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Five Forces on Coca Cola

In: Business and Management

Submitted By Wedemongar
Words 454
Pages 2
Marcus Jayqua
MBA 800-801
“Coca-Cola Braces For China Slump” October 17, 2012

Threat of New Entrants/Potential Competitors: Median Pressure * Entry barriers are relatively low for beverage industry: there is almost 0 consumer switching cost and very low capital requirement. There are more and more new brands appearing in the market with usually lower price than Coke products * However Coca-Cola is seen not only as a beverage but also as a brand. It has a very significant market share for a long time and loyal customers are not very likely to try a new brand beverage.
Threat of Substitute Products: Median to high pressure * There are many kinds of energy drink and soda products in the market. Coca-cola doesn’t really have a special flavor. In a blind taste test, people couldn’t tell the difference between Coca-Cola coke and Pepsi coke.
The Bargaining Power of Buyers: Low pressure * The individual buyer has little to no pressure on Coca-Cola * The main competitor, Pepsi is priced almost the same as Coca-Cola. * Consumer could buy those new and less popular beverages with lower price but the flavor is different and the quality is not guaranteed. * Large retailers, like Wal-Mart, have bargaining power because of the large order quantity, but the bargaining power is lessened because of the end consumer brand loyalty. * There are many kinds of energy drink and soda products in the market. Coca-cola doesn’t really have a special flavor. In a blind taste test, people couldn’t tell the difference between Coca-Cola coke and Pepsi coke. * People are getting concerns of negative effects of carbonated beverages. Increasing number of consumers begin to drink fruit juice, lemonade and tea instead of soda products.
The Bargaining Power of Suppliers: Low pressure * The main ingredients for soft drink include carbonated water, phosphoric acid, sweetener,…...

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