Dr. Pepper Snapple Group
Dr. Pepper Snapple Group (DPS) is the leading producer of flavored beverages in North America and the Caribbean. DPS is a manufacturer and distributor of more than 50 brands of carbonated soft drinks, juices, teas, and other premium beverages. It’s based in Plano, Texas and from the year 2009 to 2010 net sales increased 2% from $5,531,000 to $5,636,000 and also the segment of operating profit gained a 1% ($1,310,000 - $1,321,000).
The primary market of DPS is North America and the Caribbean. The U.S. markets hold about 89% of DPS Sales. DPS operates about 24 production plants with more than 200 distribution centers. In addition, DPS signed a $715 million dollar deal that gives Coke the right to distribute Dr. Pepper and Canada Dry in the U.S.
A strategic plan is often accused of being a waste of time and irrelevant in a changing market. But it helps to move the company in a direction which will enhance the value. Even though the strategic objectives listed below are clearly laid down. How they will be achieved may be not so clear. The company current strategy includes:
• Build and enhance leading Brands
• Focus-on opportunities in high growth and high margin areas
• Increase presence in high margin channels and packages
• Leverage our integrated business model
• Strengthen our route-to-market through acquisitions
• Improve operating efficiency
• RCI- Rapid Continuous Improvement
• Health and Wellness initiative
The beverage industry is made up with about 3000 companies. It is a highly competitive industry. Its two main competitors are Coca – Cola and PepsiCo. These two companies generate 63% of sales in North America. One of DPS is main concern is not being able to gain market share in the United S...
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...itional strategies. First DPS must enter the international market to take the dependency off of the United States. So if the United States were to have another downfall it would not affect them as tremendously. Second, enter the market of energy, sports, and low calories drink as those markets continue to increase. This leads into the next point of capturing the healthy trend. DPS has a strong portfolio of brands and should expand one of those brands more into the healthy trend. Next, is becoming more independent. Accomplishing this will decrease the dependency on the 3rd party packaging and distribution to rule out the possibility of the 3rdparties becoming redundant of DPS. Last is creating and developing DPS’s business alliances to boost company growth. Achieving this will increase brand awareness, enlarge your customer base, and enhance your product offering.
Pepsi needed a strong regional partner. Pepsi had been falling behind to Coke in Mexican market. However, changes in the regulatory environment had cut Coke’...
For example in Essentials of Management “the convenience stores were aggressive in pressing alternate beverage producers and food distributors for low prices and slotting fees”. The convenience store mainly carried two to four brands of alternative beverages outside of what was offered from Pepsi or Coca-cola, and required the sellers to pay an annual slotting fee in return for providing bottle facings on cooler shelf.” “The food and beverage distributors usually allow alternative beverage producers to negotiate slotting fees and any rebates directly with the store buyers, according to Essentials Strategic Management”. (p. 267) In 2010 Pepsi Co was the world’s fourth largest food and Beverage Company with the 2009 sales being 43 billion dollars according to Essentials Strategic Management
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
aspects: Carbonated soft drinks industry's structure, evaluation of driving change factors in this industry and finally analysis of key strategic factors it is faced with.
Frito-Lay controlled 40% of the USA-market assuring high volume production by increasing internal coordination with PepsiCo developing the Power of One strategy consisting in mixing snacks with beverages and sauces produced by Peps...
Competitive Environment i. Market Share Coca-Cola and PepsiCo are the two largest players in the industry, with 43% and 31% of the market share, respectively. ii. Implications Key success factors in the industry are a strong brand presence, maintaining customer loyalty, exploring new markets and distribution channels, as well as offering a diversified product line.
Analysis of the Coca-Cola Company The Coca-Cola Company is the world's leading manufacturer, marketer and distributor of soft-drink concentrates and syrups. The Coca-Cola Company is the world's leading manufacturer, marketer and distributor of soft-drink concentrates and syrups. The Company markets many of the world's top soft drink brands, including Coca-Cola, Diet Coke, Sprite and Fanta. Through the world's largest and most pervasive distribution system, consumers in nearly 200 countries enjoy the Company's products at a rate of more than one billion serving a day.
The Porter’s model of competitive advantage of nations is based on four key elements including factor endowments, demand conditions, related and supporting industries and firm strategy, structure and rivalry. This makes it suitable in understanding the competition existing in the soft drinks industry in the Asian markets. The factor conditions identify the natural resources, climate, location, and demographics. Coca cola and Pepsi enjoy the growing population in the Asian markets (Yoffie, 2002). A higher population guarantees the two companies adequate revenues. Other factors include communication infrastructure and availability of skilled workers. Most of the Asian countries are embracing new technologies that grow much knowledge of the diverse beverage drinks. Secondly, the demand conditions play a significant role in enhancing competitiveness for the firms. Both Coca cola and Pepsi are an
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
A company must identify its strengths and weaknesses in order to develop growth. Downsizing products is more important than developing new products. A company must be able to identify where there weak markets are at. Times change and so do products. The products that are less profitable or simply aged are the ones that must be downsized in order to make way for a different, more innovative market. When developing growth strategies a company must use the product/market expansion grid. First the company has to figure out whether they can have better market penetration, second they must consider looking for market possibilities for current products. Third they must develop their products into innovative products that people can’t live without having. Lastly they need to be diverse with their company, therefore expanding and including different features to the company could draw more attention from different
As we all should know, PepsiCo is one of the world’s leader in convenient food and beverages. PepsiCo shares are traded worldwide and particularly in NYSE (United States). PepsiCo is in the same line with Coca cola and Cadbury Schweppes as the dominating beverage companies. PepsiCo has successfully built a great brand name rivaling with coca cola, probably because PepsiCo unlike coca cola has its own bottling companies. With a competitive strategy based on differentiation rather than cost leadership like its fellow competitors PepsiCo invests highly in new packaging, flavors, formulas to outsmart their competition. Founded in 1919, producing a variety of sweet and grain-based snacks, carbonated and non-carbonated
The CSD (carbonated soft drink) industry is one that is very competitive. A few firms dominate this industry, most notably Coca Cola and Pepsi Cola. This is due to substantial barriers to entry. Cadbury-Schweppes, producer of products such as 7up and Dr. Pepper is the third leading company in this industry. Due to the dominance of Coca Cola and Pepsi, Cadbury-Schweppes faces the daunting task of having to fight for market share and survive in this fiercely competitive industry. Using economic analysis for support, Cadbury-Schweppes will need to use its strengths in the non-cola categories to compete in this CSD industry.
As the world 's largest manufacturer and distributor of non-alcoholic beverages, Coca-Cola is certainly no stranger to global marketing. Established in the US, Coca-Cola initiated its global expansion in 1919 and now markets to more than 200 countries worldwide. It is one of the most recognizable brands on the planet and also owns a large portfolio of other soft drink brands including Schweppes, Oasis, 5 alive, Kea Oar, Fanta, Lilt, Dr Pepper, Sprite and PowerAde. Despite this, Coca-Cola often struggles to maintain its market share over its main rival PepsiCo in some overseas markets, particularly Asian countries.
This competitive advantage has been rendered sustainable as other players have found it difficult to catch up with the company's competitive strategy. In spite of this clear advantage, it was noted that the company faces some challenges being the world leader in soft drink distribution. The canning and bottling of the product which is done in many countries have now fallen into the hands of independent companies, thus it becomes hard for a given company to control the quality of the packaging