Question 1 :
Why has the soft drink business been so profitable ?
An industry analysis through Porter’s Five Forces reveals that market forces are favourable for profitability. Both concentrate producers and bottlers are profitable. The industry is already vertically integrated to some extent (§ “Bottler consolidation and spin-off - p8). That’s why we sometimes will not distinguish concentrate producers and bottlers. However, we have to keep in mind that relations between concentrate producer and bottlers were often strained. Moreover, in terms of operating profit/sales (exhibit 4 - p18), during the period 1980-2004, we can notice that concentrate producer – Coca-Cola company – earned between 21% and 37,1% whereas its largest bottler – Coca Cola Enterprise – only earned between 4,3% and 8,6%.
Rivalry :
We could characterize the soft drink market as an oligopoly, or even a duopoly between Coke and Pepsi, resulting in positive economic profits. There was tough......

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Title: Coca-Cola / Pespi Business Case Hbs
Approximate Word Count: 1178
Approximate Pages: 5 (250 words per double-spaced page)

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