Question

Styles 1. Why, historically, has the soft drink industry been so profitable? 2. Compare the economics of the concentrate business to that of the bottling business. Why is the profitability so different? 3. How has the competition between Coke and Pepsi affected the industry's profits? 4. Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated soft drinks?

Answer 1

1. We can analyze the Porter’s Five Forces which reveals that market forces for soft drinks industry are favorable for profitability. Soft drink industry has been so profitable since the participants in this industry have diverse marketing strategies, and they compete with each other, and they also corporate with bottling companies very well.

The different marketing strategies used by the different companies in this industry over the time period have also proved advantageous to them.

Analyzing competition from porters 5 forces:“If the Coca-Cola company didn’t exist, we’d pray for someone to invent them” (Roger Enrico, Former CEO of Pepsi). Based on what Roger Enrico said, the completion between Coke and Pepsi increased the demand of coke, and bought a far-ranging awareness of coke for public.

I can only answer 1 question at a time..

Please do rate me and mention doubts, if any, in the comments section..