Also, fix everything that has RED writing, and put in mind for the 1st question its talking about Cola Wars and the second is about True Religion which is a denim company) Q1. A. The industry in this case is the carbonated soft drink industry. (Porters 5Forces) I. Threat of New Entry: The threat of any new entry would be reduced by sucha vertical integration and consolidation. This is because of the fact that theindustry is already dominated by the merged companies and Coca Cola andPepsi. This is supported by the brand loyalty that the major players alreadyhave. They also have absolute cost advantage as compared to any potentialnew entrants. (Is there any government regulation) II. Suppliers Power: In the carbonated soft drink industry, the suppliers are thepeople or companies that provided the concentrate producers with thecaramel coloring, caffeine, natural flavors, and phosphoric or citric acid. Theyalso offered the bottlers sweeteners and packaging. After the verticalintegration and consolidation of the bottlers and the concentrate producers,the suppliers would have an increase in bargaining power. This is because ofthe increase of demand coming from the consolidated organization. III. Buyers Power: Buyers will have more power because of the consolidation ofthe concentrate producers and bottlers. This is because of the availability ofmore retailers to sell to the end consumers. As a result, there would be alarger choice the end costumer can buy from. IV. Threat of Substitution: The substitute will continue to be the same with thevertical integration and consolidation of the bottlers and concentrateproducers. Examples of these substitutes are water, coffee, juice, peer etc. (Give example of substitute) V. Competitive Rivalry: Consolidation and vertical integration will reducerivalry. This is because of the decrease in the fixed costs of the company. Inaddition, the bigger company will be strengthened as buyers lose the ability tobuy from smaller companies. (Intensity of rivalry_ Do the firms compete on price) B. i. Complementors: it means there is other products not substituteand increase the utility of the firm product. This happened a lot in the tech industry. Second, industry life cycle analysis. ii. Industry life cycle analysis: the model is not capable to adapt.The model just makes a presentation of the current time. It might benot able to reflect well within the long term. For example, in certainlife the firm might have a high competition. iii. Macroenvinroment: It is about factors that might affect thecompanyâ€™s ability to serve. First, global forces, For example, Chinais emerging market for the horse industry. Second, Political andlegal forces. For example, the closure of horse slaughter inCanada, US and other countries. Third, Social forces. For example,people concern about horse slaughter. Fourth, demographic forces.For example, the movement from rural to urban environment.Fifth,Technological forces, For example, Online gambling, TV andmobile. Finally, Macroenvinroment forces.For example, 2008recession. iv. Firm distinctive competence: The model does not careabout the effect of a given businessâ€™s core competencies on itsability to make profit. Rather, the model only assumes the structureof the industry as the main factor that determines its profits. As a result of that, this model is hard to apply to big companies that have interactions that have been accomplished from a range of businesses. v. Uncertainty: there is uncertainty in the model. The conclusions we get from the application of these forces are often arguable. The problem with that any mistake with the conclusion might result poor understanding of the industry. C. Two of porterâ€™s five forces that have changed Two of porterâ€™s five forces that have changed are the intensity of rivalry among existing companies and the threat of subsidies. These two can be used to talk about the change
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