Five Forces Analysis
Jurtyne R. Youngblood
October 25, 2014
The Bible says in Philippians 2:3-4 “Do nothing from rivalry or conceit, but in humility count others more significant than yourselves. Let each of you look not only to his own interests, but also to the interest of others”. The industry-based view of strategy is underpinned by the five forces framework, first advocated by Michael Porter, it was later strengthen by others. The five forces strategy forms the backbone of the industry-based view of strategy. Since its introduction in 1979, has become the framework for industry analysis. The five forces measure the competitiveness of the market deriving its attractiveness (Peng, 2009). Soft drink industry needs huge amount of money to spend on advertisement and marketing. In 2000, Pepsi, Coke and their bottler’s invested approximately $2.58 billion. This makes exceptionally hard for a new competitor to struggle with current market and expand visibility. (MBA lectures, 2010). The Coca Cola Company has little worries when it comes to threats of potential entry. The beverage industry there is no consumer switching cost and zero capital requirement. Coca Cola is a beverage but it is also seen as a brand. Coke has held a significant market share for a long and their customers are loyal trying new brands are not likely. Actions indicative of a high degree of rivalry include frequent price wars, proliferation of new products, intense advertising campaigns and high cost competitive actions and reactions (Peng, 2009). The intensity of the rival threatens firms by reducing profits. Currently, the main competitor Coca Cola has is Pepsi. Pepsi has a wide range of beverage products under its brand. Coca-Cola and Pepsi are the predominant carbonated beverages and committed heavily to sponsoring outdoor events and activities. The market have other soda brands that are popular such as Dr. Pepper because of its unique flavors. The other brands...
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