Marketing Analysis : Coca Cola Essay

Marketing Analysis : Coca Cola Essay

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Along with Pepsi, Coca cola is among the two leading carbonated soft drinks brands in the world. The two companies are always competing with each other to gain market share and revenues through innovative product offers and marketing stunts. But both the companies depend on a value chain that is similar has the same properties.
Concentrate producers – this component of the CSD industry has a low bargaining power. This is so because the raw materials that are used are easily available and therefore entry into the market in this aspect is easy. However Coca Cola has a very specific formula for mixing of the elements to make the concentrate and therefore not every firm that wishes to become a supplier for Coke can become one.
On the other hand Coke enjoys an upper hand and as a buyer the company can switch to any other supplier at relatively low costs. The costs of selection another supplier is low and therefore the company enjoys buyer power.
Moreover, since it is easy to gain access to all the ingredients that are required for making of the concentrated liquids for CSD is relatively easy, there are enough suppliers or replacements of existing suppliers. Hence the company has a number of options to replace an existing supplier with a new one. Therefore Coke can choose suppliers based on need and costs (Carpenter & Sanders, 2014).
Since there are a number of such suppliers ready to tie the knot with the world leader in CSD, therefore there is significant rivalry between them. There is also no threat of substitute products as far as suppliers of concentrate are concerned. This is so because, the concentrate uses a very specific formula that create the taste of Coke soft drinks. Hence this cannot be replaced by anyone and everyone....

... middle of paper ...

...ver since the entry barriers are low and threat from new entrants are high, there is usually severe competition among the retailers. The supplier for retailers is Coca Cola which has a low bargain power.
As is evident from the above analysis that Coca Cola is well placed as a company with both the concentrate makers and the bottlers with a lot of options to leverage in their dealings with these two components of the. But the company is at a disadvantage with regards to the retailers.
Gaining leverage greater dealing ability with retailers can be tough for Coca Cola. However a certain degree of leverage can be gained by way of better incentivizing the retailers to encourage excusive sale of the company products and refraining from selling of products from rival companies.
Coca Cola can also look to set up alternative sale channels such as exclusive stores.

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