Carbonated Soft Drink Industry and Air Mail Express Industry
In the five porter model there five forces that can be used to analyze the air-mail express and the soft drink industry. The analysis will be to compare the similarities and differences using the five porter forces: buyers and sellers bargaining power, substitution threat, new rivals, and internal competition. The air express industry is highly competitive especially in the price range. This is because consumers have high bargaining power over the sellers.
Consumers are sensitive to price and value change. Similar to air express, consumers in the soft drink industry have high bargaining power. Only the companies that have the ability to keep prices low and retain value to product are able to retain customers. Coke Company used economies of scale to keep prices low. Buyer power in the air express industry is moderated by the fierce competition and low cost for customers to switch suppliers. Federal Express concentrates in marketing to acquire and retain customers. In the soft drink industry, companies like Pepsi use product differentiation that involves protection of drink formula or individual flavors. Having differentiated drinks, give the company some power of negotiation but it is not much as all the soft drinks are carbonated drinks. New entrants are not a big threat to the soft drink industry.
Even though the barriers to entry are low, gaining market share is extremely hard in the industry. The customers are sensitive to prices, product value and distance. Factors like high capital investments for packaging and distribution channels prevent new entrants in the market. In the air express industry, new entrants are not much of a threat to business. There huge cost associated with capital investments in planes, vehicles and infrastructures. The two industries are similar when compared against the five forces of the porter model. In both industries, the customer bargaining power is high.
The internal competition is high as the companies increase marketing and reduce prices to gain and retain customers. The buyer power is moderate in both cases due to the high availability of alternative products. The key dominants in the industry are, however, not worried of new entrants due to the market barriers like heavy capital investments.
Works Cited
Porter, M. Competitive Strategy: Techniques for Analyzing Industries and Competitors. 1998. Print
Siaw, I. and A. Yu. "An Analysis of the Impact of the Internet on Competition in the Banking Industry, Using Porter's Five Forces Model". 21. 4 (2004): 514-517. …
