Corporate Research Project on Carbonated Drinks Industry in Dubai
Download as PPTX, PDF3 likes2,801 views
The document analyzes the supply chain management in the global carbonated drinks industry with a focus on the UAE market. It details market dynamics, key players, growth projections, and best practices in sourcing and distribution, emphasizing the role of effective supply chain strategies. Additionally, it explores challenges and recommendations to adapt to changing consumer preferences and increasing regulations.
Corporate Research Project on Carbonated Drinks Industry in Dubai
- 1. C O R P O R A T E R E S E A R C H P R O J E C T – 1 SUPPLY CHAIN MANAGEMENT IN CARBONATED DRINKS INDUSTRY 1
- 2. OBJECTIVES To study the Carbonated Drinks industry in the world and in United Arab Emirates To study the role of Supply Chain Management in Carbonated Drinks industry To understand the best practices in sourcing and distribution in carbonated drink industry in the world To study the operations of Supply Chain Management in United Arab Emirates 2
- 3. WORLD UNITED ARAB EMIRATES Coca – Cola Limited Pepsi Cola Limited Cadbury Schweppes Ltd Al Ahlia Gulf Line General Trading Company Aujan Industries Dubai Refreshments (PSC) 3 MAJOR PLAYERS IN THE INDUSTRY
- 4. MARKET SHARE Industry expected to exceed $1,900 Billion by year 2015 Consumption Volume expected to exceed $245 Billion Kilograms by year 2015 Soft Drinks market to reach almost $586 Billion by year 2015; Carbonated Drinks to contribute almost 40% of soft drinks market 4 Source: Market Line, 2012
- 5. GLOBAL SCENARIO 5 Source: Euro Monitor
- 6. CONSUMPTION PATTERN (WORLD) 6 Source: Market Line, 2012
- 7. CONSUMPTION FIGURES 7 Source: Euro Monitor
- 8. PROJECTED GROWTH IN UAE 8 GROWTH 2014 2015 2016 2017 Bottled Water 3% 6% 8% 10% Carbonates 5% 9% 14% 18% Concentrates 5% 10% 20% 25% Fruit/Vegetable Juice 5% 11% 18% 24% RTD Coffee 40% 100% 180% 300% RTD Tea 6% 10% 15% 19% Sports and Energy Drinks 5% 10% 13% 18% Soft Drinks 4% 8% 12% 16% Source: Euro Monitor
- 9. DISTRIBUTION PATTERN IN UAE 9 Percentage off-trade BW Carbonates F/VJ RTD C RTD T Store-Based Retailing 80.6 99.3 100 96.7 100 Grocery Retailers 80.6 99.3 100 96.7 100 Hypermarkets 26.9 25.8 29 26.5 29.1 Supermarkets 12.6 10.5 11.4 10.8 11.8 Small Grocery Retailers 39.1 35.5 42.5 57.7 56.3 Convenience Stores 11.7 9.1 15.9 37.7 18.1 Independent Small Grocers 19.1 25.9 26.5 20 36.4 Source: Euro Monitor
- 10. S U P P L Y C H A I N M A N A G E M E N T LITERATURE REVIEW 10
- 11. SUPPLY CHAIN MANAGEMENT Supply Chain is defined as a group of inter – connected participating companies that add value to a stream of transformed inputs from their source of origin to the end products or services that are demanded by the designated end – consumers. - Dr. Lu, Fundamentals of Supply Chain Management 11
- 12. ROLE OF SUPPLY CHAIN MANAGEMENT Meeting consumer needs Involving minimum costs Distribution Network 12
- 13. DISTRIBUTION NETWORK 13 Types Direct Shipping Direct Shipping & In – Transit Merge Distributor Storage – Last Mile Delivery Distributor Storage – Consumer Pick Up Retail Storage– Consumer Pick Up Distributor Storage – Carrier Delivery
- 14. COST FACTORS SERVICE FACTORS Inventory Transportation Facilities and Handling Information Technology Response Time Product Variety Product Availability Customer Experience Order Visibility Return Ability FACTORS IN DISTRIBUTION NETWORK 14
- 15. DISTRIBUTION NETWORK FOLLOWED Distributor storage is suitable for industries which have fast moving items in which case storage at warehouses also makes sense when consumer wants delivery of goods relatively faster. 15
- 17. RECYCLING 17 Consumer to Recycling Plants Requires 15% less energy to reproduce Preserves Environment Use of recyclable materials
- 18. INBOUND OUTBOUND Raw materials for finished goods Ingredients, Machinery Activities for the finished product to reach the consumer Transportation, Warehousing, Order Fulfillment 18 INBOUND – OUTBOUND LOGISTICS
- 19. A L – A H L I A G U L F L I N E G R O U P ( B O T T L E R S O F C O C A – C O L A I N U A E ) 19 PRIMARY RESEARCH
- 21. SUPPLY CHAIN – BOTTLERS 21 Supplier Production Transportation Warehousing Distribution Customer
- 23. SWOT ANALYSIS 23 Strength • Large and growing Market • Basic consumer need • Low Cost • Non Alcoholic Weakness • Traditional preservation style • Narrow range of material Opportunity • Use of potential public relations • Innovative packaging • Replacement of alcoholic drinks • Replacement of tea and coffee Threat • Health Issues • Environmentalism • Distribution costs • Threat of substitutes
- 24. PEST ANALYSIS 24 • Taxes and Regulations regarding health issues • Monopoly issues Political • Demand in developing countries • Financing situation in countriesEconomic • Healthy substitutes becoming more attractive • Environmentalism Social • Innovation in production • Innovation in packagingTechnology
- 25. Porter’s Five Force Analysis – Concentrate producer INDUSTRY COMPETITOR S Rivalry among existing firms BUYERS - Low Two main buyers are Bottler and Fountain. Concentrate producers have cooperative merchandising agreements with bottlers. The number of bottlers had fallen continuously. ENTRANTS - Low It’s hard for new entrants to market, because they need a lot of resources and distribution channels are dominated by previous concentrate producers. SUBSTITUTES - Low Two concentrate producers(Coke and Pepsi) have dominated the market. SUPPLIERS - Low Concentrate producers have established long term relationship with suppliers. Switching cost of suppliers is low. Concentrate producers often maintained relationships with more than one suppliers. Bargaining power of suppliers Threat of new entrants Bargaining power of buyers Threat of substitutes POTTER’S ANALYSIS – CONCENTRATE PRODUCER
- 26. Porter’s Five Force Analysis – Concentrate producer INDUSTRY COMPETITOR S Rivalry among existing firms BUYERS - High The market seems to be saturated. Switching cost is low. Rivalry between Coca-cola and Pepsi is very high. ENTRANTS - Low Bottlers’ profit is low. Making new distribution channels is hard and expensive. The market growth has decreased. SUBSTITUTES - Low Bottlers cannot be easily replaced by other marketing channels. Selling soft drinks through bottlers still has a big portion of Concentrates’ sales. SUPPLIERS - Medium Concentrate producers have obtained small bottlers. Bottlers have maintained relationship with more than one supplier. Bargaining power of suppliers Threat of new entrants Bargaining power of buyers Threat of substitutes POTTER’S ANALYSIS – BOTTLER
- 27. LOGISTICS INVOLVED 27 Average Order Size Order Placement Transit Time Order Frequency Inventory Management Unsold/Damaged Stock Technology Mode of Transportation Warehousing Stock Keeping
- 28. FUTURE CHALLENGES 28 Consumers getting health conscious Retailers launching own drinks Emergence of non soda drinks in the market Environmentalism Rise of substitutes Increasing regulations from the government
- 29. RECOMMENDATIONS 29 Focus on low calorie drinks Increase waste water treatment Recycling bins at major consumption areas and recycling campaigns Develop Research and Development for new drinks in market Widen the target audience to senior citizens Focus on product differentiations Focus to change the image and perception to fit healthy living trend
- 30. January 2014 Team formation Topic decision February 2014 SOP submission Meeting with the mentor Discussion on the SOP and initiation of Secondary Research March 2014 Research on the secondary data Visit to Dubai Statistics Centre Primary research on the basis of a visit to the beverage industry. April 2014 Analysis and interpretation of data Final drafting of the report Presentation of the report. TIMELINE 30
- 31. RESEARCH FRAMEWORK 31 Setting Objectives Literature Review on Supply Chain Secondary Research on the Industry Primary Research by meeting Industry Experts Analysis and Interpretation
- 33. P R E S E N T E D B Y A N A N T B A N S A L K O M A L S A G A R S A N K E T G O L E C H H A 33 THANK YOU
- 34. 34 ADDITIONAL
- 35. COSTING RELATIONSHIPS Inventory Cost + Facilities Cost + Transport Cost = Total Logistics Cost 35 Source: Chopra and Meindl, 2001. “ Supply Chain Managemet”, Printice Hall NJ
- 36. PERFORMANCE CHARACTERISTICS 36 Cost Factor Performance Inventory Higher than Direct Shipping model Transportation Lower than Direct Shipping model, lowest for fast moving items Facilities and Handling Higher than manufacturer storage with larger difference for slow moving items Information Simpler infrastructure compared to Manufacturer storage Service Factor Performance Response Time Relatively faster than other models Product Variety Lower variety compared to other networks Product Availability Higher cost to provide same level of availability as in Direct Shipping Customer Experience Much better than Direct Shipping Order Visibility Visibility much more and easier compared to direct shipping Return Ability Easier than direct shipping model
- 37. DIRECT SHIPPING Manufacturer storage or Direct Shipping is best suitable for an industry which involves large variety but low demand which are highly valuable and customers are ready to wait for deliveries and have scope for advance and partial payments. Direct shipping is also suitable when customization of product is involved. 37
- 38. CONSUMER PICK UP Consumer Pick up is best suitable for companies where response time required is minimum and consumers need to choose from a variety of similar products. This design involves high handling costs at pick up points which should to be taken care off while implementing this pattern. 38
- 39. DISTRIBUTION OVERVIEW 39 Plant Warehouse Direct Route Market Indirect Route Distributor Market Direct Route: The Bottler partner has direct control of the activities Indirect Route: An organization which is not a part of the Coca–Cola system has the control of distribution activities