Porter’s 5 Forces

Porter’s Five Forces
Name
Institution
Porter’s Five Forces
A thorough analysis of the industry in which a business will be operational is one of the essential activities that should be put into consideration. Sunrise Beverages will be operational in the beverage industry, and the following is an analysis of the industry in the U.S., using porters five forces model.
Rivalry Among Existing Players
The beverage industry has been experiencing growth over the last several years as a result of intense competition among rivals (Grand View Research, 2018). This can be a good thing for Sunrise Beverages because a growing market gives a new firm a chance to compete in the industry. The major players in this industry are Coca-Cola, Pepsi Co, Nestle, and Dr. Pepper Snapple Group among others. One of these players, Pepsi Co, is headquartered in New York, where Sunrise Beverages will be located. This will create intense competition not only due to Pepsi Co’s huge presence in New York but also due to the other players who have managed to attract and maintain customer loyalty through their brands. Further, these players have invested heavily in research and development (Grand View Research, 2018) and have large market shares already.
The threat of New Entrants
New entrants in the industry will need to invest huge capital for manufacturing. Further, the existing firms have already invested hugely in research and development and are in control of the main distribution channels (Grand View Research, 2018). Their strong brand loyalty also poses a threat to new entrants since customers already identify with their branded products. According to Hill, Jones, and Schilling (2015), major players in this industry have been able to remain in control for so long while pushing new entrants away due to their huge investment in promotion and advertisement.
Threat of Substitutes
The available substitutes include water, alcohol, and tea. However, most of the players in the industry provide their customers with these substitutes (Grand View Research, 2018), such that switching products does not have to involve switching sellers. The threat posed by substitutes is therefore low, although alcoholic drinks pose a relat...