Dr Pepper Snapple group, Inc. is a major integrated brand owner, bottler, and distributer of nonalcoholic beverages in the United States. In 2007 they had net sales of $5.748 billion, 21 manufacturing facilities and approximately 200 distribution centers in the United States. They are the number one Company in carbonated soft drink products in the United States. Their business strategy is to invest most heavily in their key brands to drive profitable and sustainable growth by strengthening consumer awareness, developing innovative products, and brand extensions to take advantage of evolving consumer trends, improving distribution and increasing promotional effectiveness. Dr Pepper Snapple Group, Inc. also wants to focus on driving growth in their business with emerging categories, through brand extensions, new product launches, and selective acquisitions of brands and distribution rights. The company has a future goal of significantly increasing the number of branded coolers and other cold drink equipment over the next few years, which is expected to provide an attractive return on investment. The company also intends to leverage its integrated business model to reduce costs by strategically creating greater geographic manufacturing and distribution coverage and to be more flexible and responsive to the changing needs of large retail customers by coordinating sales, service, distribution, promotions, and product launches. A question came into play of whether or not a profitable market opportunity existed for a new energy beverage brand to be produced, marketed, and distributed by the company in 2008. With the company’s current strengths, business strategy, and positive reputation, it would seem to be a good move. But one must first consider the competition, customer, and if the company itself can successfully introduce a new product to a specific market. The company has several succinct strengths. They have a strong portfolio of leading consumer- preferred brands. This means that they have a diverse portfolio of bottlers, distributors, and retailers with a wide variety of products and provide a foundation for growth and profitability. Their Snapple brand is also a leading ready to drink tea. Overall, in 2007 more than 75 percent of Dr Pepper Snapple Group, Inc. volume was generated by brands that hold either the first or second position in their category. The strength of these key supporting brands has served as a platform for lunching innovations and brand extensions in the past such as Accelerade RTD, a ready to drink sports drink that launched in late May 2007. The company therefore had experience in what it truly meant to create a new branded energy drink which would serve to be useful, as the strategy would be similar. Entering a new product market. A second strength the company possesses is their Integrated Business Model. This provides opportunities for net sales and profit growth through the alignment of the economic interest of its brand ownership and its bottling and distribution business. Thirdly, they have strong and long standing customer relationships. This is so important for the success of a company. They have a wide range of strong relationships from bottlers and distributors, to national retailers, large food service, and convenience store customers. They also have strong relationships with some of the most important U.S. retailers including Walmart, Safeway, Kroger, and Target. Another strength is their attractive positioning within a large, growing, and profitable market. They hold the number three position in the United States, Canada, and Mexico beverage market. The company has a great competitive edge, as they cater to the need for convince and the demand for product with health and wellness benefits more so than any of their competitors. Dr Pepper Snapple Group, Inc. also has a broad geographic manufacturing and distribution coverage. They have 21 manufacturing facilities and...
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