Succubus Revealed Chapter 2

It took me a moment to really comprehend that in thirty seconds, the conversation had gone from a deeply seriously mystery about my love life to bowling for demonic bragging rights. And yet, this wasn't a particularly unusual pattern in my world. â€Å"And by ‘we,' † added Jerome, â€Å"I mean you four.† He nodded toward Peter, Cody, Hugh, and me. â€Å"I'm sorry,† I said. â€Å"Let me make sure I'm following this. You've signed us up for some sort of bowling league. One that you aren't even going to participate in. And this is somehow going to prove your employees' ‘evilness' to the world.† â€Å"Don't be silly. I can't participate. Bowling teams only have four people.† He didn't comment on the proving evilness part. â€Å"Well, hey, I'll totally yield my spot to you,† I said. â€Å"I'm not that great a bowler.† â€Å"You'd better become one.† Jerome's voice grew cold. â€Å"All of you had, if you know what's good for you. Nanette will be impossible to live with at the next company meeting if you lot lose.† â€Å"Gee, Jerome. I love bowling,† said Carter. â€Å"How come you never mentioned this to me before?† Jerome and Carter held gazes for several heavy seconds. â€Å"Because, unless you're ready to take a fall for the team, you can't really compete with us.† A funny smile fell over Carter's face. His gray eyes glinted. â€Å"I see.† â€Å"I don't really like your use of ‘us,' seeing as you've already written off any participation on your part,† I pointed out to Jerome, imitating his earlier snide tone. Peter sighed, looking rather woebegone. â€Å"Where on earth am I going to find tasteful bowling shoes?† â€Å"What's our team name going to be?† asked Cody. That immediately degenerated into a conversation of truly terrible suggestions, such as Soulless in Seattle and Split Decision. After almost an hour, I couldn't handle any more. â€Å"I think I'm going to go home,† I said, standing up. I had kind of wanted dessert but was afraid I'd be drafted for beach volleyball and cricket if I stayed much longer. â€Å"I brought the wine. You guys don't really need me anymore.† â€Å"When you get home, tell my wayward offspring that I need him to coach you guys,† said Jerome. â€Å"By ‘home,' I actually meant Seth's,† I said. â€Å"But if I see Roman, I'll let him know you've found a good use for his formidable cosmic powers.† Roman – Jerome's half-human son and my roommate – actually was a pretty good bowler, but I didn't want to encourage Jerome. â€Å"Wait!† Peter sprang up after me. â€Å"You have to draw for Secret Santas first.† â€Å"Oh, come on – â€Å" â€Å"No complaining,† he argued. He hurried to the kitchen and returned with a ceramic cookie jar shaped like a snowman. He thrust it toward me. â€Å"Draw. Whatever name you get is who you're buying for, so don't try to get out of it.† I drew a piece of paper and opened it up. Georgina. â€Å"I can't – â€Å" Peter held up a hand to silence me. â€Å"You drew the name. That's who you've got. No arguments.† His stern look stopped me from any more protests. â€Å"Well,† I pointed out pragmatically, â€Å"at least I have a few ideas.† To his credit, Peter sent me home with some chocolate fondue sauce and a Tupperware bowl filled with fruit and marshmallows. Hugh and Cody were running forward with the bowling team plan, trying to come up with a practice schedule. Jerome and Carter said little and instead kept watching each other in a speculative, knowing way that was typical of them. It was hard to read much on their faces, but for once, Jerome gave off the vibe of having the upper hand. I left Capitol Hill for Seattle's University District and Seth's condo. All the windows were dark when I pulled up, and I couldn't help a smile. It was almost eleven. Seth must have called it an early night, something I'd been urging him to do for a while. Thinking of that, my smile faded as quickly as it had come. A few months ago, Seth's sister-in-law, Andrea, had been diagnosed with ovarian cancer. The disease had been pretty far advanced when caught, and although she'd almost immediately gone into treatment, the outcome still wasn't promising. Worse, the treatments had taken a huge physical toll on her, one that was testing the family's strength. Seth was frequently helping them out, especially when his brother Terry was working, since it was harder for Andrea to care for their five daughters now. Seth had been sacrificing both sleep and his writing career to look after them. I knew it was necessary. I loved Seth's family and had helped them out as well. But I still hated seeing Seth run himself down and knew that it hurt him to put his work on hold. He claimed his writing was the least of his problems right now and had time before deadlines were an issue, particularly since his next two books were queued for printing next year. I couldn't argue against that, but the sleep issue? Yeah, I was on him a lot about that and glad to see my words had gotten through tonight. I used my key to let myself in and slipped through the condo as silently as possible. I practically lived here lately and had no trouble finding my way around furniture in the darkness. When I reached his bedroom, I could just barely make out his form wrapped up in covers, softly outlined in the light of his alarm clock. I quietly took off my coat and then shape-shifted into a cotton babydoll nightgown. It was sexy but not blatantly so. I planned on sleeping with him tonight, for real. I slid into bed and pressed myself up against his back, lightly tossing an arm over him. He stirred slightly, and I couldn't resist pressing a kiss against his bare shoulder. The scent of cinnamon and musk washed over me as he snuggled closer. Despite sternly chastising myself that he needed to sleep, I lightly ran my fingers along his arm and sneaked in another kiss. â€Å"Mmm,† he murmured, rolling over toward me. â€Å"That feels nice.† A few things hit me at once. First, Seth didn't wear any sort of cologne or aftershave that smelled like cinnamon. Second, Seth's voice didn't sound like that. Third, and perhaps most important, Seth wasn't in bed with me. I didn't mean to scream as loudly as I did. It just kind of happened. I was out of the bed in a flash, groping for the light switch on the wall while the intruder attempted to get up. He ended up getting tangled in the covers and falling off the bed with a loud thump, just as I found the light. I promptly reached for a weapon, but seeing as this was Seth's bedroom, my options were limited. The heaviest, most dangerous object I could readily grab ahold of was Seth's dictionary, a leather-bound monstrosity that he kept on hand because he â€Å"didn't trust the Internet.† I stood poised and ready to literally throw the book at the intruder as he scrambled to his feet. As he did and I got a good look at him, I noticed something crazy. He looked . . . familiar. Not only that, but he kind of looked like Seth. â€Å"Who are you?† I demanded. â€Å"Who are you?† he exclaimed. He seemed more confused than anything else. I don't think he found the threat of a five foot four woman with a dictionary all that frightening. Before I could answer, a hand touched my arm. I yelped and threw the dictionary out of instinct. The guy dodged, letting the book crash harmlessly against the wall. I spun around to see who'd touched me and found myself looking into the eyes of a white-haired woman with gold cat-eye glasses. She was wearing flowered pajama bottoms and a pink sweatshirt with a crossword puzzle on it. She was also wielding a baseball bat, which was pretty astonishing – not just because it was more dangerous than a dictionary but also because I hadn't known Seth owned one. â€Å"What are you doing here?† she asked fiercely. She glanced over at the shirtless, dumbfounded guy. â€Å"Are you okay?† For half a second, I actually toyed with the idea that I had somehow let myself into someone else's condo. Like, maybe I was just one door over. This scene was so ridiculous that a mix-up seemed far more likely. It was only the obvious evidence – like my key and Seth's University of Chicago teddy bear watching this spectacle – that drove home the fact that I was indeed where I was supposed to be. Suddenly, the sound of the front door opening and closing rang through the condo. â€Å"Hello?† came a blessedly familiar voice. â€Å"Seth!† exclaimed all three of us in unison. Moments later, Seth appeared in the doorway. As usual, he looked adorable. His reddish brown hair was typically unkempt, and he was wearing a Dirty Dancing T-shirt that I'd never seen before. Despite my panic and confusion over this current situation, the concerned part of me still noted the little signs of fatigue on Seth's face, the dark circles and lines of weariness. He was thirty-six and usually looked younger than his age. Not today. â€Å"Seth,† said the bat-wielding woman. â€Å"This lady broke into your house.† He looked at each of us in turn before resting his gaze on her. â€Å"Mom,† he said quietly, â€Å"that's my girlfriend. Please don't bludgeon her.† â€Å"Since when do you have a girlfriend?† asked the guy. â€Å"Since when do you have a baseball bat?† I asked, recovering my composure. Seth cut me a wry look before gently trying to remove the bat from the woman's hands. She didn't let go. â€Å"Georgina, this is my mom, Margaret Mortensen. And that's my brother Ian. Guys, this is Georgina.† â€Å"Hi,† I said, feeling surprise of a different sort. I'd heard a lot about Seth's mother and younger brother but hadn't expected to meet them anytime soon. Seth's mother didn't like to fly, and Ian was . . . well, from the stories Seth and Terry told, Ian was just hard to track down in general. He was the wayward Mortensen brother. Margaret relinquished the bat and put on a polite but wary smile. â€Å"It's very nice to meet you.† â€Å"Ditto,† said Ian. I now understood why he looked familiar. Aside from the fact I'd probably seen a picture of him somewhere, he also shared some of Seth's and Terry's features. He was tall like Seth, but with Terry's thinner face. Ian's hair was all brown, with no coppery hint, but it had that same messy look that Seth's did. Except, on closer examination, I had the feeling Ian's had been purposely styled that way with the help of much time and product. Seth suddenly did a double take between Ian and me. He didn't even have to say anything for me to guess the question on his mind. Or questions, perhaps. My nightgown and Ian's shirtlessness undoubtedly raised a number of them. Ian's defense came swift and certain. â€Å"She got into bed with me.† â€Å"I thought he was you,† I said. Seth's mother made a strange noise in her throat. â€Å"You were supposed to be on the couch,† said Seth accusingly. Ian shrugged. â€Å"It's uncomfortable. And you weren't home yet, so I figured there was no harm done. How was I supposed to know some woman was going to come manhandle me in my sleep?† â€Å"I didn't manhandle you!† I cried. Seth rubbed his eyes, again reminding me how exhausted he was. â€Å"Look, what's done is done. Why don't we all just go to bed – where we're supposed to – and then get to know each other in the morning, okay?† Margaret eyed me. â€Å"She's going to sleep in here? With you?† â€Å"Yes, Mom,† he said patiently. â€Å"With me. Because I'm a grown man. And this is my home. And because in thirty-six years, this isn't the first woman to stay over with me.† His mother looked aghast, and I groped for a more comfortable topic. â€Å"Your shirt's great.† Now that she wasn't threatening to strike me, I could see that the crossword spelled out her five granddaughters' names. â€Å"I love the girls.† â€Å"Thank you,† she said. â€Å"Each one of them is a blessing, born within the holy confines of wedlock.† Before I could even fumble a response to that, Ian groaned. â€Å"Lord, Mom. Is that from that Web site I told you not to order from? You know their stuff's made in China. I know this woman who could have made you one out of sustainable organic fabric.† â€Å"Hemp is a drug, not a fabric,† she told him. â€Å"Good night, you guys,† said Seth, pointing his brother to the door. â€Å"We'll talk in the morning.† Margaret and Ian murmured their good nights, and she paused to kiss Seth on the cheek – which I actually thought was pretty cute. When they were gone and the door was closed, Seth sat on his bed and buried his face in his hands. â€Å"So,† I said, coming to sit beside him. â€Å"Exactly how many women have stayed over in thirty-six years?† He looked up. â€Å"None who were caught by my mother in so little clothing.† I plucked at the skirt of the nightgown. â€Å"This? This is tame.† â€Å"I'm sorry about that,† he added, waving vaguely toward the door. â€Å"I should've called and warned you. They just drove into town tonight – unannounced, of course. Ian can't be expected to do what people expect. It would ruin his reputation. They showed up at Terry's, but there's no room for them there, so I sent them on ahead since they were so tired. I had no idea it would result in you trying to sleep with my brother.† â€Å"Seth!† â€Å"Kidding, kidding.† He picked up my hand and kissed the top of it. â€Å"How are you? How was your day?† â€Å"Well, I tried my best to keep Santa from getting drunk and then found out Jerome signed us up for a Hellish bowling league.† â€Å"I see,† said Seth. â€Å"So. The usual.† â€Å"Pretty much. What about you?† The small smile that had been tugging at his lips fell. â€Å"Aside from unexpected family? The usual too. Terry was out late with work stuff, so I was there all night with the girls while Andrea rested. Kendall has to build a papier-mache solar system, so that was fun for everyone.† He held up his hands and wiggled fingers coated in white powder. â€Å"And let me guess. No writing?† He shrugged. â€Å"It's not important.† â€Å"You should've called me. I could've watched them while you wrote.† â€Å"You were working and then . . . what, it was fondue night, right?† He stood up and stripped off his shirt and jeans, getting down to green flannel boxers. â€Å"How did you know that?† I asked. â€Å"I barely knew that.† â€Å"I was on Peter's e-mail list.† â€Å"Well, regardless, it doesn't matter. And that mall job is nothing. I could have been over here in a flash.† He stepped into his bathroom and returned a few moments later with a toothbrush in his mouth. â€Å"That job is nuffing. Haf any of your interfeews panned out?† â€Å"No,† I said, not adding that I hadn't gone on any other interviews. Everything paled compared to Emerald City. The conversation was put on pause while he finished brushing his teeth. â€Å"You should be doing something better,† he said, once he was done. â€Å"I'm fine where I'm at. I don't mind it. But you . . . you can't keep going on like this. You're not getting enough sleep or working.† â€Å"Don't worry about it,† he said. He turned off the light and crawled into bed. In the dimness, I saw him pat the spot beside him. â€Å"Come over here. It's just me, I promise.† I smiled and curled up beside him. â€Å"Ian didn't smell right, you know. I mean, he smelled good, but not like you.† â€Å"I'm sure he spends gratuitous amounts of money to smell good,† muttered Seth through a yawn. â€Å"What's he do for a living?† â€Å"Hard to say. He's always got new jobs. Or no job. Whatever money he's got goes toward carefully maintaining his hard-fought, effortless lifestyle. Have you seen his coat?† â€Å"No. The only clothing of his I've seen is his boxers.† â€Å"Ah. Well, it must be in the living room. It looks like it came from a thrift store but probably cost four figures.† He sighed. â€Å"Although, I shouldn't be too hard on him. I mean, yeah, he'll probably hit me up for money while he's here, but I can't knock him and Mom coming out to help. At the very least, they can help watch the kids now.† I wrapped my arms around Seth and breathed in his scent. It was the right one, and it was intoxicating. â€Å"And you can catch up on some writing.† â€Å"Maybe,† he said. â€Å"We'll see how it goes. I just hope I'm not babysitting Mom and Ian more than the girls.† â€Å"How bad of an impression did I make on her?† I asked. â€Å"Not that bad. I mean, no worse than any woman – scantily clad or otherwise – would've made who was spending the night with me.† He kissed my forehead. â€Å"She's not so bad. Don't be fooled by her conservative Midwest grandma act. I think you guys will get along.† I wanted to ask if Maddie had met Margaret and, if so, how they'd gotten along. I bit my tongue on the question. It didn't matter. It was in the past, and Seth and I were the present. Sometimes, especially staying here as much as I did, I felt a little weird remembering that Maddie had lived with him too. There were still little touches here and there that bore the mark of her influence. For example, Margaret was most likely staying in Seth's office, which had a futon, courtesy of Maddie's ingenuity. She'd been the one to suggest he get it to help make the office double as a guestroom. Maddie had gone; the futon had stayed. I tried not to think about those things very often, though. In the big picture, they didn't matter. Seth and I had come through too much for me to get hung up on something like that. We'd overcome the problems in our relationship. I'd accepted his mortality and his decision to risk his life by being physical with me. True, I still rationed our sex life, but the fact that I allowed it at all was a big concession for me. Meanwhile, he accepted the terrible truth that I was often out sleeping with other men in order to sustain my existence. They were difficult things for us both, but they were worth it for us to be together. Everything we'd gone through was worth it. â€Å"I love you,† I told him. He placed a soft kiss on my lips and pulled me closer. â€Å"I love you too.† Then, in an echo of my thoughts, he added, â€Å"You make it all worthwhile. All this stuff I'm dealing with†¦. I can do it because you're in my life, Thetis.† Thetis. That was his longtime nickname for me, coming from the shape-shifting goddess in Greek mythology who'd been won by a steadfast mortal. He called me that all the time – and Letha, only once. I thought again about that night. The troubled feelings it stirred never seemed to go away, but I once again tried to force them aside. It was another of those little things that I was trying not to let bug me. It was nothing compared to the greatness of our love, and like my friends had said, Seth had probably overheard the name. I fell into a contented sleep, only to be awakened abruptly around dawn. My eyes flew open, and I sat upright. Seth shifted and rolled over but wasn't awakened by my sudden movement. I stared around the room, my heart racing. I'd been jolted out of sleep by an immortal presence, one I didn't know. It had felt demonic. There was nothing here now, visible or invisible, but I knew for a fact some servant of Hell had just been in the room. This wasn't the first time I'd had unwelcome visitors in my sleep, often ones with nefarious intentions. Of course, I'd felt this demon just now, and demons – being higher immortals, not a lesser human-turned-immortal like me – could mask their immortal signature. If he or she had wanted to sneak around or hurt me unannounced, it could have done so. Whoever this was hadn't cared about discovery. I slipped out of bed and continued studying the room, looking for some sign or reason for the demon's passage. I was certain there would be one. There. Out of the corner of my eye, I caught a flash of red – in my purse. There was a business envelope sitting on top of it. I hurried over and scooped up the envelope. It was warm to my touch, but as I quietly opened it, I began to feel cold. That feeling intensified as I pulled out a letter printed on official Hell stationery. No good could come of this. Sunset had filtered more than enough light into the room to read by. The letter was addressed to Letha (alias: Georgina Kincaid), from Hell's HR: This is the thirty-day notice for your trans fer. Your new assignment will begin on January 15. Please make travel arrangements to leave Seattle and report to your new location in a timely manner.

Foreign Policy Analysis : Compare and Contrast Nigeria’s Relationship with the U.S.A. Essay

INTRODUCTION: A country’s foreign policy is a set of goals outlining how the country will interact with other countries economically, politically, socially and militarily, and to a lesser extent how the country will interact with non-state actors. The aforementioned interaction is evaluated and monitored in attempts to maximize benefits of multi-lateral international cooperation. Foreign policies are desired to help project a country’s national interest, national security ideological goals and economic prosperity. This can occur as a result of peaceful cooperation with other nations or even through exploitation. Foreign policy analysis is the systematic study of and research into the processes and theories of foreign policy. This paper seeks to evaluate the relationship (economic and military) that has existed between Nigeria and the United States of America. (U.S.A) in two very different epochs. (1960-1966), post independence, and between 1999- 2003, the immediate democratic era after a lengthy post-military  interregnum. The paper shall consist of an introduction and segments on conceptual clarifications, theoretical framework, X-ray of topic under study, and the conclusion drawn from the study shall also be presented. CONCEPTUAL CLARIFICATION International Relations: Rossenau, (1961). Views international relations as the study of the transactions, contacts, flows of information between and among separately organized nation state. Holsti, (1972). Defines international relations to encompass all forms of interaction between the members of distinct societies. Adeniran, (1983). submits that international relations is an area of study which focuses on the political, economic and other interactions among international actors and the inter-state systems. Economic relations: is a relationship between two or more states that revolves around the promotion, exchange of finance, industry and general trading activities. Military relations: A military is an organization authorized by its nation to use force, usually including use of weapons, in defending its country by combating actual or perceived threats. The military is made up of a force or forces with a capability to execute national defense policy. Military relations deal with the interaction between and among nation states to enhance capability development especially as it affects the strategic, operational, logistic and tactical requirements their military forces. Military relations are characterized by the exchange of combat arms and support services. THEORETICAL FRAMEWORK The theoretical framework within which this study shall be conducted, is the decision making approach. The theory focuses attention on the processes of public decision making. A political action has the character of a decision taken by some actors in a specific situation through a particular process. Political actions can be understood by referring to the person who took the decision and the inter-active processes by which the decision was reached. While following the decision making approach, the political scientist has to encounter a complex set of social psychological and institutional processes. Hence, this approach has to draw on several concepts developed in sociology, social psychology and psychology. Mahajan, (2000:39). The decision making approach has two fundamental purposes one is the identification of â€Å"crucial structures† in the political realm where changes take place, where decisions are made, where actions are initiated and carried out. While, the other is a systematic analysis of the decision making behaviour which leads to action. In other words, the decision approach focuses inquiry on actors called decision makers and on the state defined as the decision unit. Hence, the actions of the state are seen through the actions of the decision makers. The crux here is that if a sufficient knowledge of the behaviour and activities of the known actors is established, it can lay the foundation for the explanation of a decision. Okere, (2000:115) NIGERIA’S FOREIGN POLICY OBJECTIVES Foreign policy objectives are built upon some general principles or national interests which is embodied in the nation’s constitution. Foreign policy objectives of any nation can be classified into a trinity of military strategic, political/diplomatic and economic/cultural imperatives. In the first republic, (1960-1966) which constitutes a part of this study’s focal point the principal objectives that guided Nigeria’s foreign policy, were enunciated by sir, Abubakar Tafawa Balewa the first prime minister of Nigeria, to include among others; -Respect for the sovereignty and territorial integrity of other states. -Non-interference in the internal affairs of other states. -The promotion of functional cooperation among African states. Chapter II, sub section 19 of the 1999 constitution outlines the foreign policy objectives of Nigeria between 1999-2003. Which constitutes the second leg of the study’s time frame. What is however certain is that under the two different epochs that Nigeria’s foreign policy is to be subjected to scrutiny by this study, the principal objective of the foreign policy has been to promote and protect the country’s national interest in its interactions and relationships with specific countries in the international system. (Abdullahi: 2004). NIGERIA-AMERICA RELATIONS: Motives for Collaboration President Kennedy once noted that: â€Å"Every nation determines its policies in term of its own interest† The traditional American foreign policy encompasses both moral idealism and raw self-interests. The United States’ primary interest in relation to Nigeria is oil. As a voracious consumer of the country’s â€Å"sweet† (i.e., low-sulfur) petroleum, America recognizes Nigeria’s worth as the largest oil producer in Africa and the fifth largest in the OPEC. Nigeria has been one of the largest exporters of crude oil to the United States. American companies such as shell, Exxon Mobil, and Chevron have substantial investments in the lucrative Nigerian oil industry, which, along with other Western oil companies, they dominate. Nigeria led a peacekeeping mission as part of the Economic Community of West Africa States Monitoring Group (ECOMOG) that helped to stabilize long-time U.S. allies Liberia and Sierra Leone. A third U.S. interest is the maintenance of America cultural-historical linkages to the country of Nigeria. A great number of Americans trace their roots to Africa. Many of those Americans, including entertainer-scholar Paul b. Robeson (1898-1976), trace those origins to Nigeria. Last, but certainly not least, America needs Nigeria’s help in its campaign against international drug trafficking. The economic hardships in Nigeria, resulted in the emergence of a significant drug-dependent culture and in the conversion of Nigerian borders into a major route for the trafficking of cocaine and heroin into the United States. The United States also looks to Nigeria to help reduce the number of Americans victimized by the offer of Nigerian business opportunities that are â€Å"too good to be true.† according to one estimate, â€Å"Americans lose $2 billion annually to white [collar] crime syndicates based in Nigeria.† Nigeria sees in the United States a steady buyer of its oil. Although Nigeria’s share of the U.S. market has fluctuated over the years, the United States remains a primary purchaser of Nigerian crude oil. Second, Nigeria values political ties with America. The United States is one of the most powerful countries in the world, and the two countries share similar demographic features such as ethnic, economic, and religious complexities. Nigeria relies on these political connections as it experiments with a presidential style of government. Third, like many developing countries, Nigeria seeks to tap into America â€Å"technological capabilities† for its manpower development needs. Tens of thousands of Nigerians have flocked to the United States in search of higher education. Nigeria will maximize the benefit of its relationship with the United States by identifying and exploiting the points at which the two nations’ interests overlap. Nigeria and U.S. interests converge with respect to the purchase and sale of crude oil and the necessity of maintaining cordial political relations. (Aka, 2005) It should be noted that in the period under review, (1960-1966), it was the prime minister that maintained a near monopoly of control over the country’s foreign policy (Aluko, 1977). For Nigeria on the other hand, there was a compelling need to industrialize the economy and modernize agriculture immediately after independence. To achieve this objectives, the country would require foreign aid and the diversification of the country’s overseas market – America was one of the countries she looked up to for the injection of the required capital to f und her development plans. NIGERIA UNITED STATES’ RELATIONS (1960-1966) For centuries, United States foreign policy has been outwardly characterized by its diplomatic and economic encouragement of fledging democracies around the world. In particular, the nations of Africa and particularly Nigeria are seen to benefit from America’s idealistic foreign Agenda. (Aka, 2005). It should however be noted that few foreign political actions are based entirely in good will; they are more often rooted in prudence and rationality. Although promoting democracy may, as was earlier stated, be a sufficient national interest in and of itself, such idealistic abstraction is usually augmented by more concrete or material considerations. This is certainly true for the United States’ interest in relations with Nigeria. (Aka, 2005). There are a plethora of cultural, historical and political reasons why Nigeria has been important to the U.S. These range form population, oil, resource and strategic military importance. Nigeria’s colonial history left behind external economic relations policy that was closely linked with the west. This continued to have profound impact on the country’s external behaviour even after independence on 1st October, 1960 (Aluko, 1977). Therefore, The Nigerian foreign policy between 1960 – 1966 was politically and economically aligned (in spite of the non-alignment principle) to the west especially Britain and America. In main, due to colonial hangover (Abullahi, 2004). In recognition of the newly independent Nigeria’s potentials for a mutually beneficial relationship, the United States of America was represented at the independence celebrations by the Governor of New-York State, Mr. Nelson Rockefeller. Immediately after, on October 7, 1960, Prime Minister Balewa traveled to New-York to register Nigeria as the 99th member of the United Nations thereby becoming a recognized member of the international community. While in the U.S, the prime minister met and invited President Eisenhower to visit Nigeria at the earliest opportunity. Thus, it is clear that from the first week of independence, Nigeria had established a cordial relationship with the United States of America. (Clark, 1991). It was in the spirit of this warm relationship between these two giant states that President Kennedy extended an invitation to Nigeria’s prime minister to visit the U.S. on 21st July 1961. While in America, the Nigerian Head of Government was accorded the r are honour of addressing a joint session of the United States congress. Wherein he stated, â€Å"Our affinity with the U.S is two fold – a history of common struggles to achieve freedom from anything that is oppressive to the human spirit. Also, a blood affinity- between our two countries, there resides the largest concentration of peoples with African blood†. (Clark, 1991) The Americans stated that Nigeria was a very important friend of the United States. Balewa held a meeting with President Kennedy at the oval office together with secretary of state Dean Rusk to discuss military relations between the two states as well as the situation in Angola and Congo. Situations where the two nations had conflicting interests. On the economic front, Nigeria appealed to the U.S for assistance in building the Niger dam for power generation purposes, comparing the project to the Tennesse Dam Authority. At the end of the visit, a joint statement was issued by the two nations emphasizing the U.S economic aid to Nigeria in the areas of agricultural production and public health care services. American investments into the Nigerian economy grew and amounted to over $800 million and over a third of American total investments in Africa. (Clark Ibid, Aluko: 1977) In concluding this part of the work, it is evident that America had a profound security, political, and economic interest in Africa and Nigeria as a regional power was seen as bellwether nation in the period under study. This explains the warm economic and military relations between the two nations. NIGERIA – AMERICA: 1999 – 2003 (The years of Restoration) The election of Olusegun Obasanjo, a retired general and former military head of state from 1976 to 1979 marked a historic point in the history of the Nigeria-U.S relations. Obasanjo’s ascendancy to the Nigerian Presidency was warmly received by the United States especially because the preceding regime of Gen. Sani Abacha had a very strained relationship with the United States over a wide range of issues that included Human rights violations and Democratization. The optimism and excitement of the Americans derived from a past experience of friendly relations with General Obasanjo as Head of state. In fact, the first American President to visit Nigeria was Jimmy carter when Obasanjo was military Head of state. (Abdullahi, 2004). At the political level, shortly after assumption of office in May 1999, president Obasanjo had paid a visit to then President Bill Clinton to hold bilateral talks and also with incumbent President Bush. American-Nigeria relations grew in bounds within this period. The removal of visa restrictions, increased high-level visits of US officials, discussions of future assistance and the granting of a national interest certification on counter-narcotics effective in March 1999, strengthened the ties of friendship between the two nations and Nigeria emerged as a key partner of the U.S on the continent. (Msn.com) Two American Presidents, Bill Clinton and George Bush visited Nigeria in August 2000 and July 2003 respectively. ECONOMIC RELATIONS Economic assistance from the U.S to Nigeria increased within the period under study. Rising to $78.5 million in 2000 from 23.6 Million in 1999. In 2003, US economic assistance to Nigeria is estimated at $ 65.2 million. The American challenge in its policy towards Nigeria was to formulate a substantive partnership against the background that Nigeria provides 8  percent of America’s oil needs. (Msn.com) The United States worked closely with the central bank of Nigeria and other relevant institutions to improve the environment for investment in agriculture through policy reforms at the national and state levels. Other trade initiatives by the U.S government included capacity building in customs operations, policy reforms to encourage trade exchanges, African growth and opportunity act (AGOA) incentives for bilateral trade. Nigeria also benefited from the initiative to end hunger in Africa plan, among several other programmes. (Msn.com) What all of this demonstrates is the fact that between 1999-2003 the economic relations between Nigeria was not only very cordial and engaging, but it was characterized by the inflow of several technical aid packages intent to help boost the fortunes of the Nigerian economy. MILITARY RELATIONS In the area of defense relations between Nigeria and the U.S, the United States has supported the peacekeeping and simulation centres at the war college in Abuja-the only one of its kind in Africa. Other areas of U.S Nigeria defense relations in the period under review included personnel training, developmental and technical aid, arms sales to Nigeria, law enforcement co-operation in border control and against arms smuggling and oil theft. Military cooperation between Nigeria and U.S has been clearly manifested in the effort at resolving the Liberian crises. Wherein the U.S provided logistical equipment to the Nigerian military. The training of Nigeria military personnel in American institutions intensified. The United States also offered to provide specialized training and some facilities to the Nigeria police within this period. However, the military relationship between Nigeria and America was not without challenges or even tensions, for example, Nigerians, civilians and military alike were not keen on U.S military presence in their country. Many still attribute General Obasanjo’s replacement of Victor Malu as army chief to Malu’s open opposition to the increased military co-operation with the United States. It is the thought out opinion of this paper, that Nigeria-U.S relations within this period, especially as it concerns the economic and military ties, was in a state of growth and expansion (Aka; 2005). A COMPARATIVE ANALYSIS OF THE TWO EPOCHS American – Nigerian relations in the first republic (1960-1966) was predicated upon a mutual need for each other by the two nations. It was a relationship of mutual respect and friendliness. But most importantly, it was a dignified relationship for Nigeria which though a very young independent state, had effectively mobilized her resources to earn a respectful height within the community of nations in such a short time. (Clark 1991). Nigeria had cause to request for the in flow of American capital into her economy but even this did not diminish her sense of pride and independence. Whenever the need arose, Nigeria did not shy away from taking a different position to that of America. e.g. on the division of the world into blocs, Angola etc. The Head of Nigerian government in this period, Sir, Abubakar Tafawa Balewa was awarded a honorary doctorate of laws by the university of New York. He was also made an honorary citizen of three cities: Chicago, New York and New Orleans (Clark: 1991). Between 1999 and 2003, was a period of reengagement for the two na tions after a near total breakdown in relations. But this, time the power dynamics were radically different from what obtained between 1960 and 1966. In 1999, the United States’ of America was not just an alternative power bloc in the world that had another power bloc to contend with. She was now a sole, undisputed world power with an unrivalled economic and military might. (Abdullahi, 2004), whereas Nigeria, in spite of the potentials she is endowed with and the promise she had held in 1960, was a nation almost on her knees, a nation that had retarded in just about every aspect of its life and was attempting to rediscover itself. Prior to 1999, the U.S had stood with the Nigerian people in their struggle against dictatorship. In this era, it was not a relationship of two equals or near equals, No! It was an interaction between a world power and an oil producing strong state, that had fallen into a deep socio-economic comma. It was a â€Å"hand out† relationship. Nigeria looked up to the United States for every form of assistance. The U.S provided much for Nigeria supposedly, in the spirit of encouraging democratic g overnance. Especially, in form of economic and military aid packages. However, American oil corporations had unfettered access to Nigeria’s oil in return. But despite the exchange of visits between the presidents of the two countries, and the increased co-operation between the two countries, America refused to grant Nigeria’s request for a debt cancellation. It maintained that Nigeria had the resources to pay off her debts. The best Nigeria was offered is a  debt rescheduling. CONCLUSION In conclusion, this work was introduced within the frame work of foreign policy analysis, a conceptual clarification of relevant theoretical framework within which the study is located has been stated, Nigeria’s foreign policy objectives has been examined, motives for the collaboration between Nigeria and the U.S was X-rayed. The work also attempted an incisive analysis of the economic and military relationship between the countries in the two different epochs as it was required to do. This work shall now proceed to state some recommendations that should form the basis of a policy of relationship between Nigeria and the United States of America. First, greater consistency in the U.S-Nigeria military-security relationship. Washington should recognize that its national interest is best served if Nigeria is able to be a force for democracy and stability in the region. Military and security collaboration between the two countries and in Africa generally, can only increase, given t he threat of terrorism world wide. Second, increasing America’s diplomatic reach within Nigeria by establishing arenas for U.S. Exchanges with critical areas, such as its oil-producing areas in the Niger Delta and in Northern Nigeria where the U.S closed consular offices. Such diplomatic reach could help the U.S to make a contribution to conflict management in Nigeria. Third, developing a strategy for an economic action agenda in Nigeria, which must involve business and government actors in the U.S and Nigeria, as well as inviting input from the non-governmental sector. Such a strategy should focus on three priorities: first, an acknowledgement of the business community’s responsibility to be a constructive player in Nigeria’s economic and democratic transition; second, a focus on restructuring the extractive industry to curb corruption; and third, a focus on restoring agricultural industries to help alleviate rural poverty, curb rural-urban pressures and strengthen trade and export. Fourth, eliminating debt overhang and investing in education, health and human development; and fifth, strengthening democratic institutions and governance structures which involves supporting democratic dialogue across the political spectrum, as well as assisting in training for elections and parliamentary and political party development. Lastly, America ’s support for Nigeria should now be stronger than ever, with the re-institution of  democratic government. The touchstone should be â€Å"genuinely reciprocal and mutually beneficial† relationships unaffected by the vagaries of power and party affiliation in Washington; a policy that constantly engages the people and the leaders of Nigeria, that is not an appendage of any general policy that constantly engages the people and the leaders of Nigeria, that is not an appendage of any general policy, and that recognizes the fact that only a fundamental restructuring of the political and economic systems can bring about true democracy in Nigeria. (Aka, 2005; Clark, 1991; Abdullahi, 2004) REFERENCES Adeniran, T (1983). Introduction to international relations. Lagos Macmillan Johari, J.C. (1982). Comparative politics London: Sterling publishers. Okere, J.O (2000). Theory, theorizing in international relations and politics Owerri: Achugo Publishers. Mahajan, V.G (2000) Political Theory New Delhi: Chand Publishers. Abdullahi M.Y. (2004). The web of Nigerian politics. Abuja: AnnyPrints Productions. Ojo. O, and Sesay, (2002). Concepts in International Relations. Ile-Ife: University Press. Aluko, O, (ed) (1977). The foreign policy of African states. London: Hodder and Stughton. Maduagwu O.M., and Mohammed A.S. (eds) (2004). Challenges and prospects of Democratization in Nigeria. Fulbright Alumni Association of Nigeria, Book of Reading No. 2. Aka, P.C. (2005). United States of America and Support for Nigeria democratization in American political sciences review Vol, 106, No. 14 (December, 2005). Clark, T. (1991). A Right Honourable Gentleman: The life and times of Sir, Abubakar Tafawa Balewa. Zaria: Huda-huda Publishing Company. Msn. Com (nd). retrieved October 17, 2008 from http:about.com/african history. Msn. Com (n.d). retrieved October 18, 2008 from http:www.usembassy nigeria. org. Holsti K.S, (1967). International Politics New Jersey: Prentice Hall. Rosenau, J. (1971). The Scientific study o f foreign policy. New York: the free press.

“Catcher In the Rye” by J.D. Salinger Essay

In the novel The Catcher in the Rye by J.D. Salinger, Holden Caulfield is troubled and needs the help of someone close to him to stop his downward spiral. His troubles cloud his mind and make it difficult for him to succeed in school, and to operate in the real world. Many try to give him advice to make him realize the errors he is making so he can correct them before there are serious effects. His sister, Phoebe, really offers the contrast to Holden and his immaturity and unrealistic beliefs. She tries giving him the advice that would end the freefall he is in. Phoebes advice is the only possible solution to help Holden, and his acceptance or denial will ultimately decide his future, whether he knows it or not. Phoebe is more mature than Holden, and she is six years younger than him. She understands that, despite what Holden thinks, growing up is necessary and inevitable. Holden has Peter Pan mentality, in that he doesnt want to grow up because he feels that adulthood corrupts the innocent minds of children. Phoebe tells Holden that he is just being ignorant and unrealistic, and that he has to grow up. She gets angry with him and tells him that he is too negative and that he doesnt like anything. She tells him to say one thing he liked, and the only thing he can think of is Allie, and Phoebe reminds him that he is dead. Phoebe makes Holden realize that his negative, immature, and pessimistic views have caused him to hold on to only the memory of his brother and caused him to shut out everything else. Holden wishes to stay young so that he can feel closer to his brother. Holden has realized how he has been secluding himself, rather than accepting others because of Phoebes advice to grow up, but he doesnt accept the advice. Phoebe continues to pepper him with questions to help pull him out of his state of constant negativity, but he continually answers her by beating around the bush so he can avoid dealing with his problems. He knows deep down Phoebe is right because he is seriously trying to think of something he likes, but he cant. He knows that his sister is trying to help, but he doesnt want it because he is still clinging to the hope that he can stay young and help others stay children forever. His insecurities, exposed by Phoebe, lead him to shut himself out from Phoebe as well and now he is just about unapproachable by any that want to help himPhoebe tries to help  Holden by telling him what he has done, and he denies the advice and help because he knows she is right. Holden wants her to be wrong, but he knows she is right. If Holden had just accepts the help, he would avoid the ultimate depression he falls into. Phoebes assessment of Holden was right on, but it doesnt make a difference, despite the truth in it. Holden had created such a negative perspective of adulthood and such a grand perspective of childhood, which he doesnt want to let go of. Phoebe knew what needed to be said, and she said it, but Holden wouldnt listen, and his ignorance led to his downfall at the end of the story. Holden had the chance to be stopped from plummeting to a miserable place, but he ignores the opportunities. Many people give him good advice, especially his sister, and he rejects it. His refusal to be saved from himself and his views causes him to end up in a mental institute. In the end, it was Holdens childish mentality, which he clings to so dearly, that causes him to miss several chances to be rescued. Bibliography:Catcher in The Rye(No Sources other than the book used)

Employer †Employee Relationship Essay

Little Lamb Company needs an additional programmer for a special project. The company enters into a contract with Mary to complete this project. Just as the project is nearing completion, initially an independent contractor as she had a high degree of control over how the work is accomplished, and enters into a contract with the company a new need arises for her services. She is asked to continue with the company to complete the new project. While completing the new project, the supervisor begins working more closely with Mary and requires her to use company materials and equipment while adhering to company work schedules. Mary seems to be moving toward an â€Å"at-will† employee position, because she appears to have less control over how the work is accomplished as she will probably have to answer to the supervisor, and using the companies materials and equipment and adhering to the company work schedules. After two years suggests â€Å"at-will† employee because of the length of time being 2 years, economic conditions force the company to make budget cuts. Mary is asked to leave as an employee, as she is obviously no longer working as an independent contractor, when asked to leave the company. Thirty days later, a major contract is acquired by the company, which reinstates the need for Mary’s services as a programmer. However, the supervisor chooses to hire his equally-qualified cousin and not offer Mary the opportunity to return. The use of word â€Å"hire† implied that Mary had been an employee and not an independent contractor. Is Mary an independent contractor or an employee? Describe the factors that led to your determination. There are several criteria to determine if Mary is a contractor or an employee. For example, one critical aspect to distinguish an independent contractor from an employee is the degree of control over how the work is accomplished. Initially Mary seemed to have more control than she did at the end, so it seems that she moved from being a independent contractor at the beginning to an employee over time. However, there are many factors to consider in making a determination as to whether a worker is an independent contractor or an employee. Some of these criteria include:†¢Whether a distinct occupation or business is  being performed; e.g. programmer, so initially Mary was contracted as an independent contractor for a specific project. †¢The amount of supervision over the means by which the work is performed; e.g. â€Å"the supervisor begins working more closely with Mary and requires her to use company materials and equipment while adhering to company work schedules† implies a move away from independent contractor towards an â€Å"at will† employee. †¢The degree of skill required to perform the work; e.g., â€Å"programmer† â€Å"equally-qualified cousin†Ã¢â‚¬ ¢Who provides the tools used to perform the work, and, e.g., â€Å"requires her to use company materials and equipment while adhering to company work schedules† and therefore moving towards being an â€Å"at-will† employee†¢The place where the work is done; e.g. Mary is working in the office, â€Å"the supervisor begins working more closely with Mary and requires her to use company materials and equipment while adhering to company work schedules† suggesting an â€Å"at-will† employee position. Has the employer/employee relationship changed over the course of time? If so, how?As mentioned above, it did seem to change over time. It seems that initially, Mary could be considered an independent contractor because â€Å"Little Lamb Company needs an additional programmer for a special project† and Mary entered into a contract with the company. However, Mary was later asked to stay on and began working close to the supervisor, who expected Mary to used the company materials and equipment, to follow the company work schedule, and was terminated at will when economic conditions demanded. Thus, Mary seemed to move from an independent contractor to an â€Å"at-will† employee. 3) Was Mary’s release legal under the doctrine of employment-at-will? Why or why not?This is murky water and it depends. If Mary had moved into an â€Å"at will† employee, then the doctrine of employment-at-will allows her employee to let her go without reason (however, they initially had a contract, which we look at in the next part of this question below). In the scenario, it says Mary enters into a contract for the first project, however, makes no  mention of a contract when she is asked to stay on (however, sometimes contracts are implied). For example, in most states of the United States all employees are considered â€Å"at will† employees. That means that the employer can terminate or change the employment relationship â€Å"at will†, unless there is a contract with the employer. In general, an employer can fire an â€Å"at will† employee, or change the employee’s position or compensation with no notice and no reason. Likewise, the employee can terminate his employment â€Å"at will† without notice or reason. However, there are three possible legitimated reasons employee can challenge a wrongful termination:If not, which of the following exceptions to employment-at-will have been violated? Why?a) Breach of public policy (Perhaps) Values, principles and basic rules that the courts and legislatures consider to be in the best interest of individuals and the general public. Employer violations of specific labor and employment laws might be called violations of public policy, instead of or in addition to violations of the specific laws. That is because it is in the best interest of all workers that all employers obey such laws. Public policy may be written or implied, and varies among states and municipalities. Consequently, whether or not an employer has violated public policy is often a matter of interpretation by a court or arbitrator (i.e., hired cousin instead of having Mary return). b) Breach of implied covenant of good faith and fair dealing. Probably not, because it is dealing with contracts and the question is dealing with â€Å"at-will† exceptions. c) Breach of implied contract (this is a possibility). Why? For example, in a â€Å"contract† between the employer and the employee, even in the absence of a formal written employment agreement. For example, language in an employee handbook may promise â€Å"all layoffs are based on seniority† or â€Å"we give employees at least 2 weeks notice of all layoffs†. Therefore, if Mary thins she is wrongfully terminated, as an employee; she can challenge a wrongful termination for these legitimate reasons

5 Coke vs Pepsi 21st Century Case Study

op y 9-702-442 REV: JANUARY 27, 2004 DAVID B. YOFFIE tC Cola Wars Continue: Coke and Pepsi in the Twenty-First Century For over a century, Coca-Cola and Pepsi-Cola vied for â€Å"throat share† of the world’s beverage market. The most intense battles of the cola wars were fought over the $60-billion industry in the United States, where the average American consumed 53 gallons of carbonated soft drinks (CSD) per year. 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 o n 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. 1This 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 e nviable 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 s preadsheet, 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. [email  protected] 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 syrup), 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 U nited 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. [email  protected] harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century BottlersBottlers 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 a nd 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 gran ted 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. [email  protected] harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 perpetual 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-ad justed) 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 tha t 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 NoIn 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 superm arket. 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 m ethod, 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. [email  protected] harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century tC Historically, 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 Fried 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, whi le 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 ag reements 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, boosted 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. [email  protected] harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 The concentrate producersâ₠¬â„¢ 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 p harmacist 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. † Beginnin g 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. [email  protected] 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 r egional CSD companies continued to produce a wide assortment of flavors. tCThe 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 Cokeâ€℠¢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 (1 963). 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 Pe ndergrast, p. 310. 7 Copying or posting is an infringement of copyright. [email  protected] 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 gallons per capita in 1970. 14 Pepsi meanwhile battled aggressively in the United States, doubling its share between 1950 and 1970. The Pepsi ChallengeIn 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 unsw eetened 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 UpIn 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 Mai d. DoDiet 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.[email  protected] 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 spac e 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 A&W 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 earl y 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 b ottlers 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. [email  protected] 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 sw iftly 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 mater ial 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 NoIn 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 mo re 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 Sc hweppes 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.[email  protected] 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,à ¢â‚¬  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. P rice 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 Consumers’ 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. [email  protected] 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 h eated 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 accompanie d 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, peppe r, 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. DoAt 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. [email  protected] harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the 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 s egments: 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.T he 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 pla teau, 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. [email  protected] 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 median 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 equa tor 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 establis hed 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 r eported 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. [email  protected] 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, b oth 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 a s 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? DoOr, 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 ba ttlefields. †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. [email  protected] harvard. edu or 617-783-7860. Do Exhibit 1 702-442 Copying or posting is an infringement of copyright. [email  protected] 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 drinksBeer Milk Coffeea Bottled Waterb Juices Teaa Powder ed 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 13 0. 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 ClassicPepsi-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. [email  protected] 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