Energy Drink Case Study

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PepsiCo’s Current State Our brands are sold in more than 200 countries worldwide. In 2010, we earned the title of “fourth-largest food and beverage company” in the world. We are now in the fourth quarter of 2011 and must continue to focus on our leadership and power in the market. We must continue to differentiate our products and expand our market presence. To do this we intend to focus on our Alternative Beverages sector. Our energy drinks, sports drinks, and vitamin-enhanced beverages have given us a 2-to-1 worldwide market-share lead over Coca-Cola. Our greatest market share being here in the United States, has made us the world’s largest seller of alternative beverages. We intend to battle for the market share we currently have in addition to analyzing our current macro-environmental characteristics. We will identify key success factors we attribute to our success as well as industry dynamics. An examination of our noncarbonated beverage industry will best be determined by way of analyzing Porter’s 5 Forces. Grasping our competitive environment gives us an understanding of these forces: rival sellers, new entrants, substitute products, supplier bargaining power and buyer bargaining power. We must focus on our competitive edge and what key factors have made us successful. Competitive Forces Industry Members are Facing There are several competitive forces that we must examine; rival sellers, new entrants, substitute products, and both supplier and buyer bargaining powers. Rival Sellers: Leading energy drink brands in the United States alone consist of the following brands shown in Figure 1 on page 3. Red Bull consistently holds top sales dollar over all others in the market. We have identified them as our number one rival in our energy drink market. We believe the majority of Red Bull’s success is a direct correlation with the

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