...Industry Analysis: Soft Drinks Meghan Deichert, Meghan Ellenbecker, Emily Klehr, Leslie Pesarchick, & Kelly Ziegler Strategic Management in a Global Context February 22, 2006 Industry Analysis: Soft Drinks Barbara Murray (2006c) explained the soft drink industry by stating, “For years the story in the nonalcoholic sector centered on the power struggle between…Coke and Pepsi. But as the pop fight has topped out, the industry's giants have begun relying on new product flavors…and looking to noncarbonated beverages for growth.” In order to fully understand the soft drink industry, the following should be considered: the dominant economic factors, five competitive sources, industry trends, and the industry’s key factors. Based on the analyses of the industry, specific recommendations for competitors can then be created. Dominant Economic Factors Market size, growth rate and overall profitability are three economic indicators that can be used to evaluate the soft drink industry. The market size of this industry has been changing. Soft drink consumption has a market share of 46.8% within the non-alcoholic drink industry, illustrated in Table 1. Datamonitor (2005) also found that the total market value of soft drinks reached $307.2 billion in 2004 with a market value forecast of $367.1 billion in 2009. Further, the 2004 soft drink volume was 325,367.2 million liters (see Table 2). Clearly, the soft drink industry is lucrative with a potential for high profits, but there are several...
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...Cola Wars Continue: Coke and Pepsi Case Analysis 1. Soft Drink Industry (SDI) overview The industry considered in this analysis is Soft Drink Industry (SDI). SDI serves customer needs for refreshing and cold non-alcoholic beverages, with main industry sectors being: carbonated drinks, fruit punches, and bottled water sectors. There are three dominant companies in the industry, namely: Coca-Cola, Pepsi, and Schweppes. The soft-drink industry includes the following four major types of participating companies: • Producers of syrups and concentrates, • Bottlers, • Retail channels, and • Suppliers. 2. Porter’s Five Forces Analysis of the Soft Drink Industry (SDI): Soft Drink industry’s Carbonated Drink sector is 66 billion industry in US alone. Soft Drink industry remains very profitable, with pre-tax profits of 30% and 9% for concentrate producers and bottlers respectively. The following five forces analysis will attempt to show factors contributing to the profitability in the industry. Risk of entry by Potential Competitors: It is difficult for new entrants to enter the market because of few factors: First, in order to produce soft drinks a new company would have to have bottling or some other kind of packaging capacities or contracts with bottlers or packagers. To build a new bottling plant is very capital intensive and to enter in a contract with existing bottlers is difficult if not prohibited by the Coca-Cola and Pepsi’s agreements with existing bottlers. Because it...
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...oca Cola War Case Study Cola Wars Continue: Coke and Pepsi Case Analysis 1. Soft Drink Industry (SDI) overview The industry considered in this analysis is Soft Drink Industry (SDI). SDI serves customer needs for refreshing and cold non-alcoholic beverages, with main industry sectors being: carbonated drinks, fruit punches, and bottled water sectors. There are three dominant companies in the industry, namely: Coca-Cola, Pepsi, and Schweppes. The soft-drink industry includes the following four major types of participating companies: • Producers of syrups and concentrates, • Bottlers, • Retail channels, and • Suppliers. 2. Porter’s Five Forces Analysis of the Soft Drink Industry (SDI): Soft Drink industry’s Carbonated Drink sector is 66 billion industry in US alone. Soft Drink industry remains very profitable, with pre-tax profits of 30% and 9% for concentrate producers and bottlers respectively. The following five forces analysis will attempt to show factors contributing to the profitability in the industry. Risk of entry by Potential Competitors: It is difficult for new entrants to enter the market because of few factors: First, in order to produce soft drinks a new company would have to have bottling or some other kind of packaging capacities or contracts with bottlers or packagers. To build a new bottling plant is very capital intensive and to enter in a contract with existing bottlers is difficult if not prohibited by the Coca-Cola and Pepsi’s agreements with existing...
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...INDEX Contents | Page Number | * Executive Summary * Problem Definition * Case Issue * Industry Analysis * Environmental Trends * Macro Factors * Competition and Competitors * Industry Trends * Customer Analysis * SWOT Analysis * Recommendations * Implementation Plan | 2334557881011 | EXECUTIVE SUMMARY: History: The company was started in 1783 in London as the world’s first soft drink maker. In 1880s Schweppes expanded worldwide and in 1960s the company diversified into food products. In 1969 Schweppes merged with Cadbury which was a cocoa making business started in England in the 1830s. Year | Acquisition | 1986 | Canada Dry soft drink brands | 1989 | Certain soft drink brands and purchased Gini brand of Belgium. | 1989 | Crush brand from Procter & Gamble for $220 million. | Cadbury Beverages, Inc., a beverage division of Cadbury Schweppes PLC acquired the Procter & Gamble brands namely Crush, Hires and Sun-drop in the year 1989. They had to re launch those brands into the market because those products were paced out by their competitors. This case especially deals with the Crush brand(an orange drink). Kim Feil who joined the division in 1989 as a Senior Product Manager for managing the re launch of Crush soft drink brand. There had been a lot of discussions regarding the crush brand. After making a thorough industry review, competitors positioning and the image which Crush has on its customers mind the senior marketing...
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...Competition in the Soft Drink Industry: Case Study of Coca-Cola, Pepsi, and Dr. Pepper Krisadee Rungsatcha MBA 500: Essentials of Business Management June 23, 2013 Larry Frazier Abstract The beverage industry nowadays is very competitive. Each brand pushes all strategies to be the number one in the market and try to win more consumers and achieve their goals. The main competitors in these industries are Coca-Cola Company, PepsiCo, Inc., and Dr. Pepper Snapple Group. Coca-Cola is the largest beverage company in this market and provides the most market share that PepsiCo, Inc. PepsiCo is the second leading company, and Dr. Pepper Snapple Group is the third leading company in soft drink beverage industry. This paper presents three main competitors and focuses on competitive strategies, market strategies, and overall strength of the companies. Also, it discusses a recommendation to improve the Coca-Cola Company’s competitive position. Company Summaries Coca-Cola Company. The Coca-Cola Company is the largest beverage company in the world. The Coca-Cola Company is the leader in the market of nonalcoholic beverages and owns market shares than 500 beverage brands, including sparkling drinks, juice drinks, ready to drink, teas, coffees, and energy drinks, such as vitamin water and Powerade. The Coca-Cola Company also owns the leading brands of the diet and light beverage market, such as Diet Coke and the top five soft drinks: Fanta and...
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...Marcela Beas Dr. Pepper Snapple Group March 5th, 2013 Current Situation Analysis Mission/Vision Statement The Dr. pepper Snapple Group fuses its vision and mission statements saying, “At Dr. Pepper Snapple Group, it is our vision to be the best beverage business in the Americas. Our brands have been synonymous with refreshment, fun and flavor for generations, and our sales are poised to keep growing in the future.” This stamen is straightforward and informatively average. It establishes the company’s goal and core values. Also, it highlights DPS’ interest in future sales growth. The company includes its business strategy stating that it focuses on building and enhancing leading brands, pursuing profitable channels, packages and categories, leveraging an integrated business model, strengthening routes to markets, and improving operating efficiency (Dr. Pepper Snapple Group). External Analysis Government policies and regulations affect business development and growth. Products have to be consistent with the USDA’s dietary guidelines and adhere to the FDA’s standards for health claims. Due to the current post-recession economy, growth is expected to be slow since existing demand patterns are expected to change as consumers become more health conscious. Moreover, global awareness and concern regarding the impact of climate change continues to be a focal point as business seek to achieve better business in terms of reduced cost and risk while achieving positive impact on...
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...HABITS IN SOFT DRINKS INDUSTRY Research Proposal : Scope of introduction of a lemon-lime soft drink a local soft drink firm. The product would to be positioned as a “change of pace” soft drink to be consumed by all soft drink users, including heavy cola drinkers. Objective definition: The objectives of this research are: * We have to find out the perception and the expectations of the existing consumers from the soft-drink industry. * To analyze whatever the factors that will affect the introduction of this new soft drink in the market including the target audience , competitors etc. * To implement the research methodology and research design in order to gather and understand the data received. Research objective: The objective of the research is to understand the concept of the introducing the lemon-lime soft drink in the market by perceiving its idea of methodology, sampling plan, time and cost. Background of the soft drink industry: The 50-bn-rupee soft drink industry is growing now at 6 to 7% annually. In India, Coke and Pepsi have a combined market share of around 95% directly or through franchisees. Campa Cola has a 1% share, and the rest is divided among local players. There are two distinct segments of the market, cola and non-cola drinks. The cola segment claims a share of 62%, while the non-cola segment includes soda, clear lime, cloudy lime and drinks with orange and mango flavours. Soft and aerated drinks were considered...
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...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...
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... Abstract This paper is a strategic analysis of The Coca-Cola Company (Coca-Cola), a leader in the beverage industry. Coca-Cola, the world’s leading soft drink maker, operates in more than 200 countries and owns or licenses more than 500 brands of nonalcoholic beverages. The company faces challenges in today’s market because of market changes, socio-economic changes and globalization. An external analysis of the soft drink industry is performed to understand the impact of environment. An internal analysis of Coca-Cola is performed to understand the internal capabilities. The conclusion of this case study emphasizes that the company needs to reduce its dependence on carbonated beverage and diversify its product portfolio into the noncarbonated sector to remain competitive. 2 Table of Contents Abstract .............................................................................................................................. 2 Section 1: Introduction ................................................................................................... 5 1.1 1.2 1.3 Mission and Objectives ........................................................................................ 6 Past and Present .................................................................................................... 7 Products and Competency .................................................................................. 11 Section 2: Internal Analysis...
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...SUMMARY Introduction p.2 I- The carbonated soft drink industry in the US - Industry structure p.4 - Industry economics p.5 - Brands & Products p.6 - Consumption behavior p.7 II- Changes in the orange category during the period 1985-1989 - Orange category p.8 - Relation between market share & market coverage p.11 - Relation between market share & advertising share p.13 - Brands positioning p.15 III- Cadbury competitive position in the US - Swot analysis p.16 IV- Crush Positioning p.18 V- Crush advertising & promotion program - Objectives & strategies p.18 - Advertising budget p.19 - Crush advertising budget p.20 VI- Crush Pro forma Income statement p.20 VII- Conclusion p.21 Sides p.22 INTRODUCTION Cadbury Beverages, Inc. is a beverages-manufacturing division of Cadbury Schweppes PLC. It was created in 1969 by a merger of Schweppes PLC (1783, London, the first world’s soft drink maker) and Cadbury (1830, Birmingham, a major British confectionery manufacturer). In 1989, the Cadbury Schweppes PLC was one of the world’s largest multinational companies and the world’s third largest soft drink marketer (behind Coca-Cola and PepsiCo), with worldwide sales of $4.6 billion, performed in 110 countries. Beverages accounted for 60 percent of company sales and 53 percent of its operating income...
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...entry: It is very common that the existing company in a industry will set the barrier to the new entrants. Because these new entrants might become the strong potential competitors in the future and take away large profit from the existing company. For these new entrants, they will carry out pretty attractive competition and use better financial strength to seize current and potential market. These moves will lower the benefits of existing business and the return of investment. To prevent this situation happen, Coca-Cola will set different barriers to discourage the potential entrants. I will discuss other enter barriers. Product differentiation One of the most important factors to determine whether a business can be successful is whether they have the compared advantages. It is very important to use the differentiation strategy to make your products known by the customers. Products that easy to remember and recognize by the customers are different from others. This difference can be the service of the company, the high quality, the name of brand. All of these characteristics will set up the customers loyalty in the market. Under the advantage of differentiation strategy, even though the new entrants maybe try their best to attract the customers with lower prices or other things, they may still suffer a loss in profit because the loyalty of the customers. Capital requirement Whenever and wherever people decide to entry a industry, he has to have enough capital recourses to support...
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...BUSINESS INSIGHTS Future Flavor Trends in Soft Drinks New opportunities for natural, healthy, and exotic flavors New Ingredients Report - Published November 2008 Importance of health trends in the drinks industry over the next 5 years Source: Future Flavor Trends in Soft Drinks Key questions answered by this report... • • • • • • What are the key emerging trends and opportunities in soft drinks flavors? Which drinks and flavor manufacturers drive innovation in this area? What are the most common and fastest growing flavors in the soft drinks categories? Which new product launches featured emerging flavors and how were they marketed? What are the top flavors in new products claiming to be natural, organic or high in antioxidants? Which drinks industry trends within health and indulgence do industry executives consider the most important? Identify and anticipate the key innovation trends and new product opportunities in soft drinks flavors with this new management report... Business Insights’ Ingredients Series Business Insights is developing a unique new series of reports that identifies key trends in ingredients, future innovation and growth opportunities. We are using our strengths in analysis of the food and drinks markets to provide new insight on developments in ingredients. Ingredients companies are facing a new set of challenges as ongoing consumer demand for healthy and indulgent products creates both new growth opportunities and commercial pressures...
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...Collection Method 5 Sampling Techniques 5 Task1-B 6 Secondary Research Plan 6 Size of the market & Market structure 6 Competitors and their market share 7 Task 2 8 Summary of Collected Data and research findings 8 Data analysis 9 Study of correlation 9 Task 3 10 Report to senior manager 10 Health and wellness issues in the beverage industry 11 Task 4 14 Project Plan for the development of a new product 14 Resource Allocation 15 Project Costing 15 Business Analysis on the projected revenue and cash flow 16 Conclusion 17 References 17 Appendix 18 Introduction Star Bottling and packaging company is a medium sized business which is working for years in the UK market. Recently Star has decided to follow the diversification growth strategy by introducing a new product in a new market. The opportunity exists outside the current market. The beverage industry of UK is highly attractive and Star is planning to launch new drinks in the UK market. As the coordinator of the new product development it is important to analyze the customer profile and the customer preference and the consumer buying behavior and attitude about the soft drinks. This report focuses on data collection about the UK beverage industry, the current trends in the market, the major competitors and the size and...
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... Abstract This paper is a strategic analysis of The Coca-Cola Company (Coca-Cola), a leader in the beverage industry. Coca-Cola, the world’s leading soft drink maker, operates in more than 200 countries and owns or licenses more than 500 brands of nonalcoholic beverages. The company faces challenges in today’s market because of market changes, socio-economic changes and globalization. An external analysis of the soft drink industry is performed to understand the impact of environment. An internal analysis of Coca-Cola is performed to understand the internal capabilities. The conclusion of this case study emphasizes that the company needs to reduce its dependence on carbonated beverage and diversify its product portfolio into the noncarbonated sector to remain competitive. 2 Table of Contents Abstract .............................................................................................................................. 2 Section 1: Introduction ................................................................................................... 5 1.1 1.2 1.3 Mission and Objectives ........................................................................................ 6 Past and Present .................................................................................................... 7 Products and Competency .................................................................................. 11 Section 2: Internal Analysis...
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...Coke Zero SWOT Analysis Monessa Catuncan Trident University International SLP 1- Segmentation and Targeting Product/Brand Analyzed/Corporate Background- Since Coke Zero was first introduced to the US market in 2005, the soda drink has brought numerous accolades and profits to its parent company, Coca Cola. Coke Zero is a low-calorie variation of Coca Cola made to have the “real Coke flavor” without any of the adverse ingredients (The Coca-Cola Company.com, n.d.). While Coke Zero had a rough beginning, the product has since boomed into one of the most successful beverages out of the Coke brands. Coke Zero currently markets under the Coca Cola Enterprises NYSE symbol (CCE) and the product is sold in 130 countries around the world with its strongest markets currently being North America and Europe. The beverage’s sales numbers have increased by double-digits every year since 2006 with no signs of slowing (McWilliams, 2010). According to the last two Coca Cola Company Form 10Ks, Coke Zero saw continued success with its sales increasing by 15 percent in 2010 and 11 percent in 2011. The company’s profit margin and market share has also increased through its newest soda beverage. Since 2005, Coca Cola Enterprise’s profit margin has held around sixty-percent, and its market share averaged about $3.00 per share with a spike above $5.00 in 2010. CCE’s cost structure primarily focuses on variable products such as syrup, artificial sweeteners, and metal for its cans...
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