the soda industry

Business Management: The Soda Industry

Business Management

The Soda Industry

The purpose of this work is to describe the Five Forces in the soda industry which are Rivalry, Buyers, Entry Barriers, Suppliers and Substitutes and keeping in mind that The Coca Cola Company and the Pepsi Company are the leaders in the industry to state what the effect of generic brands have on the soda industry marketplace.

The Pepsi Company and the Coca Cola Company have been rivals in the soda industry for many long years. Recently Coca-Cola reorganized their company and achieved new efficiencies and productivity during the restructuring that has been lucrative to the bottom line of Coca Cola's ledger. The globalization of the world at large has created new aspects to a very old industry and as well the soda sector of the marketplace.

The Five Forces:

Coca Cola Company and Pepsi Company are both international producers and distributors of soda drinks. The competition between the two companies is generally a race that is neck-to-neck across the finish line each year in terms of sales and revenue. While Pepsi Company seemed to have the lead last year the Coca Cola Company targeted grocery store consumers as being their most valued customer in the market and through lowering of prices after streamlining the bottling company problems being experienced Coca Cola has taken over the larger scale buyers in the soda market. Due to the high dollar investment required for entering the soda market neither Pepsi Company nor the Coca Cola Company have much to fear from new entrants into the industry. However, as times grow tighter in the financial crunch currently being experienced many customers that actually prefer either Coca Cola or Pepsi are likely to purchase the lower cost generic store brands. Not so according to a report of the Associated Press released December 31, 2004 as the prediction that diet sodas may be taking a front row seat in the cola wars in the article entitled "A New Front in the Cola Wars: Forget Coke vs. Pepsi ... Diet Soda May Soon Outsell Regular"

. However, according to Don Guarino, who owns Meetinghouse Brewing Company in Gilmanton, New Hampshire the diet varieties will only drive up the demand for his niche sodas. Many in the industry believe that the diet sodas are going to be a big hit.

Unrealized as of yet is the problem that is forthcoming for the soda industry and all companies using the artificial sweeter "aspartame." Recently released Congressional Reports based on scientific and medical evidence state that: