Coca-Cola Wars<br />Sofia Kjellström<br />Lu Lei<br />Anna Mononen<br />Lukas Rose<br />RomainAubert<br />
Concentrate producers:<br />
Rivalry<br />Highly concentrated industry: Duopolistic<br />Industry growth: Mature for CSD.<br />Similar products <br />L...
Threats of substitute<br />For the concentrate producers, the threat is low because cost of switching are high for bottler...
New Entrants<br />Very high entrance costs to develop distribution and sign contractual agreements<br /> unequal distribu...
Suppliers’ power (Artificial sweeteners, Caramel, Citric acid, Natural flavors. Caffeine...)<br />More suppliers than prod...
Power of buyers:<br />Territory exclusivity strengthens their position<br />High market concentration<br />Limited choice ...
Market Attractiveness: Concentrate Producers<br />Gross profit 83%<br />Concentrate price increase higher than inflation <...
Bottlers<br />
Bottle producers:<br />
Rivalry<br />Territorial exclusivity<br />Market consolidation: CCE represents 70% of Coke’s North America business, PBG r...
Substitutes<br />Limitations on bottling due to product characteristics<br /> Low<br />New Entrants<br />High consolidati...
Suppliers<br />Raw materials are easily available<br />Help for the packaging from concentrate producers<br /> Suppliers ...
Market Attractiveness: Bottlers<br />Gross profit 35%<br />Retail price increase lower than inflation <br />Huge initial i...
Current state of the industry<br />Concentrate producers are buying their bottlers: 	- to be closer to the customers <br /...
Current state of the industry<br />... declining but carbonated drinks still represent 40% of the soft drink market.<br />...
Today’s challenge<br />Focus on value-added products: vitamin water, dairy segment, bottled water<br />Large investment in...
Q&A<br />
Sources<br />http://www.pr-inside.com/the-pepsi-bottling-group-inc-pbg-r2347878.htm<br />http://www.ajc.com/business/the-p...
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Sse cola wars_group2b_2011

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  • No real exit barrier
  • CCE: Coca Cola Enterprises; PBC Pepsi Bottling Company
  • CCE: Coca Cola Enterprises; PBC Pepsi Bottling Company
  • CCE: Coca Cola Enterprises; PBC Pepsi Bottling Company
  • Sse cola wars_group2b_2011

    1. 1. Coca-Cola Wars<br />Sofia Kjellström<br />Lu Lei<br />Anna Mononen<br />Lukas Rose<br />RomainAubert<br />
    2. 2. Concentrate producers:<br />
    3. 3. Rivalry<br />Highly concentrated industry: Duopolistic<br />Industry growth: Mature for CSD.<br />Similar products <br />Low-fixed cost <br />Capacity could be expanded easily<br />Fierce competition: products and company structure are really similar, the major difference comes from their marketing efforts. <br />
    4. 4. Threats of substitute<br />For the concentrate producers, the threat is low because cost of switching are high for bottlers, but increasing due to changes in end-consumer taste.<br /> Low<br />
    5. 5. New Entrants<br />Very high entrance costs to develop distribution and sign contractual agreements<br /> unequal distribution channel access. <br />Even for 3rd and 4th place of CSD, producers are still very large companies. <br />Brand equity is extremely high. <br />Bottlersare really affiliated to one of two giants.<br />Current players have enormous financial power.<br /> Barriers are high<br />
    6. 6. Suppliers’ power (Artificial sweeteners, Caramel, Citric acid, Natural flavors. Caffeine...)<br />More suppliers than producers.<br />Relatively undifferentiated supplies.<br /> Suppliers power is quite low.<br />
    7. 7. Power of buyers:<br />Territory exclusivity strengthens their position<br />High market concentration<br />Limited choice of concentrate producers<br />Tight margins: volume requirement <br />Fountains: high bargaining power – contractual transactions<br />Majority of bottling business is owned by Coca Cola and PepsiCo<br /> Low power<br />
    8. 8. Market Attractiveness: Concentrate Producers<br />Gross profit 83%<br />Concentrate price increase higher than inflation <br />CSD consumption is stagnating<br />Increasing marketing costs<br />CSD market size decreased from USD 10 billion in 2005 to USD 9.4 billion in 2009*<br /> Still very profitable but not attractive<br />*https://www.trefis.com/company?article=20065#<br />
    9. 9. Bottlers<br />
    10. 10. Bottle producers:<br />
    11. 11. Rivalry<br />Territorial exclusivity<br />Market consolidation: CCE represents 70% of Coke’s North America business, PBG represents 54% of PepsiCo’s North America bottling business<br /> Weak rivalry<br />
    12. 12. Substitutes<br />Limitations on bottling due to product characteristics<br /> Low<br />New Entrants<br />High consolidation <br />High capacity requirement – low margin products <br />High fixed-cost vs. low marginal costs<br /> Low<br />
    13. 13. Suppliers<br />Raw materials are easily available<br />Help for the packaging from concentrate producers<br /> Suppliers have high bargaining power<br />Buyers of the bottlers<br />(Vending machines, convenience stores, grocery stores)<br />Few buyers<br /> Buyers have high bargaining power <br />
    14. 14. Market Attractiveness: Bottlers<br />Gross profit 35%<br />Retail price increase lower than inflation <br />Huge initial investment in production (up to USD 75m)<br />Complex and inflexible production<br />Highly dependent on concentrate producers’ marketing efforts<br />Concentrate producers’ business is more attractive<br />
    15. 15. Current state of the industry<br />Concentrate producers are buying their bottlers: - to be closer to the customers <br /> - own the market<br /> - secure the supply chain in times of financial crisis<br />The carbonates market is the least growing<br />
    16. 16. Current state of the industry<br />... declining but carbonated drinks still represent 40% of the soft drink market.<br />Big two coming under pressure....<br />
    17. 17. Today’s challenge<br />Focus on value-added products: vitamin water, dairy segment, bottled water<br />Large investment in Asia. (Coke in China, and Pepsi in India)<br />New competitors need to be considered: Nestlé, Danone. <br />
    18. 18. Q&A<br />
    19. 19. Sources<br />http://www.pr-inside.com/the-pepsi-bottling-group-inc-pbg-r2347878.htm<br />http://www.ajc.com/business/the-pepsi-challenge-for-446766.html<br />http://www.slideshare.net/xiaoyiliu/sse-cola-wars-group5?src=related_normal&rel=2947405<br />http://www.slideshare.net/guest89fff/sse-cola-wars-group8-presentation<br />http://www.slideshare.net/akula77/sse-cola-wars-group3-2-presentation<br />http://www.slideshare.net/SSEGroup9/cola-wars-2946604<br />Euromonitor International :<br />Global Soft Drinks: Corporate Strategies – Diversification Drives Market Dynamics<br />Soft Drinks Global Trends and Opportunities<br />

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