rid of millions annually and increasing life expectancy at the same time. This is the greatest irony of recent times. Thus proving to be a contributor to endemic population growth.

Now lets face some hard facts and still if this is not alarming enough we as a species are doomed in deep filth:

Projections of population growth by 2050 is 9 billion while some estimates indicate it could touch 12 billion! Currently its growing at 74 million per year! India is major culprit being a major contributor along with few other African and Latin american nations. The parody is the whole nation was celebrating with pride recently that the 7Th Billion child was born in India while I was feeling ashamed. This I would say is national BUFFOONERY!!

Living in a highly overpopulated country like INDIA, I cringe at the sight of overcrowded trains and buses. There's a long queue everywhere one goes. People people and people! Its a ocean of people here. Human life is so cheap now a days that I hardly find any difference between people swarming in a busy market or flies buzzing over a dump yard. I have seen people falling on tracks from running trains in MUMBAI because of fights jostling for space in seriously overcrowded compartments. In BANGALORE a man near my house was murdered for a gallon of water because the city reels under water scarcity for most parts of the year. Its the same city that was tagged as Garden City 40 Years back.


Countries by population density (Source: Wikipedia):




But still INDIA celebrates it's overpopulation and hails it as an asset while corruption, scandals and sky high inflation have marred the political and economic landscape of this country. Recent Coal Gate scam which followed the 3G telecom              scam amounts to a whooping INR1,060,000 crore (US$191.86 billion)!! 
This is mind boggling and sends me into a tizzy!
I would say India is a corrupt nation because of its a land of scarcity and wants
which are a byproduct of its overpopulation.


People clambered on every inch of space on a Mumbai Suburban train. 


Common sight in Mumbai.



People bathing in a Mumbai Slum besides a Gutter.



Women from lower strata in Bangalore lined up for free water as one has to shell out Rs. 2000/ $50 per month for water. Bloody fights break out at such sites for water:




Mother Earth simply can't sustain such a massive population. This is exerting tremendous pressure on natural resources from fresh water to food supply, urban infrastructure and the list is endless... Ground water levels have depleted to an all time low which is bound to worsen with ever ballooning population. Overpopulation would breed more poverty and scarcity. This would create a vicious cycle of agony and despair resulting in strife and conflicts. 
A UN report 2 years back indicated direct correlation between rise in starvation and rise in terrorism.Glance at this chilling article.  http://www.cfr.org/africa/failed-states-world-terror/p4733   

 Have a look at the following map of malnourished percentage of people in respective countries to see for yourself the correlation. Malnourished nations are equally politically unstable as well:

To sum up mankind is in dire straits and if urgent measures aren't taken for this population explosion we as a species are doomed. UN report 2070 figures are astounding at 12 Billion and it says then population growth would start stabilizing because of decrease in fertility rates. But in this present scenario do you think we would survive this population mayhem till 2070? You think and decide!

Thanks for your patience going through my piece....







Poem on Enigmatic Europe..



The following poem is based on my impressions of the European cities I visited:



Wandering down those eerie streets on a chilly night,  
Hunting for a shelter cozy and tight.
Seems like an elusive seductress exuding ghostly aura,
As I gasp in awe, at the splendour of Praha.




City by the sea under sun,
Of gondolas, canals, frolic and fun.
Feels so warm and nice,
In this timeless city of Venice.




Iconic city of German engineering,
Running seamlessly like a fine tuned machine.
Crown of Bavaria with BMW its jewel,
Where time is god and punctuality practised as religion,
So perfect, clean and green, that am in love with Muenchen.



Air heavy with smoke of dope,
Harbour bellowing with ship horns,
Red light district oozing in exuberance with booze flowing on its streets.
Beguiling and teasing,
Bicycling paradise and fun Mecca.
So tolerant, cosmopolitan and liberal,
That night ambience feels surreal while biking in Amsterdam.




Picturesque city by the lake,
With fancy cars plying its streets and splendid mansions dotting skyline,
Sitting on piles of riches and so expensive that I deride,
Thank God, it doesn’t cost to breathe in Zurich!






Epitome of Roman wealth and might,
With the colloseum as its icon of indulgence,                
That had taken away its upright prudence.
History drips in the city of Rome.







Paradise of music and museums,
An art lover’s manna,
This is enchanting Vienna.





So ancient and captivating,
Its Pizzas delicious, mouth watering,
And glancing at it from top of the fuming Mount Vesuvius is enthralling.
With the ruins of Pompeii beside,
For Naples my heart starts praying,
To save it from the Mount’s furor and might.






Has gotten better by getting rid of its dreary past relating to Hitler,
Democracy all pervasive with people so helping and friendly,
That one wonders this was once world war epicenter.
Change is what Berlin means.




Split into two by the mighty River Danube
Emerged out of communist past and thriving in modern present.
Landscape that is mesmerizing and riveting,
A city so welcoming and caring,
That it feels like home in Budapest.





Sparkling metropolis teeming with life,
Pride of France and cradle of renaissance.
Victim of its own success, fast losing its sheen,
With illegal immigration on the rise.
Eiffel tower  standing tall and watching it all in stoic silence,
While Gustavo Eiffel is shedding tear and turning in his grave.
As I roam around in Paris…

Sunday, August 26, 2012

Best Bullshit Story of all time.



Yes, you guessed it right. It's the same old Fuckin' RELIGION! What a fuck invented by mankind to FUCK itself UP! Divine gift of reasoning and logic that only man is gifted with in the Animal Kingdom somehow goes down in a religious gutter for the religious BIGOTS, who are nothing but super IDIOTS and can also be turned into beastly IDIOTS by their holy shitty god men to plunder and butcher their fellow men.



Religion easily has the best bullshit story of all time. Think about it. Religion has convinced people that there’s an invisible man…living in the sky. Who watches everything you do every minute of every day. And the invisible man has a list of ten specific things he doesn’t want you to do. 

And if you do any of these things, he will send you to a special place, of burning and fire and smoke and torture and anguish for you to live forever, and suffer, and burn, and scream, until the end of time. But he loves you. He loves you. He loves you and he needs money.

Now here are some goodies for you to relish if you happen to be an agnostic like me or even an atheist :













































Pathetic Indian performance at the London Olympics.





Pathetic performance of India at the Olympics should serve as a stark reminder of where does India stand in International sports arena! While we rejoice with pride and pomp in India winning Cricket world cup, the world might be pitying us 
at the Olympics. As long as cricket mania doesn't subside amongst Indians, India is bound to score badly in Olympics. 

Olympics are the real barometer to measure sports mettle of a nation not cricket.


‘Cricket’ along with it’s stupid cousin ‘Bollywood(Indian Movie Industry)’ which are staple entertainment of Millions of Indians are indicative of the fact that India as a nation has very poor taste. Cricket is simply “Rubbing a HARD BALL against MALE BALLS before BOWLING” and Bollywood is “An actress running with her BALLS (oops! BOOBS) bouncing before KISSING a jackass actor” AND the crowd spins into EUPHORIA in both cases!

To quote George Bernard Shaw on cricket "Eleven fools are playing and eleven thousand fools are watching (Hundred Eleven Million Fools in case of India!)" How true because in the nation of it's birth (England), it has entirely lost luster but has gained cult following in third world banana republics like ours!!
India is yet to evolve and arrive...

Meanwhile my Waving Salutes to Sushil, Saina, Mary, Gagan and Vijay who have real BALLS to ride against the wave and earn Olympics Pride on their own accord !!!!!!





















Einstein Quote.




Humiliation and mental oppression by ignorant and selfish teachers wreak havoc in the youthful mind that can never be undone and often exert a baleful influence in later life. ~ Albert Einstein
--





I wholeheartedly agree wh you Sir, Einstein and my dislike or even hatred for most teachers can't be fathomed. All they do is lull the imagination of a child without ever letting it flourish. They nip the budding intellect inside so that it never blossoms and all this in the name of disciplining >:)


Coffee experience so unique!





Sipping on Irish Coffee in a Cafe Coffee Day but what's unique about this ordinary coffee outlet is the way it is situated overlooking a verdant hill. 


Sipping on a hot coffee amidst clouds is heck of an experience!





This beats my earlier experience with a Star Bucks cappuccino on a shivery night in Munich, Germany while waiting for my train to Paris, France when a hot coffee made all the difference between sheer pleasure or stupendous torture..



The Wanderer




Saturday, August 25, 2012

My Maiden Voyage to Europe with Budapest as Gateway.

It was May, 2010 and finally the most awaited day had come for me to fly to the land of my fantasies, EUROPE! And my first point of arrival was going to be Budapest, Hungary via Istanbul, Turkey. Reason for travel? Meant to be business but planned to be a pleasure. Well as an International Business MBA student in ITM Business School, Mumbai, I had opted for studying a trimester in it's partner university ESSCA in France and Hungary with the sole intention of bunking my lectures at ESSCA and explore all or most of my dream destinations in Europe as much as possible.

Buda Castle

I had been meticulously planning for this trip 3 months in advance so that I am not left in a lurch after reaching Europe. Right from digging into my savings, raising little funds from my parents, getting Forex, purchasing Lonely Planet guide/language books, travel gear, EuroRail pass, international health insurance e.t.c I was thoroughly ecstatic about my forthcoming trip. Being a travel freak and having traveled extensively across India all alone, I had gathered considerable experience which was proving handy now. So here were the destinations I planned to visit:

  1. Budapest, Hungary
  2. Paris, France
  3. Vienna, Austria
  4. Prague, Czech Republic
  5. Zagreb, Croatia
  6. Rome, Italy
  7. Venice, Italy
  8. Naples, Italy
  9. Berlin, Germany
  10. Munich, Germany
  11. Zurich, Switzerland
  12. Amsterdam, Netherlands
  13. Copenhagen, Denmark
Even though this was my first trip abroad, because of my passion for world affairs, general knowledge and national geographic, I was entirely confident of pulling this trip all alone in Europe.

Two great challenges ahead were be-fooling my professors in Europe so that they don't flunk me and my shoestring travel budget. I planned Budapest to be the stopover to most of the above destinations. Reasons being it's an absolutely spectacular and hospitable city..
All set and I was finally ready to fly early morning Turkish Airways flight from Mumbai at 4:30 AM. Flight boarded and after some delicious food and vodka inside the Airbus Carrier, sleepless from the previous night soon I felt asleep only to wake up 8 hours later in Istanbul. Ah! The bird's view of this city of hamams (Sauna) and carpets before landing was gorgeous! I knew it to be a beautiful city and now I was seeing it with utter helplessness of not being able to stay for a day to feel it, since my halt was just for 2 hours.

Then I board my connecting flight to Budapest and after slightly over an hour I touch down at Budapest. And VOILA! I was simply excited! It simply seemed other worldly. Obviously scantily populated, weather outside was cloudy, cold and damp with spine chilling winds giving me an authentic feel of Europe. Then I boarded my bus for the city and I hardly saw any vehicles plying on the highway. Now contrast this with the mad traffic frenzy on roads with a swarming population in India, Hungary was a visual treat!! As the city of Budapest came nearer I could only watch in awe the splendid architecture of it's castles, museums, buildings and bridges on the Danube river. Finally I reach my cozy apartment, had a few shots of vodka with roasted lamb meat, sunk into my fluffy bed and drifted into deep sleep.