Question

Conduct an industry analysis of this case before 2009 using Porter’s 5-Forces Model.

Define the industry using the industry value chain. Who are Coke and Pepsi? Are they bottler or concentrate producer or both in the value chain? Who are suppliers and buyers of Coke and Pepsi?

Answer 1

An industry value-chain is a physical representation of the various processes involved in producing goods (and services), starting with raw materials and ending with the delivered product (also known as the supply chain). ... The sum total of link-level value-added yields total value.

The buyers are the BOTTLERS and they have much power relative to the concentrate manufacturer. Because concentrate manufacturer produce most generic product and in case of bottlers they are franchised by big company like Coca-Cola, Pepsi.

Coca-Cola sells syrup to bottling companies that do the hard work of manufacturing and distributing the product to consumers; it refers to this portion of its business as "concentrate operations." The company also generates revenue from the sale of finished beverages to retailers, distributors, and wholesalers.

Among national concentrate producers COCA COLA and PEPSI COLA, the soft drink unit of Pepsi co claimed a combined 76 % of the US CSD market in sales volume in 2000. The Bottling process was capital intensive and involved specialized, high speed lines

An industry analysis by Porters Five Forces reveals that the soft drink industry has historically been favorable for positive profitability, as exemplified by Pepsi and Cokes financial outcomes. Soft drink industry is very profitable, more so for the concentrate producers than the bottler’s. This is surprising considering the fact that product sold is a commodity which can even be produced easily. There are several reasons for this, using the five forces analysis we can clearly demonstrate how each force contributes the profitability of the industry.

BUyers

LArn coke

Green pet coke

calcined petroleum coke

green raw petcoke

Suppliers of coke