Porter’s Five Forces Analysis

1) Threat Of New Entry (Medium)

 Soft drink industry is a duopoly market, a huge market share is acquired by Coke and Pepsi for a
long period of time and have gained a brand loyalty among the customers, and customers are not
likely to try a new brand.
 No switching cost to customer
 High cost of brand development makes it difficult for new firms to compete with Coke and Pepsi
 Huge investment is required for entry in this industry.
 Huge barrier to exit

2) Rivalry among existing firms (High)

 Throughout the history of soft drinks industry both Pepsi and Coke have fought for a huge market
share.
 Undifferentiated product
 Switching cost

3) Threat of substitute products

4) Bargaining power of buyers
5) Bargaining power of suppliers