Premium Essay

The Fizzy Wars

In:

Submitted By danwilson7
Words 1707
Pages 7
Economics for Managers 551 – Trimester 1, 2014 | Assessment 1 – Contemporary Economic Analysis | “The Fizzy Wars” Lee Johnston (16927959) Daniel Wilson (17491934) Greig Maitland (17485047) |

The two major players in the Australian soft drink industry, Schweppes and Coca-Cola Amatil (CCA), have been competing for market share for some time, creating a ‘price-war’ between the firms. The article chosen for this Assignment, “Price Rises hit customers in the fizzy wars”, (Mitchell 2014) signals the end of this ‘price-war’ and details the following; * Last year Schweppes implemented aggressive discounting in an attempt to increase its volumes, market share and boost sales of its new product; Pepsi Next. * Cost of production for soft drink has increased due to higher costs in materials, utilities and distribution. Neither firm could raise prices due to the above-mentioned ‘price-war’. * Schweppes parent company Asahi has issued a mandate for the firm to increase margins to 10% by 2015 and so Schweppes have been forced to raise prices to meet this deadline. CCA have followed suit by raising prices, thus, ending the ‘price-war’.
In this assignment we briefly explain the background of the Australian soft drink industry’s decrease in demand and increase in production costs and provide an economic analysis of Schweppes decision to raise prices, focusing on the short run and long run costs in a competitive market versus an oligopoly. Finally predictions on what this will mean for the soft drink market in the future are discussed.
Economic Analysis
This economic analysis focuses on the Australian soft drink market and its current change in climate due to a decreased demand for caffeinated, sugary beverages. ("Drinks Slump Sees More Than $30m Wiped Off Coke's Earnings" 2013) To make matters worse, in 2013 Australian Health organisations

Similar Documents

Premium Essay

Coke

...beverages, seeking to expand in international markets. PepsiCo looked mainly to its core product, carbonated fizzy drinks, but also diversified its product offerings. It bought Frito-Lay, the snack business in 1965, beginning its long history of diversification, to reduce its dependence on cola drinks. In 1993, it launched bottled water, Aquafina, and in 1998, it acquired Tropicana juice brands, placing it in a good position to benefit from rising consumer demand for healthier drinks. In 2001, it acquired Quaker Oats, the cereals and snacks business, following the collapse of Coke’s negotiations to buy the company, revealing divisions on strategy within Coke’s board. With Quaker Oats came Gatorade, the market leader in energy drinks, further diversifying PepsiCo’s portfolio of companies. Aquafina water and Gatorade drinks have seen rises in sales, helping PepsiCo to offset declining sales of sugary carbonated drinks, where consumers have become concerned about health and obesity. Coca-Cola has also belatedly launched new products diversifying from sugary fizzy drinks, having launched Minute Maid fruit juice to challenge Tropicana, Dasani to take on Aquafina, and Powerade to compete with Gatorade. PepsiCo’s diversification programme and it’s brand building expertise has made it the world’s fourth largest food and beverage company. Coke, relies on carbonated fizzy drinks for 80 percent of profits on the other hand, is market leader in...

Words: 3101 - Pages: 13

Premium Essay

Mr Bentley

...Strategic Management BUS3005 Portfolio Jokull Johannesson Contents: Introduction Step One Step Two Step Three Step Four Step Five Step Six Step Seven Conclusion Introduction: Strategy is a core component in business. In order for a business to survive they need to have a good strategy. This portfolio consists of a strategic plan for the product; Jaz cola. Jaz cola is one of the many products of the Coca Cola Company. It will look at the seven steps of strategy formulation for Jaz cola. Step One, Industry Analysis: Jaz cola is a product that coca cola introduced in the Philippines and is mainly targeted in the middle island, the Visayan Islands. Potential Entrants * Cosmos bottling company * Rubicon Drinks Ltd * Boost Drinks Potential Entrants * Cosmos bottling company * Rubicon Drinks Ltd * Boost Drinks Firstly I will look at the drinks industry for the first step; Industry analysis. So I will be using the Porter’s 5 forces model; Buyers * Local stores * Pongko Pongko Market Buyers * Local stores * Pongko Pongko Market Suppliers Suppliers Competitive Rivalry Competitive Rivalry Threat of Entry – High Bargaining Bargaining Power - Low Power - Low Substitutes * Juice * Tea/coffee * Iced Tea * Health drinks Substitutes...

Words: 3361 - Pages: 14

Premium Essay

Who Is to Blame for America’s Obesity Problem

...failures: an individual eats too much and exercises too little. This ignores the work of behavioural economists and biologists. Humans have evolved over millennia to ensure that weight is hard to lose. It is too simplistic to blame obesity merely on lack of willpower. That would let both food companies and politicians off the hook. “Fed Up” is determined to hold them to account. Food companies are keen for children to eat their junk foods, which are available not just in shops but in schools. America’s politicians, “Fed Up” argues, are complicit. Notoriously, America’s school-lunch law counts the tomato paste on pizza as a vegetable. This film lambasts many, from Coca-Cola to a less obvious target, Michelle Obama, for waging too feeble a war against food companies. However, the main foe in “Fed Up” is sugar. Food companies have pumped sugar into bread and peanut butter, as...

Words: 566 - Pages: 3

Premium Essay

Refresqueras

...attack--has stolen enough Of pepsi's market share to ask, is the war finally over? Inside the chairman's office on the 25th floor of Coca-Cola's stately headquarters in Atlanta, in the top left-hand drawer of his desk, Roberto Goizueta has for many years kept two charts. One describes Coca-Cola's fundamental business: selling the concentrate that transforms fizzy water into Coke. The diagram plots the four reasons Goizueta adores the business: (1) Selling concentrate requires little capital; (2) it produces superb returns; (3) it demands minimal reinvestment; (4) it spills an ocean of cash. One day recently, Coca-Cola's cerebral chairman and CEO was asked to pull out the second chart. This one illustrates PepsiCo's altogether different strategy, which has involved pouring billions of dollars into capital-intensive businesses like restaurants. Goizueta slides open the drawer and riffles through the papers. "I threw it out," he says nonchalantly. Raising his eyebrows, he dismisses the world's most famous No. 2 with trademark dispassion. "As they've become less relevant," Goizueta says, "I don't need to look at them very much anymore." Poor Roger Enrico. He certainly can't say the same about Coke. Since he became PepsiCo's chief executive in April, Enrico has been seeing a whole lot more red--Coca-Cola red--than he ever expected. Not to mention red as in ink, as in blood. PepsiCo has been badly wounded in the cola wars. Its casualties are high. Caroline Levy, who follows the soft...

Words: 1085 - Pages: 5

Premium Essay

961beer

...the front row were stylish women in sundresses beside men who showed a strong preference for black T-shirts and trendy eyewear. Forget the idea that religion or the effects of war might preclude the success of a Lebanese brewery. It’s true that many Muslims abstain from alcohol. But plenty of people in the Middle East love to drink, and this is especially true in Lebanon, where the religious plurality includes a thriving Christian population — and besides, people seek alcohol during hard times, said Mazen Hajjar, a former investment banker and airline executive who started 961 Beer. But there has been a problem. For 80 years, Lebanon “has been drinking fizzy, light beers,” he said. “I wanted to brew real beer.” His company makes a beer that was named best lager at the Hong Kong International Beer Awards last year. Other regular offerings from 961 include a red ale, a pale ale, a stout, a porter, a witbier and, starting this summer, a black IPA, or India pale ale. Photo A 961 Beer display at a Beirut supermarket. CreditKate Brooks for The New York Times Last year, the company sold the equivalent of 200,000 cases of beer in bottles and kegs. With sales in Lebanon and abroad, the company expects to break even for the first time this year. That is no small feat, considering that 961 began after war broke out between Lebanon and Israel in 2006, that the economy still hasn’t fully recovered...

Words: 1151 - Pages: 5

Premium Essay

Management

...Unit Title: Communications in Business 100 Assessment: Critical Essay Company: Pepsi Company Ltd Essay Title: Corporate Environmental Obligation: An examination of the performance of Pepsi Co Student Name: Chomansingh Mareachealee Student Number: 15570501 Semester: 1 2011 Campus: Charles Telfair Institute Tutor’s Name: Sarita Ramanan Tutorial Day and Time: Tuesday (11:30-13:30) GP 4   |   |   |   |   |   |   | Table of content | |   |   | | Content: |   | |   |   | | Introduction | 2 | |   |   | | The case against Pepsi Co and its impact & implication: |   | | |   | | (A) Achieving positive water balance | 2&3 | | (B) Land & Packaging- Moving towards zero landfill | 4 | | (C ) Climate change- reducing the carbon Footprint of operations | 5 | | (D) Protecting Natural resources and health | 6 | | | | |   |   | | The case for Pepsi Co and its impact & implication: |   | | | | | (A) Pesticide controversy in India and Carbon dioxide emission | 7 | | (B) Using Tap water for Bottling | 7&8 | | (C )Health issues and Recycling problem | 8&9 | | | | |   |   | | Conclusion: | 9 | |   |   | | References: | 10&11&12 | |   | Re: Corporate Environmental Obligation: An examination of the performance of Pepsi company Introduction: Modern organizations have high considerations for societal contribution. Nowadays...

Words: 4895 - Pages: 20

Premium Essay

Market Summary of Thums Up

...Gold Spot-orange flavored soda. It was one of the major advertisers throughout the 1980s and in the mid '80s it faced a very short-lived competition from Double Cola other than that it maintained a near monopoly in the market. Then came the liberalization face of India which opened the market for multinationals in many sectors including food and beverages. This step led to the re-entry of global giants Pepsi (1990) and Coca Cola (1993). Thums Up engaged itself in a heavy competition of endorsement with Pepsi and even launched a larger packaging of 300ml and calling it “MahaCola”. This gave Thums Up an edge over Pepsi in the rural area where it was now being reffered as “MahaCola” Coca Cola (1993) re-entered India starting a three-way Cola War with Pepsi and Thums Up. That same year, Parle sold Thums Up to Coca Cola for US$ 60 million. It is assumed by many that Chauhan brothers had lost the interest for a fight against the two...

Words: 1937 - Pages: 8

Premium Essay

Pepsico

...Indian Ethos and Values Ethical Dilemmas faced by Pepsi Co. INSTITUTE FOR INTERNATIONAL MANAGEMENT & TECHNOLOGY, GURGAON SUBMITTED BY: SUBMITTED TO: Swati Khandelwal Ms. Monica Bhardwaj PGPM (2012) (Module Leader) Executive Summary: This assignment is all about the business ethics and ethical dilemma. I have taken a case of PepsiCo. It is a high brand company. When it was heavily criticized about pesticides in soft drink. PepsiCo has to take the decision whether to continuously earn profit and not think about the society, their customer who believes more of that company or to think what can be done under that issue to resolve it, taken as their morale values and ethics into consideration. After study about the decision and their impact I analyses that the decision taken by the PepsiCo at the time of Ethical dilemma and the impact of the company is for the benefit of the society and the Stakeholders. INTRODUCTION Ethics and ethical Dilemma Ethics concern attempt to distinguish ‘right’ from ‘wrong’, ‘good’ from ‘bad’, and what constitutes desirable conduct in a particular set of circumstances (Ghosh, 2006). The concept of ethics comes from the Greek word, “ethos” that means both an individual’s character and a community’s culture. In the...

Words: 2602 - Pages: 11

Premium Essay

Marketing Research Analysis

...[pic] ASSIGNMENT COVER SHEET (INDIVIDUAL OR GROUP) Please complete and attach this form to your assignment. All assignments must be submitted to lecturer on the stipulated submission date. |Name || | |Unit Code |BUS235 |Unit Name |Market Research & Analysis | |Class Code |PT-BUS35G | |Local Lecturer’s name |Ms Mona | |Assignment No. (i.e. 1,2,3) or ‘short answer’ |Assignment 3: Research Report – | | |Final Research Report | Your assignment should meet the following requirements. Please confirm this by ticking ( the boxes before submitting your assignment √ My assignment is double-spaced and clearly legible √ My assignment is written on one side of page only √ I have provided a wide margin (4 cm) on left-hand side of page √ The first page of my assignment is clearly labelled with my name, unit no, unit name and tutor’s name. √ I have retained a copy of my assignment ...

Words: 5134 - Pages: 21

Premium Essay

Starbucks Financial Analysis

...Organization Selected – Starbucks Company Analysis Abstract Starbucks is a publicly traded company that has been a main competitor in the coffee and in the special eatery industries. This document will give a brief description of the company, an Analysis of the economic implications of operating in global markets and different market and industry structures, and an assessment of the impact of ethical and regulatory considerations of Starbucks. It will analyze the macro and micro economic environments and then give a conclusion and recommendation of how the company can improve in the future. Introduction Starbucks Corporation is an American global coffee company and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world. According to their 2012 Annual report, they have 18,066 stores in over 60 countries, including 12,903 in the United States, 1,324 in Canada, 989 in Japan, 851 in the People's Republic of China, 806 in the United Kingdom, 556 in South Korea, 377 in Mexico, 291 in Taiwan, 206 in the Philippines, 179 in Turkey, 171 in Thailand, and 167 in Germany. In addition, Starbucks is an active member of the World Cocoa Foundation (starbucks.com). Starbucks locations serve hot and cold beverages, whole-bean coffee, micro ground instant coffee, full-leaf teas, pastries, and snacks. They have over 30 blends and single origin premium...

Words: 2998 - Pages: 12

Premium Essay

Econ

...MBA6008 Organization Selected – Starbucks Company Analysis Abstract Starbucks is a publicly traded company that has been a main competitor in the coffee and in the special eatery industries. This document will give a brief description of the company, an Analysis of the economic implications of operating in global markets and different market and industry structures, and an assessment of the impact of ethical and regulatory considerations of Starbucks. It will analyze the macro and micro economic environments and then give a conclusion and recommendation of how the company can improve in the future. Introduction Starbucks Corporation is an American global coffee company and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world. According to their 2012 Annual report, they have 18,066 stores in over 60 countries, including 12,903 in the United States, 1,324 in Canada, 989 in Japan, 851 in the People's Republic of China, 806 in the United Kingdom, 556 in South Korea, 377 in Mexico, 291 in Taiwan, 206 in the Philippines, 179 in Turkey, 171 in Thailand, and 167 in Germany. In addition, Starbucks is an active member of the World Cocoa Foundation (starbucks.com). Starbucks locations serve hot and cold beverages, whole-bean coffee, micro ground instant coffee, full-leaf teas, pastries, and snacks. They have over 30 blends and single...

Words: 2999 - Pages: 12

Premium Essay

Nestle

...Course Title: Principals of Marketing (MKT 101) Prepared For Kashfia Ahmed Senior Lecture Department of Business Administration East West University Prepared By Name of Students | ID | * Jahid Hasan Rajib * F M Alif Hossain | 2010-3-13-0592010-2-10-096 | Program : Bachelor of Business Administration (BBA) Semester : Spring-2011 Course Name : Principal of Marketing Course Code : Mkt101 Section : 1 East West University Date of Submission August 4, 2011. EAST WEST UNIVERSITY In writing this term paper, we are extremely indebted to almighty Allah who creates us is this transitory world along with concerned with this Term Paper. It could not possibly thank all of those marvelous people who have contributed a lot of this assignment. There are, of course some very special people who could not go without mention. First of all, we would like to convey our felt gratitude and regards to “Kashfia Ahmed” honorable Senior lecture, Department of Business Administration, East West University whose enthusiastic guidance and help during the entire study period made it possible for us to prepare this report. We are grateful to some prominent authors worldwide whose book I have consulted in the preparation of the assignment. We also thank to our course mates for their advice and comments to the success of the report. Thank You, Jahid Hasan Rajib Id- 2010-3-13-059 On Behalf of the Group September 28, 2012 Kashfia...

Words: 5018 - Pages: 21

Premium Essay

Nestle

...Course Title: Principals of Marketing (MKT 101) Prepared For Kashfia Ahmed Senior Lecture Department of Business Administration East West University Prepared By Name of Students | ID | * Jahid Hasan Rajib * F M Alif Hossain | 2010-3-13-0592010-2-10-096 | Program : Bachelor of Business Administration (BBA) Semester : Spring-2011 Course Name : Principal of Marketing Course Code : Mkt101 Section : 1 East West University Date of Submission August 4, 2011. EAST WEST UNIVERSITY In writing this term paper, we are extremely indebted to almighty Allah who creates us is this transitory world along with concerned with this Term Paper. It could not possibly thank all of those marvelous people who have contributed a lot of this assignment. There are, of course some very special people who could not go without mention. First of all, we would like to convey our felt gratitude and regards to “Kashfia Ahmed” honorable Senior lecture, Department of Business Administration, East West University whose enthusiastic guidance and help during the entire study period made it possible for us to prepare this report. We are grateful to some prominent authors worldwide whose book I have consulted in the preparation of the assignment. We also thank to our course mates for their advice and comments to the success of the report. Thank You, Jahid Hasan Rajib Id- 2010-3-13-059 On Behalf of the Group September 28, 2012 Kashfia...

Words: 5018 - Pages: 21

Premium Essay

Political and Economical Developments Asia Europe

...Political And Economical Developments Asia Europe [Writer Name] [Institute Name] [Date] international managment In this paper, provide a descriptive title or heading for your paper by focusing on topics or countries that interest you (such as “Political and Economical Developments in the Asian or European Systems”), and then discuss the following concepts: 1) Explain in detail why and how the political systems of countries differ; 2) discuss how the legal systems of countries differ; 3) explain what determines the level of economic development of a nation; 4) discuss with examples the macro-political and economic changes taking place worldwide; and 5) analyze how transition economies are moving towards market based systems. You can use specific continents, countries, or country as your focus. Political And Economical Developments Asia Europe There has been of course many changes since 1989. To understand this we should analyze how the situation before the revolution. Before 1989 there was no political freedom. There were elections, but there was only one candidate, down from the city councils up to the MPs, all of them were nominated by an almighty party. The most powerful man was not president, neither Prime minister, but the leader of the party. He was also responsible to the leader of the party in USSR. There was no freedom of religion; every priest had to be issued a special admission to work as one. The Bishops were nominated, the orders were denied. People were not allowed...

Words: 4916 - Pages: 20

Premium Essay

Mgt 498

...growth. This rapid growth was attributed to three pioneers sectioning off the country into territories and selling bottling rights to local entrepreneurs. Their combined efforts attributed to advancements in bottling technology which improved efficiency and product quality. "By 1909, nearly 400 Coca-Cola bottling plants were operating, most of them family-owned businesses. Some were only open during hot-weather months when demand was high" (Coca-Cola, 2004). During the 1920's and 1930's Coca-Cola began its international expansion led by Robert W. Woodruff, who was the Chief Executive Officer and Chairman of the Board. Coca-Cola plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy and South Africa. "By the time World War II began, Coca-Cola was being bottled in 44 countries" (Coca-Cola, 2004). These two different periods of time were when Coca-Cola experienced its most crucial rapid change due to bottling innovation and company expansion. GLOBALIZATION Beginning in the 1920's building their global network,...

Words: 3718 - Pages: 15