1. The Cola Wars Case
Group 6
Magnus Hallberg, 20677
Marie Martinson, 20447
Alexej Cederholm, 70383
Michael Berman-Grutzky, 70384

2. Outline
• Executive Summary
• The Competitive Five Forces –
I. The concentrate business
• The Competitive Five Forces –
II. The bottling business
• Conclusions
• Sources

3. Executive Summary
• We have gone through a Five Forces
analysis of the concentrate business and
the bottling business.
• Still big profit potential, but increasing
threat from substitutes.
• The concerns for the future are health
and environment oriented, and
respecting those fields will be the key to
success.

4. The Competitive Five Forces
I. The concentrate business

5. Buyers
• Few alternatives
• Price sensitive
• Fragmented group
The Competitive Five Forces – I. The concentrate business Group 6

6. Suppliers
• Not a major cost
• Few inputs
• Many suppliers
The Competitive Five Forces – I. The concentrate business Group 6

7. Potential Entrants
• High capital requirements
• Economies of scale
• Unequal access to
distribution channels
The Competitive Five Forces – I. The concentrate business Group 6

8. Rivalry among competitors
• Fierce competition
• Aggressive price competition
• High fixed costs – high exit
barriers
The Competitive Five Forces – I. The concentrate business Group 6

9. Substitutes
• Health debate
• Acquisitions
• Total beverage companies
• Soda Stream etc
The Competitive Five Forces – I. The concentrate business Group 6

10. The Competitive Five Forces – Summary I
The Competitive Five Forces – I. The concentrate business Group 6

11. The Competitive Five Forces
II. The bottling business

12. Buyers
• Fragmented
• Limited influence on product and
price
• Fountain customers powerful
The Competitive Five Forces – II. The bottling business Group 6

13. Suppliers
Cans:
• Large part of total cost
• 2-3 suppliers compete for same
contract
Concentrate:
• Vertically integrated or franchised
• Switching cost high
• Gets marketing help from concentrate
business
The Competitive Five Forces – II. The bottling business Group 6

14. Potential Entrants
• Capital intensive
• Economies of scale
• Customer switching costs low
The Competitive Five Forces – II. The bottling business Group 6

15. Substitutes
• Alternative package solutions
• Fountain at home
• Soda Stream etc
The Competitive Five Forces – II. The bottling business Group 6

16. Rivalry among existing competitors
• Soft Drink Interbrand
Competition Act
• Advertising high
The Competitive Five Forces – II. The bottling business Group 6

17. The Competitive Five Forces – Summary II
The Competitive Five Forces – II. The bottling business Group 6

18. Conclusion
Still big profit potential, but there
is an increasing threat from the
substitutes.

19. Concerns of the Future

20. Health and Environmental Issues
• Sugar/caffeine/taurine scepticism
• Low calorie options demanded
• Recycling
Concerns of the Future Group 6

21. Sources
Articles
Porter, M. (2008), The Five Competitors that Shape
Competitive Strategy, Harvard Business Review, Jul-
Aug 1998
Websites
http://www.albany.edu/faculty/miesing/teaching/materi
als/col wars.pdf
http://www.slideshare.net/adhirock/cola-wars-case
http://www.thecocacolacompany.com/presscenter/nr_2007
0905_ccna_support_recycling.html