1. What are the strategically relevant constituents of the planetary and U. S. drink industry macro-environment? How make the economic features of the alternate drink section of the industry differ from that of other drink classs? Explain. The strategically relevant constituents of the planetary and U. S. drink industry macro-environment are basically the enlargement of the market for alternate drinks by presenting energy drinks. athleticss drinks. and vitamin drinks in international markets. and increasing the market size of alternate drinks by widening current merchandise lines and developing new merchandises.

Numerous factors affect the accomplishment of this scheme and they include: Size of the Market: It is without inquiry that the planetary drink industry is a big one. with the dollar value of the market being $ 1581. 7 billion in 2009 and volume gross revenues ( in one million millions of litres ) being $ 458. 30. Sing the distribution of gross revenues in respects to beverage type. carbonated soft drinks came on top with 12. 919. 3 ( 1000000s of gallons ) being sold and taking to a market portion of 48. 2 % . Following in volume of gross revenues was bottled H2O with a gross revenues volume of 8. 435. 3 and 29. 2 % market portion.

Fruit drink gross revenues were 3. 579. 2 and a market portion of 12. 4 % . In the alternate drink class. athleticss drinks gross revenues were 1. 157. 8 and a market portion of 4 % . ready-to-drink tea gross revenues were 901. 4 with a market portion of 3. 1 % . flavored or enhanced H2O gross revenues were 460 with a market portion of 1. 6 % . energy drink gross revenues volumes were 354. 5 with a market portion of 1. 2 % . and ready-to-drink java gross revenues volume was 51. 5 with a market portion of 0. 2 % . In 2009. the industry worldwide gross revenues of alternate drinks were 40. 2 billion. with gross revenues in the US accounting for 42.

3 % of the gross revenues. Asia-Pacific accounted for 31. 5 % . Europe 22. 2 % . and the Americas ( excepting the US ) 4 % . Growth Rate: There has been a steady growing in the value of the planetary drink industry over the old ages. Between the old ages 2005 and 2009. there has been a changeless addition in the dollar value of gross revenues. and this addition has besides been forecasted between the old ages 2010 and 2014. Sing the surrogate drinks. we see an addition in gross revenues over the old ages that even surpasses that of the planetary drink industry. Market Cleavage:

The market for planetary alternate drinks has been in being for a piece. and drinks have been chosen and selected into groups based on the type of merchandises. The different groups include athleticss drinks. energy drinks. vitamin-enhanced drinks. and relaxation drinks. with comfort and relaxation been of extreme importance to the consumer. In 2009. the alternate drink drink with the most gross revenues was athleticss drinks with gross revenues of about 60 % . Vitamin enhanced followed in gross revenues by 23 % and energy drinks came closely behind with gross revenues of18 % during that same twelvemonth.

Scope of Competition: The major worldwide manufacturers of drinks are Coca-Cola. PepsiCo. and Red Bull. There are besides smaller companies in the same industry. by their production make non compare to the three major companies. Among the most of import competitory characteristics of the alternate drink industry include merchandise invention. efficient distribution systems. and distinguishable distinction. 2. What is competition like in the alternate drink industry? Which of the five competitory forces is strongest? Which is weakest?

What competitory forces seem to hold the greatest consequence on industry attraction and the possible profitableness of new entrants? Competition in the alternate drink industry is in favour of the three major manufacturers. particularly Coca-Cola and PepsiCo. Since their alternate drink merchandise offerings are legion. and they supply to food market shops. convenience shops etc. who have a high demand for their merchandises. they avoid exposure to purchaser purchase and ever have shelve infinite in these channels.

Of the five competitory forces. the strength of competitory competition among the Sellerss of alternate drinks is the strongest. Dickering power and purchaser purchase are besides among the strongest. Persons who purchased the alternate drinks for convenience shops. food market shops and sweeping nines have the advantage of negociating monetary values with the manufacturers of the alternate drinks because of the fact that they are buying such big measures of the merchandises.

Even though the bulk of energy drinks were purchased in convenience shops. athleticss drinks and vitamin-enhanced drinks were besides available in most food shops and eating houses and were besides sometimes sold at featuring events and in peddling machines. The weakest competitory force in the alternate drink industry appears to be the bargaining power and purchase of Sellerss. Due to the fact that there are many providers in this niche. the competition is rather intense it becomes of import to hold characteristics such as ingredients. more attractive packaging etc.

to distinguish them from other trade names. The competitory force that seems to hold the greatest consequence on industry attraction and possible profitableness of new entrants is the menace of new competition. Since the alternate drink industry is a really moneymaking one and tends to transport high monetary value points. this profitableness becomes really attractive to new entrants because of the possibility of being able to accomplish success in the industry. 3. How is the market for energy drinks. athleticss drinks and vitamin-enhanced drinks altering?

What are the underlying drivers of alteration and how might those forces separately or jointly do the industry more or less attractive? The market for energy drinks. athleticss drinks and vitamin-enhanced drinks has changed a batch over the old ages and will go on to see alterations good into the hereafter. The underlying drivers of alteration include alterations in growing rate ( lessening ) and invention. Worldwide dollar gross revenues of alternate drinks grew by more that 13 % yearly between the twelvemonth 2005 and 2007. nevertheless. it slowed down to about 6 % between 2007 and 2009.

One might reason that the ground for this diminution is the impact the on-going recession has on the drink industry. Beverage manufacturers continue to keep their optimism for the industry sing future chances that will be brought to fruition by invention in trade names. spirits. and preparations. These are the aspects that they believe will back up their premium pricing and volume additions. 4. What does your strategic group map of the energy drink. athleticss drink. and vitamin-enhanced drink industry expression like?

Which strategic groups do you believe are in the best places? The worst places? The strategic group map shows the taking alternate drink manufacturers viing both geographically and in respects to assortment of drinks offered. there are therefore the strategic groups in the best places. The alternate drink companies are non merely viing domestically. but in an international graduated table as good.

Hansen Natural. the manufacturers of Monster energy drink. who splits distribution of it’s energy drinks between Anheuser-Busch and Coca-Cola is non merely successful in the United States. but in Great Britain. France. Belgium. the Netherlands. Luxembourg. and Monaco. The company has besides entered understandings to hold its drinks available in Mexico and Australia. In a similar manner. Rockstar has been able to venture internationally by holding its merchandises distributed by PepsiCo in foreign states. The states Rockstar is presently being distributed are Canada. Australia. New Zealand. Japan. Germany. Switzerland. Finland. Spin. the Netherlands. and the United Kingdom.

In a similar manner as the aforesaid alternate drink manufacturers. Red Bull besides has a trade name presence both domestically and internationally. specifically in Europe and the Americas. The strategic groups in the worst places appear to be those companies with a individual trade name e. g. . ViB. Dream Water. etc. runing entirely domestically. With the sum of competition in the market presently. it does non look that these company will do good in the long-run. 5. What cardinal factors determine the success of alternate drink manufacturers?

There are three cardinal factors that determine the success of alternate drink manufacturers and they include: Entree to distribution In order for the alternate drinks to accomplish the gross revenues volumes that its manufacturer desires. it foremost has to be widely available in shops on a consistent footing. With trade name popularity comes the advantage of holding a merchandise readily available on shop shelves. Invention With competition being every bit fast as it is in the alternate drink industry. invention is of extreme importance because it sets a merchandise or a company aside for its rivals.

Invention can be achieved by come ining into different merchandise lines or making wholly different classs of alternate drinks. Brand image A company’s image is really of import when it pertains to viing in whatever industry it does concern in. Choosing the right image to portray in advertizement. selling. etc. could perchance be what retains client trueness. or sways a customer’s determination to buy their merchandise over that of a rival. 6. What recommendations would you do to Coca-Cola to better its fight in the planetary alternate drink industry?

To PepsiCo? To Red Bull GmbH? Since it is evident that Coca-Cola is turning at a much slower gait that its rivals in the alternate drink market. I recommend that it take edifice trade name image and continual invention and new merchandise development into consideration. Portraying the right image in advertizement and selling could take to keeping in client trueness and recovering lost market portion. Since PepsiCo is ranked figure one worldwide for the sale of alternate drinks. with it’s best-selling alternate drinks including Gatorade. which held a 75 % portion of it’s 1.

57 billion US athleticss drink market. Propel. SoBe Lifewater. Amp Energy drinks. and No Fear energy drinks. I would urge that the company continue to construct upon this ranking by taking the necessary stairss to hike their trade name image. I would besides urge that PepsiCo include energy shootings to it’s merchandise line-up to farther encouragement gross revenues. There is no uncertainty that Red Bull GmbH has found its niche in the alternate drink market as the world’s figure one marketer of energy drinks. doing it the third-largest manufacturer of alternate drinks worldwide and the figure two marketer of alternate drinks in the US and Europe.

To go on it’s growing in the US and Europe. I will urge that the company continue to introduce and develop new merchandises. I will besides urge that in order to further solidify the Red Bull trade name. they should venture into production of he other types of alternate drinks. Mentions Gamble. J. ( 2008 ) . Competition in Energy Drinks. Sports Drinks. and Vitamin-Enhanced Beverages. Boston: Harvard Business Publishing.