Thursday, July 9, 2009

According to Porter’s discussion of industry analysis, is Pepsi Cola a substitute for Coca Cola?

According to Porter’s views on industry analysis, Pepsi Cola would not be considered a substitute for Coca Cola. They are both cola. Porter’s view of a substitute product is one that appears different but can satisfy the same need, like coffee and tea as described in the text. In the case of cola, bottled water or juice could be viewed as a substitute product, according to Porter.

In today’s health conscious environment, a new company might be able to capitalize on an organic, or natural soft drink. Although Snapple is a competitor of Coca Cola and Pepsi, it promotes natural teas, waters and juices. If a company could utilize a similar theme of Snapple (made from the best stuff on earth), but apply it to a soft drink, they may be able to grab a solid portion of the diet cola (health conscious) market.

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