Coke vs Pepsi - Research Paper Example

Due to a primal fear of losing ground to the competition, these contracts with suppliers are in fact the very backbone of what defines the domestic and to a large part, international success of the firms. The second of the five forces that has such a profound and noticeable effect on the marketplace is that of the supreme intensity with which the competitive rivalry takes place. As will be discussed at length later in this analysis, this high level of competition means that both companies have behaved in highly competitive and aggressive ways both as a means to closely mirror the product offerings of one another and to ensure that if one is expanding within a given region a level of reciprocity within the other firm is also exhibited. b. Which of the 5 Forces would you expect to have had the most impact on the industry for the 10 years after the case ended? Why? If only one of the 5 forces had to be considered as the one that would be the most likely to have a strong impact on the industry for the 10 years after the case ended, it would have to be that of the bargaining power of the suppliers.

As was detailed in the case, Pepsi Cola has only recently sold its controlling interests in both KFC and Taco Bell. As a function of this, these two large fast food chains, represented by thousands of chains throughout the US and the world, are not at a degree of freedom to go with the soft drink supplier that they deem to most represent the needs of the firm and of the consumer base. As a function of this, it is the bargaining power of the suppliers which has come to an even higher level of importance. c. Would your answers above be different if applied separately to Coke and Pepsi, or were they impacted similarly? Explain. It is the belief of this author that even if the answers were provided separately with relation to Coke and Pepsi, the end results would be similar.

The reason for this is due to the fact that both companies mirror each other so closely; they compete in the same markets, the offer similar products, the compete for the same customers, and subsequently the same forces impact them (Lemley 2012). As a result of these similarities, the results to the answers would be very much the same even if done separately. Question 2: Competition/Barriers to Entry (3points) a. Keep in mind these are competitive forces in one of the most profitable businesses in the history of the industrial world.

Coke and Pepsi control approximately 75% of the market share. Why have so few other firms been able to successfully enter this industry? Your answer should include some analysis about barriers to entry! One of the largest reasons that a level of further competition does not exist within the given industry is the fact that Coke and Pepsi have so thoroughly dominated the supply chain, vender contracting, and restaurant affiliation. As a function of these barriers to entry, it is almost impossible for a new, little known, start up to penetrate into such a well protected and highly contested market.

Moreover, another factor that reduces the level of competition that is noticed is the fact that when a valuable start up does experience a level of success, they are oftentimes quickly picked up by either Coke or Pepsi and co-opted into their brand; an obvious case in point would of course be Naked Juice (Jacobson 2011). Question 3: