Cola Wars Continue: Pepsi in 2010 Case Study Solution
Threat of powerful suppliers
The beverage industry is enriched with suppliers, but buyers are limited, which is why only a few companies operate in it. The threat of a powerful supplier is lower. The product has the same ingredients, so suppliers do not have any power of unique or differentiated products. As there is no substitute for a supplier’s product; they can’t control the product price to set accordingly. The industry is enriched with supplier companies due to which they can easily switch from one supplier to another. As the threat of new entrants is higher; the suppliers can easily move forward for vertical integration, and the threat of price control of suppliers is high. The focal firm plays an important role, but if the consumers directly contact the manufacturers like Coke; then Coke might not offer them price concessions, which will lower the supplier’s threat.........................................
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