Given the increase of costs using t

Given the increase of costs using the market, the forward integration of Pepsi and Coca-Cola is in line with predictions derived from transaction cost economics Controlling the delivery part of the value chain also enhances the soft drink giants' bargaining power when negotiating product price, placement, and promotion Looking at Porter's five forces model, Pepsi and Coke are reducing the bargaining power of buyers and thus shifting the industry structure in their favor. End consumers are likely to benefit from Coke's and Pepsi's forward integration in the form of lower prices and a wider variety of niche drinks. Taken together, vertial integration can increase differentiation and reduce costs, thus strengthening a firm's strategic position as the gap between value creation and costs widens.