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Poter Five Forces Essay

The environment analysis of Coca-cola industry can be done as :Buyers There are many companies to buy the soft drink products. The companies that purchase cold drink includes Fast food franchises, food store, convenience stores and vendings. Generally, the individual buyers for small retails do not have pressure on coca-cola industry. But, the large retailers like: Wal-Mart have pressure or bargainin power on the coca cola because of it’s large order quantity. But again , the bargaining power of the buyers is lessened because of the loyalty of the end consumers towards coca-cola.

Substitutes Generally, there are many substitues of coca-cola. It includes water, coffee, tea, fresh juices, etc. Coca-cola is able to counter it’s substitutes through brand equity, advertisment and easy availability. Coca-cola has been spending a huge budget on it’s advertisment with different concepts and it is also easily available in almost every corner of the world. They also began to produce these substitutes (eg:- pepsi) on their own to tap into that segment of the market. Barrier to entry The barrier to entry in the cold drink industry is fairly high.

The franchising agreement with the existing bottling companies prohibit bottler’s from taking a new soft drink companies. Even though there is the entry of any new soft drink company in the market, it would not be of any threat for coca-cola company. Suppliers The main ingredents of soft drink are carbonate water, phodphoric acind , sweetner and caffeine. The suppliers of these ingredents are not concentrated or differentiated. Many suppliers can be available easily. If a new soft drink company enters the market, it would be very easy for a new soft drink company to find a supplier willing to sell these ingredents to them.

Rivalry Talking about today’s context , the main competitor of coca-cola is pepsi. These both soft drink is able to survive in the market giving throat to throat competition to each other. Both have their own marketing concepts, advertisment concepts and stategies. The slogan of coca-coal is “Open Happiness” which generally focuses on togetherness and spreading happiness. Likewise, other soda brands that became famous was Dr. Pepper because of it’s unique flavour. Thus, in this way the environment analysis on coca-cola can be done through “Poter’s Five Forces Model”.

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