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PepsiCo porters5

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by

john francisco

on 4 April 2013

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Transcript of PepsiCo porters5

Bargaining Power Supplier Threat Substitute Product Bargaining Power Buyers Rivalry Strong Buyer Power Buyers are more concentrated than sellers

Buyer switching costs are low

Threat of backward integration is high

Buyer is price sensitive

Buyer is well-educated regarding the product

Buyer purchases product in high volume

Buyer purchases comprise large portion of seller sales

Product is undifferentiated

Substitutes are available Weak Buyer Power Buyers are less concentrated than sellers

Buyer switching costs are high

Threat of backward integration is low

Buyer is not price sensitive

Buyer is uneducated regarding the product

Buyer purchases product in low volume

Buyer purchases comprise small portion of seller
sales

Product is highly differentiated

Substitutes are unavailable Attractiveness of the Industry based on Buyer's Power Buyer Power = Attractive Industry/Increases Profit

Buyer Power = Less Attractive/Decreases profit PepsiCo's Consumers These make the industry less attractive

Well educated buyers
Low Buyer Switching Cost
Price Sensitive Buyer
Substitute products available These make the industry more attractive

Threat of backward integration low
No Buyer Concentration
Buyers purchases small amounts from sales
Product is differentiated High Substitute Threat Consumer switching costs are low

Substitute product is cheaper than industry product

Substitute product quality is equal or superior to industry product quality

Substitute performance is equal or superior to industry product performance Low Substitute Threat Consumer switching costs are high

Substitute product is more expensive than industry product

Substitute product quality is inferior to industry product quality

Substitute performance is inferior to industry product performance

No substitute product is available Attractiveness of the Industry based on Buyer's Power Low Sub Threat = Attractive Industry/Increases Profit

High Sub Threat = Less Attractive/Decreases profit PepsiCo's Substitutes These make the industry less attractive

The switching costs of the consumer are low
A lot of substitute products are available
Substitute products are often cheaper These make the industry more attractive

+Substitute products are often inferior to the products of PepsiCo
+Substitute performance is often inferior the that of PepsiCo High Supplier Power Suppliers are more concentrated than buyers

Buyer switching costs are high

Threat of forward integration is high

Buyer is not price sensitive

Buyer is uneducated regarding the product

Buyer purchases product in low volume

Buyer purchases comprise small portion of
supplier sales

Product is highly differentiated

Substitutes are unavailable Low Supplier Power Buyers are more concentrated than suppliers•

Buyer switching costs are low

Threat of forward integration is low

Buyer is price sensitive• Buyer is well-educated
regarding the product

Buyer purchases product in high volume

Buyer purchases comprise large portion of supplier sales

Product is undifferentiated

Substitutes are available Attractiveness of the Industry based on Suppliers' Power Supplier Power = Attractive Industry/Increases Profit


Supplier Power = Less Attractive/Decreases profit PepsiCo's Suppliers High Entry Threat Profitability does not require economies of scale

Products are undifferentiated

Brand names are not well-known

Initial capital investment is low

Consumer switching costs are low

Accessing distribution channels is easy

Location is not an issue

Proprietary technology is not an issue

Proprietary materials is not an issue

Government policy is not an issue

Expected retaliation of existing firms is not an issue Low Threat Entry Profitability requires economies of scale

Products are differentiated

Brand names are well-known

Initial capital investment is high

Consumer switching costs are high

Accessing distribution channels is difficult

Location is an issue

Proprietary technology is an issue

Proprietary materials is an issue

Government policy is an issue

Expected retaliation of existing firms is an issue Attractiveness of the Industry based on Buyer's Power threat new entry = Attractive Industry/Increases Profit

threat new entry = Less Attractive/Decreases profit Intensity of Rivalry is High if... Intensity of Rivalry is Low if... Competitors are few

Competitors have unequal market share

Industry growth is fast

Fixed costs are low

Products are differentiated

Brand loyalty is significant

Consumer switching costs are high

Competitors are not strategically diverse

There is no excess production capacity Attractiveness of the Industry Based on Intensity of Rivelary Intensity is low = Attractive Industry/Increases


High Intensity = Less Attractive/Decreases
+ Product is highly differentiated

-Pepsi is more concentrated than the suppliers.

-The switching costs are low

-The threat of forward integration is low- Buyer is price sensitive

- Buyer is well-educated regarding the product

- Buyer purchases product in high volume

- Buyer purchases comprise large portion of supplier sales*

+ Product is highly differentiated

- Substitutes are available PepsiCo Porter's 5 Forces Competitor Analysis Threat New Entrants High Fructose Corn syrup

important ingredient for Pepsi Less attractive: More attractive: Industry is changing to healthy trends Not many competitor forms: Coca-coal company and Cadbury scheppes There are a lot of deference products Juices, sport, Bottled water, Carbonated drinks, RTD teas Brand loyalty is significant
Competitors are numerous

Competitors have equal size

Competitors have equal market share

Industry growth is slow

Fixed costs are high

Products are undifferentiated

Brand loyalty is insignificant

Consumer switching costs are low

Competitors are strategically diverse Group Members: Ting K.
Glenn A.
Kah How K.
Anton G.
Youri H.
John F. Consumer switching costs are low
Full transcript