Analysis Of Cola Industry

944 words - 4 pages

To: Upper Management
From: Jimmy Blodgett
Subject: External Analysis of U.S. Cola Industry
Date: August 31, 2014

Purpose of the Report
Per your request, our team has spent the last month analyzing the competitive environment of the cola industry in the United States. Utilizing tools such as the Porter’s Five Forces Framework and PESTEL (political, economic, social, technological, ecological, legal factors) we were able to better create an external analysis of the industry. These tools are necessary in performing a successful external analysis. Throughout this memo we will apply these tools to the cola industry and we will highlight how these tools ...view middle of the document...

Entry into the industry would not be strategic for our firm.
Strong Rivalry within Cola Industry
Product differentiation within the cola industry is low. While Coke and Pepsi each have unique products and formulas, consumers do not find large differences in the taste of the colas. This has led to a high level of rivalry within the cola industry, forcing Coke and Pepsi to compete in areas such as pricing, promotion, and customer relations. This rivalry is not hidden by the two firms, exampled by former Pepsi CEO Alfred Steele mentioning that his main goal was to, “Beat Coke” (“Cola” pg. 6). With each new strategic initiative by Coke or Pepsi over the last century, the other competitor has responded with their own initiative. Examples include:
* Restructuring of bottling agreements and Customer Development Agreements (CDA) with retailers to gain more control of distribution
* Lowering pricing and increasing advertising and promotion spending
* Developing new product lines and expanding snack and food enterprises

Retailers Continue to Hold Power
In the past, the threat of supplier power was high in the cola industry. However, recent changes in the distribution strategies of Coke and Pepsi have brought the threat down to a medium level. Franchised bottlers have a lot of power as they can make decisions regarding where to test market the product, the amount of local advertising, packaging choices, and retail pricing (“Cola”, pg.3). Recognizing this threat, both Coke and Pepsi have acquired their largest bottle franchises and consolidated them in order to gain direct control over distribution. The consolidation of the bottle franchises has in turn limited the power of the concentrate producers, as these suppliers have limited options to sell their product.
Similar to the bottling industry, consolidation in retail has increased significantly which is a concern to the cola industry....

Other Essays Like Analysis of Cola Industry

An Analysis of Biggest Marketing Blunder – Cola - Cola Company

635 words - 3 pages In 1985, Coca Cola Company was responsible for one of the biggest blunders in marketing – New Coke. At that time, New Coke came out because of sweetness and people preferred it over all other beverages, including the competitor, Pepsi. The Coca Cola Company decided that it was time to change their formula - to make it sweeter like Pepsi. After months of working on the formula, doing the blind taste tests, research and changing their packaging

Analysis of Event Industry

1995 words - 8 pages ------------------------------------4, 5 ------------------------------------5, 6 -----------------------------------6, 7 CONCLUSION ------------------------------------- 8, 9 REFERENCE LIST --------------------------------------- 10 PURPOSE OF PAPER Discussing the positive and negative impacts on the growth of events industry, analysising the different explanations might have in the implications of this phenomenon. INTRODUCTION Over

Biosimilars Market Analysis - Biosimilars on the cusp of a new era - Global Industry size, share, trend, forecast, Analysis and growth

698 words - 3 pages  developments in the biosimilars market including the  anticipated patent expiries of key biologic products and launches of  new biosimilar products The position of HTA and P&R agencies on biosimilars Industry perspective on the expected impact of biosimilars The biosimilars pipeline and key future developments Key companies involved in biosimilars The way forward for industry Key ReasonsÂ

Coca Cola

1752 words - 8 pages strategy. Porter Five Forces Analyses: Michael Porter five forces framework helps to understand the industry rivalry and the development of business strategy. It does help to identity the rivalry from external sources in the market. Applying porter’s five forces framework analysis to Coco Cola Company in Indian context will aid us to understand micro and Macro Environment. Thus it can enable to draw a map for business strategy

Client Pitch

1227 words - 5 pages different demographics. The Coca-Cola brand is known world-wide so there are different brands to meet the needs of those consumers from around the world. The company targets consumers of all ages, but will focus mainly consumers between the ages of 10-60. There are different brands that meet the needs of consumers within each age group.} Coca-Cola SWOT Analysis • Strengths : Quality product, Loyal Customers, Effective Marketing Techniques • Weaknesses

Porter Five Forces of Coca Cola

556 words - 3 pages Porter’s Five Forces In Action: Sample Analysis of Coca-Cola Since its introduction in 1979, Michael Porter’s Five Forces has become the de facto framework for industry analysis. The five forces measure the competitiveness of the market deriving its attractiveness. The analyst uses conclusions derived from the analysis to determine the company’s risk from in its industry (current or potential). The five forces are (1) Threat of New Entrants, (2

Coca-Cola Market Analysis

553 words - 3 pages  Coca-Cola Market Analysis Personal factors that influence Coca-Cola product purchases Key personal factors that weigh heavy on consumer purchasing include the price and variety of the product and the availability to the consumer. As the US economy shows signs of growth (World Economy, 2013), consumers are still being mindful in their spending habits. Coca-Cola products have stayed comparatively priced with their

Working Capital of Coa Cola

1695 words - 7 pages Coca-Cola Co. (KO) | Short-term (Operating) Activity Analysis Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory. * Ratios (Summary) * Inventory Turnover * Receivables Turnover * Payables Turnover * Working Capital Turnover * Average Inventory Processing Period * Average Receivable Collection Period * Operating Cycle

Midterm Social Media Case Study

1060 words - 5 pages , from www.coca-cola.com/en/index.html MBALectures. (2010, October 10). MBA Lectures » Blog Archive » SWOT Analysis of Coca-Cola Company. MBA Lectures . Retrieved May 4, 2012, from http://mba-lectures.com/marketing/swot-analysis-marketing/1079/swot-analysis-of-coca-cola-company.html SWOT Analysis. (n.d.). Coca Cola. Retrieved May 4, 2012, from http://coca-cola-remodel.tripod.com/id21.html Thranax. (n.d.). Website Analytics What is a Good

Mgt 521 Coca Cola Co. Part 3

1547 words - 7 pages little experiment and turned out to be one of the biggest beverage industry of the world. Known and recognized in every corner, Coca Cola showed that with the proper tools, and dedication a dream can come true. Following some key business steps like the SWOT Analysis, Coca Cola has manage to stay at the top of the game, always coming up with new product, innovative ideas, and great marketing. The company takes seriously the stakeholders opinion and

Coca Cola

3140 words - 13 pages the internal and external environment that assist in developing strategy planning process (Finch 2012). SWOT analysis provides information that match the firm’s resources and capabilities to the competitive environment in which it operates. Strengths of Coca-Cola have been holding a large part of world culture for a very long time. Coca-Cola has focused on brand image and brand loyalty along with providing supreme taste and quality. The Coca-Cola

Related Papers

Swot Analysis Of Coca Cola

1504 words - 7 pages SWOT Analysis of Coca-Cola Introduction Coca-Cola Company is one successful globalized company. Its product portfolio is all over the world. Most offices, shops, malls, and other recreational centers market this drinking brand on a daily basis. The company has many products that enable the company to excel in the international market (Rothaermel, 2013). It leads the beverage market by a substantial rate against other

Value Chain Analysis Of Coca Cola

3369 words - 14 pages of Saudi companies, Ghamdi (2005) found that 22% of the companies in the study used value chain frequently, while 17% reported that they somewhat used it, and 42% did not use the tool at all. An interesting finding of the study was that the manufacturing firms were frequent users of the tool compared to their service counterparts (Ghamdi, 2005). The Value Chain Analysis of Coca Cola Coca Cola is a global business that operates on a local scale

Strategic Analysis Of Pepsi Cola Co

2686 words - 11 pages are too young to drink beer but think fruit juice is too juvenile can order sodas. Those too old and are putting their health at risk by drinking hard drinks can enjoy soft drinks and no one would think any less of them. In short, sodas have a mass appeal. They carry an image with them; an image of a person with a comfortable lifestyle. This essay will take a look at the company Pepsi Cola. For a better understanding of the subject

Porter's 5 Forces Analysis Of The Bottled Water Industry

599 words - 3 pages The Bottled Water Industry Threat of entry of new competitors is low. Firstly, the competitors that currently exist are large, dominating companies who already own a huge market share of the industry. New entrants attempting to enter the market will have compete with established brands such as Coca-Cola, PepsiCo, and Nestle. These brands have decades of experience in the food & beverage industry, have developed brand recognition & loyalty and