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Analysis of soft drink

Supermarkets are at present the largest channels in the U.S. and there the competition is very high.
             Government:.
             In the U.S. soft drink industry there are a range of government regulations. Regulations in mainly 2 areas. As a food product, soft drinks come under the food and drug administration. The FDA test and certifies new ingredients. The second regulation is that related to the natural environment. The impact of soft drink materials on the natural environment has been one of the most important issues. I would say that if a new entrant collaborates with these regulations it shouldn't be a big barrier for new entrants.
             My conclusion about the force: entry of new competitors:.
             To be successful in this industry, the high capital requirements for marketing, manufacturing and distribution are the most difficult barriers to entry. Therefore the threat of new entrants is low.
             Bargaining power of suppliers:.
             Supplier concentration:.
             Supplier concentration is low due to the fact that the main ingredients are sugar, water, aluminum cans, plastic and glass bottles. There are many suppliers of sugar and ingredients for soft drinks because they are commodity items. There are also many suppliers of cans, plastic and glass bottles in the U.S.
             Importance of volume to supplier: .
             The aluminum cans, plastic and glass bottles are pretty much dependant on the soft drink industry to survive in the business. This makes suppliers to have little power over the soft drink industry.
             Substitutes inputs:.
             There is not a lot of variety in inputs. The big substitute input was for sugar. When diet soft drinks came up, the demand made the soft drink industry to substitute sugar with Nutrasweet.
             This made suppliers have some power over the industry regarding Nutrasweet.
             My conclusion on the power of suppliers:.
             After reading all the aspects I came with the conclusion that the soft drink industry has more power than the suppliers.
             Bargaining power of buyers:.


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