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In December 2005, for the first time in history, Coca-Cola had a market capitalisation which was lower than that of its arch-rival Pepsi. The company''s market value was US$97.9 billion, compared to US$98.4 billion of Pepsi. This sparked a debate among the analysts about the future of the world''s largest beverage company. Only five years ago, the market value of Coke was three times that of Pepsi. Since the mid-1980s, Coke has concentrated on its core business of carbonated soft drinks, which generated huge profits for the company. However, in the mid-1990s, carbonated drinks witnessed slow growth as the consumers'' preference shifted to sports and energy drinks. Realising the changing trend, Pepsi quickly expanded into non-carbonated drinks, snack foods and restaurant businesses, while Coke stuck to its cola business. By 2000, Pepsi had a diverse product portfolio, which reduced its reliance on cola business. The case attempts to highlight Coke''s dependence on carbonated drinks and elaborates on Pepsi''s gradual expansion into other businesses. The case also discusses the trends in the snack and soft drink industries and raises a question regarding how Coke would reinforce its leadership position in a slow growth market.