Porter’s Five Forces in Pepsi

1800 words 8 pages
The model of the Five Competitive Forces was developed by Michael E. Porter in his book „Competitive Strategy: Techniques for Analyzing Industries and Competitors“ in 1980. Since that time it has become an important tool for analyzing an organizations industry structure in strategic processes.
Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change.
Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the
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Earnings for major soft-drink companies showed substantial improvement in the first three quarters of 2002, and full-year operating earnings increased 7% to 9on average. Companies are still dealing with sluggish carbonated soft drink trends in theUnited States. However, despite higher levels of marketing and promotional spending, and economic weakness in many international markets, noncarbonated beverage products continue to drive growth. Operating profits for the beverage industry are projected to rise 9%-10% in 2003 reflecting 7%-8% higher North American profits, a strong 14%-15% increase in Gatorade/Tropicana profits and a 4%-5% increase for international beverages. Beverage profits should benefit from a favorably pricing environment. For 2003, modestly higher prices for soft drinks and other beverage products in U.S. supermarkets should boost profits for manufacturers. Noncarbonated drinks should continue to show strong growth, while volume trends for carbonated beverages should continue to show improvement. In addition to marketing and promotions, aggressive new product introductions by the major manufacturers should also help to


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