Pepsi, however, denies that it ignored the clients. “These claims are totally unfounded,” states one Pepsi official. “We have always recognized the importance of partnerships with QSRs [quick serve restaurants] and have always striven to provide them with the best service. The channel is growing at around 20 percent per annum, and Pepsi-Cola has nearly a 70 percent share of the QSR market.”
Yet another problem for Pepsi in some key markets is its organizational structure, which often leads to a conflict of interest between bottlers. In Saudi Arabia, five bottlers are run by five separate influential trading companies. While having five big families on your side can be an advantage, it can also turn out to be a major stumbling block, as Pepsi is believed to be discovering now.
Although these five families may all be Pepsi partners, they are competing in several other business sectors, resulting in a lack of trust and team spirit. This divisiveness is hurting Pepsi’s interests just as the battle with Coke is heating up. It also means that any Pepsi decision about the Saudi Arabian market involving its bottlers becomes very complicated – Pepsi has to convince all five families before it can move ahead.