Coca Cola - Porter's 5 Force Model

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competitors.

Whereas, the individual buyer have no pressure on Coca-Cola since they want to buy it anyway. While on the other hand, large retailers, like Wal-Mart, have bargaining power because of the larger order quantity, but the bargaining power is lessened because of the end consumer brand loyalty. (“Porter’s Five Forces In Action: Sample Analysis of Coca-Cola”, n.d).

4. The Bargaining Power of Suppliers

This force have the low pressure, it analyzes how much power a business’s supplier has and how much control it has over the potential to raise its prices, which, in turn, would lower a business’s profitability. It works like this: the fewer suppliers there are the more power they have since they would be the only one providing supplies. It is good for the company if there are many options with the suppliers.

Concerning the Coca Cola, the suppliers are neither concentrated not differentiated, reasoning the main ingredients for soft drinks that Coca Cola produces only includes carbonated water, phosphoric acid, sweetener, and caffeine. (“Porter’s Five Forces In Action: Sample Analysis of Coca-Cola”, n.d ). In conclusion, bargaining power of the suppliers has a very low or no pressure regarding Coca Cola because it is likely to be a largest customer of any of these suppliers.

5. Rivalry among existing firms

Rivalry among existing competitors describes the intensity with which companies within the same industry jockey for market share and profitability. (Rothaermel, 2017). This force examines how intense the competition currently is in the marketplace, and that would be determine by the number of existing competitors and what they are capable of doing. Rivalry among the existing firms usually occurs or is high where the company is just growing, and there are businesses equally selling a product or service, and the consumers have options. That they can easily move or switch to the competitor’s offering for a little less costs.

The main competitor for the Coca Cola, according to the recent situation would be Pepsi. Pepsi also seem to have a wide range of beverage products under its brand. Pepsi and Coca Cola are articulately similar products, as they both are carbonated and committed to sponsoring outdoor events and activities. There are examples of other brand products that have become popular in the marketplace because of its unique flavors, like Dr. Pepper, but have failed to reach the success that Pepsi or Coke have reached. (“Porter’s Five Forces In Action: Sample Analysis of Coca-Cola”, n.d).

It really depends on what kind of industry it is, what are it’s audiences or it’s suppliers and the demographic, product’s price or quality to conclude in what area of Porter’s five forces model they need to focus. Overall, all 5 forces of Porter’s model should be well known and studied by the company while starting up the business or if they are planning to grow or remain legit in the business.