Industry Analysis of the Carbonated Soft Drinks industry Free Essay, Term Paper and Book Report
Description of the Industry
The industry of Carbonated Soft Drinks (CSD) is highly concentrated. The three major companies, Coca Cola, PepsiCo, and Cadbury Schweppes accounted in 1998 for more than 90% of market share by case volume Exhibit 1-.
Generally, there are 4 participants in the market, involved in the process of production and distribution, namely, concentrate producers, bottlers, retail channels, and suppliers. Porters 5 forces analysis reveals the following characteristics of the CSD industry:
1. A fierce competition exists among very few players: The industry is an oligopoly, or even a duopoly, given the intense rivalry between Coke and Pepsi, with a combined market share exceeding ¾ in 1998 (44.5% and 31.4%, respectively).
2. The threat of substitutes is reduced by the expansion of products portfolio: CSD have many alternative beverages, such as bottled water, juice and tea, which became more popular. Coke and Pepsi responded, either by launching new non carbonated soft drinks, or by acquiring new brands.
3. Suppliers have less bargaining power: The primary i......
Word Count: 971
Page Count: 3.8 (250 words a page / double spaced)
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