Porters Five Forces Michael Porter developed a framework, which identified 5 forces that act to either increase or reduce

the competitive force within an industry. The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into.

Threat of New Entry: >Time & Cost of New Entry >Specialist Knowledge >Economies of Scale >Cost advantages >Technology protection >Barriers to entry

Threat of New Entry

Competitive Rivalry: >Customer Loyalty >Switching costs >Number of competition >Quality differences >Other differences >Costs of leaving market

Supplier Power

Competitive Rivalry

Buyer Power

Supplier Power: >Cost of changing >Uniqueness of service >Number of suppliers >Size of suppliers >Your ability to substitute Threat of Substitution: >Substitute performance >Cost of change

Threat of Substitution

Buyer Power: >Price sensitivity >Number of customers >Differences between competitors >Size of each order >Cost of changing >Ability to substitute

Porters five forces of PEPSICO

Threat of New Entry: competition for shelf space low investment in machinery large capital investments on advertising, promotion market research and bottler support Competitive Rivalry: Coca cola is the main competitor very similar product low costs to exit famous, international brands partnered with fast food franchises as well main strength from advertising campaigns

Threat of New Entry This industry force is low

Supplier Power Low bargaining power

Competitive Rivalry Industry rivalry is high

Buyer Power Low bargaining power

Threat of Substitution Supplier Power: commodities and easy to purchase in the market large number of suppliers low switching cost of suppliers Ease of substitution is high Buyer Power: different options from the Competitors major buyers: Fast-food Restaurants and bottlers weaken the bottlers power by having a franchise agreement weaken the fast-food chains power by acquiring them (e.g. Pizza Hut,Taco Bell and KFC)

Threat of Substitution: many alternatives; Water, Tea, Juice, Milk, Beer, Distilled spirits & Energy Drink different diet brands customers switching costs are low

References: http://www.mindtools.com/pages/article/newTMC_08.htm
http://www.scribd.com/doc/40330734/Pepsi-on-strategic-managment