Courtney Lee Cola Wars 1) Why, historically, has the soft drink industry been so profitable? The increase in available concentrate flavors upped the desirae for soft drinks. Accessing more channels (vending machines, fast food chains, markets, etc.) Advertising budgets increase. 2) Compare the economics of the concentrate business to that of the bottling business: Why is the profitability so different? * Sales strategies for pepsi and coke/big companies is via direct delivery as opposed
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CASE STUDY: COLA WARS 1. Why, historically, has the soft drink industry been so profitable? PORTER analysis: Soft drink industry Rivalry: HIGH: Exhibit 2 shows that in 2004, 95% of case volume is done by 4 companies (Pepsi: 31,7%, Coke:43,1%). Therefore rivalry is very strong and extremely concentrated. Buyer (=retailers): LOW: stores like Walmart need coke and pepsi to get profit. It represent 5,5% of their sales. Consumers are fan of Coca or Pepsi. So, Why changes? Supplier: LOW: main raw
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Tractor Co Komatsu Ltd. Crown Cork and Seal Apple Inc. in 2010 Cola Wars continue: Coke and Pepsi in 2006 Google Inc. Nucor at Crossroad Caterpillar Tractor Co Komatsu Ltd. Crown Cork and Seal Apple Inc. in 2010 Seminar guidelines 1. Each student has 20 minutes for presentation. You are required to provide a Powerpoint presentation (please download your Powerpoint file before presentations start) 2. Presentation must be organized as follows: - first, a summary of the case must be given; then - answer
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Cola War 1. Why, historically, has the soft drink industry been so profitable? First, high entry barrier. Both of them have long history and large investment in advertisements which make Coke and Pepsi become the culture symbol of America. And their franchise system gets large economies of scale for them. Second, limited competition. In CSD industry, Coke and Pepsi are the main competitors. They claimed a combined 72% of the US CSD market’s sales volume in 2009. Third, their fixed customers
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1. Why historically, has the soft drink industry been so profitable? An industry analysis through Five Forces Model reveals that the market forces are favorable for the profitability: a. Bargaining Power of Suppliers: Since the primary inputs for CSD industry are sugar, sweeteners, color and packaging (bottles and cans), the suppliers of these raw materials have less bargaining power against the concentrate producers (CPs) and bottlers. i. Sugar: Sugar can be obtained from various sources on an
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flavored carbonated soft drink (CSD) market. In 2007 he held a market share of the US CSD market. And this share had been steadily growing year to year. The company is also a leader in the non-CSD drink category that comprises ready to drink tea, juice, juice drinks, enhanced water, drink concentrates and mixer categories. In addition to these beverages, the company also manufactures Mott’s apple sauce. Why Dr Pepper Snapple Group, Inc. is considering introducing a new energy drink? There are several
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class by remarking that John Connelly ran Crown Cork & Seal for over 30 years and followed essentially the same strategy for the entire period. The total return to shareholders over the 32-year period was just under 20% compounded. Now that Connelly has stepped down as CEO and given control to William Avery, is it finally time for a change? I begin by asking what are the key strategic issues facing Avery in the summer of 1989. Question 1. What are the key strategic issues that Avery needs to
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Executive Summary of the board PepsiCo has had consistently positive financial results in a very competitive and price sensitive marketplace. We believe that the company is well positioned to continue to meet its sales and revenue targets while maintaining profit margin. However, we think that in order to remain ahead of our competitors, our investment looking forward needs to be in our greatest asset, our employees. The introduction and roll out of the balanced scorecard method to create an individually
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Breaking Down the Chain: A Guide to the soft drink industry aCknowleDgments this report was developed to provide a detailed understanding of how the soft drink industry works, outlining the steps involved in producing, distributing, and marketing soft drinks and exploring how the industry has responded to recent efforts to impose taxes on sugar-sweetened beverages in particular. the report was prepared by sierra services, inc., in collaboration with the supply Chain Management Center (sCMC) at
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.......................................................................................... 6 Relevance of the Study ................................................................................................................................. 6 Why Coca-cola .............................................................................................................................................. 7 Objective of the Study ......................................................................
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