According to Michael Porter (1985), “value chain” is a set of activities that an organization carries out to create value for its customers. Porter divided all steps into two activities: Primary Activities and Support Activities. The former activities include: Inbound Logistics, Operations, Outbound Logistics, Marketing & Sales and Service. The latter activities included: The infrastructure of the firm, Human resource management, Technology development and Procurement. About Inbound Service, concentrate producers get involved in the first step. Their roles are conducting marketing programs as well as developing them, especially in terms of product development, market research, and advertising with bottlers. This step are also seen as Operations in terms of transforming the inputs into the final product. As the following step, bottlers buy concentrate, and add water and corn syrup, then packaging. At the same time, concentrate procedures are
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From the perspective of Coke or Pepsi as the principal Concentrate procedures, do a Porter Five Forces analysis of the CSD industry using H/ M/ L for the strength of each force. What are your overall conclusions from this analysis?
In terms of a Porter Five Forces analysis, there are five competitive forces: threat of Entry and Substitution, bargaining power of buyers, bargaining power of suppliers, and rivalry among current competitors.
1) Threat of Entry: Low. In terms of financial and human resources, enough funds are required to negotiate CDAs with nationwide retailers so that they get the right to select shelf space. Also, access to distribution channels built high barriers because Coke can decide the shelf space by their own, while new companies need to invest for promotions, intense selling efforts, attractive advertising and so on.
2) Threat of Substitution: High. Since consumers prefer healthy drinks to sweeten carbonated drinks, concentrate procedures confront some risks, dominating their field with
From the perspective of Coke or Pepsi as the principal Concentrate procedures, do a Porter Five Forces analysis of the CSD industry using H/ M/ L for the strength of each force. What are your overall conclusions from this analysis?
In terms of a Porter Five Forces analysis, there are five competitive forces: threat of Entry and Substitution, bargaining power of buyers, bargaining power of suppliers, and rivalry among current competitors.
1) Threat of Entry: Low. In terms of financial and human resources, enough funds are required to negotiate CDAs with nationwide retailers so that they get the right to select shelf space. Also, access to distribution channels built high barriers because Coke can decide the shelf space by their own, while new companies need to invest for promotions, intense selling efforts, attractive advertising and so on.
2) Threat of Substitution: High. Since consumers prefer healthy drinks to sweeten carbonated drinks, concentrate procedures confront some risks, dominating their field with