The document discusses the profitability of the concentrate and bottling industries. The concentrate industry enjoys higher profit margins at 35% of sales compared to 9% for the bottling industry due to supplier power over bottlers and unique products. Competition between Coke and Pepsi through "cola wars" has increased industry profits overall by raising barriers to entry and strengthening brand emotional connection, allowing higher prices. Challenges include international differences, health trends, and changing consumer preferences.

1. Cola WarsContinue Will Day #40080 Sofia Hjelm #40092 Oskar Karlsson #40104 Julie Miller #40078 Sarmad Saleem #70408 Media Management spring 2010 Instructor Robin Teigland

2. Is the concentrate industry profitable? 1)

3. Profitability of the bottlingindustry 2)

4. Conclusions Concentrateproducershavesupplier power over the bottlers The concentrateindustryproducesuniqueproductswhereas the bottlingindustryproductsproducesgenericproducts Pretax margin Concentrate industry 35 % of sales Bottling industry 9 % of sales

5. Challenges The five forces analysis enables formulating a better strategy and how to be more profitable International differences Health consciousness Consumer preferences 3)

6. Cola wars The competition between Coke and Pepsi has increased industry profits Increased barriers to entry (high marketing costs) The war has strengthened the entire category The war has made the benefits of the category more emotional which would enable higher prices

7. Sources Porter ME, ”The fivecompetetiveforces that shapecompetetivestrategy”, HBR 2008 Cola warscontinue: coke and pepsi in the twenty-firstcentury, Harvard Business School