Soda Stream Essay

519 Words3 Pages
SodaStream 1. What is SodaStream’s business Model? How is it different from the conventional carbonated soft drinks business model (e.g., coke, pepsi, etc)? SodaStream has taken completely different approach to carbonated soft drinks market, controlled by the three biggest players: Coke, Pepsi and Dr. Pepper. Unlike its big competitors that use traditional sales and distribution model focused on transforming concentrate into a bottle of soda and delivering it to a customer, SodaStream produces soda system that allows customers make their own soda at home. The company uses “razor and razor blade” business model that impels customers to keep buying the higher margin carbon dioxide refills and syrups after they purchase the soda makers at a small markup. Such approach allows the company to generate a constant source of income and to overcome economic, social and environmental challenges. It also helped SodaSteam avoid high entry barriers in the carbonated soft drink industry. 2. What challenges does SodaStream face as the disruptor and how should it approach these challenges? As the disruptor, SodaStream faces many challenges including sociocultural, economic and technological factors. Among sociocultural factors, one of the biggest challenges for SodaStream is to overcome customer’s “emotional connection” to their favorite soda brands. Unlike people in Europe, Americans don’t drink as much sparkling water. They also prefer Coke or Pepsi versus generic soda that represents less than 2% of all soda sales in U.S. In my opinion, one of the ways to overcome this challenge is to create co-opetition by partnering with Coke or Pepsi and deliver consumer’s preferred flavors. Another option is to take advantage of a new health trend and offer to the customers many varieties of naturally flavored water. While spending $80 to $200 on soda maker might be a good
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