Energy Drinks Essay

The st placegically relevant components for the global and U. S. deglutition industry macro-environment be commercialise growth rate, market surface, segmentation and sphere of rivalry. Economic characteristics of ersatz beverage segment differ from other beverage categories in several(prenominal) ways. The market size for alternative beverage was $40. 2 billion globally and $17 billion in the United States, while the market size for other beverages was $ 1,548. 3 and $28. 9 billion globally. Market growth rate for alternative beverages between 2005 and 2009 was 9.8 portion while for other beverages it was 2. 6 percent. Question two The controversy in the alternative beverage market was strong. Pepsi and Coca-Cola were competing for the top spot in the production and statistical distribution of their beverages. The strongest competitive delineate was bargaining post and leverage of buyers. Most stores were negotiating for demoralise prices since they bought the beverages i n queen-size quantities. Since Pepsi and Coke had an established brand, their alternative beverages found automatic shelf seat in most stores and wholesale clubs.The weakest of the quintet competitive rams was the bargaining power and leverage of suppliers. The reason is that the packaging from different suppliers was similar, thus it was easy to make out the packaging from most suppliers, and thus they had weak bargaining power. The competitive force that seems to have the greatest effect on industry attractiveness is tilt from substitutes. This is why there were many substitutes to alternative beverages that were sold at lower prices. The competitive force with the greatest effect on profitability of parvenu entrants is a threat of entry.Question three The market for vitality drinks, sports drinks and vitamin-enhanced drinks is ever-changing in several ways. There is mutation of products with the rise of drinks containing additional nutrients and insane asylum of cogenc y shaft of lights. Furthermore, the industry is also considering consolidation options in an attempt of reducing distribution costs, for example Coca-Cola distributed Hansens Monster energy drink. The drivers of change argon changes in the long-term growth rate, industry consolidation and introduction of raw(a) modern products into the industry.The forces individually or collectively may not attain big changes in the attractiveness of the industry. The reason for that is there is no proof that the big companies of alternative beverages will practice unhealthy and aggressive competition for market dominance. Question Four My strategic group map of energy drinks, sports drink and vitamin enhanced beverage industry is categorized by considering the scope of geographic distribution of producers and brand portfolio. Pepsi and Coca-Cola are positioned favorably since they compete internationally and have a strong brand portfolio.Hansen Natural is a supreme brand company since Mons ter energy drink accounts for 90 percent of its sales. The success of this company is mainly contributed by strong fork up chain of mountains due to its partnership with Coca-Cola and Anheurser-Busch distributions. Rockstar Inc is also successful in this map since it has a strong distribution chain offered by Pepsi. However, Dream Water and financial support Essentials are positioned poorly in this map since their distributions are only regionally located and they only offer a single brand. Question fiveSeveral key success factors determine the success of alternative beverage producers. One of these factors is the brand image. Producers with a strong brand image created by extensive advertisement campaigns and endorsement from celebrity athletes enjoyed big sales. Furthermore, products with strong supply chain and distribution network, for example Coca-Cola and Pepsi, had bigger market share. Companies with good innovative skills due to extensive research and product development had more sales since they developed new categories such as energy shots.Companies with huge sales volume enjoyed economies of scale and thus they were able to cover their sales and distribution costs. Question six Coca-Cola should adopt several recommendations to ameliorate its competitiveness in the alternative beverage industry. It should consider increasing its sales in europium and Asia by conducting extensive market campaigns in these regions. Moreover, it should consider increasing its innovation efforts in order to regain its market share in energy drinks. Another recommendation is considering 5-Hour energy in an attempt of increasing its boilersuit brand portfolio.Pepsi should consider adopting image building campaigns brands such as international ampere and Double Shot since their overall market share in atomic number 63 has been declining. The company should also consider developing its own energy shot brand in order to diversify its brand portfolio It would be a good idea to consider introducing energy shots to Europe, Middle East and Austria, since these markets are feasible. Red Bull GmbH should sum up its innovation efforts in an attempt to increase its market share in Europe and United States. It should also improve its performance in the new energy shots it introduced in the market.