Their main market of action is obviously the US one but they currently drive their strategy worldwide as it represents a huge reserve of profits. What kind of competition? Both Pepsi and Coke understood that it was better off not to erode their gross profit by playing on prices, even if the customers have showed price sensitiveness in the past history. They have no incentives to fight on prices as long as • there are not many other sellers in the market • prices can be adjusted quickly • there is a history of cooperative pricing (except punctually) Preservation of overall industry profits by Entry Enter the soft drink market is quite risky given the high dominant position of Pepsi and Coke. Hence, there is no real threat to see a new comer eroding the whole market profits by heating up internal rivalry.
Luckily this was countered by Gorbachev’s anti-alcohol campaign when he assigned alcohol factories to ice cream production. Some threats of substitutes would be trade-off of substitutes and buyer inclination to substitute (due to higher advertising on their part): beer, soft drinks, yogurts, and confectionaries. They stole some of the market demand from the Russian ice cream industry in 2000. Some buyer power issues would be available substitutes and backward integration. When the market became open it allowed many more ice cream substitutes into the market.
The pricing and packaging strategy was especially important to Printup since, unlike other drugs in CSP’s portfolio, health insurance providers would not be covering the costs for Metabical for the end-users due to the exclusion of anti-obesity drugs. Packaging strategy Due to the exclusion of anti-obesity drugs from health insurance coverage, the packaging of Metabical needed to be strategic such that the maximum percentage of CSP’s target market would be able to afford the drug. Ideally, Printup would like to package the drug for a period of 12 weeks since FDA testing showed that the maximum effectiveness of Metabical was observed by the majority of the users within that time-frame. Thereafter, the weight loss realized by the drug was very minimal. In light of both of these facts, I feel that Printup should proceed with a 4 week packaging.
These three models also understand the key role of brand equity in company’s success. Consequently, profound understanding of the market and strong commitment of the organization is very vital in every step it takes. Lastly, it seeks for a careful and creative master plan for its execution. Notably, it is not an overnight process as it is a long-term commitment. BrandAsset Valuator focuses on the internal brand designing to acquire awareness from the market.
The long term success of the firm is partially dependant on the management and employees of the firm. They need to ensure that as the organisation grows the level of training provided is consistent with this growth rate. 3. Amazon.com need to monitor the culture of the firm as they continue to grow. It may be necessary, in the future, to exert more
Britvic’s pubs trade was also affected by the recession, company shares fell to its low in 5 years, reaching 222.25 p, a difference of 165p comparing with previous year. In 2008, still feeling the traces of the financial crisis and alert to the changing attitudes in consumer behaviour, Britvic secured exclusive bottling agreements with PepsiCo for V Water and Gatorade in Great Britain. It has also launched and re-designed its packages of squash range, increased large pack production facility, which “unlocked our ability to drive a large-pack performance through increased promotional competitiveness”. Due to these changes, Britvic’s ROCE rose by 3.5% on that year. On Britvic’s liquidity ratios, the most visible trend is that the lines on current and quick ratio are always working in accordance with each other.
But in the meanwhile smaller competitors started to quickly erode market share with prices cut. In 1997, instead of cutting prices, UST reacted to the growth of this value players with the introduction of premiumRed Seal but it was late considering that other brands were already successful in this segment. Moreover, UST is over dependent on smokeless tobacco business that contributed in 1998 for about 97% of
HBS Case 9-702-442 MSB30 June 2008 COLA WARS CONTINUE: COKE & PEPSI IN THE TWENTY-FIRST CENTURY. Houssem Ghorbel Page 1 of 4 HBS Case 9-702-442 MSB30 June 2008 1- Why is the soft drink industry so profitable? Both concentrate producers (CP) and bottlers are profitable. These two parts of the industry are extremely interdependent, sharing costs in procurement, production, marketing and distribution. Many of their functions overlap; for instance, CPs do some bottling, and bottlers conduct many promotional activities.
The market was becoming more interested in the advances of faucet-mounted filters versus pitchers. At this juncture, Brita had three choices: 1 Continue to emphasize water pitchers 2 Begin endorsing a faucet-mounted system 3 Shift emphasis to increase filter sales versus pitchers Brita knew their pitchers could be found in approximately 14% of US households. This ensured them that there were still untapped markets available for their products. Thus raising the question, how should Brita attempt to further penetrate the market with their products? In addition, Brita’s promotion of fresh taste was being challenged.
Pepsi Co. and Coca Cola companies have developed the strategies which are hard for the local sellers to compete with them. However, there were still many producers including new entrants that try to access the market and compete seriously with low price and differentiation strategies among