Sse cola wars_group1a_2011.ppt

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Sse cola wars_group1a_2011.ppt

  1. 1. Media Management 2304<br />Group Assignment<br />Cola Wars – Case StudyGrop 1a<br />Ekaterina (40192@student.hhs.se), Niklas, Maria, Franziska<br />
  2. 2. Concentrate Producer Industry<br />
  3. 3. Is the concentrated industry profitable?<br />Threat <br />of substitution<br />Buy power <br />of Suppliers<br />Competitors<br />Buy Power of <br />Customers<br />Threat of new entries <br />
  4. 4. Concentrate Producers’ Five Forces<br />Raw Material Producer<br />Suppliers not too differentiated<br />Low to moderate cost of switching suppliers (vs. Long-term commitment)<br />Possible substitutes in the future (vs. original recipe) <br />Other suppliers (maintenance, factory equipment, …)  standard business product<br />Buy power <br />of Suppliers<br />LOW<br />
  5. 5. Concentrate Producers’ Five Forces<br />Threat <br />of substitution<br />LOW<br />Coke and Pepsi reduced the threat of substitutes by including them in their portfolio (tea, juice, water…)<br />Threat that fountain-buyers take on substitutes is reduced by fixing long-term contracts<br />
  6. 6. Concentrate Producers’ Five Forces<br />Fountain<br />Few big accounts with rather high negotiation power<br />Smaller accounts with low negotiation power <br />Bottlers<br />Tied closely to CP’s<br />Consolidation of Bottlers<br />Close contact to retailers is their competitive advantage<br />LOW to MODERATE<br />Buy Power of <br />Customers<br />
  7. 7. CP’s Five Forces<br />Becoming a CP requires a rather low investment and establishing supplier relationships is possible<br />Competing with the big player’s rather impossible<br /> High risk of retaliation<br />Threat of new entries <br />LOW<br />
  8. 8. Is the concentrated industry profitable?<br />Threat <br />of substitution<br />LOW<br />LOW<br />Buy power <br />of suppliers<br />Strong rivalry <br />among <br />competitors<br />Buy Power of <br />Customers<br />LOW to MODERATE<br />Threat of new entrants <br />LOW<br />
  9. 9. Attractiveness of CP‘s Industry<br />Size (of end market as products get pulled through the chain)<br />US = mass market<br />Europe and Asia developed into strong markets alike<br />Growth Potential<br />Consumption is more level in mature markets<br />Emerging markets options<br />Forces<br />Low threat of 5 forces<br />
  10. 10. Bottling Industry<br />
  11. 11. Bottlers’ Five Forces<br />Concentrate Producer<br />Duopoly<br />Long-Term binding contracts<br />1/3 of Bottlers’ cost<br />Packaging Manufacturer<br />Excess supply<br />Consolidation of Bottlers<br />Long-Term commitments (Quality)<br />½ of Bottlers’ Costs<br />Sweetener Producer<br />Undifferentiated product<br />1/10 of Bottlers’ Cost<br />HIGH<br />MODERATE<br />Buy power <br />of Suppliers<br />LOW<br />
  12. 12. Bottlers’ Five Forces<br />Threat <br />of substitution<br />MODERATE<br />Fountain sales do not influence Bottlers’ volumes directly<br />Direct concentrate delivery ( Soda Stream)<br />Environmental Awareness of Consumers<br />
  13. 13. Bottlers’ Five Forces<br />Supermarkets<br />Consolidation of retailers and rise of power<br />Large % of store‘s business<br />Vending<br />Invented by CP‘s and owend<br />Convenience Stores<br />Consumer Choice<br />Some bargaining power of big chains<br />Other Outlets<br />MODERATE to HIGH<br />Buy Power of <br />Customers<br />
  14. 14. Bottlers’ Five Forces<br />High investments needed<br />Distribution Network is essential<br />Only few independent Bottlers left<br />Threat of new entries <br />LOW<br />
  15. 15. Bottlers‘ Five Forces<br />Threat <br />of substitution<br />MODERATE<br />MODERATE to HIGH<br />Buy power <br />of suppliers<br />Moderate rivalry <br />among <br />competitors<br />Buy Power of <br />Customers<br />MODERATE to HIGH<br />Threat of new entries<br />LOW<br />
  16. 16. Attractiveness of Bottling Industry<br />Size<br />Limited geographical area<br />Growth Potential<br />Industry Consolidation <br />Forces<br />Moderate to High threat of 5 forces<br />
  17. 17. Concentrate vs Bottling Industry<br />More flexibility for CP‘s (diversified buyers)<br />High dependency of bottlers on CP‘s<br />Higher overall forces for Bottlers which shrinks the margin<br />High margin for CP‘s as main player <br />Strong brand image of CP‘s<br />BUT, attractivness of bottlers industry higher for new entrants as lower entry barriers<br />
  18. 18. Current Challenges<br />Slower growth of consumption in mature markets<br />Financial crisis throughout various markets<br />Rise of other beverages<br />Win over emerging markets<br />Rising power of retail conglomerates<br />Build Strategy to Challenges<br />
  19. 19. References<br />Porter, ME, "What is Strategy"<br />Porter, ME, “The Five Competitive Forces that Shape Competitive Strategy”<br />David B. Yoffie, ”Cola Wars Continue: Cola and Pepsi in the Twenty-First Century”<br />
  20. 20. Question & Answers<br />

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