Coke vs Pepsi: Doing Well vs Doing Good?

Analysis of the Coca-Cola versus Pepsi brand wars is one of the longest running soap operas in global business history. Whose CEO is more impressive? Who's winning market share? Who's more innovative? Who's getting in trouble (to be truthful, Coke always seems to be winning that one)? Who's dominating yet another developing market?

The reality is that both are highly profitable steam-rollers who bestride the earth like collosii. Not much can hurt them - but they do provide a laboratory for viewing contrasting management initiatives, sales gambits and strategic vision.

Brandchannel's Dale Buss provides the latest installment:


"The brand giants of the soft-drink industry have provided an interesting contrast.

Coca-Cola is taking beverage-market share from PepsiCo in North America, it was just reported. But Pepsi is ascending to the throne of industry do-goodism with its Refresh project and other aspects of its “Performance with Purpose” positioning.

So who would you rather be: PepsiCo CEO Indra Nooyi or Coca-Cola CEO Muhtar Kent? And perhaps more important: Would you rather be a Coke shareholder or a PepsiCo shareholder?

The case for PepsiCo, of course, is that Nooyi wanted to form a different kind of company when she ascended to CEO in late 2006, one that is defined by its global corporate citizenship – and she is well on her way to doing just that.

She has brought the company into an aggressive embrace of broader-than-bottom-line purposes, has moved PepsiCo brands forcefully into better-for-you products, and has made the Pepsi Refresh project and other “cause” initiatives into a widely admired marketing model. The company’s approach toward recruiting and retaining workers with disabilities is another aspect of that.

Meanwhile, Coca-Cola has tried to do much of the same under Kent, who became CEO in mid-2008. But Coke simply hasn’t been synonymous with what Harvard Business School Professor Michael Porter calls “shared values.” In fact, Coke is getting singled out for missing just one of its important sustainability goals.

Yet, Coke has been taking sales from Pepsi in the crucial U.S. market and has seen soda volumes actually tick up lately, a contrast to the rest of the industry. PepsiCo cited rising costs and other problems this week for its drop in profitability during the fourth quarter.

Turning to another type of bottom line, share price, provides an interesting contrast as well: PepsiCo’s price is almost exactly where it was when Nooyi inherited the helm nearly five years ago, while Coke’s price has appreciated nearly 20% since Kent took over nearly three years ago.

So if you’re a PepsiCo shareholder, are you getting performance with purpose? Or purpose without performance?