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Difficult for an entrant to compete and gain any visibility. Established brand names and loyal customers impossible to match.
o Distribution Channels – Retailers enjoy high margins of 15-20% on these soft drinks for the space they offer. New entrants cannot convince retailers to substitute Coke/Pepsi for their new products.
o Bottling Network – Both firms have agreements with their existing bottlers that prohibit bottlers from taking on new competing brands for similar products. Also have % shares in bottling companies so this supplier doesn’t hold much bargaining power.
o Fear of Retaliation – Coke and Pepsi Co can win price wars – lowering prices to drive competition out...
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