Final answer:
The ease of making carbonated water increases the competitive force of the threat of new entrants in Porter's industry analysis model. New firms can enter the market easily, but establishing a strong brand to compete with giants like Coca-Cola or Pepsi requires significant investment in marketing and advertising.
Step-by-step explanation:
According to Porter's model for industry analysis, the ease of making carbonated water suggests that barriers to entry are low. This increases the threat of new entrants in the market. New firms might be tempted to enter the market if they see that the process is not technologically difficult and if there are potential economic profits to be earned. This is especially relevant when there's no need for significant brand differentiation or intensive capital investments at the start.However, for these new firms to become a significant threat to established companies like Coca-Cola or Pepsi, they would need to overcome the barrier of brand recognition, which typically requires substantial investments in advertising and marketing. The core characteristic of monopolistic competitors is that they are able to differentiate their products sufficiently to gain some market power and create barriers to entry for new competitors.