Cola Wars Continue: Coke and Pepsi in 2010

Harvard Business Case 9-711-462

Five Forces in the cola industry: Porter's Five Forces Framework

Power of buyers

For concentrate owners: Strong. The power of buyers is extremely strong within the soda industry, given that consumers can quickly shift their alliance from one beverage to another. Also, cola is not strictly a 'necessity' as a product -- no one needs to drink soda, and consumers can easily eliminate it from their budgets if necessary.

For bottlers: Strong as well. Bottlers are extremely dependent upon soda manufacturers for their business, given that they are among bottlers' largest customers.

Power of suppliers

For concentrate owners: Medium. Concentrate owners broker agreements with large and small retailers, agreeing to assume costs of marketing in exchange for shelf space. They have the right to grant exclusive territories to their bottlers and to prohibit bottlers from selling competitor products....
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