Coke Wars Presentation

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Coke Wars Presentation

  1. 1. www.ruionkoh.blogspot.com
  2. 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. 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. 4. 1.1 What are “soft drinks”? - Carbonated - Functional - Juices - RTD Tea & Coffee - Water Bottled ? www.ruionkoh.blogspot.com I ndustry Introduction
  5. 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. 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. 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. 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. 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. 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. 11. Intensity of rivalry Bargaining power of buyers Bargaining power of suppliers Threat of substitute Risk of entry <ul><li>Major firms fight for -competitive advantages </li></ul><ul><li> -market share </li></ul><ul><li>Difficult compete against cost efficient </li></ul><ul><li>concentrated producers </li></ul><ul><li>Adopted vertical integration in their </li></ul><ul><li>distribution channels </li></ul><ul><li>High investment for specialized technologies and </li></ul><ul><li>equipment </li></ul><ul><li>Difficult to dispose </li></ul><ul><li>Existing producers already have experience and </li></ul><ul><li>assets to process its concentrates </li></ul><ul><li>Commodities are homogenous goods </li></ul><ul><li>Turned to synthetic sweeteners </li></ul><ul><li>Size of concentrate producers dwindles </li></ul><ul><li>Size of bottling plants </li></ul><ul><li>Owed by concentrate producers </li></ul><ul><li>Adopted forward integration in their business line </li></ul><ul><li>Low switching cost for buyers </li></ul><ul><li>Taste of the concentrates are difficult to </li></ul><ul><li>be imitated </li></ul><ul><li>Most of the CSD products use high fructose </li></ul><ul><li>corn syrup </li></ul><ul><li>TCCC gain 47% market share </li></ul><ul><li>(largest share in soft drink industry) </li></ul>www.ruionkoh.blogspot.com Porter’s Five Forces
  12. 12. <ul><li>Concentrate producing industry is PROFITABLE </li></ul><ul><ul><li>High intensity of rivalry- duopolistic nature </li></ul></ul><ul><ul><li>Low threat of new entrants- high investment and </li></ul></ul><ul><li>high cost to exit </li></ul><ul><ul><li>Low bargaining power of suppliers- goods are difficult </li></ul></ul><ul><ul><li>to differentiate </li></ul></ul><ul><ul><li>Moderate bargaining power of buyers </li></ul></ul><ul><ul><li>- better control on bottlers but switching cost for </li></ul></ul><ul><ul><li>buyers is low </li></ul></ul><ul><ul><li>Low threat of substitute- no substitutes exist for concentrates </li></ul></ul>CONCLUSION www.ruionkoh.blogspot.com Porter’s Five Forces
  13. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 28. <ul><li>Strong Distribution channel </li></ul><ul><li>Well-establish company </li></ul><ul><li>High Market share </li></ul><ul><li>Leading brand </li></ul><ul><li>Strong brand Value </li></ul><ul><li>Largest players in soft drinks industry </li></ul><ul><li>Best recognized global brands </li></ul><ul><li>Innovative </li></ul><ul><li>Strong revenue growth </li></ul>Strengths <ul><li>Sensitive towards its Consumer </li></ul><ul><li>Aggressively adopts to the </li></ul><ul><li>inorganic growth </li></ul><ul><li>Cost saving </li></ul><ul><li>Acquisition </li></ul>4.1 Strengths of Coke and Pepsi S wot Analysis
  29. 29. <ul><li>Sluggish performance in mature market </li></ul><ul><li>Poor cost management </li></ul><ul><li>Yet to overcome continued downward economic pressures </li></ul>Weaknesses <ul><li>Overdependence on single largest market </li></ul><ul><li>Low bargaining power </li></ul>4.2 Weaknesses of Coke and Pepsi S wot Analysis
  30. 30. <ul><li>Increasingly health conscious </li></ul><ul><li>Expand in other beverage categories </li></ul><ul><li>The third largest player in functional drinks </li></ul>Opportunities <ul><li>Expand internationally </li></ul><ul><li>Tap the potential of growing market </li></ul><ul><li>Per capital consumption of its product </li></ul>4.3 Opportunities of Coke and Pepsi S wot Analysis
  31. 31. <ul><li>Increasing concern of healthy concept beverages </li></ul><ul><li>Sluggish growth in carbonated drinks’ market </li></ul><ul><li>Overdependence on its bottler partners </li></ul>Threats <ul><li>Higher fuel price </li></ul><ul><li>Intensive competition </li></ul>4.4 Threats of Coke and Pepsi S wot Analysis
  32. 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. 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. 34. major types of water Spring Mineral Purified 3 5.1 The water bottled industry www.ruionkoh.blogspot.com W ater bottled segment
  35. 35. <ul><li>Will Coke and Pepsi repeat their success in the water segment </li></ul>YES ? 5.1 The water bottled industry www.ruionkoh.blogspot.com W ater bottled segment
  36. 36. <ul><li>Home and office delivery-Nestle </li></ul><ul><li>Dasani (Coca-Cola) and Aquafina (Pepsi) </li></ul>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. 37. <ul><li>China- Big market and offer great opportunity </li></ul><ul><li>Danone & Nestle- Increase promotion activities </li></ul><ul><li>Danone- Local presence – Dannon </li></ul><ul><li>Nestle- £1.25 million in marketing-Nestle Aquarel & Nestle Purelife </li></ul>By aggressive advertising 5.3 By aggressive advertising www.ruionkoh.blogspot.com W ater bottled segment
  38. 38. <ul><li>Positioning to the targeted segments </li></ul><ul><li>In CSD- Diet Coke & Diet Pepsi as Health conscious products </li></ul><ul><li>Dasani- as affordable range water </li></ul><ul><li>Evian- expensive products </li></ul>By positioning the water bottled brands 5.4 By positioning the water bottled brands www.ruionkoh.blogspot.com W ater bottled segment
  39. 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. 40. The Coca-cola Company or PepsiCo will be the leader? www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
  41. 41. <ul><li>Strong brand recognition – adolescent </li></ul>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. 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. 43. 6.2 Pepsi’s effective cost reduction <ul><li>Effective management </li></ul><ul><li>Harvest own fruits </li></ul><ul><li>Lower price, gain competitive advantage </li></ul>www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
  44. 44. <ul><li>Diversify into different business portfolio </li></ul><ul><li>Global snacks value $61.2billion, 2008 </li></ul><ul><ul><li>Pepsi held $20.6 billion (33.1%) </li></ul></ul>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. 45. Conclusion <ul><li>Strong brand recognition </li></ul><ul><li>Effectiveness in cost reduction </li></ul><ul><li>Aggressiveness in seizing opportunities </li></ul>www.ruionkoh.blogspot.com F uture leader Coke or Pepsi?
  46. 46. PepsiCo will be the future leader! www.ruionkoh.blogspot.com
  47. 47. www.ruionkoh.blogspot.com
  48. 48. Thank You www.ruionkoh.blogspot.com

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