Coca-Cola - Porter's 5 forces, PEST and SWOT

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//The attractiveness and the competence of any industry is governed by analyzing its internal, as well as, external environment, which helps in determining its overall profitability. In the following discussion, Porter's Five Forces model and PEST analysis are conducted for Coca-Cola.//

Porter Five Forces Model of Coca-Cola (See Table in Attached File)

Threat of New Entrants

Coca-Cola has earned an immense brand image and market share, which makes it uneasy for the competitors to enter the market. Further, the customers are also not likely to switch towards a new brand. There are many factors that determine Coca-Cola has moderate pressure from the new entrants (Valuation Academy, 2015). In terms of advertising and marketing, the company has invested a huge amount to establish itself, which provides a barrier to other entrants as they need large capital to compete with the brand image. Moreover, the customer loyalty and efficient retail distribution along with the fear of retaliation among new entrants and effective bottling network has made the new players to give a rethought for competing with Coca-Cola.

Threat of Substitute Products

The company faces moderate to high pressure of threats from the substitutes. It is so because the switching cost is very low and perceived value of beverages is also low and customers can easily move to a different brand if an effective promotional strategy is adopted by other brands. Moreover, with increasing consciousness towards health, other beverage industries are focusing on providing healthy drinks to consumers, which also contributes towards a higher level of threat from substitutes (MBA lectures, 2010).

Bargaining Power of Customers

The company has low pressure from bargaining power of buyers as the fast food chains, vending machines or food stores have less or no power of bargaining as they are involved in bulk purchasing.

Bargaining Power of Suppliers

The bargaining power of the suppliers is very less because all the suppliers provide the same supply and is hardly differentiated; therefore, the company has numerous suppliers to switch, and the switching cost is also very low. Apart from this, suppliers can also not afford forward integration (MBA lectures, 2010).

Rivalry among Existing Firms

The company has faced the high pressure of rivalry from PepsiCo. The taste of both the beverage drinks is hard to differentiate. Apart from this, other brands like Dr. Pepper also offer unique and different flavors, which help in attracting the customer and may violate the established customer loyalty (Hill, Jones & Schilling, 2011).

PEST Analysis of Coca-Cola

In the external analysis, the manufacturing of the Coca-Cola products is regulated by the government. ...