Dr. Pepper Snapple Group
Dr. Pepper Snapple Group (DPS) is the leading producer of flavored beverages in North America and the Caribbean. DPS is a manufacturer and distributor of more than 50 brands of carbonated soft drinks, juices, teas, and other premium beverages. It’s based in Plano, Texas and from the year 2009 to 2010 net sales increased 2% from $5,531,000 to $5,636,000 and also the segment of operating profit gained a 1% ($1,310,000 - $1,321,000).
The primary market of DPS is North America and the Caribbean. The U.S. markets hold about 89% of DPS Sales. DPS operates about 24 production plants with more than 200 distribution centers. In addition, DPS signed a $715 million dollar deal that gives Coke the right to distribute Dr. Pepper and Canada Dry in the U.S.
A strategic plan is often accused of being a waste of time and irrelevant in a changing market. But it helps to move the company in a direction which will enhance the value. Even though the strategic objectives listed below are clearly laid down. How they will be achieved may be not so clear. The company current strategy includes:
• Build and enhance leading Brands
• Focus-on opportunities in high growth and high margin areas
• Increase presence in high margin channels and packages
• Leverage our integrated business model
• Strengthen our route-to-market through acquisitions
• Improve operating efficiency
• RCI- Rapid Continuous Improvement
• Health and Wellness initiative
The beverage industry is made up with about 3000 companies. It is a highly competitive industry. Its two main competitors are Coca – Cola and PepsiCo. These two companies generate 63% of sales in North America. One of DPS is main concern is not being able to gain market share in the United S...
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...itional strategies. First DPS must enter the international market to take the dependency off of the United States. So if the United States were to have another downfall it would not affect them as tremendously. Second, enter the market of energy, sports, and low calories drink as those markets continue to increase. This leads into the next point of capturing the healthy trend. DPS has a strong portfolio of brands and should expand one of those brands more into the healthy trend. Next, is becoming more independent. Accomplishing this will decrease the dependency on the 3rd party packaging and distribution to rule out the possibility of the 3rdparties becoming redundant of DPS. Last is creating and developing DPS’s business alliances to boost company growth. Achieving this will increase brand awareness, enlarge your customer base, and enhance your product offering.
Pepsi needed a strong regional partner. Pepsi had been falling behind to Coke in Mexican market. However, changes in the regulatory environment had cut Coke’...
For example in Essentials of Management “the convenience stores were aggressive in pressing alternate beverage producers and food distributors for low prices and slotting fees”. The convenience store mainly carried two to four brands of alternative beverages outside of what was offered from Pepsi or Coca-cola, and required the sellers to pay an annual slotting fee in return for providing bottle facings on cooler shelf.” “The food and beverage distributors usually allow alternative beverage producers to negotiate slotting fees and any rebates directly with the store buyers, according to Essentials Strategic Management”. (p. 267) In 2010 Pepsi Co was the world’s fourth largest food and Beverage Company with the 2009 sales being 43 billion dollars according to Essentials Strategic Management
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
Analysis of the carbonated soft drink (CSD) industry shows that there are 2 important players i.e. Concentrate Producers and Bottlers. Focusing on the downstream of the supply chain it is to be pointed out that concentrate producers incure relatively low fixed costs with respect to production plant, staff, equipment and R&D as the concentrate is produced of a more than 100 years old formula and relatively cheap raw material (e.g. caffeine). Concentrate is shipped to bottlers which incure relatively high fixed cost with respect to plant, equipment and staff and which add carbonated water and high fructose corn syrup to the concentrate, bottle or can, package and ship it to the respective retailer. Besides that CDS hold a big stake in the direct delivery of concentrate to diverse fountain accounts like McDonalds, Burger King etc.
Therefore, the long-term brand of Coca cola and better pricing strategies would help in competing with Pepsi. Unlike, Pepsi, Coca cola had targeted entering into partnership and alliances with local distributors and firms. This helps to develop strong relationship within the domestic firms to reduce the domestic barriers and thus, enhance the company’s competitiveness (Thabet, 2015). Lastly, the Asian markets consist of related and supporting industries to the soft drink industry that helps the companies in gaining a strong competitive position in the markets. Based on the competitive advantage of nation’s model, Coca cola has more home based advantages to develop a competitive advantage in relation to other countries on a global
Analysis of the Coca-Cola Company The Coca-Cola Company is the world's leading manufacturer, marketer and distributor of soft-drink concentrates and syrups. The Coca-Cola Company is the world's leading manufacturer, marketer and distributor of soft-drink concentrates and syrups. The Company markets many of the world's top soft drink brands, including Coca-Cola, Diet Coke, Sprite and Fanta. Through the world's largest and most pervasive distribution system, consumers in nearly 200 countries enjoy the Company's products at a rate of more than one billion serving a day.
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
A company must identify its strengths and weaknesses in order to develop growth. Downsizing products is more important than developing new products. A company must be able to identify where there weak markets are at. Times change and so do products. The products that are less profitable or simply aged are the ones that must be downsized in order to make way for a different, more innovative market. When developing growth strategies a company must use the product/market expansion grid. First the company has to figure out whether they can have better market penetration, second they must consider looking for market possibilities for current products. Third they must develop their products into innovative products that people can’t live without having. Lastly they need to be diverse with their company, therefore expanding and including different features to the company could draw more attention from different
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...
Dr Pepper Company is the oldest major manufacturer of soft drink concentrates and syrups in the United States. Dr Pepper is the company's principal brand. Cadbury Schweppes PLC acquired Dr Pepper/Seven-Up Cos. Inc. in March 1995. The new business will be called the Dr Pepper Company, which will focus on the Dr Pepper brand by handling all beverage system sales, which account for 75 percent of its business, in addition to related independent bottlers. The second operating group will be Cadbury Beverages/Seven Up Co., which will service independent bottlers not carrying Dr Pepper. Dr Pepper/Seven Up soft drink brands now hold about 16 percent of the U.S. market. Dr Pepper and Seven-Up are among the top 10 carbonated soft drinks, with Dr Pepper being the top non-cola soft drink. Other soft drink include: A&W Root Beer, Canada Dry, Schweppes, Welch's, Sunkist, Squirt, Crush and Hires (Levy 1999). According to the soft drink industry report, there is large sales growth recently in non-colas. Dr Pepper was number three in the industry. The reason is because non-colas have above-average caffeine level, and will be aimed at the 12-to 21-year-old market. Obviously, management sees this product as an opportunity to more fully participate in the growing popularity of non-colas.
As we all should know, PepsiCo is one of the world’s leader in convenient food and beverages. PepsiCo shares are traded worldwide and particularly in NYSE (United States). PepsiCo is in the same line with Coca cola and Cadbury Schweppes as the dominating beverage companies. PepsiCo has successfully built a great brand name rivaling with coca cola, probably because PepsiCo unlike coca cola has its own bottling companies. With a competitive strategy based on differentiation rather than cost leadership like its fellow competitors PepsiCo invests highly in new packaging, flavors, formulas to outsmart their competition. Founded in 1919, producing a variety of sweet and grain-based snacks, carbonated and non-carbonated
Dr Pepper enjoys 16% of the market share with fourth largest advertising spending. The company firmly holds the position of US third largest CSD industry player with its attractive product mix.
Frito-Lay controlled 40% of the USA-market assuring high volume production by increasing internal coordination with PepsiCo developing the Power of One strategy consisting in mixing snacks with beverages and sauces produced by Peps...
This competitive advantage has been rendered sustainable as other players have found it difficult to catch up with the company's competitive strategy. In spite of this clear advantage, it was noted that the company faces some challenges being the world leader in soft drink distribution. The canning and bottling of the product which is done in many countries have now fallen into the hands of independent companies, thus it becomes hard for a given company to control the quality of the packaging
Beverages are divided into diet category, 100% fruit juices, fruit drinks, water, energy drinks, tea and coffee etc. Coca-Cola is the leading provider of soft drinks in the world. It not only has the No. 1 selling soda with regular Coke, but its Diet Coke brand outpaced Pepsi for second billing. Within the pop category, Coca-Cola has a number of brand variants, including Dr Pepper and Sprite. The company also produces fruit juices and sports drinks. Emphasis on the soft drink industry, though, has contributed to Coca-Cola 's ability to distinguish itself as a quality provide. Coca cola has its market presence around 200 countries. Every year, The Coca-Cola Company launches hundreds of new products to meet the ever-changing tastes of consumers around the world. In 2014 alone, the company launched more than 450 new products. These recently launched beverages cover a wide selection of categories, including sparkling (Sprite Cranberry, a seasonal drink sold in North America), ready-to-drink coffee (a new offering from the popular Japanese brand Georgia), juice drinks (del Valle Peach Nectar from Brazil and Minute Maid Pulpy Pear from China), enhanced water (Aquarius Delight from Argentina) and a new beverage made from organic fruit (ViO Bio Limo from