1.Do a complete five-forces analysis of competition in the global alternative drink industry, then tell me which of the five competitive forces is strong, weak, and why.
Especially in the force of rivalry (one of the 5 forces), you must identify the market size, growth rate, profit margins, what are the main categories in the alternative drink industry, who are the major competitors and their relative sizes, the competition scope, the main competition weapons)
2. Briefly identify 6 to 7 key success factors in the alternative drink industry
3.What are the other economic traits that are outside the industry but still can affect all competitors (for example, overall economy trend, long term innovation, globalization, maturity stage of the industry, relevant legislation, etc.)? Briefly explain how these factors can affect the industry.
What are the strategically relevant components of the global and U.S. beverage industry macro-environment? How do the economic characteristics of the alternative beverage segment of the industry differ from that of other beverage categories? Explain.
The strategically relevant components of the global and U.S. beverage industry macro-environment: • Global beverage companies such as Coca Cola and PepsiCo had relied on such beverages to sustain in volume growth in mature markets where consumers were reducing their consumption of carbonated soft drinks. • Coca-Cola, PepsiCo, and other beverage companies were intent on expanding the market for alternative beverages by introducing energy drinks, sports drinks, and vitamin drinks in more and more emerging international markets. • Beverage producers had made various attempts at increasing the size of the market for alternative beverages by...
...Competition in Energy Drinks, Sports Drinks, and Vitamin-Enhanced Beverages
June 17, 2013
Three Musketeers: Anatalio, John Patrick
Cadao, Ana Graciela
Sanchez, Maria Leona
1. What are the strategically relevant components of the global and U.S. beverage industry macro-environment? How do the economic characteristics of the alternative beverage segment of the industry differ from that of other beverage categories? Explain.
SEGMENTATION: The global market for alternative beverages was divided by product type (sports drinks, energy drinks, and vitamin-enhanced beverages) with different demands for each group. Sports drinks accounted for nearly 60% of alternative beverage sales in 2009, while vitamin-enhanced drinks and energy drinks got about 23% and 18% of 2009 alternative beverage sales, respectively, in the US.
RIVALRY: The worldwide competition between three major producers (PepsiCo, Coca-Cola and Red Bull) made the industry rivalry become global. In U.S., Pepsico has engulfed almost half or 47.8% of the market shares last 2009. The only region where Coca-Cola beats Pepsico is in Asia-Pacific. Coca-cola has 13.7% of the market shares while Pepsico has 12.4%. Worldwide, Pepsico is still...
.... Soft DrinkIndustry Five Forces Analysis:
Soft drinkindustry is very profitable, more so for the concentrate producers than the bottler’s. This is surprising considering the fact that product sold is a commodity which can even be produced easily. There are several reasons for this, using the five forces analysis we can clearly demonstrate how each force contributes the profitability of theindustry.
Barriers to Entry:
The several factors that make it very difficult for the competition to enter the soft drink market include:
Bottling Network: Both Coke and PepsiCo have franchisee agreements with their existing bottler’s who have rights in a certain geographic area in perpetuity. These agreements prohibit bottler’s from taking on new competing brands for similar products. Also with the recent consolidation among the bottler’s and the backward integration with both Coke and Pepsi buying significant percent of bottling companies, it is very difficult for a firm entering to find bottler’s willing to distribute their product.
The other approach to try and build their bottling plants would be very capital-intensive effort with new efficient plant capital requirements in 1998 being $75 million.
Advertising Spend: The advertising and marketing spend (Case Exhibit 5 & 6) in the industry is in 2000 was around $ 2.6 billion (0.40 per...
...Leslie Pesarchick, & Kelly Ziegler
Strategic Management in a Global Context
February 22, 2006
IndustryAnalysis: Soft Drinks
Barbara Murray (2006c) explained the soft drinkindustry 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 drinkindustry, 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 drinkindustry. The market size of this industry has been changing.
Soft drink consumption has a market share of 46.8% within the non-alcoholic drinkindustry,
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...
...health-conscious consumer. At Nike, our goal has always been to give consumers what they want now, as well as to anticipate their future tastes, and to thus tailor our strategy to accommodate those tastes. We have recognized an unfilled market potential in the non-carbonated energizing sports drink arena, thus developing an entirely new product category.
Our branding strategy is to enter the market by carving a new niche of protein-enriched energizing sportsdrinks. Our objective is to educate consumers about the new drink, as well as to make a profit and gain market share in the industry. We hope that by being market leaders, our name will become synonymous with the new drink category, and will aid in our sustaining a competitive advantage over the copy-cats that are sure to flock the market after the new products’ introduction and subsequent success.
Our primary target market is 18-34 year old females who will use our sports drink whenever they needed a boost: at work, in the gym, or just when they felt like it. The secondary target market is 18-34 year old males who fall into much the same socio-cultural and economic category as the primary target market. The Nike Motion energy drink will be positioned as a high-end item, costing $2 per environmentally-friendly can. It will come in a variety of fruit flavors and will boast the replenishment of electrolytes and other...
...What are the strategically relevant components of the global and U.S. beverage industry macro-environment? How do the economic characteristics of the alternative beverage segment of the industry differ from that of other beverage categories? Explain.
The strategically relevant components of the global and U.S. beverage industry macro-environment are Market Size, Market Growth, Markets Segmentation, and Intensity of Rivalry.
The beverage industry serves an incredible large market. In 2009 alone, the beverage market consumed more than 458 million liters of beverage, resulting in over $1.58 trillion in sales for the industry. Although there is a declining trend in the consumption of carbonated soft drinks in the United States, as of 2009, carbonated soft drinks still accounts for the lion share of the U.S. beverage market with 48.2% of the market; while bottle water and fruit juice account for 29.2% and 12.4%, respectively. The remaining market space was occupied by the alternative beverages segment, which includes sports drinks, flavored or enhanced water, and energy drinks with 4.0%, 1.6%, and 1.2%, respectively
While U.S. beverage market saw a decline of 2.1% and 3.1% for the years 2008 and 2009, respectively, due in large part to the economic recession, the global market dollar value as...
1. Industryanalysis (1.5%):
What is the driving forces changing the luxury handbags and leather accessories industry globally?
Defining luxury goods is the key to answering this question, they are items not considered essential to the consumer and are often associated with affluence and abundance. Coach belongs to the luxury handbags and leather accessories industry. In order to afford luxury goods, one has to be affluent and abundant, which makes the economic force a key driving force in this industry. The increasing incomes and wealth in the emerging markets such as Eastern Europe and Asia has driven the growth for luxury goods internationally.
The other key driving force in the luxury goods industry is the changing consumption habits of consumers. The growing segment of consumers in luxury goods earn substantially less than traditional ones (those who earn 300,000 or better), but they still desire products with superior quality and styling. This is due to the effectiveness of television advertising and programming. The other factor being that middle income household would like to rewards themselves with luxuries for their hard work.
Effective pricing strategy also contributed to the industry. Big box discounters such as Walmart and Target allow consumers to buy necessities at very low prices then spend lavishly on extravagances such as luxury goods. All in all,...
...II – IndustryAnalysis
2.1 Industry Description
This industryanalysis will aid in researching the industry which is the Snack Food industry. We can also determine how the company will compete in the industry.
2.2 Industry Trends
The progressively improved Philippine economy towards 2012 and 2013 was seen to benefit sweet and savoury snacks. Also, the higher purchasing power translated into greater purchasing ability even for more expensive sweet and savoury snacks, allowing greater room for numerous product launches.
In the present years, factors such as current trends, cultural trends, health factors and physiological factors ensure that the high demand for finger foods will remain constant.
1. Current Trends- “Hot/Spicy Flavours “Heat Up” the Market within sweet and savoury snacks, manufacturers are introducing new products aimed at consumers’ increasing affinity for hot/spicy flavours. In April 2011, for instance, Frito-Lay partnered with the Tapatio hot sauce brand to release Tapatio-flavoured Doritos, Fritos, and Ruffles chips/crisps (tortilla, corn, and potato, respectively). The company also launched its Cheetos Crunchy Fiery Fusion line in 2011, while other manufacturers worked with major hot sauce companies like McIlhenny Co (Tabasco brand) to produce spicy-flavoured snacks. This trend follows what we have seen in related...