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Cola Wars Continue: Coke and Pepsi in 2010 article
1. For soft drink industry, what are the barriers to entry? What are the first-mover advantages? Historically, are there any substitutes available? What did they cost and did they have an effect on the price?
2. Do suppliers have any real power vis-à-vis the concentrate manufacturer? Who are the buyers (for the concentrate manufacturer) and how much power do they have?
3. How can companies make so much money in the middle of a “War”? How has the war between Coke and Pepsi affected the industry’s profit?
4. Compare the economics of the concentrate business to the bottling business. Why is the profitability so different? Identify and describe briefly the five forces of competition in the bottling industry.
5. Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated drinks?
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