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
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