1. Almdudler Case Study 1
Almdudler Case Study
Cindy N. Tran
MGMT 434
10/21/14
Section 004

2. Almdudler Case Study 2
Almdudler is the most popular and it is considered to be the national drink of
Austria. Coca-Cola is the second most popular drink in Austria. It is a sweetened
carbonated beverage that is made out of grape and apple juice concentrates that is
flavored with herbs. The flavor can be similar to drinking ginger but it is fruitier and
bitterer. Roughly 80 million liters of the Almdudler is produced each year.
Erwin Klein developed Almdudler in 1957, the name was derived from the
common phase auf der Alm dudeln, which means “singing in the alpine meadows”. It
was originally created and marketed as an alternative to alcoholic beverages or a mixer
for alcoholic drinks. Almdudler is exported to nine different countries: Czech Republic,
Slovakia, Switzerland, Germany, Hungary, Belgium, the Netherlands, Australia and the
United States.
Before Almdudler was created, Coca-Cola had dominated the soda industry in
Austria and worldwide. Erwin had a vision that Almdudler would not only conquer the
Austrian market but also withstood any other competitions. So when creating Almdudler,
every detail was carefully review over. When Almdudler was released, Coca-Cola and
other international brand could not taken over the competition Almdudler. It was due to
the unique adventure in tasting, freshness of more than 30 natural herbs and a sound
marketing strategy that made Almdudler more appealing than any other brand to a wide
mass of people.
I believe that Almdudler is in great standing in the soda market. They have
managed to stay as the number one drink in Austria and beating Coca-Cola, which is one
of the largest soda companies in the world. Everyone knows about Coca-Cola and how

3. Almdudler Case Study 3
well known they are. Almdudler is currently exporting to nine different countries, which
includes the United States.
Using the five forces analysis this is what I came across the soda industry in the
United States. The first force is the bargaining power of buyers. In the United States,
the soft drink market is the largest market in the beverage industry. It is worth about $60
billion dollars and three firms control 89% of the soft drink sales. Everyone drinks soda
in the United States and they consume about 56 gallons or more of soda each year. The
average price of a soda cost about $2, which is relatively cheap compared to anything
else. Drinking soda is simple and it doesn’t need any instructions on how to use the
product since it is straightforward. The soda industry can be very competitive since the
companies want the consumer to drink their products over their competitors. If the price
of a particular soda rises up, consumers are not afraid to switch to another brand that is
cheaper. There are also some consumers who are loyal to one certain brand and thinks it
is better than their competitor.
The second force is the bargaining power of suppliers. Each company has a
different formula, color, and flavor for their beverage. There is no two products are
exactly alike. Having a variety of tastes is necessary for the consumers. Companies can
switch suppliers very quickly and easily. Suppliers for the soft drink industry do not have
a lot of competitive pressure. Suppliers are usually the bottle equipment manufacturers
and packaging suppliers. It is really easy to become a supplier in the industry because
companies will choose the suppliers who would do the best job and have the best price as
well.

4. Almdudler Case Study 4
The third force is the threat of new entrants. Existing companies already have
cost and performance advantage because they have purchased large capital expenditures
and have economies of scale. Also they have direct supply and distribution channels
setup. Soft drinks are not proprietary since everyone can make them; it is just the flavor
and brands that is proprietary. Having experiences can help the company lower costs and
improve performance. There are a lot of difficult qualifications that is required for the
industry like licenses and insurance. They must need to get FDA approval to sell their
product, have a license to produce and distribute internationally, and insurances to cover
potential lawsuits, accidents or faulty products.
The fourth force is the threat of substitutes. Consumers would not factor in the
cost when switching to substitutes. The differences between the brand and substitute
would be a couple of cents. There are substitutes for carbonated beverage like water, tea,
sports drink, etc. Consumers are not likely to buy substitutes because brand name loyalty
is a very strong competitive pressure in the industry.
The fifth force is rivalry among existing players. The industry is not growing as
fast as other industry. It is also not rapid as well. The well-known brands among the
companies are an important competitive edge among new businesses trying to start a
company. It would be really difficult to get out of the business due to all the money lost
from fixed costs and advertisements, also binding contracts with set distribution channels.
The three entry strategies for Almdudler to enter in the United States are direct
exporting, partnering, and joint ventures. There are some good points to use direct
exporting when entering in the US market. Direct exporting gives you more control over
areas like pricing, labeling and distribution; greater profit margins and have closer ties to

5. Almdudler Case Study 5
customers and markets. It can accelerate export sales volume in the long rung. Only
major resource required is time than capital. Then there are bad points to direct
exporting. Direct exporting requires a significant amount of time to travel and service
costs. This can result in the losing the focus of the home market. The company has to
learn on how to do business in the chosen market that includes negotiating, pricing, terms
and conditions.
Forming a partnership with a company in the United States can be a possible way
to enter in the US market. There are some good and bad points of a partnership. The
huge advantage would be a simpler tax papers, because businesses that is structured up as
a partnerships does not have to pay income tax. Instead all profits and losses go through
to the individual partners. Also there is less paperwork to fill out. There are legal
liability issues, that the company is liable for the business’s obligations and debts. In
partnerships, any partner or owner in the company can make decisions on behalf of the
company. Even if the partner did not say anything to anyone, everyone is responsible for
the outcome. There would be management issues because they would use personal
finances and money invested in the partnership.
Forming a joint venture can be a possible way to enter in the US market. There
are some good points and some bad points to a joint venture. The company would be
sharing the cost, improving the financial resources and reducing the risk. It is nice to
have another company to share the cost and the risk. The company would have a local
management technology because cultural differences and taste would play an important
role in a running the business. Having a local partner would help your product adapt to
the culture and local employees. Also having vital domestic connections means that

6. Almdudler Case Study 6
having established and long standing connections with important people would help the
company be more exposed. In a joint venture, the company would have a reduced profit
because it is shared evenly with the other partnered company. The company would have
reduced managerial participation means it can lead to loss of control in the overall
business. Having a business can put up legal disputes and they are usually hard to avoid.

7. Almdudler Case Study 7
References
4. Porter's Five Forces - Soft Drink Industry SAR Analysis. (n.d.). Retrieved October 21,
2014, from https://sites.google.com/site/softdrinkindustrysaranalysis/porter-s-five-forces
Almdudler. (2014, October 16). Retrieved October 21, 2014, from
http://en.wikipedia.org/wiki/Almdudler
Pros and Cons of Direct Exporting - Pros and Cons of Direct Exporting. (n.d.). Retrieved
October 21, 2014, from https://sites.google.com/site/prosandconsofdirectexporting/pros-
and-cons-of-direct-exporting
The Pros and Cons of a General Partnership. (n.d.). Retrieved October 21, 2014, from
http://www.allbusiness.com/business-planning-structures/business/2513-1.html
Gavina, N. (2012, February 13). Pros and Cons of Entering in an International Joint
Venture... Retrieved October 21, 2014, from
http://h2odots.wordpress.com/2012/02/13/pros-and-cons-of-entering-in-an-international-
joint-venture/
Hofer, C., & Keplinger, A. (2009). Almdudler in the U.S.A.