Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

Strategic Management

.
by

Paul Haughey

on 5 December 2015

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of Strategic Management

'Competition in Energy Drinks,
Sports Drinks, and Vitamin
Enhanced Beverages'

Case Study 2
Macro Environment
Analysis
Threat of Substitutes

Switching costs are low.

There are many substitute products available such as tap water, juice, tea, coffee.

Substitutes don't fully replicate consumer wants.

Threat of substitutes is weak to moderate.
Drivers of Change
The economic downturn
Change in the level of sales achieved due to the economic crisis and the high prices associated with alternative beverages.

Increase health awareness of consumers
People are more health-conscious and are made aware of the many health related issues associated with the consumption of energy drinks, sports drinks and vitamin-enhanced drinks.
Negative
Positive

Product innovation
New products and the enhancement of existing products

Customer Preferences
Customers changes in preferences and lifestyles has caused them to move away from carbonated soft drinks and other beverages to more energy drinks.
Group Strategic Map
Access to
distribution
Innovating
product skills
Images
Consumer
Knowledge
Research
and Analysis
Having a Goal
and Achieving it
SWOT ANALYSIS
Strength
Leading in most beverage categories in the US such as Aquafina for mineral water, Frappuccino for ready-to-drink coffee, Tropicana for orange juice and Gatorade for sports drinks.
Strong distribution and broader product line.

Weakness
Weak presence in the energy drinks market.

Opportunity
International Markets. New product development.

Threat
Decline in carbonated sales. Others stronger in the energy market.

Strength
The world’s most recognizable soft drinks brand
Strong distribution channels

Weakness
Weak presence in the alternative drinks market place

Opportunity
Expand their alternative product line/ create new products
Enter European market

Threat
PepsiCo dominating alternative beverage market.
Increasing trend for healthier beverages

Overall macro environment.
The soft drinks industry is changing. Consumer wants are changing.
Significant profit is available, but only to those who can meet consumer demand, both nationally and internationally.

Overall strategy
Lifestyles are changing. Consumers are more educated and concerned about health issues around food and drink consumption. Carbonated drinks market is set to decline.
New, innovative, differentiated, consumer responsive products are required. Only those who can meet consumer needs effectively will succeed.
THANK YOU FOR WATCHING
Economic crisis and decline in sales 2009

Perceived health risks to consumers.

However...

Global beverage industry projected to grow from $40.2 billion in 2009 to nearly 53.5 billion in 2014.

International market potential.

Innovation and creativity.

Product line expansion.
Threat of new entrants

High price point make them an attractive segment for both new entrants and established companies.

Steady growth in purchasing power in developing countries/ new markets.

Distribution channels expensive to establish.


Threat of new entrants is moderate to strong.
Bargaining power of buyers

Strong demand for goods

Bulk buyers like convenience stores charge slot fees.

Some seller’s brand are strong.

Seller’s product delivers results which are moderately important to buyers.

Buying power of buyers is weak to moderate.
Political
The U.S. Food and Drug Administration forced the removal of energy drinks containing alcohol.



Economic
Recession in the US caused the US beverage industry to decline in sales.
Sales in sports drinks declined by 12.3 % between 2008 and 2009, and the sales of flavored and vitamin-enhanced waters had declined by 12.5% over the same period.

Decline has been offset by increased purchasing power in the developing countries.
Growth in purchasing power of consumers in developing countries is expected to contribute towards industry growth.
Macro 2
Social
Consumers are continuing to develop preferences for bottled water, sports drinks, fruit juices, ready-to-drink tea, vitamin enhanced beverages, energy drinks, ready-to-drink coffee, and other types of beverage


Legislative
Caffeine content of energy shots and energy drinks has previously not being regulated by the US Food and Drug Administration and could contain as much caffeine as the producer thought appropriate.
Health reports critical of certain ingredients in the some alternative drinks.
Macro 2
Bernard Brennan
Susan Mulkerns
Ade Akintunde
Paul Haughey

We hope you've been
energised!
Geographical Share of Alternative
Beverages Market 2009

United States 42.3%
Asia-Pacific 31.5%
Europe 04.%

(Total Dollar Value in 2009 $40.2 Billion)

Us Beverage Industry Volume Sales
By Segment 2009

Carbonated Drinks -2.33%
Bottled Water -2.7%
Sports Drinks -12.3%
Vitamin Drinks -12.5%
Energy Drinks 0.2%
Innovation:
Marketing:
Branding:
Distribution:
KEY SUCCESS FACTORS
Innovative products lines
Strong and Dynamic Marketing
Highly recognizable brands
Efficient distribution Channels
Strength
Excellent marketing campaign; they've 'got wings'
World’s number one seller of energy drinks

Weakness
Narrow product line
Private Company
Expensive distribution channels

Opportunity
Diversify their line of beverages to capture wider market
Geographical expansion into Asia-Pacific area

Threat
Criticism of energy drinks mixed with alcohol
Restrictive legislation on energy drink caffeine content
Strength
Rapid growth since launch of Monster Energy drink in 2002

Weakness
Weak international brand recognition
Reliance on contract bottlers
Reliance on others for distribution, one of which is Coca-Cola.

Opportunity
European market, other international markets

Threat
Restrictive legislation on energy drinks
Worldwide Market Share of Alternative
Beverage Market, 2009

Company Worldwide USA Asia-Pacific Europe

PepsiCo 26.5% 47.8% 12.4% 12.9%
Coca-Cola 11.5% 10.2% 13.7% NA
Red Bull 7.0% 10.6% NA 10.1%
Others 55.0% 31.5% 73.9% 77.0%
Market Share for Leading Energy Drinks Brands in the USA, 2009

Brand 2006 2007 2008 2009

Red Bull 43% 35% 40% 40%
Monster 15% 23% 23% 27%
Rockstar 11% 11% 12% 8%
NOS NA 2% 2% 4%
Amp 4% 5% 8% 3%

PepsiCO
Develop its own energy 'shot' brand.
Purchase or form stronger alliance with Rockstar company

CocaCola
Improve product line and increase product innovation.
Increase focus on current international markets, but include Europe.

Red Bull GmbH
Expand product line.
Become a public company
Invest in distribution channels

Hansen Natural Corp.
Increase brand recognition.
Purchase bottle companies and invest in distribution channels
Recommendations
Conclusion
x
Full transcript