The Value Chain Analysis Of Coca Cola And Coca-Cola

Along with Pepsi, Coca cola is among the two leading carbonated soft drinks brands in the world. The two companies are always competing with each other to gain market share and revenues through innovative product offers and marketing stunts. But both the companies depend on a value chain that is similar has the same properties.
Concentrate producers – this component of the CSD industry has a low bargaining power. This is so because the raw materials that are used are easily available and therefore entry into the market in this aspect is easy. However Coca Cola has a very specific formula for mixing of the elements to make the concentrate and therefore not every firm that wishes to become a supplier for Coke can become one.
On the other hand
Hence the company has a number of options to replace an existing supplier with a new one. Therefore Coke can choose suppliers based on need and costs (Carpenter & Sanders, 2014). Since there are a number of such suppliers ready to tie the knot with the world leader in CSD, therefore there is significant rivalry between them. There is also no threat of substitute products as far as suppliers of concentrate are concerned. This is so because, the concentrate uses a very specific formula that create the taste of Coke soft drinks. Hence this cannot be replaced by anyone and everyone. hence it can be concluded that the buyer – Coca Cola, enjoys the upper hand in its dealings with concentrate suppliers.
Bottlers – another very important component of the CSD supply chain are the bottlers. The function of the bottlers is to manufacture and package the CSD into bottles. The business of bottling uses some basic technology which is not tough to acquire apart from the regular paper work and finances, entry barriers into this business are low and hence there is threat of new
The bottlers are an integral part of the supply chain of the company that it cannot do without. The bargaining power of suppliers for the bottlers is also low as there are a number of suppliers with an abundance of the raw materials used for bottling. The machinery and technology is also abundantly available. Hence the bargaining power of suppliers is low. Industry rivalry would be considered to be high due to the ease of market entry and the availability of raw materials and the technology needed for the process.
Retailers – the end point of the supply chain of Coca cola are the retailers who sale the CSD directly to the clients. Now for Coca Cola, the retailers are the buyers and the company can do virtually nothing without the retailers.
The bargaining power of the retailers is high compared to the seller – Coca Cola, since they are the ones that actually conduct the sale – sometimes even through push selling and exclusive company branding where rival products are not kept. For this however Coca Cola has to incentivize the retailers into doing