MGMT 471 Cola Wars Case Note Study Guide Break Down of Porter s Five Forces in the Soft Drink Industry Rivalry Among Existing Competitors Pepsi sells other items besides beverages equal distribution of power between Coke and Pepsi similar products strategies fight for similar resources Threat of New Entrants Barriers to entry are high High complexity Substantial investment required Bargaining Power of Suppliers there are many suppliers switching costs to another supplier are low materials needed for concentrate producers are basic goods possibility of forward integration of suppliers however not likely there are only one or few reliable options for materials Bargaining Power of Buyers unique product hard to duplicate bottlers have franchised bottling agreements with companies brand loyalty consumers buyers are price sensitive there are many buyers number of bottlers continues to decrease Threat of Substitute Products or Services offer substitutes themselves Large number of substitutes Some substitutes are a healthier alternative
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