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Cola Wars
Threat of Entry of New Competition: Low.
The economy of scale within the CSD industry requires enormous amount of capitol to enter into this market, making this threat relatively insignificant.
- Threat of Substitutes: High.
Colas are now part of many different selections of drinks. Health and medical experts also contribute to this theat.
-Threat of Customer Buying Power: Medium.
It appears the customer base will buy soft drinks with expendable cash, but harsh economic times will force consumers to cheaper options.
-Threat of Suppliers' Bargaining Power: Low.
Concentrate providers are significantly tied into the success of this industry and has few outlets with the buying power of this industry.
Threat of Intense Rivals: Medium.
The 60 years of cola wars between Pepsi and Coke explicitly demonstrate a relatively two sided battle.
This industry is both profitable and attractive for CP's due to the simple...
Coke and Pepsi have created barriers to this competition by buying and controlling all threatening products. When bottled water became a profitable product, both companies easily shifted to this new market demonstrating the power of controlling the industry.
1d. The bottlers do have power but only when it is combined. The widespread influence of the larger CPs make it hard to organize and combine efforts to lower costs.
2a. Since Coke and Pepsi have split the market between fountain and retail sales, it seems as if a gentlemen's agreement to not destroy the market has been reached. Their competitive advantage arises when consumers choose to drink CSD as opposed to free water or hard drinks.
2b. Coke and Pepsi choose not to compete when they ignored traditional pricing for attracting retail business. In aiming to attain market share of the store brand…
4. In the period from the mid-1980's through the end of the century the structural changes Coke and Pepsi adopted focused on consolidating and buying up smaller brands of CP's. Certain brands were often sold back and forth several times. As the two giant companys continued to grow during this period, it became evident of this dual power structure within the CSD industry.
4a. The rationale behind this structural change rested mainly on eliminating Porter's force of the threat of rivalry to this dual power structure.
5. The current economic landscape has threatened the abilities of certain markets to function with confidence and accuracy. This general distrust within the environment has large corporations such as Coca Cola and Pepsi concerned about their standing amongst their consumer base. However, globalization has helped ease this problem with new markets opening in new places all the time. The middle east in recent times has been a place where these two companies may be able to exploit and sustain their competitive advantage within this industry.
Cola Wars Continue: Coke and Pepsi in 2010 Harvard Business Case 9-711-462 Five Forces in the cola industry: Porter's Five Forces Framework Power of buyers For concentrate owners: Strong. The power of buyers is extremely strong within the soda industry, given that consumers can quickly shift their alliance from one beverage to another. Also, cola is not strictly a 'necessity' as a product -- no one needs to drink soda, and consumers can easily
Increasing their product lines with good products will increase their sales around the world. The biggest threat that Coca-Cola faces is the intense competition that exists within the industry. Coca-Cola has three main competitors, these being: PepsiCo, Cadbury Schweppes, and the Cott Corporation. All of these companies have products that compete with Coca-Cola products around the world. The competition between Coca-Cola and Pepsi has dominated the industry for more than
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This provides tremendous opportunity to build market share without significant increases in infrastructure. The downside of these markets is that they tend to be less efficient, because fixed costs are higher in relation to revenues. The company can win in such markets, however, if it uses its globally powerful brand to gain a stronger presence in underserved markets, thereby pre-empting rival firms from entering these markets. With Coca-Cola establishing
internal and external business environment of two fast food giants, McDonald's and KFC. The major sections of the paper include introduction to the companies; the competitive analysis of the fast food industry using five forces model; the Balanced Scorecard and SWOT analysis of the companies; and a set of recommendations in the light of these analyses. The purpose of this paper is to present an analysis of the Global fast
A low concentration of market share is always held by many rival firms making the competitive landscape more intense. Threat of substitutes; Substitutes refer to other products in other industries. Pepsi deals with beverage industry and food industry for example. The private label food products that are low priced compared to those of Pepsi which is highly priced, is leading to price wars as customers opt for cheaper products. Buyer power;