Same for any industry. Throw enough money at it and you'll eventually win. No company is invincible (unless maybe you're a government regulated monpoly). It's possible Pepsi could unseat Coke. That's if Pepsi wanted to spend 20 billion on advertising and another 10 billion on distribution. Heck, the only reason people buy Coke is because of their brand really. Not really a barrier i'd consider very big.
It seems a little odd to say that the only reason people buy Coke is because of their brand. Taste is a rather important concept when it comes to food and beverages. A beer is not just a beer just as a soft drink is not just a soft drink in terms of determining tastes and personal preferences of taste for choosing a product for consumption. Since we have all sampled both the Coke and the Pepsi product in terms of cola, I imagine Coke would receive a substantial number of votes of choice as a preferred cola based on taste alone that would reflect the dominant market share that product has over any other cola. Any advertising campaign from a competitor such as Pepsi would do little to change the actual taste of the product. I am well aware that there are cola consumers who prefer to choose the taste of Pepsi (or another cola) over Coke. Of course, one could look up such taste test results from an organization such as Consumer Reports to get an accurate read of the importance of taste and product as it relates to explaining why one company dominates over others:
consumerreports.org
Disclaimer: I do, on occasion, engage in consumption of Diet Coke - or Cola Light as they call it on this side of the pond.
People HAVE TO BUY WINDOWS.
You might want to spend some time reviewing and digesting the licensing agreements that the beverage companies have with organizations throughout the globe. Some of them do 'have to buy Coke or Pepsi'.
Southwest's advantages:
-buys contracts for oil, to hedge its bets from price swings in the oil market
Not unlike any transportation company. Southwest uses 74 million gallons of jet fuel per month.
-uses only one type of plane (boeing 747 i think)
You are correct about using only one type of plane which scales the maintenance, parts, pilot and staff training to a streamlined operation. Southwest began in 1971 aimed at the short-haul market with only three airplanes (Boeing 737's). Today they have 353 airplanes that serve 58 airports with an average flight distance of 509 miles and duration of 1 hour and 30 minutes. The 747 made by Boeing is not exactly an airplane designed for such short-haul trips. The plane Southwest uses is the 737 series from Boeing and their average plane age in the fleet is 8.4 years.
-focuses on being the lowest cost provider (no meals)
True. They serve peanuts or raisins. Average one way fare is $85 and Southwest provides 90% of the discount travel in America. Talk about niche dominance. They also utilize the internet with over 30% of bookings coming via the internet for the cost of $1 per ticket to Southwest as compared to $10 per ticket via travel agents. Their website is one of the top 100 e-business websites in the United States.
-spending lots of time and money on examining their employees. For example, Southwest wants employees who have a certain type of spunk and are always happy. If employees are happy, reports have shown that customers are more happy.
Proof is in the results. Southwest ranks in "the 50 most coveted employers". They have ranked number one in the past ten years in fewest customer complaints in the airline industry. Of course, there are plenty of other categories that they have been rewarded, but certainly the "happy employees" adds to the success of the company. Nothing like 14 stock splits since 1977 to make many of those employees "happy".
There are others, but those are just some. That said, this is nothing a competitor couldn't copy IMO.
There have been others that have attempted to 'copy' and enter such short-haul niche markets without organization success. In studying any market or industry, there are important barriers to entry and first mover advantage that are stronger than might appear on the surface. Considering that Southwest dominates the discount niche by holding 90% of the US share, that's a pretty firm lock on a target niche.
p.s. i understand Coke has more barriers. Obviously, they've continue to dominate for over 100 years. Gatorade has dominated while Coke is unable to get more than 13% share with its poweraid drink. This is enough history to show me that these companies have some form of competitive advantages.
I guess we will have to see if the relatively 'young' company of Southwest (30 years) dominates their niche specialty target market for another 30 years or not. By the way, Gatorade tastes a heck of a lot better to me than the Coke sport drink. Nothing to do with brand - simply based on taste. Taste can be quite a barrier to entry. Just don't ever let your mother-in-law know that her apple pie doesn't taste as good as your own mother's pie. I made that mistake once a decade ago and am still paying for it.
Disclaimer: I do drink Gatorade on occasion. It helps wash down a certain apple pie...
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