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    Expected Retaliation From Existing Bottlers/concentrate Manufacturer (Reducing The Price of Bottle/concentrate)

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    Kowshik Moyya
    The CSD industry faces both opportunities and threats to profitability. Factors that could increase profits include introducing more non-cola drinks to capture health-conscious customers, strong synergy among stakeholders, and expanding into overseas markets. However, factors that could decrease profits are local competition abroad, consumer health concerns about CSDs, the threat from large retailers, not catering to local tastes globally, reduced CSD consumption in the US, and regulatory issues. The industry must navigate these forces to maximize long-term profitability.

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    Expected Retaliation From Existing Bottlers/concentrate Manufacturer (Reducing The Price of Bottle/concentrate)

    Uploaded by

    Kowshik Moyya
    27 views4 pages
    The CSD industry faces both opportunities and threats to profitability. Factors that could increase profits include introducing more non-cola drinks to capture health-conscious customers, strong synergy among stakeholders, and expanding into overseas markets. However, factors that could decrease profits are local competition abroad, consumer health concerns about CSDs, the threat from large retailers, not catering to local tastes globally, reduced CSD consumption in the US, and regulatory issues. The industry must navigate these forces to maximize long-term profitability.

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    The CSD industry faces both opportunities and threats to profitability. Factors that could increase profits include introducing more non-cola drinks to capture health-conscious customers, strong synergy among stakeholders, and expanding into overseas markets. However, factors that could decrease profits are local competition abroad, consumer health concerns about CSDs, the threat from large retailers, not catering to local tastes globally, reduced CSD consumption in the US, and regulatory issues. The industry must navigate these forces to maximize long-term profitability.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    27 views4 pages

    Expected Retaliation From Existing Bottlers/concentrate Manufacturer (Reducing The Price of Bottle/concentrate)

    Uploaded by

    Kowshik Moyya
    The CSD industry faces both opportunities and threats to profitability. Factors that could increase profits include introducing more non-cola drinks to capture health-conscious customers, strong synergy among stakeholders, and expanding into overseas markets. However, factors that could decrease profits are local competition abroad, consumer health concerns about CSDs, the threat from large retailers, not catering to local tastes globally, reduced CSD consumption in the US, and regulatory issues. The industry must navigate these forces to maximize long-term profitability.

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    © All Rights Reserved
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    of 4

    New Entry

    - Setting up Concentrate manufacturing process costs little capital, but high investment - Challenge with respect to building synergy with stakeholder such as bottlers, concentrate
    required in bottling setups: High manufacturer and retailers: Medium
    - costs for advertising, promotion, market research, and bottler support borne by - international operations encountered several obstacles, including antitrust regulation, foreign
    concentrate manufacturer and bottlers: Medium exchange controls: Low
    - Initial investment in trademarks: High - Expected retaliation from existing bottlers/concentrate manufacturer (reducing the price of
    bottle/concentrate)

    Power of Suppliers
    - Fast-food restaurants, contributing to fountain sales:
    High Industry Competitions Power of Customers
    - Sugar and syrup providers, main ingredient for colas:
    Medium - 3 Players captured 88% market share in US: High - Non-cola CSDs included lemon/lime, citrus, pepper-
    - concentrate producers with their prices to bottlers: High - Declining liquid consumption in US past 2 years: High type, orange, root beer, and other flavors (can play
    - Bottlers, since they control DSD delivery: High - Declining CSDs market share: High pepsi or coke against other vendors )- Buyers have
    - shelf space charges by walmart and other retailers: - Using its Distribution prowess Pepsi and Coca Cola so many options can switch easily: High
    Medium outstripped competing brands even in new portfolio - Growing healthy drinks’ demand : High
    - The rapid growth of the mass-merchandisers, led by (H20): ?
    Wal-Mart posed new threat to profitability for Coke, - overseas markets enabled Coke and Pepsi to
    - Rivalry in acquiring the international market between pepsi
    Pepsi, and their bottlers: Low & coke : High broaden the scope of innovation: High
    - Concentrates have exclusive rights to newer markets:
    - Ad campaign competition: High - Coke World war 2 feat; Pepsi Great depression
    Low
    - Bottlers have the opportunity to produce non-cola - Capturing bottler business: Low market capture: Low
    drinks: Medium - Market strategy of Pepsi was based on pricing: Medium - Pepsi targeting family customers
    - Coke developing automatic fountain dispenser;
    introduce vending machine: Low
    Substitutes

    - CSD industry size is reduced in US due to change in consumer preference: High - experiment with new cola and non-cola flavors; with packaging options: Medium
    - Non-cola CSDs included lemon/lime, citrus, pepper-type, orange, root beer, and other - Switching cost is very low: Medium
    flavors (more health conscious consumers could move towards these): Medium - Regional demands and potentials: Medium
    - Local competition in international market: Medium
    - Private label bottled water are cheaper alternatives: Low
    Temp Slide
    New entrants in an industry bring enter the market with the desire to gain market
    share. Businesses can lose their market share in such scenarios. The severity of
    the threat depends on the entry barriers in that market.

    Threat of Substitutes
    - CSD industry size is reduced in US due to change in consumer preference
    - Non-cola CSDs included lemon/lime, citrus, pepper-type, orange, root beer, and other flavors (more health conscious consumers could move towards these)
    - Local competition in international market
    - experiment with new cola and non-cola flavors; with packaging options
    - Switching cost is very low
    - Regional demands and potentials, like jal jeera, nimbu paani etc

    New Entry

    - Setting up Concentrate manufacturing process costs little capital, but high investment - Challenge with respect to building synergy with stakeholder such as bottlers, concentrate
    required in bottling setups manufacturer and retailers
    - costs for advertising, promotion, market research, and bottler support borne by - international operations encountered several obstacles, including antitrust regulation,
    concentrate manufacturer and bottlers foreign exchange controls
    - Initial investment in trademarks - Expected retaliation from existing bottlers/concentrate manufacturer (reducing the price of
    bottle/concentrate)
    Factors affecting Soft Drink industry profitability

    Factors Tending to Increase in Profitability Factors Tending to Decrease in Profitability

    1. Introduction of more Non-cola CSDs could leverage 1. Local competition in international market
    increase market share in this segment and try to 2. Study revealing CSD drinks causes obesity or
    capture more health conscious customers injurious to health
    2. Pepsi & coke brought back bottlers business under 3. The rapid growth of the mass-merchandisers, led
    their control by Wal-Mart posed new threat to profitability for
    3. overseas markets enabled Coke and Pepsi to
    Coke, Pepsi, and their bottlers
    broaden the scope of innovation
    4. Strong synergy among existing stakeholders 4. Doesn’t have expertise to cater to local regional
    ( concentrate producers, bottlers, retailer and taste in emerging markets (like Jalzeera in India
    suppliers) 5. CSD industry size is reduced in US due to
    5. Coke developing automatic fountain dispenser; change in consumer preference
    6. “Soda Tax” on sugary drinks
    introduce vending machine
    7. international operations encountered several
    obstacles, including antitrust regulation, foreign
    exchange controls
    8. Environmentalists against Use PET for water
    bottles
    Industry Profit Pools - CSD Industry

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