Dr. Pepper Snapple Group


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This was a Capstone project in which I worked in a team and conducted a strategical analysis of a company. Our group chose to look at Dr. Pepper.

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  • Put in info about hand-cranked vending machine
  • Need data on how effective this plan is, have numbers but need graph in comparison to b4
  • If can find data/graph on who soda co target
  • *Need data on obesity and diabetes trends.*- http://library.cqpress.com/cqresearcher/document.php?id=cqresrre2003013100&type=hitlist&num=0
  • Although this marked the second year of growth for the beverage industry, after two consecutive declines in 2008 and 2009, the pace of growth slowed from 2010However, despite a growth in beverage market overall, the sales of carbonated soft drinks fell 1 percent in 2011, faster than the 0.5 percent decline in 2010- this is related to the healthier living trend in AmericaDPS and PepsiCo are both rolling out new ad campaigns to compete with coca-cola:The new Dr Pepper campaign carries the theme “Always one of a kind,” replacing the previous theme used in 2011,“There’s nothing like a Dr Pepper.” - The Dr Pepper Snapple Group spends about $40 million a year on ads for Dr Pepper alone. Pepsi-is bringing back Sofia Vergara for a second year as the spokeswoman for its Diet Pepsi brandIn June 2010, Coca-Cola paid DPS $715 million for the right to continue selling Dr Pepper drinks once it acquired the North American bottler, Coca-Cola Enterprises, There was also a similar deal between Dr Pepper and PepsiCo who bought its own top North American bottler and paid DPS $900 million to continue selling Dr Pepper, Crush and Schweppes.Energy-sales grew 14.4 percent by volume in 2011. This means it was the fastest-growing segment with the beverage industryWater-sales volume was up 4.1 percent in 2011, faster than the 3.5 percent growth in 2010
  • JUST FOR DPS –compared to the overall market globally, DPS only makes up 5.1% of the market share.US- 2010(not correct=89.2%) of total revenues$5,903 millionInternational- 10.8% of total revenues$607 millionLatin america $382 million=6.07%It is clear that Coca-Cola dominates the market with 47.6% of the market share
  • Energy drinks-sales grew 14.4 percent by volume in 2011. This means it was the fastest-growing segment with the beverage industryBottled water-vitamin/mineral-As for bottled water, its growth continues to accelerate. In 2008 and 2009, tough economic times led to a decline in bottled water sales, but the category recovered in 2010, and its growth rate accelerated in 2011. Bottled water sales volume was up 4.1 percent in 2011, faster than the 3.5 percent growth in 2010. Distribution mergers/aquistion- talked previously about the acquisitions of the Coca-Cola and PepsiCo companiesCost of resources increasing-as the US becomes more anti-obesity and health conscious, with plans like the sugar tax, soft drink companies are finding their cost per bottle is increasing. (one example of this is the increase in cost of fructose/or corn syrup).
  • Global projected growth rates of the carbonated soft drinks industry
  • Source: http://finance.yahoo.com/q/co?s=dps
  • General Counsel=oversees all legal issues for the company.Corporate Affairs=overall responsibility for all aspects of internal and external communications, public relations, government affairs and corporate social responsibility.Packaged beverages=coast-to-coast sales force and fleet responsible for direct-to-store delivery (DSD) and warehouse distribution.Supply Chain=logistics & distribution; manufacturing; quality, environment, health & safety (QEHS); concentrate manufacturing; supply chain planning; packaging & engineering; corporate facilities; and non-franchise sales across North America, Canada and the CaribbeanConcentrated Beverages=national sales organization that includes route-to-market and fountain foodservice teams in the U.S. and Canada and recetly Latin AmericaHuman ResourcesR&D=product development, regulatory, nutrition, sensory and consumer guidance, flavor and concentrate technology, chemistry, functional ingredient technology, process development engineering and knowledge management.Marketing=commercial brand management and marketing, including market research, graphics, merchandising, consumer and shopper insights, brand activation, advertising and sales promotion.
  • Revenue for 2011 has increased by $267,000 from 2010- even though consumption has been declining, the prices have been rising steadily and this has made up for the drop in ConsumptionEarnings before Interest and Taxes have decreased by 10,000 from 2010, which means our operating margin has increased by 277,000Moving on to the balance sheet, both our assets and liabilities have increased for 2011 but our equity has decreased by 196,000 from 2010Lastly our operating cash flow has also decreased by 1.7 million, however 2010 was not a typical year- in the past the average has been around 680,000(on cash flow financial we had a lot of money under other liabilities)
  • These expectations were based upon several factors including the recent 2-3% increase in commodity costs and because of the 2-2.5% increase in their pricing mix
  • Cite:DPSG annual report 2010
  • Cite: DPSG annual report 2010
  • Threats-loss of partner bottlers- there is a possibility that if
  • Water- right now we only have our brand of water in Latin America- called penafiel but that should branch out in USThe health and wellness market makes up $600 billion dollars globally Graph is in millions of $Projected growth- reach 64.46 Billion Liters by 2015natural beverages, manufactured without any additives or preservatives are dominating the fruits and vegetables market. Nutritious food products and drinks manufactured using organic ingredients are gaining preference. Teas and juices- already compared to competitors offer a variety of teas and juices but we should take advantage of this competancy and the health concern and diversify our line
  • http://www.cnbc.com/id/46796332
  • Dr. Pepper Snapple Group

    1. 1. MGT 400 Strategic Management (Capstone) Instructor: Eric Drouart
    2. 2. COMPANY OVERVIEW• Mission Statement• Key Facts• Company Highlights• Company History• Recent Products
    3. 3. MISSION STATEMENT• “At Dr Pepper Snapple Group, it is our vision to be the best beverage business in the Americas. Our brands have been synonymous with refreshment, fun and flavor for generations, and our sales are poised to keep growing in the future.” http://www.drpeppersnapplegroup.com/company/mission/
    4. 4. 5 Strategic Principles1. Building and enhancing our leading brands.2. Pursuing profitable channels, packages and categories.3. Leveraging our integrated business models.4. Strengthening our route to market.5. Improving operating efficiency.http://www.drpeppersnapplegroup.com/company/mission/http://investor.drpeppersnapple.com/strategy.cfm
    5. 5. CORE VALUES 1. Accountable. 2. Customer-Centric. 3. Transparent and Honest. 4. Inspect What We Expect. 5. Our Own Decisions. 6. No Blame-Fixing.http://www.drpeppersnapplegroup.com/values/call-to-action/
    6. 6. CORE VALUEShttp://www.drpeppersnapplegroup.com/values/call-to-action/
    7. 7. KEY FACTS • Ranked #404 on the Fortune 500 in 2011. • Revenue was $5.6 billion in 2010. • 200 Warehouses & Distribution centers. • 19,000 Employees. • Over 50 Brands today. • Own Bottling and distribution network in 2006.http://news.drpeppersnapple.com/fact-sheet/corporate-fact-sheet
    8. 8. KEY FACTS (CONT.) • Located in the United States, Mexico, Canada, and the Caribbean. • Headquarters are in Plano, TX. • 21 Manufacturing / Bottle facilities in North America.http://news.drpeppersnapple.com/fact-sheet/corporate-fact-sheet
    9. 9. COMPANY HIGHLIGHTS • 2009: #1 in Product of the year USA Awards. • Snapple Green Tea wins the North American Tea Championship. • 2010: Named Company of the year by BMC and BWM. • 2010: Snapple Compassionberry & Crush Cherry are named Retailer Choice Best New Product Awards.http://www.drpeppersnapplegroup.com/company/awards-recognition/
    10. 10. COMPANY HISTORY • Public on May 7, 2008. • Spin-off of Cadbury Schweppes. • 1783: Jean Jacob Schweppe invents soft drinks. • 1885: Charles Alderton invents Dr. Pepper in Waco, TX. • 1970’s: Snapple Beverage Corp. established. • 1995: Cadbury Schweppes purchases Dr. Pepper/Seven Up, Inc.http://www.drpeppersnapplegroup.com/company/history/
    11. 11. COMPANY HISTORY (CONT.) • 2000: Cadbury Schweppes acquires Snapple Beverage Group. • 2006: Own bottling and distribution network established. • Present day: – 50+ Brands = Refreshment, fun, flavor. – 6 of the top 10 non-cola soft drinks. – 9 of the 12 leading brands are #1 in their flavor categories.http://www.drpeppersnapplegroup.com/company/history/
    13. 13. EXTERNAL ENVIRONMENT Technology GeneralSocietal Values Economic and Lifestyles Conditions Population Legislation and Demographics Regulations
    15. 15. TECHNOLOGY • Technology is at the forefront of the soft drink industry. • Example: – Social Vending System machines by PepsiCohttp://www.independent.co.uk/life-style/gadgets-and-tech/soft-drink-maker-delivers-social-technology-with-drinks-from-vending-machines-2276508.html
    16. 16. GENERAL ECONOMIC CONDITIONS • Despite the struggles of economies in recent years, the soft drink industry has remained extremely successful. – Overall worldwide consumption increased by 4.1% in 2011.http://www.marketingweek.co.uk/soft-drinks-industry-thrives-despite-tough-economy/3025395.article
    17. 17. UNITED STATES
    18. 18. MEXICO
    19. 19. CANADA
    20. 20. DPSG Stock Pricehttp://investor.drpeppersnapple.com/stocklookup.cfm
    21. 21. LEGISLATION and REGULATIONS• Soda Taxes• FDA Guidelines• School Beverage Guidelines• Energy Drink Guidelines• Dietary Guidelines
    22. 22. POPULATION DEMOGRAPHICS • U.S. children and teenagers are seeing heavy soda advertising in recent years. – Hispanics and African Americans. • 2008 to 2010: – Advertising spending increases for DPSG and Coca Cola; drops 22% for PepsiCo.http://www.reuters.com/article/2011/11/01/us-soda-idUSTRE79U62C20111101
    23. 23. U.S. Populationhttp://www.incontext.indiana.edu/2011/july-aug/article1.asp
    24. 24. SOCIETAL VALUES and LIFESTYLES• Health conscious individuals.• Obesity and diabetes awareness.• Low calorie diets have emerged in recent years. – School guidelines and soda taxes.• At DPSG, we sell different products in our different countries. – Mexico, Caribbean, Canada .
    25. 25. INDUSTRY ANALYSIS• Overview• Market Definition• Category Definition• Industry Trends• Future Growth Drivers• Projected Growth Rates• DPSG Performance vs. Industry• Risks
    26. 26. INDUSTRY OVERVIEW • The U.S. beverage market grew by 0.9 percent in 2011 • Advertising • Bottle Distribution mergers and acquisitions – Coca-Cola Enterprises and PepsiCo • Energy drinks • Bottled water- growth continues to acceleratehttp://www.cnbc.com/id/46796332
    27. 27. MARKET DEFINITION AS % OF SALES• DPS total sales= $5,903 million
    28. 28. CATEGORY DEFINITION Additional Categories: • Funcitonal Drinks – Engery Drinks= 57.6% Global – Sports Drinks= 26.1% Global
    29. 29. INDUSTRY TRENDS • Energy Drinks • Bottled Water • Distribution and Bottling Center Mergers/Acquisitions • Costs of resources increasing
    30. 30. FUTURE GROWTH DRIVERS• Current Obesity epidemic• Emerging diabetes epidemic (1 in 3 Americans will be obese by 2025)• The Aging Population• Energy Drinks
    31. 31. FUTURE GROWTH DRIVERS Current Obesity Epidemic
    32. 32. FUTURE GROWTH DRIVERS Emerging Diabetes Epidemic • Affects 25.8 million people in the US alone – 8.3% of US population
    33. 33. PROJECTED GROWTH RATES (in sales)
    34. 34. DPSG YTD PERFORMANCE (relative toindustry)
    35. 35. RISKS• We operate in highly competitive markets• We may not effectively respond to changing consumer preferences, trends, health concerns and other factors• We depend on a small number of large retailers for a significant portion of our sales• We depend on 3rd party bottling and distribution companies for a portion of our business• Our financial results may be negatively impacted by recession, financial and credit market disruptions and other economic conditions
    36. 36. RISKS• Costs for commodities may increase substantially• Weather and climate changes could adversely affect our business• Our products may not meet health and safety standards or could be contaminated• We depend on key information systems and third party service providers• Certain raw materials we use are available from a limited number of suppliers and shortages could occur
    37. 37. COMPETITIVE ANALYSIS• Top Competition• Primary Competitors• Market Share• Geographic Market Share• Competitor Comparisons• Strategic Focus and Growth Strategies• New Product Activities• Summary
    38. 38. Top Competition
    39. 39. PRIMARY COMPETITORS• The Coca-Cola Company – Over 139,600 employees worldwide – Estensive product line with over 3,500 products – Drew in $35.119 billion dollars in revenue at the end of 2010• PepsiCo Inc – Over 285,000 employees worldwide – Have been bringing in a gross revenue of over $60 billion – Increased revenue over 30% in 2010 and over 15% over in 2011• Nestle S.A. – They have a wide variety of products from chocolate to soft drinks – Made the most profit out of all competitors in 2011 with $10 million – Biggest strenght is taking global products and putting them in local markets.
    40. 40. Market ShareMarket Share between beverage companies in 2011 and 2012
    41. 41. SALES BY GEOGRAPHIC REGION-Americas accounts for 51.4% ofthe global carbonated soft drinksmarket value.-Europe accounts for a further35.2% of the global market.
    43. 43. BENCHMARKING AND COMPARISONS 2010 Key Financials ($) Revenues Net Income Total Assets Total Liabilities Coca-Cola 35,119.0 11,809.0 48,671.0 23,325.0 Cott Corp. 1,803.3 59.8 1,529.2 994.0 PepsiCo 57,838.0 6,320.0 68,153.0 46,677.0 Dr. Pepper 5,636.0 528.0 8,859.0 6,400.0Yahoo Finance
    44. 44. BENCHMARKING AND COMPARISONS 2010 Key Financials Ratios ($) Profit Revenue Asset Liabilities Debt to Return on Margin Growth Growth Growth Asset Assets Ratio Coca-Cola 33.6% 13.3% 20.1% 18.7% 47.9% 26.5% Cott Corp. 5.4% 12.9% 75.0% 110.4% 65.0% 5.0% PepsiCo 10.9% 33.8% 71% 108.3% 68.5% 11.7% Dr. Pepper 9.4% 14.0% n/a n/a 65.2% 10.9%Yahoo Finance
    45. 45. STRATEGIC FOCUS & GROWTHSTRATEGIES • 6 business segments. – North America – Operates in over 200 – Eurasia and Africa countries and employs – Europe nearly 100,000 people. – Latin America – Most products are manufactured and sold by – Pacific bottling partners. – Bottling Investments – Diverse products. • Sparkling and still beverages. • Juice and juice-drink. • Ready-to-drink tea.- DataMonitor
    46. 46. STRATEGIC FOCUS & GROWTHSTRATEGIES (Cont.) • These 3 units are divided into six – PepsiCo is a global snack additional segments: and beverage company. – FLNA – 3 Business Units: – QFNA • PAF = PepsiCo Americas Foods. – LAF • PAB = PepsiCo Americas – PAB Beverages. – Europe • PI = PepsiCo International. – Asia, Middle East, and Africa (AMEA)- DataMonitor
    47. 47. STRATEGIC FOCUS & GROWTHSTRATEGIES (Cont.) • Nutrition Business has 4 sub-divisions: – Largest food and beverage – Infant company in the world. – Healthcare – 6 divisions that are – Performance organized along product groups. – Weight management • Beverage • 3 geographic zones: • Milk products – Zone Europe • Nutrition and ice cream – Zone Americas • Prepared dishes and cooking aids – Zone Asia, Oceania, and • Pet care products. Australia. • Pharmaceutical products.- DataMonitor
    48. 48. NEW PRODUCTS & ACTIVITIES • Coca Cola – New Minute Maid Light Packaging. (3/21/12) – NCAA March Madness Campaign. (3/15/12) – Arctic Home Campaign. (12/1/12) – Coke Zero & Mission Impossible. (10/19/11) • Pepsi – New Mountain Dew flavors and Pepsi next released (1/12) – New Starbucks drinks released in February. (2/12) – Amp Energy drinks reformulated. (2/12) • Nestle – Boosts dairy industry in Sri Lanka. (4/2/12) – Uses avalanche research to create better ice cream. (3/26/12) – R&D efforts strengthened in Asia. (3/20/12) – Nutrition guide launched for cancer patients in Spain. (3/19/12)http://www.thecoca-colacompany.com/dynamic/press_center/global- filter/products/globalIndex.htmlhttp://www.gillettepepsicola.com/products/new_products.phphttp://www.nestle.com/Media/NewsAndFeatures/Pages/NewsAndFeatures.aspx
    49. 49. COMPETITOR STRENGTHS &WEAKNESSES Strengths WeaknessesCoca-Cola Company -Popularity. -Word of mouth -Well known. -Lack of popularity of many Coca Cola’s -Branding is obvious and easily brands. recognized. -Most unknown and rarely seen. -A lot of finance. -Result of low profile or non-existent -Customer loyalty. advertising. -International Trade. -Health issues.Nestle -Ability to leverage strong brand name to -Increasing instances of product recalls generate sales. hamper brand equality. -Ability to customize products to the -Slow recovery of product volume from local market conditions. economic downturn in 2009. -Strong focus on R&D. -Relative less sales exposure in emerging markets.PepsiCo, Inc. -Branding -Overdependence on Wal-Mart. -Diversification -Overdependence on US Markets. -Distribution -Low Productivity. -Leadership in the snack business -Image Damage Due to Product Recall. segment. -Health Issues- Data Monitor
    50. 50. SUMMARY OF THE COMPETITION• Coca-Cola – The Coca-Cola Company (Coca-Cola) is the #1 leading manufacturer, distributor and marketer of non-alcoholic beverages. – Owns or licenses more than 500 brands.• PepsiCo – PepsiCo is one of the largest food and beverages companies in the world. – 18 brands generate over $1,000m in annual sales.• Nestle – Nestle is the largest food and beverage company in the world. – Diverse range of products.• Anheuser-Busch – ABInBev is one of the worlds largest brewers based in Belgium. – Portfolio of over 200 Brands.- DataMonitor
    51. 51. DPSG INTERNAL ANALYSIS• Organization Structure• Financial Summary• Primary Product Segments• Product Segments Revenues• Net Sales per Region• Company Performance• Projected Performance Trend• Core Competency• Products Statistics• Current Growth Strategies
    52. 52. ORGANIZATION STRUCTURE Larry Young CEO & President Martin M. Ellen CFO Human Resources R&D Marketing Supply Chain Concentrated Beverages Packaged Beverages IT Financehttp://www.drpeppersnapplegroup.com/company/leadership/
    53. 53. FINANCIAL SUMMARY Source: Yahoo! Finance(in thousands) 2011 2010 2009Profit & Loss Revenue 5,903 5,636 5,531 EBIT 1,039 1,049 1,111 Operating Margin 4,864 4,587 4,420Balance Sheet Asset 1,757 1,309 1,279 Liabilities 7,020 6,400 1,279 Equity 2,263 2,459 3,187Cash Flow Operating Cash Flow 760 2,535 865
    54. 54. PRIMARY PRODUCT SEGMENTS • Beverage Concentrates – Dr. Pepper, Canada Dry, Sunkist, Schweppes, 7UP, A&W, R C Cola, and Sun Drop • Packaged Beverages – NCB= Hawaiian Punch, Snapple, Mott’s, Yoo-Hoo, and Nantucket Nectars – CSB= 7UP, Dr. Pepper, A&W, Sunkist, and Canada Dry • Latin America Beverages – Squirt, Penafiel, Aguafiel, Crush, and ClamatoDPSG Annual Report 2011
    55. 55. PRODUCTS SEGMENTS REVENUES Market Share Beverage Concentrates: 40% (US) Packaged Beverages: 49.2% (US) Latin America Beverages: 6.07%DPSG Annual Report 2011 and Global Soft Drink Industry Report
    56. 56. NET SALES PER REGION International for DPS is Mexico, The Caribbean, and Canada $5.9 billion of net sales in 2011 from the U.S. (89%), Canada (4%) and Mexico and the Caribbean (7%)DPSG Annual Report 2011 and Global Soft Drink Industry Report
    57. 57. COMPANY PERFORMANCEYahoo.Finance.com
    58. 58. COMPANY PERFORMANCEYahoo.Finance.com
    59. 59. PROJECTED PERFORMANCE TREND • DPS expects sales to grow modestly over the next 3 years with expectations on the low end • Also Muted core growth is expected – Volumes are expected to remain soft along with increased marketing spend and competition from Coca-Cola and PepsiCohttp://www.bevnet.com/news/2012/dr-pepper-beats-forecasts-though-muted-growth-expected-for-2012
    60. 60. CORE COMPETENCY• R&D – 2008: Invested $17 million – 2009: Invested $16 million – 2010: Invested $15 million• Manufacturing – 18 Manufacturing Facilities in the U.S. – 174 Distribution Centers in the U.S. – Along with 3 manufacturing facilities and 23 distribution centers in Mexico• DPSG also has their own fleet of over 5,000 delivery trucks that provide product transportation across the nation
    61. 61. CORE COMPETENCY CONTINUED • R&D Areas of Investigation: – Product Development – Microbiology – Analytical Chemistry – Process Engineering – Sensory Science – Nutrion – Knowledge Management – Regulatory Compliance • DPSG has a high level of expertise in flavors and sweeteners as well.
    63. 63. CURRENT GROWTH STRATEGIESBuildingShareholderValue Over Time INVEST FOR OPTIMIZE RETURN ON CAPITAL GROWTH (2015+) Build Our Brands Grow Per Caps BUILD THE FOUNDATION Rapid Continuous (2007-2010) Improvement (2011-2015)
    64. 64. DPSG SWOT ANALYSISStrengths: Weaknesses:• Strong portfolio of brands. • Minor compared to larger peers.• Integrated business model. • Rely on 3rd-party bottlers for• Strong customer relations. packaging and distribution.• Differentiation Strategies. • Continued focus on carbonated – unique taste. soft drinks rather than alternative – Snapple Facts and functional beverages. • Lack of international exposure.Opportunities: Threats:• Growth to international markets. • Loss of partner bottlers.• New product launches or line • Socio-cultural trends towards extensions. healthier lifestyles• Growth into functional (energy drink) market. - sugar tax• People have more discretionary income.
    65. 65. KEY ISSUE #1• Growing health consciousness in the United States. – U.S. consumption of soft drinks in 2011 fizzled to its lowest level since 1996. • Customers are opting for bottled waters, juice, teas, and energy drinks. • Energy drink market grew 16% in 2011. – Dr. Pepper Snapple (along with Coke and Pepsico) lost volume in 2011. – The average U.S. customer drank 714 8-ounce servings of soft drinks in 2011, down from 728 8-ounce servings in 2010. – Total soft drink consumption was 9.274 billion cases in 2011, down 1% from the year before, and the seventh straight year of decline.http://www.foodproductdesign.com/news/2012/04/u-s-soda-consumption-fizzles.aspx
    66. 66. KEY ISSUE #1• Growing health consciousness in the United States. – In the United States, a 2005 survey reported: • 74% of consumers claimed to have changed their eating habits due to health and nutrition concerns. • 87% considered nutrition an important factor in purchasing groceries. • 64% stated a willingness to pay more for healthier versions of food items. – Health-conscious households make up 18% of the U.S. market overall.http://tippie.uiowa.edu/marketing/research_papers/grocery%20basket%20data.pdf
    67. 67. KEY ISSUE #1• Growing health consciousness in the United States.• Over the past 5 years, the CSD industry has declined 7.1%.• It is expected to decrease by 2% a year over the next five years.
    68. 68. RECOMMENDATION for KEY ISSUE #1 • What we are doing now: – Launched a new line of 10-calorie drinks – Dr. Pepper Ten – Plans for 7 Up Ten, Sunkist Ten, A&W Ten, RC Ten, and Canada Dry Ten
    69. 69. RECOMMENDATION for KEY ISSUE #1 • What we could be doing: • Health and Wellness Market – Water – New age beverages • Teas and Juiceswww.jdford.com/pdfs/JDF_Comp_Health_Wellness_09.pdf
    70. 70. KEY ISSUE #2• Lack of focus on alternative and functional beverage markets. – These markets have seen strong growth as consumer preferences have shifted away from CSD products to healthier options. – DPSG focuses the majority of their resources and efforts on existing and new CSD’s. – By DPSG ignoring emerging product categories such as energy drinks, this could be a missed growth opportunity going forward.
    71. 71. KEY ISSUE #2• Lack of focus on alternative and functional beverage markets. – President and CEO Larry Young:• “No, we’re still very happy with our portfolio… we stay focused on the total portfolio, but we are putting a lot of emphasis right now on our carbonated soft drinks. As I mentioned a moment ago, I think with the tough economic times we’re going to see people come back in and recognize that value. That’s where we’re putting a strong focus.”
    72. 72. KEY ISSUE #2 • Lack of focus on alternative and functional beverage markets. – Example – Bottled Waterhttp://www.accuval.net/insights/industryinsights/detail.php?ID=142
    73. 73. RECOMMENDATIONS for ISSUE #2Diet Drink Promotion • A more health conscious world is looking for an alternative drink for a fit lifestyle. • Products such as Snapple, Hawaiian Punch, and Mott’s have show no more than 0.5% growth. • Increase our promotion of non-soda diet drinks such as Snapple and Hawaiian punch.
    74. 74. RECOMMENDATIONS for ISSUE #2 – Market for Bottled Water • Dasani’s bottled water volume rose 11% in 2011. • Implemenation of our new bottled water product into the market. • Multiple advertising and promotional campaigns for “Dr. Aqua.”http://www.beveragemarketing.com/reportcatalog4a.html
    75. 75. RECOMMENDATIONS for ISSUE #2 • Market for Energy Drinks – Energy Drink Sales grew 14.4 percent by voulme in 2011. – Boost and relaunch the Venom product. • Generate growth and sales through new sponsorships and promotion.http://www.cnbc.com/id/46796332
    76. 76. KEY ISSUE #3• Low international presence.• DPSG only has a presence in the United States, Canada, Mexico, and Latin America.• Coca-Cola and PepsiCo are both in over 100 countries worldwide.• International segment has been a primary driver for these companies as health consciousness has increased in North America.• Low exposure presents a significant growth opportunity to DPSG, but they have not indicated they want to expand.
    77. 77. RECOMMENDATION for ISSUE #3• Strategic Thrust: – Compete against Coca Cola, PepsiCo, Nestle. – Potential for large increases in revenues. – Less over-reliance on one particular country.• Short-Term (5-10 years) – Expand international presence into Europe and South America. • Europe represents 35.2% of the soft drink industry. (2011)• Long-Term (10-20 years) – Expand into Asia-Pacific. • Represents 11.4% of soft drink industry. (2011) • Length of time will vary based on whether this percentage increases or decreases.
    78. 78. WHY THESE REGIONS WORKhttp://mapsofworld.com/world-top-ten/maps/world-top-ten-carbonated-soft-drink-consumer-countries.jpg
    79. 79. OVERVIEW of EUROPE 2002 Data Measurement = Liters per Person Average Consumption per Country = 89.8 litershttp://www.nationmaster.com/graph/foo_sof_dri_con-food-soft-drink-consumption
    80. 80. KEY ISSUE #4• Loss of partner bottlers. – DPSG’s distribution network is heavily reliant on Coca Cola and PepsiCo. – If Coke and Pepsi make their bottling partners wholly owned subsidiaries, DPSG will see amplified costs. – This will lead to unfavorable positions with retailers and consumers.
    81. 81. RECOMMENDATION for ISSUE # 4• Become less dependent on 3rd party bottlers by improving and expanding upon the DPSG owned bottling system• Activities that support this recommendation: – Recently resolved an issue with our oldest bottler of Dr. Pepper, the Dublin Dr. Pepper Bottling Company – Sued the bottler because they – Sold the soft drink beyond the six county territory designated in its licensing agreement – To end the bottlers unauthorized use of the label “Dublin Dr. Pepper”
    82. 82. THANK YOU! Questions?
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