Sse Cola Wars Group6

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Sse Cola Wars Group6

  1. 1. The Cola Wars Case Group 6 Magnus Hallberg, 20677 Marie Martinson, 20447 Alexej Cederholm, 70383 Michael Berman-Grutzky, 70384
  2. 2. Outline • Executive Summary • The Competitive Five Forces – I. The concentrate business • The Competitive Five Forces – II. The bottling business • Conclusions • Sources
  3. 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. 4. The Competitive Five Forces I. The concentrate business
  5. 5. Buyers • Few alternatives • Price sensitive • Fragmented group The Competitive Five Forces – I. The concentrate business Group 6
  6. 6. Suppliers • Not a major cost • Few inputs • Many suppliers The Competitive Five Forces – I. The concentrate business Group 6
  7. 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. 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. 9. Substitutes • Health debate • Acquisitions • Total beverage companies • Soda Stream etc The Competitive Five Forces – I. The concentrate business Group 6
  10. 10. The Competitive Five Forces – Summary I The Competitive Five Forces – I. The concentrate business Group 6
  11. 11. The Competitive Five Forces II. The bottling business
  12. 12. Buyers • Fragmented • Limited influence on product and price • Fountain customers powerful The Competitive Five Forces – II. The bottling business Group 6
  13. 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. 14. Potential Entrants • Capital intensive • Economies of scale • Customer switching costs low The Competitive Five Forces – II. The bottling business Group 6
  15. 15. Substitutes • Alternative package solutions • Fountain at home • Soda Stream etc The Competitive Five Forces – II. The bottling business Group 6
  16. 16. Rivalry among existing competitors • Soft Drink Interbrand Competition Act • Advertising high The Competitive Five Forces – II. The bottling business Group 6
  17. 17. The Competitive Five Forces – Summary II The Competitive Five Forces – II. The bottling business Group 6
  18. 18. Conclusion Still big profit potential, but there is an increasing threat from the substitutes.
  19. 19. Concerns of the Future
  20. 20. Health and Environmental Issues • Sugar/caffeine/taurine scepticism • Low calorie options demanded • Recycling Concerns of the Future Group 6
  21. 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

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