The Michael Porter's Five Forces Analysis Of Coca Cola

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The Michael Porter five forces analysis has become one of the most commonly used sources of analyzing industries. Supplier power is when the provider of the inputs has the ability to determine price and terms of supply. The suppliers have the power on firms within an industry; this could be by decreasing the quality of goods that are purchased or increasing prices. This results to the reduction of profitability.
The power of a supplier is usually determined by a few factors. These include:
• The domination of firms in the industry; if there are a few firms dominating the industry.
• Suppliers products can be differentiated to the point of bringing brand loyalty amongst customers, thus making it hard to switch suppliers for the customer.
• The
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Coca cola started its operations in Kenya in 1948. (Territories). Coca Cola is one of the greatest customer related companies in Kenya, being one of the most preferred drink in Kenya and having the largest amount of customers. Coca colas main ingredients are caffeine, carbonated water, sweetener and phosphoric acid.
The differentiation of inputs in the production of soda is very minimal as there is no alternative to the sugar NutraSweet which has been patented thus giving a supplier less power over a buyer. Suppliers of bottles are also dependent on the buyer as they are the people that establish and make their companies. This occurs mainly cause there are more companies offering more goods which are similar and substitutes such as water and juice. Which is further still supplied and produced by coca cola.
Coca cola being one of the largest customers for their suppliers gives them the ability to have bargaining power over their suppliers this is because as mentioned above the supplier is not a credible threat to coca cola as it being a big company it can always find alternatives. Thus having low pressure when it comes to the power of their
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This was encountered and done after they purchased their machinery for production after brewing and packaging products at home. Keroche is obliged to contend with other products to sell in the industry this is because as it is operating in the same industry as EABL they must have encountered difficulties in obtaining an efficient supplier because with a monopoly buyer there was a chance that not many suppliers were available. Thus giving them the difficulties of obtaining a supplier that would match their targeted selling price. Although this may have been a problem for Keroche they conquered these difficulties by establishing their own supplier and producing at home thus avoiding a large impact of switching costs. This gave them power over the suppliers as they did not have many buyers thus giving Keroche the upper hand and the ability of growing the
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