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The Five Porter Forces - Essay Example

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In the paper “The Five Porter Forces” the author provides an analysis on which a company should base the production techniques and shows a balance of forces that determine the profitability of an industry. For a firm to ensure maximum profits there is need to use Porter's model…
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The Five Porter Forces
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The Five Porter Forces

Download file to see previous pages... This is thus applicable to the Coke and Pepsi industries who are major rivals in the production of carbonated soft drinks.
The structure of the concentrated producers is such that a blend of the raw material ingredient is produced, packaged in plastic canisters and taken to the bottlers. Concentrate producers add artificial sweeteners to carbonated drinks while the bottlers add sugar or high fructose is making the process of the former to be less capital intensive than the latter. Production cost is low under the concentrate producers with little capital being used on machinery, labor and overheads and still ensuring that production can serve the whole of the United States (Greenwald & Kahn 91). Innovation and sophistication is a key goal in the firm with high investments awarded to marketing, advertising, research, promotion and bottler support. However, key emphasis is given to the development of customer development agreements with other advanced companies to promote marketing strategies and employment of many people to meet the production demand
Bottlers on the other hand add sugar, carbonated water, high fructose corn syrup to the concentrates and packed it ready for delivery to customers. The sales include maximization of space, positioning of brand, setting displays and points of sale and coming up with promotional activities. The process of the bottlers is capital intensive, involves high speed and high cost the o produce a package that is of similar type and size. Much of the system is capital intensive with major investments being accounted for trucks and distribution process.
The industry structure of the concentrate producers is more attractive based on the model provided by Porter on industrial framework.  ...Download file to see next pagesRead More
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