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The profitability of the leading cola syrup manufacturers PepsiCo and Coca-Cola and of the bottlers in the cola business is very different. PepsiCo and Coca-Cola enjoy an 81 percent operating profit as a percentage of sales; bottlers experience only a 15 percent operating profit as a percentage of sales.
Using the above case, perform Porter's Five Forces analysis that explains why one type of business is potentially so profitable relative to the other.
What advice would you give to the CEOs of the other bottlers that might increase their operating profits?
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