Finally, how ethical a company is and the social responsibility they undertake also affects the image of a brand. Another economic factor affecting the soft drinks industry is the price of imports, exports and exchange rates. To say the least there is plenty of the pie to go around but it is hard to gain market share.
However, if a newcomer were to try and enter the industry, its current players would make it very challenging because of brand loyalty and recognition amongst customers.
Customers are highly sensitive to the price of soft drinks and are willing to change brands if one becomes much more expensive than the other. The soft drink industry is very competitive, so prices only fluctuate slightly depending on geographical location transportation or short-run sale discounts.
In terms of equipment manufacturers, the suppliers are generally providing the same products. Soft drink companies own a portion of their own supply companies.
There is no need for information on how to use the product it is a simple task. Product innovation is necessary to fill the buyers need for a variety of tastes.
They have low costs, competitive pricing, and strong business relationships. Threat of Substitutes Available substitutes do not have performance limitations or high prices that would justify their use over the products in the soft drink industry because substitutes are not priced at a high enough cost where it would affect their use as a mainland product.
Public Domain PepsiCo is the second biggest company in the global food and beverage industry. Firms often provide incentives to customers on the buyer side.
Brand identities define soft drink flavors i. Customers would not incur costs in switching to substitutes. The number of equipment suppliers is not in short supply, so it is fairly easy for a company to switch suppliers. The choice of switching to a substitute for a customer would in most cases be the difference of cents.
Fixed costs act as a firm barrier to entry and can include costs for warehouses, trucks, labor, etc. No two products are typically exactly alike.
Percentage of consumer spending on food and non-alcoholic beverages has decreased throughout Europe in the last decade, with Difference can occur based on geographic location and how far the products need to travel. The following are some of the key points that PepsiCo must address based on the results of the analysis: Suppliers for the soft drink industry do not hold much competitive pressure.
The global market presents challenges that threaten PepsiCo while creating opportunities for improvement. New entrants can learn from the first entrants history but do not have first hand experience. Bottling, distribution, and storage could be contracted out, but it would likely increase costs in the long run and weaken the supply chain.
The next section of the report will take a more in depth look at the two companies of Coke and Pepsi including their strategies as well as a performance analysis of the companies financials.
Companies are willing to switch suppliers whenever is necessary. This brand image is often affected by the promotion and advertising a company does, whether positively or negatively.
Thus, brand image is something that can be the difference between sales of one product instead of another. Suppliers to the industry are bottling equipment manufacturers and secondary packaging suppliers.1 Industry Analysis: Soft Drinks Barbara Murray (c) explained the soft drink industry by stating, “For years the story in the nonalcoholic sector centered on the power struggle between Coke and Pepsi.
Transcript of The Soft Drinks Industry Analysis What is A Soft Drink "A nonalcoholic, flavored, carbonated beverage, usually commercially prepared and sold in bottles or cans." (American Heritage Dictionary).
Market Analysis of Coca Cola. Print Reference this. Disclaimer: The Macro Environment- PEST Analysis of Coca Cola After CCI it covers the 2nd largest market share % of the soft drink industry in India.
Pest Analysis Of Soft Drink Industry. Soft Drink Industry Five Forces Analysis: Soft drink industry is very profitable, more so for the concentrate producers than the bottler’s.
This is surprising considering the fact that product sold is a commodity which can even be produced easily.
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Environmental Analysis of Soft Drinks Industry in India. This Coca Cola SWOT analysis reveals how the company controlling one of the most iconic brands of all time used its competitive advantages to become the world’s second largest beverage manufacturer.Download