INDUSTRY STRUCTURE (PORTER’S FIVE FORCES)

The industrial structure defines various operational activities as well as the relationships of such operation within a given organization. The industrial structure, therefore, defines the core values of the organization and its purpose in the economy in a country. The manufacture companies under discussion are the Coca-Cola, Pepsi-Cola, and the bottle producers. All contribute to the Carbonated Soft Drink Production across the globe. In connection with the industrial structure, this essays will compare the industrial structure of the concentrate producers and the industrial structure of the bottlers to identify which one is attractive.

In line with Porter’s force analysis, and the first being a competitive rivalry, the concentrate producer had an attractive industrial structure as compared to that of the bottlers. This is because the consecrate manufacture had realized and undented who their competitors in the market were hence developed various strategies to counteract the competitive strategy of a counterpart, on the other hand, the bottlers where tied to manufacture the bottles for specific companies hence their strategies were dependent on the companies to which their products served. Competition kept both Coca-Cola and Pepsi-Cola in the market since the competition as it was to their advantage, making them make extra profits compared to the bottlers.

Secondly, the better bargaining power supplies that the concentrate producer commanded was better than that of the bottlers. The concentrate produces conducted various researchers as to what suits the customers best hence making the concentrates as per the consumers demanded. By producing the products at a lower price as a strategy as well as switching their attention to advertisements of the products, the concentrates producers were able to command attention from suppliers of their products, unlike the bottlers’ that concentrated more on production ignoring attracting the supplies to their products.

Thirdly, on the bargaining power of the customers, the concentrate producers have been able to carry out various research as well as market analysis on their products hence making the to switch from one product to another to influence the purchasing power of their products. Even to the extent that both Coca-Cola and Pepsi-Cola lowered their prices was in the response to influence the bargaining power of the consumers to their products. On the other hand, the bottlers were not able to include their consumers by either increasing or reducing their prices of their services hence a lower profit margins as compared to the concentrate producers.

In threat and new entrance, the concentrate producers played it to their interest as each one employed elaborate strategies to enter different markets such as in retail shops, warehouses and even supermarket to gain access to the market in every new locality. They further widened their market by moving to the international arena by opening several branches to which they could expand their market. To the bottlers, they were slow to manage the new threat into the marked as consumers’ choice changed over time.

In conclusion, threats of, substitute products and services were better handled by the concentrate produces. Those who were producing counterfeit products of the Coca-Cola company were not spared through the court process. In addition, due to may substitute that were slowly getting into the market, the Carbonated drinks had to be revised, and the ingredients used also corrected to gain an advantage over the non-carbonated soft drinks. Such strategies helped the concentrate producers stay afloat in the market as compared to the bottlers that where not taking much interest in the structure, drinks in the market to make their products more attractive to the consumers.

Reference

Vulpala, L. (2007). Cola Wars : Five Forces AnalysisGoutham’s Thoughts. Retrieved 18 October 2007, from https://goutham.wordpress.com/2007/10/18/cola-wars-five-forces-analysis/