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Coke Wars Presentation

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  • 1. www.ruionkoh.blogspot.com
  • 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
  • 47. www.ruionkoh.blogspot.com
  • 48. Thank You www.ruionkoh.blogspot.com

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