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

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Case Three – Competition in Energy Drinks, Sports Drinks and Vitamin-Enhanced Beverages Introduction:
The problem which I will be looking at in this report is whether the energy drink, sport drink and vitamin-enhanced beverages are able to be sustainable in the beverage industry. Of the four companies to be discussed; will all of them still be around in 10 years? During the mid-2000’s these alternative beverages enjoyed rapid growth; they had premium prices and high profit margins that made them an important part in the lineup of their brands (Thompson, p. C-75). The strength of these companies had been growing strong but had a slight decline in recent years. SWOT for the Industry

Strength:
Product Expansion – many new products have been developed
Distribution Channels – Can use convenience stores, grocery stores
Able to deliver with carbonated soft drinks
Weakness:
Price is high compared to soft drinks
Unhealthy ingredients
Caffeine is not regulated – like in soft drink industry

Opportunity:
Consumer demand
Supplier Channels – ingredients, cans, labels
Product Innovation – provides differentiation
Brand Loyalty – taste, image, energy boosting
Brand building skills needed
2 oz. energy shots
Threat:
Economy
Scientific evidence that some products are not healthy
Effect people with heart arrhythmias and insomnia
Mix with alcohol
Relaxed Drink Niche – abuse with prescription cough syrup
As we look at this SWOT analysis of the alternative beverage industry we notice that there are some opportunities that they have created and are able to use in the future. Consumers’ choices are changing from the standard soft drink to alternative beverages. The key is to be sustainable by building up these products. The main opportunity to help with sustainability is to build brand loyalty. Try building up the knowledge and uses of your brands will help you gain the skills needed to continue building the brand. SWOT for PepsiCo

Strength:
Leads in US: Aquafina – mineral water
Frappuccino – ready to drink coffee
Tropicana – orange juice
Gatorade – sports drinks
Strong distribution
Broad product line
Weakness:
Slow growth in Latin America and Japan
Opportunity:
Food division should expand internationally
Threat:
Coca Cola leading brand for carbonated drinks
Living healthy awareness
PepsiCo has grown to be a strong competitor in the global market of alternative beverages. This SWOT shows that they need to increase their growth in the markets of Japan and Latin America. As we discussed in the overall market they can learn how to increase their brand loyalty. SWOT for Coca Cola

Strength:
Leading manufacturer, marketer and distributor for non-alcoholic beverages
Gaining distribution of new beverages such as Minute Maid, Dasani and Powerade
Multi-year distribution agreement with Hansen Natural Corporation Weakness:
Market share in alternative beverages
Opportunity:
New product development
Introduction of existing brands into new country markets
Threat:
PepsiCo is slowly taking over the market with multi-line of beverages
Increase trend in healthy living
Globally they have been a top company in the beverage industry. They have been not as strong in the alternative beverage market. The experiences they have with the carbonated beverages can continue on with the new industry and increase their brand loyalty to the alternative side. The key is to expand their brands into the global market and make it sustainable. SWOT for Red Bull GmbH

Strength:
#1 seller of energy drinks
Weakness:
Lack of innovation
Reliance on small product base
Opportunity:
Diversification of beverages to capture wider market opportunity
Geographical expansion
Threat:
Other energy drinks such as Powerade and Gatorade
Healthier drinks such as mineral water and juices
Red Bull has been a leader in marketing of their product. This marketing prowess has made...
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