Five Competitive Forces for Coca-Cola Company

Topics: Coca-Cola, Soft drink, PepsiCo Pages: 4 (1287 words) Published: June 26, 2013
Five Competitive Forces for Coca-Cola Company
The soft drink industry is very competitive for all corporations involved, with the greatest competition being that from rival sellers within the industry. All soft drink companies have to 7 think about the pressures; that from rival sellers within the industry, new entrants to the industry, substitute products, suppliers, and buyers.

The competitive pressure from rival sellers is the greatest competition that Coca-Cola faces in the soft drink industry. Coca-Cola, Pepsi Co., and Cadbury Schweppes are the largest competitors in this industry, and they are all globally established which creates a great amount of competition. Though Coca-Cola owns four of the top five soft drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite), it had lower sales in 2005 than did PepsiCo (Murray, 2006c). However, Coca-Cola has higher sales in the global market than PepsiCo. In 2004, PepsiCo dominated North America with sales of $22 billion, whereas Coca-Cola only had about $6.6 billion, with more of their sales coming from overseas, as shown in Table 4 and Table 5. PepsiCo is the main competitor for Coca-Cola and these two brands have been in a power struggle for years (Murray, 2006c).

Brand name loyalty is another competitive pressure. The Brand Keys’ Customer Loyalty Leaders Survey (2004) shows the brands with the greatest customer loyalty in all industries. Diet Pepsi ranked 17

th
and Diet Coke ranked 36
th
as having the most loyal customers to their brands.
Refer to List 15 for the brand loyalty rankings of the various competitors. The new competition between rival sellers is to create new varieties of soft drinks, such as vanilla and cherry, in order to keep increasing sales and enticing new customers (Murray, 2006c). New entrants are not a strong competitive pressure for the soft drink industry. Coca-Cola and Pepsi Co dominate the industry with their strong brand name and great distribution channels. In...
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