Michael Porters Five Forces model will be applied to determine Coca-Cola industry analysis. The five forces include threats of the products, buyers bargaining power, suppliers bargaining power, competition among other companies.
Potential competitor’s threats
The entry barriers are low for the company, and capital requirements, and customers switching cost are unavailable. The company has increased in providing new brands by maintaining the same prices for other product. Coca-Cola is not only known for its beverages production but a brand in its initials. It has obtained a significant market share for a period and enhanced its loyalty to its customers
Substitute product threats
There are different types of beverages products in the market and offering threats to the company since the Company does not produce a unique flavor. Companies such as Pepsi have created similar products just like Coca-Cola products, and many customers cannot distinguish the difference in taste between the two companies.
The buyers bargaining power
The buyers do not exert pressure on the company, but big retailers, for instance, Wal- Mart enhance a bargaining power since they purchase the products to a great quantity. Additionally, the bargaining power of the end customers is less
Supplier’s bargaining power
The bargaining power of the suppliers is low since they are not differentiated or concentrated on the products the company offers. Coca-cola is one of the largest enterprises of all the suppliers
Competition from other existing companies
Pepsi is the main competitor to the company which offers different products. Pepsi and Coca-cola produce almost similar products that are carbonated beverages. There are also other beverage products offered on the market that have highly popularized such as Dr. Peeper as a result of composing unique flavors but still they are on the run away towards gaining success such as of big companies such as Coca-cola and Pepsi.
Coca-Cola faces both direct and indirect competition. Direct competitors include competition from Pepsi and supermarkets won products while indirect products include, hot beverages, juices and water (Nasdaq 2016). The company gains its significant competition fro m the ability to exploit and assemble necessary resources. Additionally, its long-term competition bases are achieved by creating and developing new capabilities and resources to the changes in the market conditions. The company market has been termed as active over the last few decades as a result of strategizing in increasing consumer promotional and trade initiatives. The different promotional efforts enhanced by Coca-Cola have provided a significant competitive advantage to the company as compared to other businesses hence it has positioned effectively in promoting its brands.
Coca-Cola Company has uniquely positioned its self in the beverage industry. It has developed different beverage flavors that have enhanced consumer satisfaction at all times. One of the significant competitive advantages the company gains is the promise to customers on producing quality products. Quality is one of the main objectives of the company and in 2004 the company was awarded for its quality in Golden Peacock national quality award (Business Line 2005). Finally, it has gained its competitive advantage by going global by taking up effective international marketing approaches through integration and standardization of different services to ensure that the company has expanded internationally. Although the company faces competition indirect and directly in pricing strategy as a result of the company’s products being costly as compared to other competitors still, maintains customer loyalty by applying different marketing initiatives.
Business Line (2005) AP Coke plant gets quality award; Retrieved from http://www.thehindubusinessline.com/todays-paper/tp-corporate/ap-coke-plant-gets-quality-award/article2165542.ece
NASDAQ (2016) the coca cola competitors; Retrieved from http://www.nasdaq.com/symbol/ko/competitor