HTM 4101 Strategic Management Cola Wars case study – Five forces analyses Concentrate producers: Bargaining power of buyers: Refer to the case‚ direct buyer is the bottler and indirect buyers are the end consumer and suppliers such as supermarkets and other outlets. Bargaining power of buyers for concentrate producers refers to the bargaining power of the bottlers. From the industry perspective‚ it is true that bottler could choose to switch their concentrate producers. Bargaining power
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Coke has been leading the competition from 1998-2002 in terms of higher market capitalization‚ gross margin and net income. However‚ Pepsi was leading the fight in terms of growth in revenue and net income. However‚ Pepsi’s stock performed 45% better than Coke’s stock. Overall‚ Pepsi was a smaller company but it was growing faster than Coke. Coke had a strong foundation‚ however‚ their revenue during this period increased due to summer months artificially increasing the demand. Pepsi‚ on the other
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competition between Coke and Pepsi affected the industry’s profits? Their competition for greater market share led to the evolution of both companies into dominant companies that left little room for other competitors for the vast majority of their history. This increased growth in profit‚ however‚ meant a lot more advertising and capital investment‚ which it’s profitability began to reach its peak in the late 1970’s as most other small bottlers were forced out of the market. Thus‚ as Coke and Pepsi pulled
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WEEK 1 DISCUSSION STRUCTURAL FORCES EFFECTS on COLA DRINKS INDUSTRY SUPPLY CHAIN by GIDAGA ALFRED HOOO31960 ABSTRACT Carbonated soft drinks branded under Coca Cola and Pepsi Cola remain major household names in the soft drinks industry. Spanning operation from the original Franchise agreement of 1899 to-date‚ is an indication of managerial ingenuity of strategy design‚ implementation and control. Profitability and sustainability as a key issue in business operations necessitates these
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Cola Wars (Porter’s Five Forces) Barriers to entry The barriers to entry are high for new companies; therefore‚ the threats of new entrants are low. For example‚ retailers enjoy significant margins for their bottom-line. This makes it tough for the new entrants to convince retailers to substitute their new products for Coke and Pepsi. There are an economy of scale‚ high required investment‚ high costs for advertising and marketing promotion‚ high channels of distribution‚ and high products differentiation
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the consumers and it is unique. Coke and Pepsi’s powerful brands are inimitable‚ so not really many substitutes were on the market. The entry barriers are pretty high. There are significant costs to enter the industry of soft drinks producers which automatically eliminates small players. The loyalty for the brand is also an issue. Consumers seemed to be pretty loyal over the years - it makes it very hard for a new enterer to compete with the major players Coke and Pepsi and right after Cadbury
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sweeteners and it accounts for high portion of sales. However‚ the bottlers are allowed to handle the non-cola brands as well and they have the right to decide on final retail pricing; and top bottlers get contribution from the main companies such as Coca-Cola. 2. How has the competition between Coke and Pepsi affected the industry’s profits? In the 1980s‚ Cola Wars between Coke and Pepsi started to heat up. To get more profits than the other‚ they tried in doing so many things such as
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Cola Wars Pepsico – Profile PepsiCo is one of the world’s leading producers of snack foods and beverages including Pepsi soda. Its principal businesses include: Frito-Lay snacks‚ Pepsi-Cola beverages‚ Gatorade sports drinks‚ Tropicana juices and Quaker foods. PepsiCo brands are available in nearly 200 countries and territories. The company operates in four divisions: PepsiCo Americas Foods (PAF)‚ PepsiCo Americas Beverages (PAB)‚ PepsiCo Europe‚ and PepsiCo Asia‚ Middle East and Africa (AMEA).
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the new Coke fiasco‚ how could Coca-Cola’s marketing research have been improved? Be specific. Coca-Cola’s marketing research could have been improved in many ways to help it reach success over Pepsi in the long run. Pepsi started off in the 70’s and 80’s with marketing campaigns like the “Pepsi Generation” and the “Pepsi Challenge” which really made Pepsi gain momentum on Coke. Coke could have done some research on this to determine some similar types of campaigns to compete with Pepsi. Coke was also
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responsible for industry profitability‚ an analysis of the five competitive forces offers an explanation for the success of the soft drink (CP) industry. The soft drink industry benefits from generally benign forces. Colas characterized the first 50+ years of the soft drink industry‚ with Coke and Pepsi accounting for the top brand names. While substitutes for soft drinks certainly exist‚ the major players in the CP industry have successfully shaped this competitive force in their favor‚ by changing
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