Coke Wars Presentation
- 2. 1st Speaker Mr. Koh 2nd Speaker Ms. Lim 3rd Speaker Ms. Siew 4th Speaker Mr. Tan 5th Speaker Mr. Loh 6th Speaker Ms. Cheong www.ruionkoh.blogspot.com G eneral I ntroduction
- 3. 1st Speaker Mr. Koh Soft Drinks Industry - 1.1 What are “soft drinks” - 1.2 The growth of the soft drinks industry -1.3 The soft drinks industry’s value-chain www.ruionkoh.blogspot.com
- 4. 1.1 What are “soft drinks”? - Carbonated - Functional - Juices - RTD Tea & Coffee - Water Bottled ? www.ruionkoh.blogspot.com I ndustry Introduction
- 5. 1.1 What are “soft drinks”? Characteristics of Soft Drinks : - Non-alcoholic Flavoured (usually) Sweetened (usually) soft drink n. 1) In both senses also called soda pop; also called regionally cold drink, drink, pop, soda, soda water, tonic. Figure 1.1 Definition as according to The American Heritage® Dictionary of the English Language ( Barbara, 2003) 2) A non-alcoholic, flavoured, carbonated beverage, usually commercially prepared and sold in bottles or cans. www.ruionkoh.blogspot.com I ndustry Introduction
- 6. 1.2 The growth of the soft drinks industry Total revenue generated by GLOBAL BEVERAGES industry in 2008 = $1,416.3 billion In other words, Total revenue generated by SOFT DRINKS industry in 2008 = 416.4 billion www.ruionkoh.blogspot.com Data compiled from datamonitor.com I ndustry Introduction
- 7. 1.2 The growth of the soft drinks industry Figure 1.2, Figure 1.3, Table 1.2 and table 1.3 Compilation of Global Soft Drinks Growth (Market Value) from datamonitor.com www.ruionkoh.blogspot.com I ndustry Introduction
- 8. Factors that lead to the downward-slopping demand in soft drinks industry : - 1.2 The growth of the soft drinks industry Economical Condition Changes in Consumers’ Lifestyle www.ruionkoh.blogspot.com I ndustry Introduction
- 9. 1.3 The soft drinks industry’s value-chain Concentrate Producers Bottlers -Produce soft drinks -Distribute soft drinks to retailers & end users -Produce concentrates from raw materials Concentrates Vertically Intergrated www.ruionkoh.blogspot.com I ndustry Introduction
- 10. 1st Speaker Ms. Lim Porter's 5 Forces - 2 .1 Intensity of rivalry - 2.2 Barriers to entry - 2.3 Bargaining power of suppliers - 2.4 Bargaining power of buyers - 2.5 Threats of substitutes - 2.6 Conclusion www.ruionkoh.blogspot.com
- 11. Intensity of rivalry Bargaining power of buyers Bargaining power of suppliers Threat of substitute Risk of entry Major firms fight for -competitive advantages -market share Difficult compete against cost efficient concentrated producers Adopted vertical integration in their distribution channels High investment for specialized technologies and equipment Difficult to dispose Existing producers already have experience and assets to process its concentrates Commodities are homogenous goods Turned to synthetic sweeteners Size of concentrate producers dwindles Size of bottling plants Owed by concentrate producers Adopted forward integration in their business line Low switching cost for buyers Taste of the concentrates are difficult to be imitated Most of the CSD products use high fructose corn syrup TCCC gain 47% market share (largest share in soft drink industry) www.ruionkoh.blogspot.com Porter’s Five Forces
- 12. Concentrate producing industry is PROFITABLE High intensity of rivalry- duopolistic nature Low threat of new entrants- high investment and high cost to exit Low bargaining power of suppliers- goods are difficult to differentiate Moderate bargaining power of buyers - better control on bottlers but switching cost for buyers is low Low threat of substitute- no substitutes exist for concentrates CONCLUSION www.ruionkoh.blogspot.com Porter’s Five Forces
- 13. Business Level Strategy 3rd Speaker Ms. Siew - 3.1 Components of Differentiation Strategy for PepsiCo - 3.2 Components of Differentiation Strategy for Coke www.ruionkoh.blogspot.com
- 14. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 15. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 16. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 17. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 18. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 19. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 20. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 21. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 22. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 23. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 24. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 25. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com B usiness level strategy
- 26. Developing world-class advertising campaigns Introducing new can And bottle design Responsiveness towards customer needs Good distribution channel Innovating healthy products Providing the Coca-Cola Experience Comparison www.ruionkoh.blogspot.com
- 27. SWOT Analysis - 4.1 Strengths of Coke and Pepsi - 4.2 Weaknesses of Coke and Pepsi -4.3 Opportunities of Coke and Pepsi - 4.4 Threats of Coke and Pepsi 4th Speaker Mr. Tan www.ruionkoh.blogspot.com S wot Analysis
- 28. Strong Distribution channel Well-establish company High Market share Leading brand Strong brand Value Largest players in soft drinks industry Best recognized global brands Innovative Strong revenue growth Strengths Sensitive towards its Consumer Aggressively adopts to the inorganic growth Cost saving Acquisition 4.1 Strengths of Coke and Pepsi S wot Analysis
- 29. Sluggish performance in mature market Poor cost management Yet to overcome continued downward economic pressures Weaknesses Overdependence on single largest market Low bargaining power 4.2 Weaknesses of Coke and Pepsi S wot Analysis
- 30. Increasingly health conscious Expand in other beverage categories The third largest player in functional drinks Opportunities Expand internationally Tap the potential of growing market Per capital consumption of its product 4.3 Opportunities of Coke and Pepsi S wot Analysis
- 31. Increasing concern of healthy concept beverages Sluggish growth in carbonated drinks’ market Overdependence on its bottler partners Threats Higher fuel price Intensive competition 4.4 Threats of Coke and Pepsi S wot Analysis
- 32. Water bottled segment - 5.1 The water bottled industry - 5.2 By enhancing their well established bottling and distribution system -5.3 By aggressive advertising 5th Speaker - 5.4 By positioning the water bottled brands Mr. Loh W ater bottled segment
- 33. Water Bottled Industry Sparkling flavored Water Sparkling Unflavored Water Still flavored Water Still unflavored Water 2007 7.3% 119.4 Billion liters 5.1 The water bottled industry www.ruionkoh.blogspot.com W ater bottled segment
- 34. major types of water Spring Mineral Purified 3 5.1 The water bottled industry www.ruionkoh.blogspot.com W ater bottled segment
- 35. Will Coke and Pepsi repeat their success in the water segment YES ? 5.1 The water bottled industry www.ruionkoh.blogspot.com W ater bottled segment
- 36. Home and office delivery-Nestle Dasani (Coca-Cola) and Aquafina (Pepsi) By enhancing their well established bottling system 5.2 By enhancing their well established bottling and distribution system www.ruionkoh.blogspot.com W ater bottled segment
- 37. China- Big market and offer great opportunity Danone & Nestle- Increase promotion activities Danone- Local presence – Dannon Nestle- £1.25 million in marketing-Nestle Aquarel & Nestle Purelife By aggressive advertising 5.3 By aggressive advertising www.ruionkoh.blogspot.com W ater bottled segment
- 38. Positioning to the targeted segments In CSD- Diet Coke & Diet Pepsi as Health conscious products Dasani- as affordable range water Evian- expensive products By positioning the water bottled brands 5.4 By positioning the water bottled brands www.ruionkoh.blogspot.com W ater bottled segment
- 39. -6.1 Pepsi’s targeting the youngster to build strong brand recognition -6.2 Pepsi’s effective cost reduction -6.3 Pepsi’s aggressiveness in seizing business opportunities 6th Speaker Ms. Cheong The Coca-cola Company or PepsiCo will be the leader? www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
- 40. The Coca-cola Company or PepsiCo will be the leader? www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
- 41. Strong brand recognition – adolescent 6.1 Pepsi’s targeting the youngster to build strong brand recognition “ Marketers plant the seeds of brand recognition in very young children, so that it will grow into lifetime relationships” (Media Awareness Network, 2009) www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
- 42. Market share Source: Bruemmer, 2009 6.1 Pepsi’s targeting the youngster to build strong brand recognition www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
- 43. 6.2 Pepsi’s effective cost reduction Effective management Harvest own fruits Lower price, gain competitive advantage www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
- 44. Diversify into different business portfolio Global snacks value $61.2billion, 2008 Pepsi held $20.6 billion (33.1%) 6.3 Pepsi’s aggressiveness in seizing business opportunities Source: Progressive Media Group, 2005 www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
- 45. Conclusion Strong brand recognition Effectiveness in cost reduction Aggressiveness in seizing opportunities www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
- 46. PepsiCo will be the future leader! www.ruionkoh.blogspot.com