International marketing plan-Part B

International marketing plan-Part B

Introduction

Soft drink industry of every country is being regarded as the highly revenue provider and competitive, and (Keh et al, 2007) has further explained this industry as the sector that has been ruled by powerful companies like Pepsi and Coca Cola. However, as the fight of becoming market leader is reaching its peak the large companies are now trying to focus on product diversification and change in marketing techniques.

Meanwhile, the situation of Cuba soft drink industry is slightly different as this industry is largely controlled by local drinks manufacturers rather than drinks sold by Pepsi and Coca Cola (Buhalis, 2000). Since the company is entering the Cuba beverage industry after decades and thus has decided to conduct detail analyses of industry using economic factor and five competitive forces.

Discussion

Dominant Economic Factors

Soft drink industry of Cuba can be analyzed using three common economic factors (Market size, growth rate, and overall profitability). The size of soft drink industry has continuously changing in recent years as the overall consumption of non-alcoholic and alcoholic is around 47.35 percentage with the major percentage is of non-alcoholic drinks.

It was further observed that the overall market value of this industry since 2008 has remained around $250-300 billion and it has expected to reach $400 billion by the end of 2015(Hinterhuber, 2004). This valuable information provides clear indication to Coca Cola Company that this has the potential of gaining huge profits but they have to overcome certain challenges that could hinder company progress of establishing itself in the industry.

According to (Teece, 2010) the current market position of soft drink industry is mainly because of sections imposed by US policies that prevented various companies like Coca Cola to enter in this highly profitable industry. However, situation is changing and the industry analyst is optimistic of witnessing high growth as major international companies are trying to enter in the market along with Coca Cola in various other segments of this industry.

The prevailing revolutionize is endorsed with the extensive growth in other sectors like water (10 percent) and coffee (13 percent), and sports and energy drinks that have also increased their market share around (10 percent). It has been expected that profitability of the industry would remain constant; however, lack of substitute and poor political condition has created speculation within industry and is threaten to stagnant the growth rate (Buhalis, 2000). Because of prevailing uncertainty majority of local soft drink companies are trying to diversify their product line by entering into alternative market of (foods, coffee, water, and others) and there is a strong possibility the management of the Coca-Cola Company after entering into the market would opt for early product diversification.

Over the years, the geographic range of current rivalry provides clear explanation of certain economic characteristics that are present in the industry. (Hinterhuber, 2004) during his extensive research found that soft drink industry of Cuba is controlled by four local companies that are listed below along with their primary ...