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Poster's 5 Forces

The document analyzes Coca Cola's industry using Porter's Five Forces framework. It finds that competition among existing players like Coke and Pepsi is strong, as the two major companies dominate the market. However, the threat of new entrants is weak due to high barriers to entry from required investments. The power of suppliers and customers is also weak due to many alternative options. The strongest force is the threat of substitute products like fruit juices and Pepsi, which present viable alternatives for customers.

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Christine Diaz
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259 views

Poster's 5 Forces

The document analyzes Coca Cola's industry using Porter's Five Forces framework. It finds that competition among existing players like Coke and Pepsi is strong, as the two major companies dominate the market. However, the threat of new entrants is weak due to high barriers to entry from required investments. The power of suppliers and customers is also weak due to many alternative options. The strongest force is the threat of substitute products like fruit juices and Pepsi, which present viable alternatives for customers.

Uploaded by

Christine Diaz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Poster’s 5 forces

COMPETITION AMONG INDUSTRY- MODERATE FORCE

The beverage industry has two big players and they are Coca Cola and Pepsi. There is strong
competition between the two leading beverages. There are also a few smaller teams, but they
pose no serious competitive threat. The two major players are about the same size and have
goods and tactics identical to each other.

*customer’s satisfaction- strong force


*innovative style- strong force

The customer’s satisfaction can be the strong force in the competition industry of the Coca Cola
Company because of that customers will choose coca cola brand than any other competitor.
Innovation of style is also can be strong force, because of that it will help the Coca Cola
company to be more popular.

THREAT OF NEW ENTRANTS- WEAK FORCE

There are many factors in the drinks industry that hinder the entry of new brands. It is unlikely
overnight to develop a brand. There are major investments to be made. Each portion requires a large
investment from operations to marketing. The level of client loyalty in the industry is moderate and it
will take some time for every brand to create customer loyalty.

*customer’s loyalty

Customer’s loyalty is one of the moderate force for the company, this will help because their
customer will no longer find other brand of beverages and will stick to their brand.The threat of
entrants is low for the soft drink industry. Very few entrants are able to deal with Coke. Furthermore,
heavy capital spending will be a barrier to entry when joining the soft drink market.

POWER OF SUPPLIERS- WEAK FORCE

The negotiating power of Coca Cola's suppliers is poor. That's because the number of suppliers is
high and Coca Cola's switching costs are low. Although Coca Cola can switch easily from one
supplier to another, it is not possible for any supplier to switch as easily from Coca Cola. For any of
the suppliers, that may result in losses.

*low switching cost


*strong to moderately large size of individual suppliers
*large number of suppliers- weak force
POWER OF CUSTOMERS- WEAK FORCE

In the case of Coca Cola, the bargaining power of individual consumers is low. Small volumes are
usually purchased by individual consumers and they are not concentrated in particular markets either.
The distinction level between Pepsi and Coca cola, however, is low. They mostly sell flavors that are
similar. For consumers, switching costs are not significant and the two brands also enjoy elevated
brand loyalty.

The customers have a moderate force that affect the company because the consumers can choose
what beverages brand they buy base on the nutrition fact or how it affects to their health. This
situation makes buyers' bargaining power a powerful force to control the external environment of the
company. And also the buyer power is higher when it comes to the retail stores.

THREAT OF SUBSTITUTE PRODUCTS- STRONG FORCE

Pepsi drinks, fruit juices, and other hot and cold beverages are the primary alternatives for Coca Cola
products. The number of substitute products for Coca Cola products is high.
*low switching cost for the customers
There are many beverages that can be alternative of coca cola such as Pepsi drinks, fruit juices and hot
and cold beverages, this external factor can contributes to the strength of the threat of substitution of Coca
Cola Company.
Pratap, A. (2017). Coca Cola Five Forces Analysis. Retrieved from Porter's Five Forces Analysis of Coca
Cola (notesmatic.com)

 Competition among industry- strong force


 Threat of new entrants- weak force
 Power of suppliers- weak force
 Power of customer- weak force
 Threat of substitute products- strong force

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