“If competition intensifies and returning to the market becomes difficult, create new competition and dominate the market.”

In the early 1990s, competition was extremely fierce. Business giants were competing, and attempts to dominate the market reached their peak. Everyone knew who controlled the industry and who the numbers were indicating as the almost undisputed leader.

“Coca-Cola” had almost claimed the throne of the industry, while “Pepsi” was lagging behind with a 47% drop in sales. Unfortunately, that wasn’t all—Pepsi’s market value had dropped to less than half the market value of Coca-Cola.

Imagine how tough the situation was and how intense the challenge everyone was facing.

But surprisingly, Pepsi took the competition to an entirely different level.

Not only did it get itself back on the map, but it also created an entirely new industry in which it became the dominant player.

Pepsi decided to shift the competition to a space where it could become the “Category Captain.”

Pepsi started working on a new product outside the traditional competition of carbonated beverages. It began to study the market in this new category it wanted to dominate in order to rebalance the market power once again.

Pepsi developed a product, and when it launched it in the market, everyone discovered that it was going to take over the U.S. market.

You might wonder: How is that possible?

Yes, Pepsi was able to dominate the entire U.S. market, and as of the moment you’re reading this, this product is the best-selling brand since its launch and has remained the market leader.

But that’s not all. After Pepsi launched this product, Coca-Cola copied Pepsi and created a competing product. However, this happened three years after Pepsi’s product launch, so it was too late.

Pepsi began to expand into new markets to regain its reputation and outperform both Coca-Cola and Pepsi in this entirely new field.

Pepsi launched a highly important and effective new brand, which was also a very healthy product. It began marketing it and building a strategy that showed it had created an entirely new category for itself, positioning Pepsi as the leader in this new field.

So, what is this new product?

And is it just one product?

No, Pepsi didn’t stop at just one product; it created a whole market around it. It developed a full product pipeline, dividing it into stages for market testing before full-scale launch once testing was successful.

Pepsi created a whole new ecosystem for its product.

What is this product?

It’s “AQUAFINA.”

Yes, “AQUAFINA” is the brand that allowed Pepsi to dominate the non-carbonated water category in the U.S. market.

You have to imagine how successful this brand was and how it was marketed as a brand associated with a better lifestyle and better health.

Pepsi didn’t just stop at water; it also created several other products under “AQUAFINA,” including:

• Lip Balm
• Wrinkles Cream

Thus, Pepsi leveraged the massive success of the brand and demonstrated that it was marketing it as a healthy brand, not just a bottled water brand.

The case study of creating “AQUAFINA” is one of my favorites, and anyone who has worked with me knows that this case and similar ones serve as the starting point for solving a common problem in the market. It encapsulates the golden rule:
“How to be a Category Captain.”

This is not limited to Pepsi and Coca-Cola; there are many case studies reflecting this kind of strategic thinking that we can learn a lot from.

This example also perfectly illustrates the concept of “Red vs. Blue Ocean Strategies,” a concept that was popularized by the book “Blue Ocean Strategy,” which had not even been written at the time of this event.

I always repeat the following:

“Books draw from market successes, which are then scientifically and systematically formulated and later published in business or marketing books.”

And here, it’s important to highlight a crucial point:

It’s easy for someone with market experience to tell you about many books, even if they haven’t read them.

But it’s difficult for someone who knows about the market only through books to tell you how to overcome the first obstacle in the market.

Studying case studies is extremely important and inspiring. It changes the mindset of anyone working in business, from the smallest sales representative to the largest CEO.

Therefore, study many case studies. You’ll notice huge differences and find solutions to many of the problems you might face.