Analysis Of Porter 's Five Forces Analysis

1424 Words6 Pages
Strategy Analysis: Porter’s Five Forces Analysis While I am writing this article, many people like me are thinking that business competition is a war between two or more corporation for more sales or market share. But according to Harvard business prof. Michael E.Porter, competition or comparison is more complex. It is not about who is biggest, it’s all about who is most profitable. The Porter’s Five Forces Model reflects or illustrate how this competitive environment is in industry or corporation is reflected and they are: Supplier power, Threat of new entrants, Buying power, Threat of substitutes. These five forces will help us to find out how Coca-Cola and Pepsi, the world’s giant carbonated soft drink producers, place their product in the competitive market. How they can survive in the market competition, as well as they can be more profitable and successful. Buyer Power – The power of Customers Customers, buyers who are the most important base for any company to make profit. They drive the demand and supply of the product which impacts the product supply and price. According to this case, bargaining power of buyers is weak. For these companies, there ae two types of buyers for soft drink – bottlers and big retailers like Walmart, Target, and McDonald etc. In the case it is mentioned that bottlers are in contract with soft drink companies for syrup. The large retailers have less bargaining power because they are fragmented so buyer’s power is weaker than supplier. On other side, in the developing countries like China and India, where buyers have more bargaining power because buyer’s market is not consolidated as US market. The soft drink industry in developing countries is not fragmented which gives buyers or customers adv... ... middle of paper ... ...ompany. Source: www. marketrealist.com Coca-Cola and Pepsi are two leaders globally, both companies have their presence in more than 200 countries worldwide. To be in market and retain the market share, both companies are trying to differentiate their product portfolio, both companies are investing huge amount of money on advertising and promotional campaigns. Coca-Cola and Pepsi are the two major gainer in the CSD industry. There is other promising competition in CSD industry is Dr. Pepper, because of its unique flavor. In fact, this is important what analyst are expecting Coca-Cola to grow at 7.7% and Pepsi to grow at 8.4% moving forward against product of Dr. Pepper Snapple’s expected long-term growth rate of 6.6%. The below pie chart represents product and service segmentation of industry in 2013. Source: www. marketrealist.com Source: Cola War case study

More about Analysis Of Porter 's Five Forces Analysis

Open Document