Retirees from a cola industry, Gerry Garaza, Ponso Tamahon and Bong Alegre came up with the idea of setting up a softdrink business. What factors will be considered to develop a strategy for the starting business?
The government and parents are branding soft drinks as junk food and is bad for the health. This poses a threat to the industry because prospect market will decrease in number or may chose an alternative drink.
There has been a gradual increase in the prices of raw materials, bottling equipment and delivery equipment for soft drinks. Unlike prospective competitors who had purchased their materials a long time ago at a much lower cost, they will have to buy at current inflation prices. This is a disadvantage to the group because their focus is in keeping their costs and prices down.
The soft drink market is shrinking because of the present economic condition. Cost and prices will continue to increase, thus a large number of people in the low end of the market will switch to a cheaper alternative, such as water, gulaman, etc.
Since the target market of the group's product is the lower CDE market, distribution will be costly. There are a lot of sari-sari stores and most of them are short of capital.
Conflict of Interest
There is somehow a need to question the involvement of Alfonso Lao, the owner of Citrus Beverage, the largest player in the juice market. He is the prospect financial partner, however, his product is an alternative or competitor of the soft drinks industry.
Gerry in marketing research, conscious of customer behavior and competitor intelligence.
The team needs to develop a cola that will be favored by the target market. They have already chosen Coca-Cola as their benchmark and the challenge they are facing is to develop a cola that will taste as good or better than Coca-Cola.