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Coca-Cola Amital is one of the most recognisable products and brand around the world (Heller et al 2006).
In 1973 Coca-Cola was introduced into Australia with the first plant in Australia opening in Sydney in early 1983. Coca-Cola Amatil also known as CCA is an independent company which produces a variety of soft drinks and mineral waters. In 1964, CCA had entered the Australian beverage industry a by 1990 they had all the “Australian Coca-Cola bottling licensed territories in Australia” (Coca-Cola Amatil).
The force for traditional competitors will be high if there are many competitors with the same product or service. For example CCA and Pepsi, these two companies both have similar products and pricing structures. The force of the traditional competitor is high if there are many competitors with the similar products and pricing structures. To compete against markets like CCA and Pepsi is hard because they do not hold shares in markets as big as CCA and Pepsi. But to produce a similar product of CCA is not difficult (Azam 2009, p.9). As it is difficult to buy into a business like CCA, as large amounts of money is needed along with the right resources and skills, many other businesses can not afford to take this step and therefore there will be less completion for CCA.
New Market Entrants
CCA has been established for many years and is recognised all over the world. So, for a new market entrant to enter into this industry will be very costly and right experience is required if the new entrant wants to succeed in this industry. Barriers to entry in this industry are high. This is because of the cost to buy into this industry. The force for this industry will then be low as there already are other products out there similar to CCA’s such as Pepsi, L.A. Ice to name a few. CCA is known around the whole world; therefore they have a high degree of brand recognition. For a new entrant into this market the barriers will increase higher making it harder for the new entrant to have its brand recognised (Ahmed 2008, p.6).
Threat of Substitutes
There are many substitute products around that pose a threat to CCA. Consumers may purchase coffee, tea and juice, this which costs the consumers a minimal difference in price.
Supplier Bargaining Power
Supplier bargaining power is high if there is small number of suppliers to choose from. Therefore this allows the supplier to demand a price and the buyer will need to pay because there may be no other option for the buyer to select from (Levy, Yuval). Suppliers also can threaten companies by using their own material and create the product and sell it, therefore the buyer will buy the materials from the supplier to not allow the suppliers to create an outlet of their own.
Buyer Bargaining Power
Buyers hold a huge amount of power when buying goods and services. This is because like coke produced by CCA, consumers can choose between products by CCA and Pepsi. This may be to obtain a cheaper price. Customers are also able to haggle with their supplier by offering cash, or threatening to changer suppliers to attain a cheaper price (Porter, M., Porters Five Forces Model). Customers will always choose the most cost efficient method to save and to maximize their profit (Azam 2009, p.8).
It is recommended that CCA to source out all of its major competitors that may pose a threat to them. Also as reach shows that Coca-Cola is not healthy as ten percent of the drink in a can is made up of sugar which can lead to high stress levels and cause diabetes etc (Ponce, G.).
Therefore for CCA to continue to have large profit come in with health risks in mind to their products, CCA can introduce a healthy range of products such as orange juice.
- Ahmed S. 2008, A Strategy Audit: Paloka, Business Policy,
- http://www.scribd.com/doc/8433992/Strategic-Management-Strategic-Audit-of-Pakola viewed 23 March 2010
Azam Q. 2009, Strategic Planning, Business Policy,
- http://www.scribd.com/doc/12731896/Strategic-Management- Concepts Viewed 17 March 2010
Coca-Cola Amatil Australia
- http://www.ccamatil.com/Australia.asp viewed 17 March
Heller Et Al 2006, Coca-Cola Management,
- www.thinkingmanagers.com/companies/coca-cola.php viewed 13 March2010
- Levy, Yuval. Micheal Porters Five Strategic Market Forces, viewed 21 March
- Porter, M. Porters Five Forces Model, “Porter’s five forces of competitive position model and diagrams.”
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