Case #5: competition in energy drinks, sports drinks and vitamin-enhanced beverages.Here are the instructions:I have attached all the pages of the case study that you need to read before write the...

Question 1: What are the strategically relevant components of the global and U.S. beverage
industry macro-environment? How do the economic characteristics of the alternative
beverage segment of the industry differ from that of other beverage categories? Explain.
In the current scenario, the market value of the beverage industry would be nearly 7,400
billion and in terms of the value beverages market may have CSDs commanding approximately
85 % share, but the fact is that the non carbonated segment had currently clocked a very
impressive 35% growth (year-on-year) considering the data for past few years compared to
nearly 7% to 8 % growth by this entire segment. This change has been attributed towards the
rapid shift of the United States from colas towards the non-carbonated drinks. Also to compete
with the plethora of the brands towards the non-carbonated space of the juices, water as well as
niche drinks, the companies like Coca-Cola and Pepsico needed to be nimble. They were
required towards having a faster go-towards-market with the new brands within the non-
carbonated drinks space. (Non101, 2009)
As of 2011, the Coca Cola Company has net sales of over $46 billion and net profit $28
billion. It has total employee base of around 67,400 in 2011 in US only. Coca Cola is global
leader in terms of manufacturing, marketing and distribution of soft drinks. It has many product
ranges which include water, enhanced water, juices & juices drinks ready-to-drink teas and
coffees, and energy and sport drinks (Coca-Cola Co, The In Soft Drinks - USA, Euromonitor
International, 2012). Though there are issues of marketing; positioning and pricing that have to
be tackled, as fruit based juices are more expensive than carbonated drinks. Also, distributions of
fruit juices and non-carbonated drinks have to be addressed, so that a wider distribution is made
possible. In spite of the initial obstacles, marketers agree that consumers are taking to non-
carbonated drinks faster today. Coke’s effectiveness was primarily the result of the synergistic fit
within its structural as well as contextual dimensions.
Question 2: What is competition like in the alternative beverage industry? Which of the
five competitive forces is strongest? Which is weakest? What competitive forces seem to
have the greatest effect on industry attractiveness and the potential profitability of new
entrants?
The beverages industry includes company that operates in alcoholic and non alcoholic
items; it is mature industry with limited opportunities for growth. Companies that operate within
this industry endeavor to diversify their product offerings to compete better against each other
and increase their market share. Companies are improving upon their distribution arrangements
and also pursuing for lucrative distribution arrangements and acquisitions so that they can
expand their operations, product base and increase their global reach.
Globally big companies like Coca Cola and Pepsi distribute their well known products
both carbonated and non-carbonated through bottling subsidiaries. These bottlers depend on
these market leaders to develop new products, improve on existing products and maintain
advertising for them. They enter into a long term sizable contracts for distribution with these
subsidiaries thereby affecting their results. Recently, with the increase of awareness level of the
causes of the common health concerns and issues like diabetes and obesity, has led to increase in
demand...