Cola Wars Continue: Coke and Pepsi in 2006

Spenser Garrison Strategic Management 3/17/10 Case 1: Cola Wars Continue: Coke and Pepsi in 2006 The soft drink industry is very competitive for only companies involved. Recently the competition between established firms has only change magnitude with the market nearing its saturation point. All companies in the industry, especially those thought process about entering, consecrate to think about Porters 5-Forces model and the pressures it outlines; ambition among establish firms, risk of infection of entry by potential competitors, substitute products, suppliers, and buyers. When talking about market share, PepsiCo and Coca-Cola have the lions share. They have dominated the industry over the past 40 years with Coca-Cola leading in the category in 2004 (C256). With slender resistance from Cadbury Schweppes, the distant third largest company in the industry, the twain companies main focus was to increase market demand by outdoing each other in promotions, advertisements, and corporate acquisitions. Rivalry and ability struggle have defined the existence of PepsiCo and Coca-Cola, looking for a competitive advantage to gain an edge on the competition. This rivalry has been to the benefit to the companies, the industry, and its consumers as a whole.

Both have in condition(p) to not only stay afloat, but flourish in an industry that has constantly grown since Coca-Cola began advertising in 1891 (C258). They did this by increasing the demand in their products, and gaining bell ringer loyalty by their consumers. In some instances, they were selling cases of Dasani (Coca-Cola) and Aquafina (PepsiCo) for less than the cost of bottling it (C267). The risk of entry by potential competitors isnt a inviolate competitive pressure in the industry. PepsiCo and Coca-Cola dominate the industry with their brand name and distribution channels, which makes it difficult for new entrants to compete with these active firms. High fixed costs of production facilities, logistics, and economies of scale in like manner deter entry. Its... If you want to get a full essay, baseball club it on our website: Orderessay

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