India's Soft Drinks Industry

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INDIA'S SOFT DRINKS INDUSTRY

TABLE OF CONTENTS
TOC \o "1-3" \u PART A: CONTEXTUAL ANALYSIS OF INDIA AND THE INDIAN SOFT DRINK INDUSTRY PAGEREF _Toc323046458 \h 3

INTRODUCTION PAGEREF _Toc323046459 \h 3
1. FACTOR CONDITIONS PAGEREF _Toc323046460 \h 4
1.1 OPPORTUNITIES PAGEREF _Toc323046461 \h 4

1.1.1 INDIA’S PHYSICAL RESOURCES PAGEREF _Toc323046462 \h 4

1.2 THREATS PAGEREF _Toc323046463 \h 6

1.2.1 INFRASTRUCTURE PAGEREF _Toc323046464 \h 6

1.2.2 EDUCATION AND LABOUR PAGEREF _Toc323046465 \h 6
2. DEMAND CONDITIONS PAGEREF _Toc323046466 \h 7

3. RELATED AND SUPPORTING INDUSTRIES PAGEREF _Toc323046467 \h 9 3.1 AVAILABILITY OF RELATED AND SUPPORTING INDUSTRIES PAGEREF _Toc323046468 \h 9

3.2 BARGAINING POWER OF SUPPLIERS PAGEREF _Toc323046469 \h 9 3.3 BARGAINING POWER OF BUYERS PAGEREF _Toc323046470 \h 9
4. FIRM STRATEGY, STRUCTURE AND RIVALRY PAGEREF _Toc323046471 \h 10

4.1 CULTURAL IMPACT ON FIRM STRATEGY AND STRUCTURE PAGEREF _Toc323046472 \h 10

4.2 RIVALRY AMONG EXISTING COMPETITORS PAGEREF _Toc323046473 \h 10 4.3 THREAT OF NEW ENTRANTS PAGEREF _Toc323046474 \h 11
4.4 THREAT OF SUBSTITUTES PAGEREF _Toc323046475 \h 12
5. GOVERNMENT PAGEREF _Toc323046476 \h 12

6. ROLE OF CHANCE PAGEREF _Toc323046477 \h 12
CONCLUSION PAGEREF _Toc323046478 \h 13
PART B: CRITICAL EVALUATION OF PORTER'S NATIONAL DIAMOND MODEL PAGEREF _Toc323046479 \h 13 REFERENCES PAGEREF _Toc323046480 \h 15

PART A: CONTEXTUAL ANALYSIS OF INDIA AND THE INDIAN SOFT DRINK INDUSTRY

INTRODUCTION
A.G.Barr has been in the soft drinks business for over 130 years and is one of the biggest soft drinks company in United Kingdom (UK) (A.G.Barr, 2012). The company has a long standing success in the European market with its popular soft drinks such as IRN-BRU, Barr and Tizer. With a strong-hold in the Europen market, now A.G.Barr would like to expand their business to other markets. Following The Coca-Cola Company (TCCC) and PepsiCo success in the Asian market, the company would like to venture into the soft drinks industry in India. The definition of a soft drink market is the retail sale of bottled water, juices, carbonates, functional drinks, ready to drink (RTD) tea and coffee, and smoothies (Datamonitor, 2011).

According to Datamonitor (2011), the India soft drinks market is valued at $3.8 million as of 2010 even though it accounts only 3.3% of the overall value in the Asia-Pacific market. Japan and China hold the top two positions with a combined market share of 71.2% (Datamonitor, 2011). Hence, before setting up an operation in India, the company need to know further details of the local soft drinks industry such as the market share, the customer profile, the suppliers and the competitors. As such, the main purpose of this report is to analysis the feasibility of the India expansion and gives proper recommendations. The Porter's Diamond analysis, the SWOT analysis and Porter’s 5 Forces analysis will be used to evaluate and comprehend the India soft drinks market.

1. FACTOR CONDITIONS
Firstly, we will evaluate the factor conditions of India which may serve as an opportunity or a threat towards our venture into the soft drinks industry.

1.1 OPPORTUNITIES

1.1.1 INDIA’S PHYSICAL RESOURCES
India is a country rich of raw materials, resources and land. For this report, we will focus on those physical resources that are essential for the soft drinks industry – water, sugar, aluminium, power sources.

With a land space of over 2.9 million square kilometres (sq km) and a population of 1.22 billion people, India has only 314,070 sq km of water (CIA World Fact book, 2012). Even though the Indian government has done many things do improved the situation by building water plants and water piping in the urban and rural areas, there are still about 18.5% of the population (226 million) that lack...
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