Sse cola_wars_6a_2011

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Porters five forces

By Tatjana Apanasevich, tatjanaa@kth.setErik Bergschld, bergsc@kth.seJeanette Finder, 40199@student.hhs.seCaroline Perman, 40205@student.hhs.se

2304 Media Management

Overall the market has potential of profitability, because:barrier of entry is rather low initial investmentsthere are many different suppliers to choose from hence low supplier powerlow switching costs for end consumerspeoples preferences are changing together with changing trends, there are several ways to enter the market which might prove profitable for the new concentrate producerthere is high rivalry which means that it might be difficult to compete

gross profit is much higher for concentrate (83% compared to 35%) (concentrate industry is a more attractive market in terms of return) the initial investment is lowerconcentrate market has a higher business opportunity

Development in societyConcentrate: Health awareness increasing (1) For bottlers: environmental factors and recycling is becoming more centralNew distribution channels e.g. online shifting power structures - increasing power of retailersmore international markets = a different way of competingInformation spread, e.g. contamination of coke could have negative effects.more substitutes are entering the market - increasing competition

decreasing margins more marketing costs keep up the competition, costly to differentiate

Porter, ME, "What is Strategy"Porter, ME, The Five Competitive Forces that Shape Competitive StrategyCase: Cola Wars Continue

1) both a challenge and an opportunity depending on how well the companies in the industry adapts.*