“Coca-Cola and Shasta.” These two products are in the same industry and both were invented around the same time. Nonetheless, a very different perception comes to consumers‟ mind when they hear these two words. In the 21st cent ury, Coca-Cola is considered one of the most valuable brands in the world, whereas Shasta is mostly known in United States, particularly in the West Coast region. Coca-Cola is owned and operat ed by The Coca-Cola Company, and Shasta is currently owned by National Beverage Corp. This report will examine, compare, and analyze both companies in terms of operation, promotion, management, and finance. In addition, SWOT analysis and Porter‟s Five Forces will be conducted to evaluate the companies‟ positions in the industry. The report will also identify several issues that both companies currently face and suggest alternatives and recommendations in order assist Shasta, a subsidiary of National Beverage Corp., to gain more market share. Table 3 exhibits that National Beverage Corp. makes up only about 2.8% of the soft drink industry in 2010.
Dr. John Pemberton, a pharmacist from Atlanta, invented Coca -Cola in 1886. The world‟s largest non-alcoholic beverage company trademarked its name and logo in 1893. After thirty years of establishment, the company went public in 1919. The share price of its initial public offering (IPO) was $40 a share (Datamonitor, 2010). Coca-Cola expanded rapid ly; it is currently available in more than 200 countries and reaches about 99% of the world population (National Geographic Channel, 2011). Consumption rate of trademarked or licensed products amounts to 1.7 billion servings a day. As of December 31, 2010, the company has 139,600 employees worldwide (The Coca-Cola Company, 2011).
Similarly, Shasta was founded in 1889, three years after Coca-Cola. In Northern California, Mt. Shasta, “a group of businessmen opened a health and vacation resort at the s ite and featured naturally carbonated spring water.” The carbonated water received positive feedbacks from clients who stayed at the health and vacation resort . Shortly after, t hese businessmen established Shasta Mineral Springs Company and started selling the product throughout the West Coast region, including California, Oregon, and Washington. In 1928, the company was renamed The Shasta Water Company, and began to diversify its carbonated water line to a segment with more flavors. In 1985, Shasta was acq uired by National Beverage Corp. Despite of the acquisition and product diversification, Shasta is serving the same West Coast market that it was serving decades ago (Shasta Beverage, Inc, 2010). Target Market
Coca-Cola views everyone as potential consu mers. Coca-Cola targets all age groups; however, the one with most potential is the age group between 18 to 25 years old , which tends to have busy lifestyles. Furthermore, the company attempts to appeal students and family-oriented consumers. The socio-economic status of these demographics ranges from lower to upper-lower income level (Grimm, 2000). These are a few characteristics of Coca -Cola‟s target market. Soft drink Industry
Shasta‟s main focus is variety. Even though the company sells a variety of cola, the sales of other flavors are better. Statistics show that ethnic groups prefer flavored drinks over cola. Based on this research, Shasta has centered its target market on et hnic groups. Shasta‟s demographic targets: low to middle income consumers, less educated individuals, and large families. Psycho -graphically, the company targets individuals who look for value and quality in a product, like Shasta cola, as an alternative to Coca-Cola or Pepsi (C. Anicich, E-mail Interview, April 20, 2011).
Table 3: Industry Trends & Comparison Analysis (source: Beverage Digest)
Source: Beverage-Digest (Top-10 CSD Results for 2010).
II. Operational Analysis
The Coca-Cola Company
Water is the main...