Pepsi Porter's Five Forces Analysis

Strategy analysis

1. Conduct an industry analysis using Porter’s 5 forces to evaluate the attractiveness of the industry with respect to profitability of bottlers.

Porter’s 5 forces: Porter’s 5 forces is designed my Michael E. Porter of Harvard University. To run a successful firm and to know the current market one should analyze the firm with the five forces. Irrespective to the type of industry, size and stage of the industry the five forces help the industry to grow in a healthy competition for a long range of period. The five force include Buyer power, Supplier Power, Substitute effect, Threat of Entry and Rivalry. In carbonated soft

Pepsi is the main substitute for Coca cola as both products are having similar pricing. Many people cannot differentiate the taste between them. Availability, convenience of carbonated drinks and Brand loyalty plays an important role. As a long term strategy different varieties of coca cola and Pepsi have emerged. There are more substitutes both internally and externally. As part of company development Coca Cola and Pepsi developed their own products like original CSD, diet version, zero diet version, juice, water, and flavored water. There are many alternatives to carbonated drinks like sports drinks, flavored water, Juice, Wine, Milk, Beer and alcohol. Quality of the drink, age of the individual and Price plays important role in selecting the substitutes. Here customer is the key person for choosing. During the mid 1900’s the consumption of CSD increased by 10% annually and while reaching 21st century there are many ups and downs and was set at average of 3% growth annually. The choice of customers are changing through years. Fountain beverage is another step for increase in revenue by giving customers the experience of selecting making their own drinks. The availability if CSD is another reason for market share. Compared to Pepsi, Coke is

From past to present the rivalry between the firms is very transparent. There is a constant battle for the highest market share. There is a constant competition between the major bottlers in their strategies for setting up the shelf space in the retail. Whereas smaller brands like Shasta and Faygo distribute to the ware house and ignoring the shelf space. Coca cola is taking 1st place, PepsiCo is 2nd and Dr. Pepper Snapple is taking 3rd place. Coca cola and Pepsi compete with their marketing strategies and product differentiation. With respect to the sales both Coca Cola and Pepsi hugely invested their returns on R&D for new beverages and supported bottlers for extensive marketing. Pepsi projected themselves from beverages to snacks for revenue. Both the companies are striving for sustainable growth, increase in revenue ,decrease in operational cost and wage