SSE_cola wars_group4b_2011
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    SSE_cola wars_group4b_2011 SSE_cola wars_group4b_2011 Presentation Transcript

    • Coca-Cola vs Pepsi
      Media Management 2304
      Alexandra Drissner, Johan Ericsson, EmelieLevall, Charlotta Storckenfeldt
      21373@student.hhs.se
    • Outline
      • Steps in industryanalysis
      • Porter‘sfiveforces – concentrateindustry
      • Porter‘sfiveforces – bottler‘sindustry
      • Challengestoday
    • Industry analysis
      • Industry definition:
      • Concentrate industry is the industry that produces concentrates for carbonated soft drinks (only producer no service provider)
      • Bottling industry is the industry that fills concentrates, which might also include DSD (producer and service provider)
      • Geographicscopeis North America
    • Valuechain
      Definition of participants
      Fountainchannel
      Packagin& sweeteners
      Consumer
      Concentraterawmaterials (naturalflavors etc.)
      Concentrate
      Bottlers
      Retailerchannel
    • Concentrateindustry
    • Rivalry
      • High intensity of rivalry due to slowindustry growth and two equal sized, highly committed rivals that strive for leadership
      • Dimension of competition is based on price (premium) but even more on branding
       High rivalryamongexistingfirms
    • Threat of entry
      • High entry barriers due to high capital investments for research, branding, advertising etc. and unequal access to distribution channels (dependent on bottler networks of Coke & Pepsi)
      • Expected retaliation of existing players high
       Low threat of entry
    • Buyer power
      Bottlers:
      • Low negotiation power as “anchor bottler” account for the majority of volumes from the concentrate producers; high switching costs for buyers
       Low buyer strength
      Fountain Channel:
      • High negotiation power as switching costs for fountain accounts are low
       High buyer strength
    • Threat of Sub.
      • Substitutes of growing importancee.g. due to health issues
      • High switching costs for bottlers
       Medium threat of substitutes
    • Suppliers power
      • Less concentration than in the concentrate industry
      • No product differentiation
      • Low switching costs
      • Few or no substitutes
      • Little threat of forward integration
      Low supplier strength
    • Bottlingindustry
    • Rivalry
      • Exclusive territories lowers rivalrybetween bottlers of the same brand
      • Franchise agreements forces each area to have several bottlers (higher concentration than needed?)
      High rivalry between different brand bottlers and low rivalry between same brand bottlers.
    • Threat of entry
      • New Entrants
      • Capital intense industry
      • Difficult to get retailer shelf space
      • Coke/Pepsipolicy of exclusiveterritories
       Low threat of newentrants.
    • Buyer power
      • Retailers have high negotiation power,but Coke/Pepsi are better off than small brands.
       Moderate to high buyerstrength
    • Threat of Sub.
      • Substitutes
      • Fountains
       Threat of substitutesdiffersbetweenrestaurants (high) and retailers (low)
    • Suppliers power
      • High concentration of suppliers
      • Substitutes associated with switching costs.
      • High threat of forward integration  High supplierstrength
      • Packaging
      • High share of bottler’s total cost
      • No differentiation  Low to mediumsupplierstrength
       Low supplier strength
    • Challengestoday
      • Increasingimportance of private labels
      • Non-CSDbeverages of growingimportancebutadjustments of bottlingfacilitiesrequires high investments
      • Power of retailersincreasing
      • Health issues
      • CSD-marketissaturated
    • Consequences of Cola Wars
      • Changedbase of competition: Fromprice to brand
      • Reducedprofitabilitybecause of:
      • high advertisingspendings
      • Increasedprofitabilitybecause of:
      • consolidation of bottlers
      • onlyfewconcentrateproducers (whoareincreasinglydependent on coke‘s/pepsi‘sbottlernetwork)
    • The End