Analysis Of Porter 's Five Forces Essay

Essentially, the soft-drink industry is largest beverage industry. It gross millions a year, and has different distribution channels. For example, these soft-drinks are sold in supermarket, Vending Machines, Gas stations, etc. The cost is incomparable to the amount of consumer we currently have in America. If Americans consumer on average 50 gallons in a year. The cost of 2.00 is not missed by the average person. With that said, there is a least likely chance that a person would attempt to duplicate the process at home. The soda making process is too time consuming, and inconvenient when a person can simply can go to the store to purchase. Consumers can either be very loyal to the brand or fickle. Influx in prices can make consumers switch very quickly. However, there are typically incentives associated with loyalty. There are giveaways and contest that entices the customers to keep purchasing. For example, Snapple does this with a real fact on every lid. I personally know people that will buy the product just to read the facts.

The soft drink industry is one of the most highly profitable industries in the USA. Also, the competitive market is a very large market. Americans consumed about 53 gallons of soft drinks per person a year in 2000 by $ 60.3 billion!! Comparing with the market in 1990, since it was 47 gallons. In recent years, the market growth has slowed.

The existing concentrate business is largely controlled by Coca-Cola Company (Coca-Cola) and PepsiCo (Pepsi), together claiming a combined 72% of the U.S. carbonated soft drink (CSD) market sales volume in 2009. Refer to Exhibit 1 for an illustration of the CSD industry value chain. For more than a century, Coca-Cola and Pepsi have maintained growth and large market shares through mastering five competitive forces, shown in Exhibit 2, that drive profitability and shape the industry structure.

The first of Porter’s Five Forces is the threat of new entrants. According to the case study, there has been a wave of new entrants to the retail industry. These include Best Buy, Costco, Wal-Mart, Old Navy and the recently irrelevant, Target Canada. The second force, the threat of substitute products or services, is also prevalent in the retail market. Inevitably, the target audience that the Hudson’s Bay Company is trying to cater to, will shop at other retail stores for the same goods due to consumers behaviours and preferences. Another impacting force is the bargaining power of suppliers. However, this force does not play as large of an impact to HBC as one might initially assume. Traditionally, HBC among other large retail stores makes a large percentage of their

Assuredly, our business will be offering some specialty product and service. Our competitive strategy is differential. We are different from other companies because we are specializing in an online service that other companies don’t have.  Companies like Pbteen and Dormco are very limited on their service because they only provide a certain amount of diagrams. Our company provides the actual size/diagram of the room in which the students are living in. Additionally, our company’s product/service that we are providing is different from your competitors because no other company offers all college students a kit that provides all the essentials at a special discounted price. Furthermore, our business will act against each of the Michael Porter’s five forces by offering a variety of products and services.

Poter 's Five Competitive Forces Analysis for Concentrate Producers, Bottlers, and Retailers in the Soft Drink Industry

The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten

An industry analysis through Porter’s Five Forces reveals that market forces are favorable for profitability.

The domestic US airline industry has been intensely competitive since it was deregulated in 1978. In a regulated environment, most of the cost increases were passed along to consumers under a fixed rate-of-return based pricing scheme. This allowed labor unions to acquire a lot of power and workers at the major incumbent carriers were overpaid. After deregulation, the incumbent carriers felt the most pain, and the floodgates had opened for newer more nimble carriers with lower cost structures to compete head-on with the established airlines. There were several bankruptcies followed by a wave of consolidation with the fittest carriers surviving and the rest being

There are more than 900 registered brand names in the US. The top 10 brands are marketed by the 3 leading US soft drinks companies which are Coca-Cola, PepsiCo and Dr. Pepper/7up. The cola flavor is the most popular of carbonated soft drinks in the US with 65.7% of the market share. The orange flavor comes in 3rd with only 3.9% of the market share. As far as market segments are concerned there are only two segments; the regular carbonated soft drink and the diet carbonated soft drink (Kerin & Peterson, 2007).

Porter's fifth force that Porter describes is current rivalry among existing firms. In the specialty eateries industry,

Porter 's Five Forces model (PFF) is a powerful instrument that can be utilized by companies to investigate its situation and identify its industry 's competitors. Analyzing industry will help any business in determining the competitive strength and weaknesses. By using PFF model, investors can gain valuable information regarding what the actual factors that affect the organization 's profitability (Evans & Neu 2008). This paper will analyze the Cola Wars case study based on the PFF model, and the primary components of soft drink industry. At the end of this paper, some recommendations will be given to Coca-Cola company to enhance its position in the market.

The industry of Carbonated Soft Drinks (CSD) is highly concentrated. The three major companies, Coca Cola, PepsiCo, and Cadbury Schweppes accounted in 1998 for more than 90% of market share by case volume –Exhibit 1-.

Porter’s Five Forces model is used to evaluate the degree of rivalry between competitors in a given industry through assessing the four forces that lead to this outcome. These forces are the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products.

The global beverages industry is currently a low-growth market, with an expected compound annual growth rate of 5.7% between 2017 and 2025 (Grand View Research 2017). Additionally, the industry is quite saturated with firms that offer increasingly differentiated products. However, due to this low growth rate, companies have been engaging in price competition to gain competitive advantage and increase their market share. Nevertheless, Coca Cola is a dominant force in this market, controlling 40% of the industry, and is therefore at a low risk of losing its position.