Rhetorical Situation and Visual Design

1) Practical visual design is rational in the sense that each step of the way you can understand why you're making design decisions. 2) The three elements of the rhetorical situation are audience, purpose and context. 3) Some examples of large-scale responses to the rhetorical situation of a document include 11† x 17† four panel format, heavier paper, and arrangements of the documents major elements -brochure-like format, visual demeanor. ) Some examples of local-level responses to the rhetorical situation of a document are typography, large, bold type, bulleted list, single page letter, parallel layout, -narrow text columns, two bar charts and table, labels. 5) Traditional rhetorical strategies apply to visual design in the following ways Arrangement and emphasis strategies pertain to the visual structure and organization of the document. Clarity and conciseness strategies pertain primarily to functional matters of style, of making the design readable and efficient.Tone and ethos strategies relate primarily to readers subjective responses to the visual language, its voice and credibility. 6) Cognate strategies of visual designs interrelate and overlap because technicality may add to clarity as well as to conciseness. In the same way, the placement of the headings or drawings on a page in not entirely a matter of arrangement rather than ethos and of clarity rather than emphasis. 7) The three kinds of activities in the design process are Invention -Revision -Editing. ) Conventions in the context of communication are customary forms and configurations that members of an audience expect. 9) The three ways of grouping visual conventions are according to scope, degree of flexibility and size of the use group. 10) â€Å"Visual discourse community† means an audience that understands certain conventions. 11) Three guidelines for using visual conventions are Identify relevant conventions for any design problems you're trying to solve Realize that some conventions are more rigid than others Think of conventions in terms of your readers, who give them meaning and significance.

The Love of My Life

In the short story â€Å"The Love of My Life,† two teenagers make one bad decision and their lives are changed forever. The author, T. Coraghessan Boyle, wrote the story based on an actual news story that had occurred a few years back. The author does a great job of making the relationship between Jeremy and China seem so wonderful and almost innocent, that it is hard to be angry with them. The two characters in the story, Jeremy and China, are young and are head over heels for each other.The very first line of the story is all it takes to make the reader realize that these two youngsters share the true meaning of love, â€Å"they wore each other like a pair of socks. † All of that changes when the two find out that China is pregnant. Instead of properly handling their situation, they have the baby and dispose of it in a dumpster at a motel. Although the story has a very upsetting plot, you can't help but feel some sympathy toward the characters. The beginning of the st ory starts out describing the great, young love that Jeremy and China had.They did everything with each other, spent almost every waking moment together, and rarely ever fought. Both teenagers were on a great track in life; graduating at the top of their high school class, both going to top colleges and well-liked by most. They would tell each other â€Å"I love you† more times in a day than they could keep track of. Every time they walked into a room they would kiss. They seemed to have the perfect relationship. Then, the summer before college would commence, they went on a week-long camping trip alone.Of course, being alone, they had the opportunity to have sex and enjoy their time together. Obviously caught in the heat of the moment, knowing they were out of condoms, they had sex anyway. One irrational decision led to their lives changing forever. Before going to school in the fall, China learned that she was pregnant. Out of immaturity, and fear, she decides to do nothing about it and hide it, hoping it would perhaps just go away. Jeremy is just as clueless and scared as she is, and goes along with her decision.When the night comes that China is to have her baby, she calls up Jeremy and they meet at the motel they had met at many times before. When she arrives there, Jeremy is waiting at the door. When she walks by him, â€Å"they didn't kiss- they didn't even touch- and then she was on the bed. † By this time, they have almost completely lost all of the love in their relationship and all their fighting has just pulled them apart more and more. Hours passed, and she finally had the baby. After the trauma of giving birth, all she could say to Jeremy was, â€Å"get rid of it. Jeremy, not knowing what else to do, listened to her order. After driving China back to school, he returned to the motel, wrapped the baby in a plastic bag, and disposed of it in a dumpster. Like most secrets, this one didn't last very long. Both teenagers were soon arres ted. On the day of their court appearance, China writes Jeremy a note saying, â€Å"I love you, will always love you no matter what. It is apparent that she still loves him so much, but it is hard to tell whether Jeremy still feels the same at this point in the story. All he can say to her before they part is, â€Å"you told me to get rid of it. A part in the story that seems to be very ironic is that China always would joke with Jeremy that she would â€Å"never be like those breeders that bring their puffed-up squalling little red-faced babies to class. † Sadly, the thing that they had once laughed at others for happened to them. It can also become so intense and cause people to do crazy things, just like the characters in â€Å"The Love of My Life. † They may not have killed one another, but they did murder their baby. They were blinded by their love and still so immature that they did not know how to deal with such a serious situation like that. The Love of My Life Love conquers all. That’s what we hear over and over again growing up. Everyone longs for that one amazing person to waltz into our lives and steal our hearts for the rest of eternity, but is it possible that love will be strong enough to face any problem that gets in our way? T. Coraghessan Boyle once said â€Å"As strong as love might be, there is always something stronger that could come along and shatter it† (After). T. Coraghessan Boyle was born in 1948 as Thomas John Boyle in Peekskill, New York. When Boyle went to college he never dreamed that one day he would have a major in Literature.He originally went to major in music as an aspiring saxophone player at SUNY Potsdam (â€Å"Auteur†). â€Å"That did not work out because I did not have near the talent of my colleagues† he said â€Å"I became a singer in a rock band† (â€Å"Auteur†). After he lost interest in music he moved on to history. From history, he changed his major to English a nd history. When Boyle finally found were he belonged he channeled his creativity into writing fiction, where he is now know as a literary legend, or as Boyle likes to say a rock star of literature. Mark Twain once said â€Å"Boyle‘s writing is deliciously infectious† (â€Å"Auteur†).Twain also includes that â€Å"Boyle’s masterful use of wit and dark satire pepper the pages with a focus on social exploration in contemporary times† (â€Å"Auteur†). With that kind of response from the great Mark Twain I can understand how Boyle has twenty-three novels and sixty-four short stories. In the short story â€Å"The Love of My Life† Boyle describes an extremely powerful love between two young teenagers named China and Jeremy. These two were inseparable, completely taken by love since the end of their junior year when they started dating, and they were not afraid to show it. They kissed whenever they met, no matter where or when, even if one of them had just stepped out of the room, because that was love, that was the way love was,† and they believed that nothing could end this incredible feeling (Boyle 382). Until the end of August, when China found out she was pregnant, that was when their problems began. China did not tell anyone about the baby except Jeremy. They went to two different colleges and that they would deal with the baby when it was time for China to give birth. When China’s water broke she called Jeremy and they went to a motel.Jeremy delivered the baby girl and China told him to â€Å"get rid of it† so he threw the baby in the dumpster outside (Boyle 387). They left the motel and went back to the college as if nothing ever happened. The police came the next morning and arrested both China and Jeremy. China and her parents decided to place the blame on Jeremy by allowing everyone to think that China had believed she had miscarried, and Jeremy acted alone on dumping the breathing child i nto the dumpster. This enormous problem eventually led to the downfall of China and Jeremy’s relationship.Boyle gets his ideas for his stories in many different ways, some can be from him just walking down the street and an idea pops into his head, others ideas come when he is watching television or reading a book. Boyle got the idea to write â€Å"The Love of My Life† from a case he read in the newspaper (After). The case was about a murder investigation involving Amy S. Grossberg and Brian C. Peterson for the murder of their new born baby boy. Grossberg delivered the baby at a Comfort Inn in Newark, Delaware, in November 1996 (â€Å"Amy†). Grossberg was assisted by her boyfriend Brian Peterson. Peterson threw the baby in the dumpster.In March1998, Peterson pled guilty to man slaughter and served a two-year sentence. On April 22, 1998, Grossberg agreed to plea bargain, and was sentenced to two-and -half years in prison on July 9, 1998. Later, Peterson got marri ed and now lives in Florida. Grossberg has now started a high end greeting card business with her parents (â€Å"Amy†). The only differences between the Peterson and Grossberg case and â€Å"The Love of My Life† is Boyle changed Peterson and Grossberg’s names and the sex of the baby, other than that the two stories are very similar. Love is a theme that is expressed frequently in this story, making some wonder, what is love?China and Jeremy believe love should be expressed physically, rather than physically and emotionally. China says love should be â€Å"the way it was in the movies, where the stars ambushed each other on beds the size of small planets and did it again and again until they lay nestled in a heap of pillows and blankets† (Boyle 381). Jeremy says explains that â€Å"there was no feeling like this, no triumph, no high – it was like being unconquerable, like floating,† (Boyle 381) and for their spring break trip, Jeremy â€Å"d idn’t even bring his fishing rod, and that was love† (Boyle 383). Their idea of love is questioned when China is pregnant.Jeremy begins to think of China as â€Å"pig-headed, stubborn, and irrational† (Boyle 385). Yet he does what she asks, like when she tells him to â€Å"get rid of it†, it meaning the baby, he does not ask questions he simply wraps the baby in plastic and leaves the room (Boyle 387). China’s love is also questioned when she chooses to testify against Jeremy, blaming him for the death of their child, claiming to have believed she had a miscarriage. Yet she claims to still love him. In this short story, Boyle uses water to symbolize the state of their relationship (Robertson). Boyle mentions it raining or not raining fourteen times.When the water is calm and peaceful then their relationship is going well and blooming (Robertson). However, when the water turns rapid, so does the relationship. For instance, when Jeremy and China go on their five day backpacking trip near the lake, Boyle makes use note that â€Å"not a drop† of rain is suppose to fall (Boyle 383). With no rain in sight Jeremy and China are going to have very peaceful trip. Another example of â€Å"not a drop† of rain falling is the night before Jeremy is arrested and he is dreaming of fishing in the river, that is also a peaceful moment for him.On the other hand, the day China’s water breaks we are told that â€Å"it is raining, raining hard† which is a sign that their relationship is struggling (Boyle 386). Later that evening â€Å"the rain had turned to ice† this could be a sign of how cold they are toward each other (Boyle 386). After hours of labor and hours of rain the baby is born. The very next day when the police come to arrest Jeremy it is raining again. Boyle draws parallels between China’s dorm life and her time at Sarah Barnes Cooper Women’s Correctional Institute (Kettering).The food à ¢â‚¬Å"was exactly what they served at the dining hall in college,† and the room was â€Å"just like a dorm room, except that they locked the doors at night† (Boyle 388). The image of the moon is used to unify the story (Kettering). China quotes a John Donne poem to Jeremy, saying she loves him â€Å"More than Moon† (Boyle 384). As she grows with her pregnancy, he begins to call her â€Å"More than Moon† since her stomach is so round and white (Boyle 384). The note that she sends to him during the trial references the poem again, saying that she loves him â€Å"More than Moon† (Boyle 389).Boyle uses nature to symbolize the emotions that Jeremy and China feel. For example, spring and winter are used to show the highs and lows that China and Jeremy go through during these times of the year. When Jeremy and China are so in love with one another, Boyle uses imagery associated with spring to indicate that their love is fertile and growing (â€Å"Termâ₠¬ ). I feel that Boyle uses this story as an attempt to inform us that no matter how in love we think we are, something can always go wrong, and that you may never get that love back.He allows us to see and feel what Jeremy and China feel through what they say to each other and the words he uses to describe their love. As the story continues we gain more understanding of their relationship, and this is why the story is so heart breaking when China turns her back on Jeremy at the end to save her own future. This whole story triggers our emotions, it allows us to feel the love they have for each other and then feel the betrayal. Which makes Boyle’s point very clear, love does not conquer all. The Love of My Life In the short story â€Å"The Love of My Life,† two teenagers make one bad decision and their lives are changed forever. The author, T. Coraghessan Boyle, wrote the story based on an actual news story that had occurred a few years back. The author does a great job of making the relationship between Jeremy and China seem so wonderful and almost innocent, that it is hard to be angry with them. The two characters in the story, Jeremy and China, are young and are head over heels for each other.The very first line of the story is all it takes to make the reader realize that these two youngsters share the true meaning of love, â€Å"they wore each other like a pair of socks. † All of that changes when the two find out that China is pregnant. Instead of properly handling their situation, they have the baby and dispose of it in a dumpster at a motel. Although the story has a very upsetting plot, you can't help but feel some sympathy toward the characters. The beginning of the st ory starts out describing the great, young love that Jeremy and China had.They did everything with each other, spent almost every waking moment together, and rarely ever fought. Both teenagers were on a great track in life; graduating at the top of their high school class, both going to top colleges and well-liked by most. They would tell each other â€Å"I love you† more times in a day than they could keep track of. Every time they walked into a room they would kiss. They seemed to have the perfect relationship. Then, the summer before college would commence, they went on a week-long camping trip alone.Of course, being alone, they had the opportunity to have sex and enjoy their time together. Obviously caught in the heat of the moment, knowing they were out of condoms, they had sex anyway. One irrational decision led to their lives changing forever. Before going to school in the fall, China learned that she was pregnant. Out of immaturity, and fear, she decides to do nothing about it and hide it, hoping it would perhaps just go away. Jeremy is just as clueless and scared as she is, and goes along with her decision.When the night comes that China is to have her baby, she calls up Jeremy and they meet at the motel they had met at many times before. When she arrives there, Jeremy is waiting at the door. When she walks by him, â€Å"they didn't kiss- they didn't even touch- and then she was on the bed. † By this time, they have almost completely lost all of the love in their relationship and all their fighting has just pulled them apart more and more. Hours passed, and she finally had the baby. After the trauma of giving birth, all she could say to Jeremy was, â€Å"get rid of it. Jeremy, not knowing what else to do, listened to her order. After driving China back to school, he returned to the motel, wrapped the baby in a plastic bag, and disposed of it in a dumpster. Like most secrets, this one didn't last very long. Both teenagers were soon arres ted. On the day of their court appearance, China writes Jeremy a note saying, â€Å"I love you, will always love you no matter what. It is apparent that she still loves him so much, but it is hard to tell whether Jeremy still feels the same at this point in the story. All he can say to her before they part is, â€Å"you told me to get rid of it. A part in the story that seems to be very ironic is that China always would joke with Jeremy that she would â€Å"never be like those breeders that bring their puffed-up squalling little red-faced babies to class. † Sadly, the thing that they had once laughed at others for happened to them. It can also become so intense and cause people to do crazy things, just like the characters in â€Å"The Love of My Life. † They may not have killed one another, but they did murder their baby. They were blinded by their love and still so immature that they did not know how to deal with such a serious situation like that.

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

ORGANISMS FROM MY CLASSMATES Essay Example | Topics and Well Written Essays - 1000 words

ORGANISMS FROM MY CLASSMATES - Essay Example In this web Gloeophyllum sepiarium and human beings have the highest trophic level; they are at the top of their food chain. The Alaskan paper birch receives its nutrients through photosynthesis and nutrients from the soil. The Gloeophyllum sepiarium is a fungus that gains its energy through decomposing dead organic matter such as dead wood and leaves that the Alaskan Paper Birch provides but the decomposition if dead matter is returned to the soil and recycles the nutrients produced by the tree through improving the soil. Humans also use the tree for nutrition. The sap from the tree is edible and used in producing wine, beer and health tonics. The Black Bear and the lynx are on the next trophic level in the food web. As mentioned this web is a simple illustration but in this example the bear and lynx will gain their nutrition from the American Jewel Scarab. The bear's diet consists of plants, meat and insects in this case the American Jewel Scarab. The bear will also eat the bark from trees and the edible sap produced by the Alaskan Paper Birch. The web demonstrated here is known as a detrital web it contains plants, omnivores, carnivores and fungi the decomposers. All the organisms rely upon another for their nutrition and energy to maintain the circular food web of the ecosystem. The energy flows from one trophic level to the other. Each trophic level passes on biomass to the next level but pass on much less than they receive (Tscharntke & Hawkins, 2002). The Alaskan Birch in this web is known as a producer as it produces its own energy; food and glucose from photosynthesis producers have the most energy in a food chain, and is the first trophic level. Humans, the Black Bear, the Lynx and Gloeophyllum sepiarium are all on the secondary trophic level. There are no examples of the primary level in this web as there are no herbivores. All organisms in the web are able to be decomposed by Gloeophyllum sepiarium and the nutrients are broken down and returned to the soil that the Alaskan Paper Birch once again recycles to produce its energy. References Tscharntke, T., Hawkins, B., A., (eds) (2002) Multitrophic Level Interactions, Cambridge University Press,

Report on the Current Financial Crisis Essay Example | Topics and Well Written Essays - 1000 words

Report on the Current Financial Crisis - Essay Example They explain that increasing liquidity and increasing nontraditional mortgages which were deceptive and beyond the ability of borrowers to pay was another trigger of financial crisis. Another trigger of financial crisis was the failure in securitization and credit rating which made poorly performing mortgages into bad financial assets. Security markets and stakeholders brought down credit quality in mortgages they securitized even as credit-rating organizations erroneously rated such securities as viable investments (Bancel and Usha 179). The buyers did not carry out due diligence thereby leading to losses. The financial crisis had various impacts on the global economy and the financial markets. The crisis led to reduction in the gross domestic product in most countries. The decline in GDP in some European countries in 2009 ranged between 5 and 8 percent and the decline was highest in countries that had their financial systems highly leveraged and the credit growth was high before th e onset of the crisis. The financial crisis also led to increased rates of inflation in countries especially in countries where the financial sector has not been adequately regulated (Bancel and Usha 183). The rates of unemployment globally went up following the financial crisis. Unemployment increased due to slowed production and sales in most economic sectors thereby constraining the job opportunities. The financial crisis also led to a decline in global trade with the less developed countries suffering from huge deficits of trade. The other effect of the financial crisis was negative impacts on the exchange rates of most currencies (DLA Nordic 1). Most import dependent countries experienced a sharp decline in the value of their currencies as compared to other countries thereby disadvantaging importers. Systematic risk refers to the possibility of the whole financial system collapsing in contrast to the collapse of a single group or component. Systematic risk has spread throughout the globe due to integration of the globe in trade, markets and finance. Technology has enhanced integration thereby making the world a global village (Tchana Tchana 1). The other factor that led to the spread of systematic risks throughout the globe is regulation. Systematic risks cause increased flow of investment in different countries. This is because as the investors seek to diverse their profits and mitigate the negative impacts, they choose to invest in countries that have low risk levels. Additionally, the systematic risks caused by financial crisis causes reduction in investments as the banks lack adequate resources to loan out for capital investment. Consequently, long term investments become slowed. The financial crisis had two effects on credit such as bonds (Bancel and Usha 183). The first effect was a reduction in the number of creditors given that only those creditors able to issue good quality bonds could get to the market thereby increasing their credit ratings. Ad ditionally, average systematic risks of creditors also increased dramatically (Bancel and Usha 183). The Federal Reserve has implemented several short and long term measures to prevent the domino effects (Reddy and Joellen 1). The main aim for Fed’s involvement was to enhance liquidity given that during the period the liquidity was low. Fed offered improved liquidity via open

Paradise Lost vs. Heart of Darkness Essay Example | Topics and Well Written Essays - 1750 words

Paradise Lost vs. Heart of Darkness - Essay Example Marlow’s narration about his journey to the Congo in Africa is the central subject of the novel. Marlow is employed as a ferry-boat captain by a Belgian trading company. His job is to carry ivory downriver, but the main task assigned to him is to bring Kurtz back to his society. Kurtz is a rebel who has moved away from his own civilization and settled in deep jungles of Congo. The character of Kurtz is revealed by Marlowe’s narration inducing a mixed feeling of hatred and sympathy for him. In the epic poem, â€Å"Paradise Lost† by John Milton, the poet recounts the events that led to the downfall of mankind. Adam and Eve, the first human beings to be created by God lived in the Garden of Eden. The beauty of the Garden of Eden was so enchanting that it was also called as Paradise. But Satan who was keen to avenge God, lures Eve to consume the forbidden fruit. On the knowledge of Eve’s horrendous act, Adam also eats the fruit for he is not ready to leave Eve alone in her suffering. Adam and Eve are expelled by God from the Garden of Eden as a chastisement for their act of disobedience. The title of the poem refers to the lost purity of Adam and Eve. The two characters that make one to feel sympathetic towards them are Kurtz in the novel, â€Å"Heart of Darkness† and Adam in the poem, â€Å"Paradise Lost†. Kurtz has gained control on the tribes of the jungle and taken over the territory. He has a great influence on the native tribes who worship him. The company is not ready to accept any threat to its own control over the region and assigns Marlowe to bring Kurtz back to his own civilization. Kurtz has settled in jungles as an act of defiance against the cruel ways of the company but he is not able to keep himself away from the temptation of power. He utilizes the natives to conduct brutal incursions in the neighboring regions to procure ivory. Though Kurtz is living amidst the

Discussion Post #4 Essay Example | Topics and Well Written Essays - 250 words

Discussion Post #4 - Essay Example Goldhirsh immense passion for social views and his argumentative nature presents him as a woody and a more allelic person. On the brighter side, some of his laborers still liked him. They felt at ease and comfortable with his management style. In addition, Goldhirsh compares entrepreneurship with the great satisfaction that comes from docking after making it through an unrelenting storm. Entrepreneurship is about having the right idea, objectives and motivation for progress and development. For example, Goldhirsh talks gracefully of Dr. Edwin Land, who broadly motivated him with his robust approach to business (Burlingham 194). As a result, Bernie Inc developed to become one of the most established US Steel Company. Interestingly, Goldhirsh compares entrepreneurship with artistry. It is the art of creating something like a business out of something like a bold idea. It is fascinating how a combination of skills, ambition and drive can motivate the development of such a big

Research Methods Essay Example | Topics and Well Written Essays - 2000 words - 1

Research Methods - Essay Example In the business of fashion design, it is the role of the designer to transform cultural influences with the use of technology into new products. Fashion design technology research is supposed to be developed in a way that it enhances fashion design understanding in the post-modern context, therefore posing this question: In which way has technology influenced the creativity in fashion design? While focusing on creativity in fashion design, this study should evolve while incorporating a grounded theory approach to qualitative inquiry. There should be an interview of luxury-level fashion designers and industry executives in countries with a rich history when it comes to fashion design, France being a good example. The interview should be in depth and regarding creativity and technological ingenuity especially pertaining to the internet when it comes to fashion design process. There should be a concise data analysis which should lead to the definition of a typology for creativity and te chnology in fashion design in the global competitive environment. There should be a relation of these typologies with the use of technology. ... The fashion technology should encompass all aspects that are concerned with the design, production, and distribution of material and apparel goods. Under the discussion of fashion, there are broad components of women’s wear such as accessories, jewelry, and perfume. The production of basic apparel items does not rely on the same conceptual driving force found on novelty and change. For the purpose of a well grounded research fashion industry technology on women’s wear should involve companies or individuals that are involved in the manufacture, fabrication, marketing, and sale of items which:- (a) Have precise aesthetic and performing properties, (b) Elicit psychological response associated to desire and need and (c) Are embraced by a group of women for a limited amount of time. The fashion industry technology function within industrial societies context and is complex encompassing a wide array of disciplines which include aesthetics, design, product development, econom ics, global business, marketing, consumer behavior, operations, and management as well as anthropology, psychology, and sociology. Historical Context The Origin of fashion design technology In the research on fashion design, there should be a note on the focus on technological phenomenon which was developed in the mid-20th century as a result of the internet which is the crux of technology. It is the Internet which has facilitated users to explore the World Wide Web for information and entertainment thus facilitating the development of a new business model, e-commerce which is the process of business transaction through contact made on the World Wide Web. The founding of brands in fashion design is based on creative and innovative research and development aided by technology facilitating

Conformity and Obedience Assignment Example | Topics and Well Written Essays - 250 words

Conformity and Obedience - Assignment Example administering the drug, the nurse would have broken health care rules such as; accepting the instructions through phone which is not allowed, administering double of the maximum limit of the drug. Despite the fact that the nurse understands the dose that is supposed to be administered to the patient, the nurse changed in order to respond to the request or rather order from the doctor. Obedient in nursing practice should not be blind obedient but rather a professional interaction between a nurse and a doctor (Quinn, 1998). The responsibilities in health care settings are channelled as well as enforced, whereby some people such as physicians have power over others. In regards to this, the nurses in health care settings have to perform the activities since it comes from an authority figure. The nurse has to comply with the given orders from the physician. In this case, nurses are regarded as the helpmeets of physicians whereby they should not be the arrogant equal of men. Therefore, the nurse complies with physicians’ instruction since they get orders from them, despite breaking the rules of the hospital and risking the health and well being of the

Anishinabe Social Issues Essay Example | Topics and Well Written Essays - 1250 words

Anishinabe Social Issues - Essay Example Being a tribe they had to overcome poverty, discrimination, and invasion and family biases to claim their identity. However, they still face some social issues as a minority in American society and they can be as below. Threat to culture and language – Being an older tribe of Northern America, the community find it difficult to preserve their culture and language. They were people living in natural environment and had spiritual beliefs. Since the invasion of Whites, the Anishinabe culture has been threatened. First they had to leave their homeland and then slowly they had to adapt the culture of Americans. They were alienating from the ancestral cultural beliefs and rituals and slowly became multi – cultural. Now the tribe is one the verge of assimilating to the American culture and losing their identity. Their language, religious beliefs, diet and customs all have changed to a large extend and they face a cultural identity crisis. This tribe is losing all their values and stand nowhere among the American society. Recognition from government - They don’t get the right recognition from the federal government and only some communities are considered as tribes by the government. The American government has not done anything credible to protect this tribe. Many children were removed from their homes for the purpose of education and this dismantled their family structure. Even the land allotment law was not of much help to the tribes. The children were forced to abandon their language and government did nothing to protect them. The tribe still does not have much recognition like other citizens. Anishinabe tribe still faces tension with the state government and country governments. They do not get full recognition from federal government. Anishinabe tribe is considered as a tribe by some state government however some state does not give much recognition to them. The band government formed by the tribes does not get much recognition

Answer question Essay Example | Topics and Well Written Essays - 500 words - 1

Answer question - Essay Example Some of the Senators opposed it simply because of party politics which led them to believe Wilson had no leadership skills. There were several characteristics associated with the progressive era including a need for purification of the government, issues of women suffrage and their need to end as well as being prohibited. There was also a need to focus on the important values in society which included education and focusing much on the family. The progressive era also sought modernization of the country. Roosevelt wanted the federal government to take control of the corporations so that they can protect the consumers as well as conserve the corporations themselves. Taft let the others make decisions on progressive such as increasing tariffs, opening up land for private use among other things. Wilson reduced the tariffs especially the import fees, there was a new income tax, and there was introduction of new Federal Reserve notes and an introduction of central bank in 12 regional reserve districts among other reforms. Progressive era opened up colleges for women making them enter the male dominated job markets as clerics, typists, lawyers and even doctors and journalists. This followed their role in social work and especially where they were teaching the immigrants proper and decent ways to behave and earn wages without being taken advantage of by the men. After they became properly educated, they started advocated for more of their rights and freedom from male shadows and they were helped by the women in professional jobs. Freedom according to women was to be allowed to work and venture outside of their homes like the men; others defined it as being offered equal wages to the men in the same field while to others freedom constituted not being offered lower class jobs and being sexually undermined in the workplaces. Among the successes included the reunification of the unions

Roller-coaster of Emotions Essay Example for Free

Roller-coaster of Emotions Essay The plain was rich with crops; there were many orchards of fruit trees and beyond the plain the mountains were brown and bare (3) Ernest Hemingway, A Farewell to Arms. To the innocence of children fruit trees and plains is all they are aware of but in fact, what is beyond is what makes Ernest Hemingway want to explain, that beyond those plains there has been chaos and terrible deaths. After a scanning the entire landscape, the eyes can come across the true reality of the war, which made fruitless trees, beat up grounds, chaos, but also soldiers that have learned the true meaning of what war really is. Frederic Henry, the protagonist in Hemingways literary war novel, comes across the reality what life has to offer and overcomes many obstacles that changes him to become the person he ends up being towards the end of the novel. In his novel, A Farewell to Arms, Ernest Hemingway demonstrates that the destructiveness of war turns him from the naive solider, to the being in love, and finally to Henry the person that sees the world as a bad place that destroys a family. To begin with, Henry has no personal control with his temptations towards women, drinks excessively and simply has carelessness revolving him. The way that Henry enjoys obliterating war is being with women and drinking alcohol which lets him get away for a while. Henry has come across a person that cares for him and wants him to be on the right path, that person is the priest. Trying to get Henry out of his disastrous life, his friend the priest, recommends that Henry visits Abruzzi because it will let Henry become a better person. The priest comes across Henry and wants him to prosper and offers Henry to see Abruzzi and visit my [the priests] family at Capracotta (8), but instead the captain wins over Henry by saying, come one†¦ We go whorehouse before it shuts (9). Henry leaves that night with a simple good-night towards the priest and wonders off with the rest of the men. The reality of Henrys decision was that he wants to do what is right, but can never manage to do the prudent thing. Henry could have stayed home with the priest but instead his temptations leads him to the wron path. Later on that night Rinaldi asks Henry how the night went. Just like men talk Henry starts going on about how he had a beautiful time every where he went and Rinaldi is there to cheer him on. Rinaldi is almost the exact mirror image as Henry as they perceive women, Rinaldi confirms to Henry that in this town we have beautiful English girls. I am now in love with Miss Barkley (12). Henry’s main goal is to get pleasures that are easy and fast, he calls those strange excitement which shows that he has little or no ability to feel satisfied. Frederic Henry has not been able to find his inner self, he only knows what men in war like to do best; Henry drinks alcohol visits the whorehouses to substitute not being able to figure himself out. To come to a conclusion that the people that want to help him, Henry ignores them and shows this when he sat next to the priest and he was disappointed and suddenly hurt that I [Frederic] had not gone to Abruzzi. He had written to his father that I [Frederic] was coming and they had made preparations (13). This is significant because it shows that the help his close friend offers means nothing to him, he confesses that while going out it lets him get a grip of his emotions; something which he cannot do while sober. The way Henry sees things is that people settle for a small amount of pleasure instead of going the extra mile in order to get what they really want. When Henry starts changing is when he meets Catherine Barkley and his love towards her becomes a role in his transformation in his personality. Catherine at first is just someone that attracted Henry to her, her tawny skin and petite body was a reason why she caught his eye. He has found himself fallen for someone and is constantly wanting to be with her. He searches for her, but she was not in the garden and I [Frederic] went to the door of the villa where the ambulances drove up. Inside he saw the head nurse, who said Miss Barkley was on dutytheres a war going on, you know (22). Henry clearly knew that a nurse in war has a stressful duty and has hardly any time to spend time with their loved ones. Henry wants to be with her and no longer is going around with other women, he wants to be with Miss Barkley and he wants to go the extra mile to go in search for her, just to sound some time together. He is so eager to be with her that he goes the next evening to the hospital to see her but has to wait until she came down. While he sits down waits for her he sees every detail inside the hospital, something he never did before, there were many marble busts on painted wooden pillars along the walls of the room they used for an office†¦they had complete marble quality of all looking alike (28). He is patiently waiting for Catherine, meanwhile he is staring at his surroundings. He has changed into a different man than what he was before he met Miss Barkley. They see each other and she asks if he loves her, he replies with a yes but seems unsure of it. While they converse one thing leads to another and they begin kissing, Frederic sees that both her eyes are shit and thinks to himself, I did not love Catherine Barkley nor had any idea of loving her. This was a game, like a bridge, in which you said things instead of playing cards. Like a bridge you had to pretend you were playing for money or playing for some stakes. Nobody had told me what the stakes were. It was all right with me (30-31). At this point he just wants someone to play around with instead of learning the true meaning behind what love really is. Then becoming injured in war awakens Henry and love has put him to the test. I went out the door and suddenly I felt lonely and empty†¦when I could not see her there I was feeling lonely and hallow (41). His real emotions towards her start rising out when he sees that she can really take care of him by which he was injured terribly. Henry suddenly begins to be more aware of other people rather than just himself and it leads towards a step forward in his persona. The termination of Henrys transformation leads into the last words of the novel, he has come to love his Catherine but sees the world as someone that kills with no question. Everything Henry does now revolves around Catherine. His love for her grows as when he is away at the front lines. His uniform is now star-less because he wants nothing to do with war, the faded part of his uniform showed the stars had been removed. He then comes across charming people that not only offer him shelter, but also clothing. Theres a closet. Take anything you want. My dear fellow, you dont want to buy clothes (242) but Henry responds that he would much rather pay for the clothes. Henrys actions are now more powerful and also shows us that he has more responsibility in him, something that he really did not know how to do at the starting point of the novel. Being away from Catherine improves his ability to take action and make him into a better person that he can be. But later his dreams of Catherine being near him are coming true and has her near. While they are together in the hotel room Henry explains to Catherine that if people bring so much courage to this world the world has to kill them to break them, so of course it kills them. The world breaks every one and afterward many are strong at the broken places. But those that will not break it kills. It kills the very good and the very gentle and the very brave impartially. If you are none of these you can be sure it will kill you too but there will be no special hurry (249). He tries to convince himself that he will be all right since he has escaped the war, little did he know that he was not able to escape freely, but to find out that Catherine had died with the baby they had made together. Ever since then Henry is not able to become the person he had been wanting to be. He ends up being a lonely man, with no family, that sees the world and everyone in it, against him, and nobody there to guide him any longer. Catherines fast death concluded his idea on having that there is life left that war took from him. In conclusion, Ernest Hemingway shows us how war can basically destroy not only a family but also a person that is left without it. Hemingway has Frederic Henrys character to demonstrate that there is always a need to escape from the destructiveness of war in order to keep sanity in ones self. With Frederic Henry as Hemingways model, shows us that you cannot have a rainbow without a little bit of rain, which means that even though Henry was put into awful situations like death, he was able to find the person he was destined to become.