Introduction

Pepsi was stared in 1853 by caleb bradham in New Bern, North Carolina, & United States. In 1898, one of Caleb's formulations, known as "Brad's Drink" a combination of carbonated water, sugar, vanilla, rare oils and cola nuts, is renamed "Pepsi-Cola". On August 28, 1898, Pepsi-Cola received its first logo. In 1902, he applied for a trademark with the U.S. Patent Office, Washington D.C., and formed the first Pepsi-Cola Company. 1905, Pepsi-Cola's first bottling franchises were established in Charlotte and Durham, North Carolina. In 1906, Pepsi gets another logo change, the third in eight years. In 1923, PepsiCola Company was declared bankrupt and its assets were sold to a North Carolina concern, Craven Holding Corporation, for $30,000.

Formulation
Roy C. Megargel, a Wall Street broker, bought the Pepsi trademark, business and goodwill from Craven Holding Corporation for $35,000, forming the Pepsi-Cola Corporation. In 1928, after five continuous losing years, Megargel reorganized his company as the National Pepsi-Cola Company. In 1931, U.S. District Court for Eastern District Virginiadeclared the National Pepsi-Cola Company bankrupt, the second bankruptcy in PepsiCola history.

REFORMULATION
The Loft candy company acquired the National Pepsi-Cola Company. Charles G. Guth, president of Loft, assumed leadership of Pepsi and commanded the reformulation of Pepsi-Cola syrup formula. 1934 was a landmark year for Pepsi-Cola. The drink was a hit and to attract even more sales.

Micheal Porter 5 force model

Threat of substitutes
Water, Juices, Beer, Energy & drinks Local beverages like tea, coffee & nimbu pani pose a threat to some extent to established players.

Intra industry rivalry

There is intense rivalry between Coke and Pepsi.

Bargaining power of buyers

The bottlers, retailers and distributors have significantly greater bargaining power than the end consumer does. Large retailer such as Reliance, Big Bazaar, are able to extract profits from the Company through incentives such as volume-based purchases, promotions and displays. The bargaining power of the consumer is low. Although the presence of substitutes does serve to increase buyer power for consumers, but a high degree of brand loyalty mitigates this loyalty. In short, we can say that the end consumer has medium bargaining power.

Bargaining power of suppliers

There are many suppliers. Pepsi accounts for a large percentage of the suppliers total revenues. Thus, it is important for the suppliers to contain whatever bargaining power they have. The overall bargaining power of the suppliers is considered low.

Threat of new entrants

Pepsis product differentiation caused by their marketing strategy has limited the threat of new entrants. Also the heavy start up costs of manufacturing and packaging plants would be a deterrent.A new company would be very hard pressed to take market share away from established players like Pepsi, Coke etc.