Q1. Why is the soft drink industry so profitable? OR Why is it not easy for new players to enter the industry? Already a mature market‚ coke & pepsi spent a lot of money‚ time & effort on all things e.g. networking‚ manufacturing Q2. Why CPs are more profitable than bottlers? The concentrate manufacturing process involved little capital investment in machinery‚ overhead‚ or labor. A typical concentrate manufacturing plant cost about $25 million to $50 million to build‚ and one plant could
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Cola Wars Continue: Coke and Pepsi in 2010 The software drink industry has been very profitable historically because the manufacturing process requires low cost of overhead. Although this is not the case for bottlers‚ the high volume and demand for CSD allow for the market to be very attractive to incumbents. Since the 1970s‚ the CSD industry has been enjoying an average growth every year of 3% for the last 30 year. Even at the lowest point in 2009‚ CSD sales compose of 87% of all beverage sales
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"Cola Wars Continue: Coke and Pepsi in 2010" Read and Apply: Michael E. Porter (2008)‚ “The Five Competitive Forces that Shape Strategy”‚ Harvard Business Review‚ (January 2008)‚ pp. 2-17 Assignment Questions (AQ) (a) Why has the soft drink industry been so profitable for concentrate producers? Compare the economics of the concentrate business to the bottling business: why is the profitability so different? [50% points] The soft drink industry has been extremely profitable for Concentrate
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Case Study #1 – Cola Wars Continue: Coke vs. Pepsi in the 1990s Cameron V. Collins MGT – 490 June 10th‚ 2011 Case Study #1 – Cola Wars Continue: Coke vs. Pepsi in the 1990s Introduction When it comes to soft drinks there are two top soft drink brands that come to mind‚ Coke and Pepsi. These two brands were invented in the 1800s and produced tasteful drinks that could be acquired at the nearest drinking fountain. The first drink produced by both companies‚ Coca-Cola by Coke and Pepsi-Cola
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Cola Wars Continue: Coke and Pepsi in 2010 1. Why‚ historically‚ has the soft drink industry been so profitable? Soft drink industry is profitable because the industry has concentrated revenues between 2 major players and it is virtually impossible for a new player to compete with the key players. The industry giant’s wield power over the retail outlets. Convenience stores‚ vending machines‚ fountains are widely distributed and hence they don’t have the power to bargain over pricing issues and
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Coca-Cola was originally formulated in 1886 by John Pemberton in Atlanta‚ Georgia and then later acquired by Asa Candler. One of the most influential people in Coca-Cola ’s history was Robert Woodruff‚ who became CEO of the company in 1923‚ and later developed Coca-Cola ’s international business and was instrumental in cooperation with U.S. Armed Forces during WWII. Caleb Bradham‚ a North Carolina pharmacist‚ invented Pepsi in 1893. Like Coca-Cola‚ Pepsi developed a franchised bottling system in
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The cola industry is an attractive industry if you’re a concentrate producer and an incumbent in the business. The powers of input suppliers which supply the main ingredients in cola concentrate are weak. The bargaining position of the concentrate producer is extremely strong since most of the inputs required to manufacture concentrate is relatively easy to purchase and the concentrate industry has many suppliers to offer those inputs. In addition‚ analyzing the cola wars case‚ Coca Cola concentrate
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Cola Wars: PepsiCo Dr. Michelle Biavatti 13 de octubre de 2009 Omar Sandoval Piña 119084 Mikel Novella Salazar 116656 Marisol Perez Chow 118631 Jorge Villanueva Almanza 121027 Gerardo Rafael Nomara Parra 119176 Índice Resumen Ejecutivo………………………………………………………………………. 3 *Identificación de la industria……………*……………………………………………… 4 Análisis Externo General………………………..……………………………………… 4 Modelo de las Cinco Fuerzas de Porter……………………………………………… 6 Ciclo de vida de la industria
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Cola Wars Continue : Coke and Pepsi in 2010 Introduction "Cola Wars Continue: Coke and Pepsi in 2010” explain the economics of the soft drink industry and its relation with profits‚ taking into account all stages of the value chain of the soft drink industry. By focusing on the war between Coca-Cola and PepsiCo as market leaders in this industry with a 90% market share in carbonated beverages‚ the study analyses the different stages of the value chain (concentrate producers‚ bottlers‚ retail
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Cola Wars Continue: Coke and Pepsi in the 21st Century Concentrate Producers and Bottlers were two of the four major participants that were involved in the production and distribution of Carbonated Soft Drinks (CSDs) in the United States. The Concentrate Producers (CPs) were responsible for blending raw material ingredients‚ packaging the blend in plastic canisters‚ and shipping it to the Bottler. Using Porter’s Five Forces analysis for the CPs industry‚ we determined that
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