Porters Five Forces

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The global economy and closely tied emerging socio-factors continue to cause a decline in demand for soft drinks. This paper will utilize Porter's Five Forces Model and the PEST analysis to determine whether or not these external pressures have created an attractive industry (NAICS) and what barriers exist. According to Beverage Digest, the industry continues to consolidate as companies compete for fewer sales. This is a long-term positive for the industry as it decreases competition and gives the larger players a stronger hold as industry leaders (CNBC.com, 2010). However, even these companies, along with all of the others within the soft drink industry face barriers associated with the changing nature and desires of its buyers,…show more content…
In order to compete within a small local market, soft-drink manufactures must compete against global), Beverly (sold in Italy with a bitter flavor from the inclusion of quinine) and Senzao (a carbonated and geographical tastes. The challenge for companies within this industry is to differentiate itself and find a strong niche, whether local or globally, which can dislodge industry giants which have entered the markets under their global iconic brand or simply purchased other local brands. Availability of Substitutes - HIGH Due to the global reach of the industry’s giants, soft drink manufactures must combat common, well of global or domestic competition for the market share. The threat of substitutes within this industry is a very real threat. Possible substitutes that continuously place pressure upon both the soft drink industry include teas, coffees, juices and waters primarily due to tradition but now due to a growing global up swell for health consciousness. According to Anderson Spencer (2011), soft drink producers have reacted to a consumer shift away from high calorie and high sugar content drinks to healthier drinks. Consumers are moving from soft drinks to more specialized drinks which tout health benefits as well as coffee and tea drinks. The larger consumption of the substituted products. Intensity of Rivalry According to Barbara Murray

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