Competition in energy Drinks case Analysis



Competition in energy Drinks case Analysis

Introduction

Alternative beverages were the prime products in the ear of 2000. They consisted of sports drinks, energy drinks and vitamin-enhanced beverages. The rapid growth in this industry and high profit margin that the companies were gaining from the sale of these beverages marked its importance for the big players in the beverage industry (Gamble, 2010). The major big players globally in the beverage industry are Coca-Cola and PepsiCo, decided to extend their market share like other big companies in the sector of energy drinks, vitamin-drinks and sports drinks. The entrepreneurs such as the maker of Monster Energy (Hansen Natural Corporation), Red Bull GmbH, Glaceau vitaminwater originator and Living Essentials gain massive profits through the sale and development of these alternative beverages.

Decision Maker(s)

The key decision makers in this case study are distributors, suppliers and the major brands of alternative beverages in the market. The consumers can find the alternative beverages in the supercenters, superstores, wholesale stores and convenience stores. The small sellers focused on using the distribution channels and the third part to sell their products while the beverage giants Pepsi and Coca cola relied on its product line. The suppliers are related to the producers of the nutritive and non-nutritive ingredients. The packaging, cans and bottle suppliers are also listed among the suppliers.

The manufacturers of the alternative beverages are also the main decision makers as they are the producers of the energy drinks.

Problem Statement

There are various problems mentioned in the case study, such as the evaluation of strategically relevant components of the global and U.S. beverage industry. The competition in the alternative beverage industry is very high among the big players as well as the small producers, each wanting to get the maximum share. The market for these alternative beverages is very dynamic and the manufacturers have to adopt effective strategies to keep their market share as the consumers are shifting from carbonized drinks to alternative beverages. The success factors of alternate beverages depend on many factors which are vital to be evaluated. In the process of market expansion by these beverage industry giants, they were highly criticized about the risk hazards these energy drinks can cause to the customers.

Identify Alternatives

Coca Cola and Pepsi Co adopted the strategy to rely on these energy beverages to increase volume growth as people were reducing their consumption of carbonated soft drinks. These beverage industry giants wanted to capture the alternative beverages by introducing sports drinks, energy drinks and vitamin drinks in order to capture the international market. They have made an attempt of extending the existing line of products and producing new products in order to attract more and more customers and gaining market share. The core focus of these manufacturers was to increase the production of the spots drinks, energy drinks and vitamin enhanced beverages. The alternative beverages production became the prominent part of beverage companies. There should be proper marketing campaign designed to build the image of Coca-Cola products in the ...