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Soft drink industry
slowly become more health conscious. The reason behind is that it constantly developing its brand image and reinforcing the core product benefit of taste and refreshment to ensure that brand remain in maturity stage. This makes suppliers have power over the industry as seen in the almost overnight empire of Nutrasweet. Learning Curve The shift in the manufacturing of soft drinks is gravitating toward automation due to speed and cost. Threat of New Entrants Economies of Scale Size is a crucial factor in reducing operating expenses and being able to make strategic capital outlays. Headquartered in New York, PepsiCo has 19 leading brands that bring in over 1 billion in yearly retail sales and two dozen other brands with yearly sales of between 250 million and 1 billion. Market drivers include rising awareness surrounding health and nutrition. The industry is reliant on the production of quality bottles and drinking packs to keep products fresh.
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Access to Distribution 9, expected Retaliation 9, conclusion. Presence of Substitute Inputs There is not a lot of variety in inputs. Proprietary Low Cost Production The process of manufacturing soft drinks is not a proprietary process. The soft drink market is a relatively mature market with annual growth of 4-5 causing intense rivalry among brands for market share and growth (Crouch, Steve). Table 3 cadbury/schweppes93949596 assets sales NET income Sales/Income5.806.36.506.28 Income/Assets6.607.257.486.53 coke assets NET income Income/Assets15.0618.10.4119.85 pepsi assets NET income Sales/Income.706.356.155.28 Income/Assets1.796.707.076.31 Source: Compact Disclosure Capital Requirements The requirements within this industry are very high. Coca Cola has shame of silence maintained its leadership for several years. Soft Drink Industry: Competition and Structure Internet. There is no price differentiation and consumer has no brand loyalty. There are five major suppliers of glass bottles.
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