Market Strategy for Frucor

Topics: Strategic management, Energy drink, Drink Pages: 11 (3488 words) Published: November 12, 2011


Table of Contents

1. Executive Summary:3
2. Introduction:3
3. Company Background:3
4. Internal Analysis4
4.1. Porter’s Generic Business Strategies4
4.2. Value Chain Analysis:4
5.1Initial Country Screening:6
5.3. Porter’s Five Force:8
6. Recommendation8

1. Executive Summary:

This study explores expansion opportunities for FrucorBeverages ,Energy Drink“V” ,a New Zealand based company .The study focuses on possible problems faced by competitors, trade barriers, logistics, currency instability and preferable entry mode in potential target economies. Country screening technique shows two possible markets: India and Brazil. The macro-environment analysis, economist model, porters five force models, industry analysis trend identifies India as the better option to invest considering rapid growth of energy drink segment. Factors such as abundant source of raw materials, rapidly increasing consumer market, economic sustainability, constant market growth and limited entry barriers makes India as the best risk-return option.(Srinivasan, 2009).Based on the SWOT analysis of competitors, it was found that joint venture with Pepsi co India would be the preferred mode of entry for Frucor to introduce “V” in Indian market. 2. Introduction:

The purpose of this analysis is to look for possible expansion of” V” in rapidly growing non-alcoholic sector in developing economies. Indian market was found favourable to invest, the study looks at industry and economist model analysis of Indian and Brazilian market. It looks at opportunities of introducing V in the Indian market and looks at whether expanding in India would be a profitable decision or not. Study identifies and analyses the competitor’s market share, looks at various entry mode strategies and identifies the best possible entry mode. 3. Company Background:

Since its establishment as juice business entity in 1962, Frucor Beverages ltd has evolved into one of a leading beverage company in Australasia and New Zealand. The company is a wholly owned subsidiary of Suntory Ltd, Japanese brewing giant. With a workforce of 600 employees worldwide and headquarters based in Auckland, Frucor is the second largest non-alcoholic beverage company in New Zealand. Frucor Beverages is owner of a wide range of non-alcoholic beverages that includes sports and energy drinks, carbonates, flavoured milk, bottled water and fruit juices.The various brands owned by FrucorBeverages are illustrated in Exhibit A. The company has a strong distribution network in New Zealand through which the PepsiCo brands are also distributed. The company currently exports its products to countries like South Africa, Ireland, UK and parts of Europe (e.g. Spain). The company entered the Chinese market in 2003 by introducing the Mizone brand (Euromonitor, 2010). According to (Scoop Business,2010) acquisition of Frucor by Suntory has helped Frucor to compete in global market. “V” was launched by the company in 1997,and currently has 60 % of market share in energy drink segment in New Zealand and approximately 40 % in Australia. In 2010 , 'V 'entered Europe, through its launch by Frucor Brands in Europe in Amsterdam. Following year in 2011 ,through with their sister company Orangina Schweppes Frucorbevergaes launched ‘V’ in Spain. The expansion of ‘V’ into Spain would further increase Frucor’s current annual exports of approximately NZ$250 million .The brand has received innumerable national and international awards. ‘V’ is definitely the brand that will lead Frucor’s expansion into the global market.(Scoop Business, 2010) 4. Internal Analysis

4.1. Porter’s Generic Business Strategies

Porter's generic strategies focus on analysing...
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