1. Why is the soft drink industry so profitable? An industry analysis through Porter’s Five Forces reveals that market forces are favorable for profitability. Defining the industry: Both concentrate producers (CP) and bottlers are profitable. These two parts of the industry are extremely interdependent, sharing costs in procurement, production, marketing and distribution. Many of their functions overlap; for instance, CPs do some bottling, and bottlers conduct many promotional activities. The industry
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in these countries. On the hand, Pepsi Cola was founded in 1893. Following footsteps of coke, Pepsi also adopted franchise bottling system. Overcoming financial and legal hurdles around 1940’s Pepsi became second largest selling carbonated soft drink brand. In 1965 PepsiCo was formed through the merger of Pepsi and snack food giant Frito-Lay to exploit the non-CSD industries. With further successful merger and acquisitions with small and medium scale industries like Tropicana, Quaker Oats to name
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The Coca-cola is a carbonated soft drink or beverage which was originally invented or intended as a patent tonic medicine in 1886. It has served not only as a beverage but also as a cure for many diseases, including morphine addition, dyspepsia, neurasthenia, headache and impotence.Coca-cola or previously known as Yum Yum and Koke, is today the biggest beverage maker to the world for the last couple of years.Coca Cola as a brand has been distinct to such an extent that it houses across 80 brands
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(other energy beverage) while at the same time preserving profitability and its customer base. Insights from the Dr Pepper Snapple Inc The energy drink experience, based on the data in the report of the marketing division, reveals the following: 1. It is the fourth largest non-alcoholic beverage category, after carbonated soft drinks, sport drinks, and bottled water, but the
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Discussion Questions 1. Why, historically, has the concentrate sector of the soft drink industry been so profitable? The concentrate sector of the soft drink industry has been very profitable because of low capital investment and maintenance costs. Moreover, it has relatively low COGS compared to other sectors in the industry. These producers also have more negotiating power with both the buyers and the suppliers. To add more, this is also because concentrate business can avoid fixed operating
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FINANCIAL INFORMATION ANALYSIS Business Policy Analysis Application Exercises Question 3 One of the fastest growing industries is the memory chip industry, which supplies memory chips for personal computers and other electronic devices. Yet the average profitability has been very low. Using the industry analysis framework, list all the potential factors that might explain this apparent contradiction. Concentration and Balance of Competitors • The concentration of the memory chip
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Pepper Snapple Group, Inc. – Memo of Recommendation Strategic Issue Energy beverages in 2006 were the fourth largest nonalcoholic beverage category in the United Sates after carbonated soft drinks (CSD), bottled water, and sport drinks. Currently the company sells ready-to-drink tea, juice, juice drink, and mixer categories. The main issue is Dr Pepper Snapple sells four categories which are not among the top four. Therefore, they are missing out on a huge opportunity in the market. It would be
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market and to analyze the results in order to gather data to generate recommendations on the strategic marketing of the company. The research will survey a sample of 1,000 people in the US different by age, income, location and personal preferences for drinks. The population will be selected randomly by a computer by using the grocery store loyalty programs members as reference. The extent of the research is wide enough to ensure that the survey will give us a framework of the feelings towards the healthy
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MANAGERIAL RESPONSE TO THREATS Threat of new entrants Barriers to 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
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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
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