Analysis Of Coca Cola Porter's Five Forces

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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 …show more content…

The fear or threat of new entrants in the soft drink industry is low, compare to any other industry like restaurant chain or fast food and retail chain. Carbonated Soft drink industry has high barriers for new entrants. Brand loyalty is one the extremely high barrier for new entrants. The threat of competition has medium pressure on the market strategy for the carbonated soft drink industry because switching cost is low for any consumer. I.e. if you don’t like or want to taste of soda from Coca-Cola you can easily switch to Pepsi. Health awareness is major impact on beverage industry because today’s consumer have become more aware and health conscious. Other factor is advertising, coca cola spending $230 million in advertising for its flagship Coca-Cola drink. This will put more pressure on new competitors or new entrants. For any new entrants or corporation needs to spend more money which is not possible in early years of product launch. People who consume sugary drinks regularly: 1 to 2 can a day or more have more 26% chance of type 2 diabetes than people who rarely have such drinks. Risks are even greater in young children, adults. Due to awareness demand of healthy beverages and health awareness the competition from the health drinks provider has increased day by

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