Coca Cola: 5 Forces Analysis

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Coca Cola Five Forces analysis: 1) Rivalry among existing firms: Coca Cola is the largest manufacturer, distributor and marketer of concentrates and syrups in the world with sales in over 200 countries. The annual revenues of the group exceeded USD 21 billion in 2005. The main product of Coca Cola is carbonated soft drinks for which it commands a share of > 40% in US. Together with Pepsi, Coca Cola makes up >70% of US market in this segment. Branding is a prominent feature of the non-alcoholic beverages industry. The Coca Cola brand is one one of the most famous brands in the world. Among top 10 non-alcoholic beverage brands in the US, 5 belong to Coca Cola including the top spot. The non-alcoholic beverages segment of the commercial beverages industry is highly competitive. Coca Cola competes with major international beverage companies that, like Coca Cola, operate in multiple geographic areas, as well as numerous firms that are primarily local in operation. 1.1 Global competition: In many countries in which Coca Cola does business, including the United States, PepsiCo is a primary competitor. a) PepsiCo is Coca Cola’s main global competitor in the carbonated soft drink segment. b) Unlike Coca Cola, PesiCo is also diversified into the non-carbonated beverage, snacks and health foods segments. Beverages only accounted for 37% of PepsiCo’s global turnover of US$ 27 billion in 2003 vs. 100% for Coca Cola. Its portfolio of beverages and its fast growing snack foods give PepsiCo enormous clout with retailers allowing it to wrest shelf space away from Coca Cola. c) PepsiCo has diversified early into the bottled water and sports drinks market giving it a leading share in the non-carbonated beverages market. Coca Cola brands have a limited share in these markets. Other significant competitors include Nestle, Cadbury

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