“A typical PBC distribution zones consist of a large manufacturing plant or a distribution warehouse that sends product to five to eight satellite warehouses facilities within a driving distance of 165 miles. Before selecting the zone in Tampa, Florida, PBC assessed 18 different zones to ensure the optimization.”
This strategy though very simple resulted in reducing costs in the potential bleeder zones for pricing. Direct to store model resulted in success quickly became a research for most of us to investigate. But the essence here is to understand, this worked for Pepsi at the current time frame, it certainly raises questions for the future.
Is this sustainable in the long run ? Will the profit margin continue being large and how soon will this innovation in supply chain need to be replaced for the sake of competitors who can ape a similar model.
Keep a close eye price and brand wars of Cola and we will soon find out , whether this strategy was for the long run or like most innovations just a competitive edge for the short run.