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Substitutes: Large numbers of substitutes like water, beer, coffee, juices etc are available to the answer aside consumers but this countered by concentrate providers by huge advertising, carry equity, and making their product easily available for consumers, which most substitutes stoolnot match. similarly soft drink companies diversify business by crack substitutes themselves to shield themselves from emulation. Rivalry: The Concentrate Producer diligence can be classified as a Duopoly with Pepsi and Coke as the firms competing. The market share of the rest of the argument is too low-pitched to cause any upheaval of pricing or industry structure. Pepsi and Coke mainly over the years competed on specialty and advertising rather than on pricing except for a period in the 1990s. This prevented a huge dent in profits. Pricing wars are however a feature in their international expansion strategies. Economics of Bottling vs.

Concentrate Business high number of bottlers when compared to the concentrate producers which fosters competition and reduces margins in the bottling business Huge capital be to set up an efficient plant for the bottlers while the capital costs in concentrate business are minimal be for distribution and production account for around 65% of sales for bottlers while in the concentrate business its around 17% Most of the brand equity created in the business remains with concentrate producers workable reasons for Vertical Integration: With the decrease in the number of bottlers from 2000 in 1970 to less than 300 in 2000, the concentrate producers were concern about the bottlers clout and started acquiring stakes in the bottling business. They could offer attractive packaging to the end consumer. To preempt refreshful competition from entering business if they control the bottling. Effect of competition between Coke and Pepsi on industry profits: During the 1960s and 70s Coke and Pepsi concentrated... If you want to get a full essay, order it on our website: Ordercustompaper.com

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