Dr Pepper Snapple Group Energy Drink Case Study

In: Business and Management

Submitted By Samueljk
Words 1334
Pages 6
MARKETING


CASE NO. 1
DR PEPPER SNAPPLE GROUP, INC.
ENERGY BEVERAGES




Definition of the problem
The Dr Pepper Snapple Group, Inc. senior company management has developed a corporate strategy to target high-growth and high-margin beverage businesses. The firm is the only major domestic nonalcoholic beverage company in the US without a significant branded energy drink of its own while this beverage market is the fastest growing category. Dr Pepper Snapple group needs to determine if a market opportunity exists to introduce its own, new energy drink brand. In order to effectively evaluate the benefits of entering the energy beverage market, the company needs to identify a consumer group where a favorable opportunity exists, and develop a brand differentiation strategy that effectively appeals to that market.
Alternatives
1. The company may choose to remain inactive in the energy drink market. The company has a significant market share in the carbonated soft drink (CSD) segment and participates in other major beverage markets as well. The company achieves strong operating margins and stable cash flows from other businesses. Choosing not to enter the energy drink market is unlikely to impact the company’s performance in these other successful businesses.
2. The company may choose to introduce a new energy drink brand to the market. This alternative would expose the company to the fastest growing and fourth largest nonalcoholic beverage category in the United States (in 2006). The company’s objective would be to achieve profitable growth using this approach.
Evaluation of alternatives
For evaluation, a SWOT analysis is used to indicate the firm’s strengths, weaknesses, opportunities, and threats.
The company’s strengths:
1. Dr Pepper Snapple Group, Inc. owns a diverse portfolio of well-known CSD and non-CSD brands.
2. The company…...

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