Economic Analysis Project: Identifying Product Or Service

Coca- Cola Economic Project Analysis
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Coca Cola Economic Project Analysis
I choose write about the Coca Cola Company, a firm that operates in the carbonated soft drink industry that is highly competitive. Coca-Cola was founded in the year 1883, and it has turned out to be the leading manufacturer, distributor, and marketer of nonalcoholic soft beverages for over 500 brands around the world. Morever, the Company is located in Atlanta, Georgia, with more than 200 subsidiaries across the world. Back in 1886, the Company first operated as soda fountain drinks. The company’s main rivals are PepsiCo, and Dr. Pepper and Nestle, Therefore, through the aid of Porters Five Forces, the economic situation and performance of the company can be revealed in detailed as follows.
Competition Analysis
Currently the company major competitor is Pepsi. As Coca-Cola, also Pepsi also has a wide range of brand beverages a wide market coverage as well. In addition, both Coca- Cola and Pepse are heavily committed to sponsoring outdoor events and activities as a way of promoting their brands ( Coca-Cola , 2015). Notably, both Coca-Cola and Pespsi have little differentiation strategy and this has forced them to adopt the low cost strategy, which triggeres intense price competition. This is evident by the infamous Cola war that has made the general level of competition for the two major firms to be very high (Anders, 2013). In addition, there are competition coming from Dr. Pepper, which offers soda brands with unique flavors.
Threats of New Entrants
New entrants are always perceived as potential competitors and threat in the market. In the carbonated soft drink industry, the new entrants find it easy to join the market as there is minimal entry barriers. This is evident by the continuous appearance of new and little known brands into the market with equal or lower prices than Coke products (Nganga, 2014). However, the threat from the new entrants is not massive despite the easiness to join since Coca-Cola is reaping from its strong brand and big market share (Hitt, Ireland, & Hoskisson, 2014 ). Also, the company has managed to counter the threats from new entrants due its loyal customers who are not likely to sample new products from other companies.
Buyers and Suppliers Bargaining Power
This tools helps to evaluate the company’s market demand and supply of products. To begin with, the company’s buyers have low bargaining power because they tend to buy the products in small volumes and many customers are concentrated in specific market segment. On the other hand, since both Pepsi and Coca-Cola have a low differentiating level, this gives customers a low switching costs since they can switch from one brand to another as they offer similar flavors (Anders, 2013). Also, the demand of the products is almost constant since Coca-Cola customers are not highly sensitive to prices and this makes their bargaining power to be generally weak.
Similarly, the Coca-Cola suppliers have a weak bargaining power because the company has hig...