Energy Drinks, Sports Drinks Case Study

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Case: Competition in Energy Drinks [pic] Executive Summary The beverage market is a large market with the worldwide total market share in the billions. It’s a mature sector and includes companies that market nonalcoholic and alcoholic items. Since growth opportunities are limited, many members of the industry endeavor to diversify their offerings to better compete and gain share. While this industry has grown significantly over the years, recently it has experienced market stagnation as new entrants and products enter an already fierce marketplace. The marketing of energy drinks, sport drinks, and vitamin-enhanced beverages targets many segments, so much so that Coke and Pepsi now own or distribute many of the labels vying against their mainstay brands. This case deals with the competition within the alternative beverage segment by exploring the strategic components, competitive forces, changes in the market, group map, and success factors. In addition this case focuses on key recommendations that will be needed to navigate the complex arena of the alternative beverage segment. Strategic Components of Alternative beverage segment The US beverage market grew by 0.9 percent in 2011 and although this marked the second year of growth for the beverage industry, after two consecutive declines in 2008 and 2009, the pace of growth slowed from 2010 (Berk, CNBC, 2012). This study emphasizes a point of a societal shift of Americans being more health conscious and not consuming as much carbonated beverages as in years past. The alternative drink market is in the midst of an expansion. The worldwide sales have grown 13% annually from 2005 to 2007. The pace of growth is much slower due to the overall global economic slowdown; however it is still projected to reach $53.5B by 2014. The retail price for an alternative drink is 50-75% higher then

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