Concentrate Bottling Industry Structure

Using ys outletsted soft drink. machine)expensive.or similar products. ents with retailers. king their carbonated soft drink. Using our knowledge of industry structure (Porter’s Five Forces) please compare the industry structure of the concentrate producers to the industry structure of the bottlers- which one is more attractive - why?

Concentrate Producers Industry Structure:

New Entrant Barriers: (MEDIUM)

• Little capital investment needed for machinery, overhead, labor.

• Not many ingredients involved

• High brand recognition through marketing and Customer Development Agreements with retailers.

• Coke/Pepsi have 72% of US carbonated soft drink market

No consumer switching costs, little capital needed to start beverage company. Can be difficult with large Coke/Pepsi brand recognition/loyalty and popularity.

Using ys outletsted soft drink. machine)expensive.or similar products. ents with retailers. king their carbonated soft drink. Using ys outletsted soft drink. machine)expensive.or similar products. ents with retailers. king their carbonated soft drink.

Suppliers: (LOW)

• Flavor concentrate

• Sugar/Fructose

• Carbonated water

Few undifferentiated suppliers. Very basic raw materials needed.

Buyers: (LOW)

• Supermarkets

• Fountain outlet owners

• Vending machine owners

• Mass merchandisers

• Convenience stores

• Gas stations

• Fast food/restaurants

• Bottlers

There are many different buyers.

Substitutes (HIGH)

• Alcoholic drinks

• Milk

• Juice

• Coffee

• Tea

• bottled water/beverages

• powdered drinks

• energy drinks

• Water

There are many other substitutes with no switching costs in the market making threat of substitutes high.

Rivals: (LOW to MODERATE)