According to porter вЂњhigh rivalry, limits the profitability of the industry.вЂќ The Coca Cola Company and Pepsico are competing based on brand image. There is an intense rivalry between these two companies. This relates to PorterвЂ™s article on the 5 competitive forces that shape strategy. The two companies have fought over the past decade to win market share from one another as overall sales dropped. supermarkets, convenience stores and other retail outlets. Last month Beverage Digest reported that Pepsi-ColaвЂ™s market share fell 0.5 percentage point while Diet Coke slipped just 0.1 percentage point in the U.S. Competitive RivalryД¬ompetitive rivalry is between two main competitors the Coca Cola Company and Pepsico to satisfy the taste of consumers in this industry. Creating a niche market for their drink in the form of marketing to a certain segment in the soft drink industry.

How does a newcomer circumvent the barriers to soft drink industry? Perhaps create new distribution channels of their own. According to PorterвЂ™s article, supply-side scale economies deter entry by forcing the aspiring entrant either to come in the industry on a large scale, which requires dislodging entrenched competitors. In porters 5 forces, Porter refers to supply-side economies of scale, where firms such as the CCC and Pepsico can produce at large volumes enjoy lower costs per unit because they can spread fixed costs over more units, employ more efficient technology, or command better terms from suppliers. These companies definitely have the advantage over there competitors. The Coca Cola companyвЂ™s main competitors are Dr.Pepper, Nestle and Pepsico. Most of the companies in the soft drink industry are profitable. For this particular industry, the competitive forces are benign, (favourable). The Coca Cola company says on its website it is facing strong competition from well-established global companies and many local participants. One of the 5 forces that shape the soft drink industry is barriers to entry. Coca-Cola should continue to develop their brand loyalty worldwide and convince consumers to have reliability in their products. Rationale: Entrants are slowly rising to the carbonated soft drink industry and as organization must find new barriers. Coca cola has their products everywhere on their store shelves which make it accessible to consumers while new private companies will have a hard time selling their products to wholesalers, retailers, and distributors.

One strong barrier to entrant that prevents from coming would be distribution channels. Having strong barriers prevents from this rising situation to happen. Private companies currently earn 14.4% of the soft drink industry. The challenge for this organization today and the future is to focus private companies because they can imitate the products and put cheaper prices. Price is a huge factor to take into consideration with regards to other entrants. Coke can lose its profits margin and can have a major impact on the trademark itself if they increase prices. If Coca Cola decides to increase most of their product by a $0.50 increase, it would be very likely, consumers would buy Pepsi products. Certainly, Coke does have these products on hand. So they may not be interested in soft drinks but look at tea, juices, milk and even water. Nowadays, consumers are really being health-conscious about their health. To get the point, the buyer can switch from one product to another at no cost under the Coca Cola brand. Coca-Cola has over 500 brands of products which are potentially substitutes. Coke nearly earns 48% of the soft drink industry and there are no competitors that are nowhere near coca colaвЂ™s distribution. If you donвЂ™t have that high capital investment it would be hard to enter the industry. In addition, a barrier to entry when entering the soft drink industry would be a high capital investment. There are very few entrants who can compete with Coke.

The threat of entrants is low for the soft drink industry. Internal Fit/Factors Porter 5 Forces Analysis Threat of EntrantsД¬oca-Cola does have a lot of competitors in the soft drink industry. Coca Cola products are significant because they make each product unique. For instance, a can of coke has a secret formula that will be difficult to imitate. Rationale: Coca Cola Company continues to work on research/development and focus on making new products.

What does low threat of new entrants