Cola WarsTo begin with, the carbonated soft drinks industry is a profitable industry as its products like Pepsi or Cola are sold widely across the world. The industry relies heavily on concentrate producers and bottlers to reach its market. This is further analyzed through Porter's five competitive forces; - Threat to new entrant: When a competitor wants to enter this industry they will need a distribution channel. However, most bottlers in the industry are tied to a contract or agreement with dominant companies such as Pepsi or Coca-Cola that does not allow them to “carry other competing brands” (p.3). So, it would be difficult for new companies to get a distribution channel. Additionally, competing companies face obstacles posed by mergers and acquisitions. As with Pepsi's acquisition of “PBG and Pepsi America,” new entrants to an independent bottling company will have difficulty finding other distribution channels (p.12). Furthermore, dominant companies like Coca-Cola spend “$2.34 million” on advertising costs, which helps the company achieve brand equity and brand loyalty for the company (p.19). And brand-loyal customers aren't interested in trying competitors' products. Therefore, the competitor would have to invest in marketing to promote its brand, which would prove costly for the CSD companies alone, who would invest around $100 million in automated storage facilities alone (p.3). Additionally, when inventory costs, employee payroll, and management duties are added to the list, the cost of expenses and investments increases. For example, Coca-Cola's long-term assets in 2009 were approximately $10.4 million (p.15, Exhibit 3a). Therefore, the cost of starting a business would require the company to financially invest large sums of capital in the initial startup