Rivalry: Dr. Pepper Snapple Vs. Coca-Cola
a) Rivalry among Competing Sellers
Dr. Pepper Snapple is a smaller competitor to Coca-Cola. However, Pepsico is Coca-Cola’s rival competitor due to its relative size. Both have global recognized brands that compete in product differentiation instead of pricing. For instance, a 12-ounce can of Coke is usually priced similar to a 12-ounce can of Pepsi. Nonetheless, Coke attempted to change the taste of its product in the 1980s (i.e., product differentiation). Unfortunately, the New Coke was rejected by the public and reintroduced the original Coke as Coke Classic. Finally, due to the recent decrease in buyer demand, there has been an increase in competitive rivalry between the two brands. As a result, rivalry among competing sellers has …show more content…
As a result, there have been numerous alternative drinks in the market that buyers view as good or better substitutes than Coke, such as bottled water, juice, etc. Moreover, these substitute products are relatively priced (i.e., low switching costs to buyers). Thus, the pressure from sellers of substiture products is strong.
d) Bargaining Power of Suppliers
Demand for Coca-Cola supplier’s products is low because the ingredients used for soft drinks are commodities. In addition, materials such as cans and plastic bottles are also commodities that can be purchased from any chosen supplier because it has a low switching cost. Therefore, the bargaining power of suppliers is weak.
e) Bargaining Power of Buyers
Three of the top fast-food restaurants in the United States have agreements with Coca-Cola to resell their soft drinks. The cost for these top fast-food restaurants to switch to competing products is low. As a result, due to the large purchase volume and low margins in the fast-food industry, buyer bargaining power is strong. Nevertheless, the consumers of these products (i.e., general public) do not have bargaining power because they do not buy in high volume. Thus, the overall bargaining power of buyers is moderate when taking both situations into
Dr. Pepper Snapple is a smaller competitor to Coca-Cola. However, Pepsico is Coca-Cola’s rival competitor due to its relative size. Both have global recognized brands that compete in product differentiation instead of pricing. For instance, a 12-ounce can of Coke is usually priced similar to a 12-ounce can of Pepsi. Nonetheless, Coke attempted to change the taste of its product in the 1980s (i.e., product differentiation). Unfortunately, the New Coke was rejected by the public and reintroduced the original Coke as Coke Classic. Finally, due to the recent decrease in buyer demand, there has been an increase in competitive rivalry between the two brands. As a result, rivalry among competing sellers has …show more content…
As a result, there have been numerous alternative drinks in the market that buyers view as good or better substitutes than Coke, such as bottled water, juice, etc. Moreover, these substitute products are relatively priced (i.e., low switching costs to buyers). Thus, the pressure from sellers of substiture products is strong.
d) Bargaining Power of Suppliers
Demand for Coca-Cola supplier’s products is low because the ingredients used for soft drinks are commodities. In addition, materials such as cans and plastic bottles are also commodities that can be purchased from any chosen supplier because it has a low switching cost. Therefore, the bargaining power of suppliers is weak.
e) Bargaining Power of Buyers
Three of the top fast-food restaurants in the United States have agreements with Coca-Cola to resell their soft drinks. The cost for these top fast-food restaurants to switch to competing products is low. As a result, due to the large purchase volume and low margins in the fast-food industry, buyer bargaining power is strong. Nevertheless, the consumers of these products (i.e., general public) do not have bargaining power because they do not buy in high volume. Thus, the overall bargaining power of buyers is moderate when taking both situations into