People only know that "Pepsi" is sweeter than "Coca-Cola", but they don't know what touching love and cruel competition are behind this little bit of sweetness. On September 30, 2009, Pepsi-Cola, the world's second largest beverage empire, was ordered to pay 1.26 billion yuan in compensation without its knowledge due to an own lawsuit. There is news that this is another business war concocted by the old rival Coca-Cola Company. In fact, for more than 100 years, the struggle between the "two Les" has never stopped and has long gone beyond the scope of ordinary business wars.
Charles Guth was born in a slum in New York. Charles was optimistic and smart. He mixed juice and gelatin to make a gummy candy that could deform, bounce, and have different shapes. In one year, Charles developed a small factory with only one sugar boiler and nine workers into a factory with more than 100 people. On Christmas Day in 1929, while delivering goods to a candy store, he met a tall, beautiful girl wearing a white hat. Charles was moved by love, and a girl who introduced herself as Sophie Kalsey took him to the slum where he once lived. Sophie's home was not there. She found a secluded place, took out many handmade small cloth bags, and divided the candies in the paper bags into smaller packages.
When he knew that Sophie was carrying out her mother’s last wish and came here to give candies to poor children, he was particularly moved. He begged to accompany her until dark, and then secretly placed the candies at the homes of people in need. in front of the door. On that night, Charles fell deeply in love with Sophie, and he was sure that there was a mysterious connection between himself and Sophie.
However, Charles sadly learned that Sophie was engaged to Jones, the son of Han Puno, the president of Coca-Cola Company. Charles knew that although Jones far exceeded him in terms of financial resources and educational background, he was romantic, arrogant and had a divorce experience. Charles believed that Sophie would never be happy marrying him.
Charles never shrinks from doing things. Three months after they met, he directly expressed his feelings to Sophie. He took out several small cloth bags embroidered with blue and red patterns and said: "Since I knew he was a kind-hearted person, After receiving the gift, I have been collecting them and constantly imagining what kind of person she is. Sometimes, I think she is the old lady across the street, so I take the initiative to tidy the lawn for her. Sometimes I think she should be a lovely nun. , so I ran to collect pumpkins for her. I have helped many people, so I have been helped by many people. Now that I know who she is, please give me the opportunity to use all my loyalty and life. Make you happy.
Sophie was so moved by the passionate courtship that she wanted to break off the engagement, so she went to confess to her father. At this time, in 1927, the United States entered the Great Depression era, and hundreds of companies were affected. and factories went bankrupt, and countless people committed suicide because of unemployment. Faced with her daughter’s plea, Karsi said: “If you cancel the engagement, they will terminate our cooperation, 500 people will be unemployed, and my father will go bankrupt. ”
Sophie was in great pain, and Charles was also confused. He wanted to give Sophie happiness, but if Sophie lived in pain all day long because of their union, it would be against his will. Original intention. In the spring of 1927, two lovers were forced to break up. Just as Charles watched with great sadness that Sophie was about to become someone else's bride, a friend informed that a beverage company called Pepsi announced. After going bankrupt, the boss offered to sell the factory and formula for $5,000. Charles had an idea. If he wanted to win Sophie, he must first win over Sophie's father, Kalsi.
At that time, PepsiCo already had one. With a history of more than 20 years, it could not survive the Great Depression. After Charles obtained the franchise, he planned to first change its formula to make it suitable for ordinary people. Seeing how popular Coca-Cola was, Charles bought the drink. Taste it repeatedly. In order to prevent the formula from being leaked, Coca-Cola did not apply for a patent, because the law stipulates that when applying for a patent, the formula must be published, and the exclusive use period of the patent is only 20 years. After the period, the formula will become public. *Technology, allowing the public to use it freely.
For this reason, Sophie became Charles’ motivation. The taste is comparable.
As soon as the drink was invented, Charles applied for a patent. In addition, Charles also collected a large number of second-hand beer bottles through various channels.
In the spring of 1929, Charles produced the first batch of drinks and sold them cheaply in these bottles. At that time, the price of Coca-Cola was $1 per liter, and Charles launched a large 2.5-liter bottle for 5 cents. The absolute price advantage and similar taste made Pepsi win the favor of many low-income people as soon as it was launched.
Charles initially only sold it through his candy chain. Within three months, many retail stores were selling this cheap and high-quality drink. Like a dream, Coca-Cola Company's Hampnor and Jones woke up and found that a strong competitor had suddenly appeared in the market. They didn't know who the boss was.
But soon Jones knew who he was, because Sophie proposed to break off the engagement with him, and the person he wanted to marry was the person who produced the same drink as him. Jones was very angry. He thought that Charles must have plagiarized their technology, and it must be Sophie and Kalsi who helped him, because Kalsi had been engaged in the canning of his drinks. Furious, he vowed to send Sophie, Kalsi and Charles to prison.
But he soon discovered that Charles had registered a patent. If he wanted to sue him for plagiarism, he would have to publish his own formula to compare with him, so that he would automatically leak the secret. Jones suffered a loss and was unable to fight back, so he vowed to destroy PepsiCo at all costs.
But Charles took things step by step. In 1931, in order to build his own brand, he asked someone to design a unique package. At that time, Coca-Cola's packaging bottles were large at the top and small at the bottom, which resembled a curved bottle of a female body. Charles made A completely opposite, rugged packaging bottle is produced, with a capacity twice as large as Coca-Cola. In addition, he also designed a unique circular logo based on the red and blue patterns on Sophie's candy bag. The upper part of the logo is blue, representing Sophie, the lower part is red, representing himself, and the middle part is red. There is a wavy line that resembles both the shape of water and a smile, which also represents that the company will always take a smiling service route.
In 1931, Jones sued Charles to the New York Superior Court. In August of the same year, the court ruled in favor of Pepsi-Cola. From then on, there was only one word difference between the trademarks of Pepsi-Cola and Coca-Cola. Just this month, Charles married his beloved Sophie. However, just as the newlyweds were talking sweetly, Hampnor and Jones, who had lost the case, organized a new round of more brutal competition after returning.
Jones's first move was to lower the price. With his huge financial resources, he signed contracts with all consignment retailers, stipulating that for every gallon of Coca-Cola sold on consignment, he would receive an additional two cents commission, but he would enjoy this discount. Merchants who meet the conditions are not allowed to sell other carbonated drinks.
This is equivalent to excluding Pepsi from all retail stores. In addition, once Coca-Cola lowers its price, Pepsi will lose its price advantage. Plus, with thin profits, they cannot give more to retailers. In the end, except for Charles's own candy chain, which still insisted on retailing, other businesses refused to let Pepsi in.
At the same time, as the shadow of World War II approached, Charles had a premonition that the price of sugar would rise sharply. Considering that sugar was the main raw material for the production of candies and beverages, he invested a large amount of money in hoarding sugar. superior. However, this judgment was a major mistake. In the mid-1930s, due to government intervention to expand sugarcane planting, the price of sugar fell instead of rising. The money Charles hoarded could not be realized, and the sugar also depreciated because he had been hoarding it for too long, causing huge consequences for him. Difficulties in capital turnover.
In 1936, Charles already had two children, but at this time both of his companies were in faltering. At Christmas that year, he could not even satisfy Sophie's wish to go to the slums to distribute candy because He no longer had the money to buy raw materials, and he had reached a point where he had to sell one company in order to save another. After the New Year, one day Charles discovered that Sophie was missing. He was about to call the police when he suddenly received a call from Jones: "Brother, if you want to sell the company to me, you can, and Sophie will also sell it to me. I could have He married her solemnly, but now he can only treat her as a commodity. Think about it, whose fault is this?" Charles was very shocked. Then Sophie's crying voice sounded on the phone. She explained that she wanted to beg Jones. Help, who knows that Jones is not a generous man at all. Charles personally rushed to Atlanta to pick up his wife, and made her swear not to go to Jones no matter what kind of trouble she encountered in the future.
The company tremblingly supported By the end of 1936, Charles finally met an investor named Mike, who was willing to buy 51% of PepsiCo's shares, which meant changing the company's legal representative. Mike is a person with great advertising awareness. When he took office, he launched nationwide advertisements. At the same time, Pepsi returned to using second-hand wine bottles for filling, and more clearly promoted the theme of "drinks for the lower class". In this way, they achieve rapid sales growth.
When Jones realized that Mike was a rare talent, in 1941, Jones paid a lot of money to poach Charles. At that time, Coca-Cola occupied one-half of the bottled beverage market, while Pepsi-Cola only divided the remaining half with many other beverages. The 5% stake Jones promised would be more profitable than the 51% he held in PepsiCo. This was a huge temptation for Mike.
Charles was panicked. If Mike defected, not only would he have a strong opponent, but the 51% equity he owned could also influence the development of the company, making Pepsi become a subsidiary of Coca-Cola in disguise. So he asked Mike not to turn to Jones for the sake of his friends. But businessmen only value profits. Mike believes that the personal feud between Charles and Jones has seriously hindered the development of Pepsi-Cola. There is only one way to save the company, and that is for Charles to leave completely.
In order not to compromise with Jones, Charles endured the humiliation. On the eve of the 1941 war, after retaining a small share of the equity, he left Pepsi, which he founded, and concentrated on selling gummy candies.
With the outbreak of World War II, Mike's life began to be difficult. At this time, Mike thought of Charles again, but by driving away Charles, Jones' goal had been achieved. At this time, Mike was already It doesn't make any sense anymore.
After the end of World War II, Charles' candy business recovered and he approached Mike to negotiate to repurchase most of the shares. Mike was also willing to join forces with Charles again because of being humiliated by Jones. Pepsi-Cola gained a strong market position. Until the deaths of Charles and Jones in the 1960s, Coca-Cola could only watch Pepsi grow from an unknown person in the past to a beverage empire that was equal to its own. Sophie also continued to do charity until her death.
Until now, the struggle between the two companies has never stopped.
Thinking:
1. What implications does Charles’s strategy for entering the beverage industry have for entrepreneurship?
2. What are the characteristics of Coca-Cola’s competitive approach to fight back against PepsiCo?
3. Until now, the competition between "Cola" and "Pepsi" has never stopped. How to understand the cooperation between "Coca-Cola" and "McDonald's" and "Pepsi-Cola" and "KFC"?