Analysis Soft Drink Essay Example for Free

Analysis Soft Drink Essay1Analysis of the U. S. soft drink industry, based on the competitive forces model of Michael Porter. In the soft drink industry the entry of new competitors depends on the barriers to entry that are present, and also the reaction from existing competitors that the catechumen can expect. I will now analyze the six major sources of barriers to entry the soft drink industry. Economies of scale deter entry by forcing the newbie to come in at large scale and risk strong reaction from existing firms or come in at a puny scale and accept a cost disadvantage. If a company wants to decline its unit cost of their product, they will have to produce more to lower the cost. The more you produce, the lower the costs. In the soft drink industry establishing firms have brand identification and customer loyalties. The brand name can have differences. This is a senior high barrier to enter. Entrants are forced to spend a lot to all overcome existing customer loyaltie s. The capital requirements within this industry are very high.Production, distribution and advertising are a must to compete with the industry leaders like coca cola and Pepsi. So if a new The aluminum cans, pliable and glass bottles are pretty much dependant on the soft drink industry to survive in the business. This makes suppliers to have little power over the soft drink industry. The access to distribution channels is a high barrier because the most successful soft drink companies are aggressively using up their distribution channels and buying full ownership of bottling plants.Supermarkets are at present the largest channels in the U. S. and there the competition is very high. Switching costs is also a barrier to entry this business. Switching costs by changing from one supplier to the other may happened. Also employee training, new equipment, exam new technology. This things are common in this industry. This are barriers for new entrants.