The threat from other beverages such as bottled water, tea, coffee, energy drinks e.g. was considered to be increasingly high 10-15 years ago. However, looking at the threats for Coca Cola and Pepsi, they responded by expanding their offerings; Coke in alliance with Nestea and aquisitions as Minute Maid Pepsi with their internal product innovation of Orange Slice.- The Concentrate Producers’ vigorous diversification and expansion of product portfolio substitutes less of a threat relatively to previous years.
Revenues in this industry are very concentrated , if you look at Exhibit 3, one could conclude that Coca Cola company and Pepsi Cola together with theirassociated bottlers, command 75,5% of the market in 2000. Adding in the next tier of soft drinkcompanies, the top six controlled 89% of the market. You could go as far as describing the market as a duopoly with Coke and Pepsi, resulting in positive economic profits for them two. To be sure, therewas tough competition between Coke and Pepsi for market share, and this occasionally hampered profitability.For example, price wars resulted in weak brand loyalty and eroded margins for both companies in the 1980s.The Pepsi Challenge, meanwhile, affected market share without hampering per case profitability, as Pepsi wasable to compete on attributes other than price.
Which makes the consumers turn to non carbonated products. Both coke and Pepsi has vigorously expanded their portfoliosAnd they are getting used to having a wide variety of products like lemon-lime, juice, bottled water and coffee. All of these has taken both sales and shelf space from coke and pepsi. But these new non-cola, non carbs offers growth potential today The non-carborated drinks stands for the growth today
The war has made “Cola” the dominating soft drink which benefits both companies.
Sse cola wars_group8b_2011
Coca Cola Wars<br />- An analysis of the soda drink industry in the twenty-first century<br />Course 2304 Media Management By Group 8b; <br />Dr. Robin Teigland Charles Florman Lindeberg, firstname.lastname@example.org<br /> Karin Rimbäck. email@example.com<br />Johanna Sjöblom, firstname.lastname@example.org<br /> Carl Waldenor, email@example.com<br />
The Soda Drink Network (dynamic)<br /><ul><li>Restaurants
Concentrate Industry<br />Threat of Substitutes <br />Direct Substitutes - The concentrate blend<br />The secret blend of the concentrates makes it impossible to copy the Coca Cola or Pepsi taste and therefore the threat is considered to be low.<br />Indirect Substitutes – The soft drink <br /><ul><li>Increasing consumption of other beverages such as bottled water, tea, coffee, juice e.g.
The Concentrate Producers’ diversification and expansion of product portfolio substitutes less of a threat for existing actors.</li></ul>MEDIATEinfluence on the market<br />
Concentrate Industry<br />Rivalry Among Existing Firms<br /><ul><li>Extremely concentrated revenues. </li></ul> Coca Cola and Pepsi Cola claimed 75,5 % of the U.S. CSD market in sales volume in 2000. <br /><ul><li>Characteristics of a duopoly
Buyers switching costs between the largest CSD brands are low</li></ul>HIGHrivalry<br />