Thursday, March 7, 2019
Competition Energy Drinks Essay
The beverage industry, manage most food service industries in these economic times, faces numerous challenges. non one company is excluded from the challenges of economic conditions, demographics, social and globular campaigns, and regulatory, political, and legal factors. The global economic conditions affect the energy drink industry in many shipway. This industry depends highly on the disposable income of its nodes. People are real(prenominal) cautious with their money these days and if additional income does not exist to bribe these items, then the companies suffer.In recent projections, however, this does not chew the fatm to be the case. The global industry factors show a projected yield of $20 trillion in sales betwixt 2009 and 2014, and demand for these alternative beverages is expected to ontogeny globally as customer purchasing power increases. Social factors exploit an important part in the industrys strategy, as well. With customers interested with healt hy lifestyles and lick, the alternative beverage industry has increased sales in the last decade.Customers demanding low calorie, energy & vitamin-enhancing drinks turn to these types of beverages for their take instead of carbonate soft drinks. Alternative drinks are consumed by a slim demographic. These products are generally weepd by young adults, college and high school students, athletes and exercise aficionados. Another branch of these drinks are the energy shots, which have become in truth popular in the last decade. With new legislation and ever-changing regulations, it is very important for companies to stay abreast of all changes.There has been an increase in negative reports on what affects energy drinks have on people that map them, from high blood pressure to arrhythmia, which as forced some companies to intromit warning labels on their incase. There is in like manner a concern with the intake of these drinks contributing to the obesity issue, many of these dri nks contain high fructose edible corn syrup, and many additives that fanny contribute to weight gain if consumption is not limited. Competition is fierce in this industry not only between the two biggest competitors, coca plant-Cola partnership and PepsiCo Inc., but also violent manipulate GmbH, Hansen earthy Corporation and privately induceed regional crosss.The two major companies, Pepsi and Coca Cola, are unwavering competitors within the alternative beverage commercialize and use both the mental institution of new products as well as the introduction of existing products in new markets to increase sales. Pepsi has introduced several new products Charge, Rebuild, and conduct three new brands available to consumers interested in vitamin-enhanced drink alternatives. Pepsi has also recently agreed to distribute the Rockstar brand drinks in Canada and the United States.Coca-Cola corporations strategy is to distribute their existing brands in the new markets of Japan, s iemens Korea, Hong Kong and other Asia/Pacific countries. In order to repugn with these two major companies, Red Bull relies on sponsorships and promotion as well as re regorgeation endorsements. By using advertising in this manner, Red Bull is able to use its slogans and logos in a variety of ways to get their name out into the public. Hansen Natural Corporation utilizes a various approach to boost sales. This company increased their package size and gloss over hold opened a competitive price compared to Red Bull.Like Red Bull, Hansen also uses celebrity promotion and sponsorship as a marketing tool. This is not to say that PepsiCo Inc. and Coca-Cola Company do not utilize this method of advertising, as they both spend billions on advertising promotions, celebrity, and sporting endorsements. The competitive sharpness in this case lies with PepsiCo Inc. , whose sales of energy and alternative beverages have surpassed its competitors in the past few years. New entrants are not a firm competitive pressure for this industry.The dominating companies are unsurpassed in their sloshed brand names and great distribution channels. The industry is fully saturated. These factors form it difficult for new companies to compete against them. Any new company absentminded to get into this industry would face high capital start-up expenditures and would surely bomb due to the high cost. Substitution of products is also an area where the competitive force is low. With brand loyalty, the market for substitution is very low. Consumers want the brands they are utilise and wont accept substitution.Suppliers for the industry do not withstand much competitive pressure either. Suppliers to this industry are bottling equipment manufactures and secondary packaging suppliers. The suppliers have little bargaining power, as the two major brands own their own bottling centers. As addressed earlier, changes in this industrys long-term growth rate is a positive one. Growth is hig h in this market and is expected to offer to grow. One of the reasons for this is the increasing globalization. Coke is expanding its operations to be more global as are some of its competitors.The changing spectrum of the customer base is not really a factor here. Most of the demographic has not changed much since the introduction of these alternative beverages. Marketing and innovation has to continue to grow so that the company can grow. Regulatory influences and government form _or_ system of government changes are a huge factor in this industry. As the customers call for increased legislation and regulation of the ingredients, the companies have to make adjustments to their drink formulas, and this could probe costly if not monitored closely.Society is constantly changing and this industry needs to transition with these changes. By the introduction of new products and the re-tooling of existing products, all of the competitors can be successful. This industry has several suc cess factors, product marketing, product differentiation, brand name, a strong distribution network and the ability to adapt to change.PepsiCo Inc. and Coca-Cola Company have strong aspects of all of these factors which is what has made both of them so successful. PepsiCo Inc.has branching into the food market as well as remaining in the soft drink and alternative beverage markets. Coke has had a akin(predicate) strategy and relies heavily on their brand name and product recognition. every last(predicate) of the companies have unique and successful marketing techniques such as sponsorships, promotions, and celebrity endorsements. In order to pass a successful strategic plan, a company needs to establish a group of people to discuss the goals and objectives of their company, sometimes called a depute force.The assess force should then limit what the companys goals and objectives are. By drafting Mission and Vision statements, this task force can begin to convey their goals and objectives. Strategic planning is an on-going task for every company. When a plan is established the implementation and monitoring phases begin. To be successful a company should be constantly monitoring its goals and objectives and changing them when the need arises. With competition so high in this industry, a strong strategic plan is critical.In viewing these companies one can see that their plans are very strong. In order to continue to grow and compete in this market all companies need to look forward at the changing times, attitudes and cultures. All of the companies in this market, as with any market, need to maintain their competitive advantage and find new and different ways to achieve it. A comprehensive action plan needs to be put into place and reviewed often. By doing this all companies have a better disaster at keeping their competitive advantage and enjoying better profits for their shareholders.