The Coca-Cola Industry Abstract The CSD (carbonated soft drink) industry is one that is very competitive. A few firms dominate this industry, most notably Coca Cola and Pepsi Cola. This is due to substantial barriers to entry. Cadbury-Schweppes, producer of products such as 7up and Dr. Pepper is the third leading company in this industry. Due to the dominance of Coca Cola and Pepsi, Cadbury-Schweppes faces the daunting task of having to fight for market share and survive in this fiercely competitive industry. Using economic analysis for support, Cadbury-Schweppes will need to use its strengths in the non-cola categories to compete in this CSD industry. Introduction 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. The main external threats to Cadbury-Schweppes are competition from Coca-Cola and Pepsi and changing consumer tastes. External opportunities include increasing sales internationally and development of new products. Cadbury-Schweppes has many internal strengths and weaknesses in its organizational, marketing, operational, and financial activities. These characteristics along with economic analysis will be used to provide the answers needed in order to survive and thrive in the CSD industry. Analysis In order to understand the situation of Cadbury-Schweppes in the CSD industry, the product, which is soda, needs to be analyzed.
The soda that when you guzzle it, the great flavor fills your taste buds and the bubbles of carbonation explode in your mouth leaving a savory taste in your mouth. Dr Pepper is a very popular soda, that is apart of the Pepsi family. Dr Pepper is in stores all around, and is very popular, so not knowing about it, you'll stand out, but don't worry for reading this will inform you of Dr Pepper. This paper contains writing about the history of Dr Pepper such as; when it came to the world, how it was made, who made it, how has it changed, the flavors of it, and how/what are they, the company, doing now, in 2016.
Coke continuously out-stands Pepsi, even though they share a very similar taste and colour, however Coke should not be the drink that receives all the love and attention for what it offers. Despite their similar soda colour, the drinks actually contain some different ingredients, which produce a different taste, and affect the body differently. Furthermore, the way the companies markets their drinks makes a huge contribution to how successful their products will become. The major element for success however stems from their impact on society and how the companies utilize their social power to evolve. The two major soda companies are constantly head to head with one another, yet it is what they do that sets them apart.
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.
Beverage giant Coca-Cola wants to get a little love for its iconic cola drink from the upscale consumer set, so its decided to create and test-market a sleek set of contoured aluminum bottles for its flagship Coke brand. Yes, we said aluminum bottles.
To handle the enormous scope of its business, the Coca-Cola Company has divided into six operating units: Middle and Far East Groups, Europe, The Latin America Group, The North America, The Africa Group and The Minute Maid Company. The head Quarter is in the United States. Methods of Research I will use The method of research which I will use is the secondary research, i.e. I have asked The Coca-Cola Company to send me their history and annual reports. I will also call The Coca-Cola Company office to ask some details, I will also use ask them some relevant questions (questionnaire method), interview the people on the high street and will do some research over the Internet. From those sources I am going to finish my all other tasks.
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.
By and large, the soft drink industry leaders post high profits every year. Concentrate producers realize higher profits than bottlers in the industry generally (Daft & Marcic, 2001; Wilkinson & Kannan, 2013). That comes off as odd given than the commodities they sell can be generated rather easily (Louis & Yazijian, 1980; Yoffie & Harvard University, 2002). The high profits can be best explained through a Five Forces appraisal, which shows how the varied forces affect the industry’s profitability. The forces are entry barriers, suppliers, rivalry, buyers, and substitute threats.
In 1996, Cadbury Schweppes gathered activities in two major fields, both consumer-oriented: confectionary and beverages. The beverages branch was highly competitive, all the more so as few giant players operated on the market. Cadbury Schweppes owned international bottling and partnership operations and sold products in 149 countries. The company, divided into five divisions in 1996, had a varied product portfolio, based on international brands such as Schweppes or Dr. Pepper/Seven Up, acquired by the group in 1995. As for the ...
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...
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...
With the times changing PepsiCo and other soft drink companies realized that when people go to have a snack they look for a drink as well, and with consumers looking for the healthy option soda company’s like PepsiCo were losing customers” (p.1). This is a creative and effective marketing strategies by the Pepsi Company since, they could realize the wants and thought of providing the need. In this case, the want was a drink with a snack, and their plan was to provide the most suitable drink with the snack, so that more people will buy their product, and their brand will promote. Since the consumers were looking for healthy soda drink instead of any kind of soda, this strategy didn’t work so well because they were losing customers like some other companies. However, it didn’t stop Pepsi Company to use this strategy, rather the company came up with a new strategy provide the healthy soda drink with the snack and be profitable at the same time. According to Ryder (2013), “PepsiCo introduced the “Power of One” in which PepsiCo purchased the two largest bottling groups, New York based Somers Pepsi Bottling Group (PBG) and Minneapolis based Pepsi-Americas. This merge gave PepsiCo direct control over 80% of its bottling network” (p.1), their new strategy
Pepsi is one of the largest carbonated soft drinks (CSD) companies in the world with a huge number of employees all over the world. It is holding a strong posi...
Experimentation with the new market for carbonated beverages on the decline coke has done experiments in new flavors and healthier alternatives to try to stay competitive. As well as investing in “Keurig Green Mountain is a K-Cup maker but has a new Keurig Cold that can deliver Coca-Cola through the new system.” (Cooper, 2014)
...ind areas for product improvement, as well as create solutions for potential problems and pitfalls facing the brand. Among PepsiCo’s strengths are brand recognition and loyalty, as well as product diversification. The company can build on these strengths to confidently introduce into the market that are innovative and health-conscious. PepsiCo will also continue to grow our in commitment in environmentally responsible manufacturing. Challenges facing the company are varied, not insurmountable. PepsiCo has had problems with employee/management relations, and discrimination. There have also been some marketing issues, including controversial ads and poor logo redesign. PepsiCo will need to make sure it gains control over the image it wants to portray to its target market, stay on top of PR issues, and ensure that there is no over-reliance on any single retail outlet.
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