Strategy report

Running Head: CARBONATED BEVERAGE INDUSTRY 1
A Study on Carbonated Beverage Industry of Nepal to Assess the Industry Attractiveness
for Potential New Entrants
Group C
Natasha Baidya (17303), Raj Maharjan (17317), Dipesh Raj Pandey (17321), Rajesh Paneru
(17322), Shishir Sharma (17329)
Kathmandu University School of Management (KUSOM)

CARBONATED BEVERAGE INDUSTRY 2
ACKNOWLEDGEMENT
We would like to express our sincere thanks to Kathmandu University School of
Management for specifying the criteria to complete a report on existing industries in partial
fulfillment of the requirement for Master of Business Administration (MBA). The study has
helped us blend our theoretical learning in the real life organizational practices.
We would not forget to express our sincere gratitude to Prof. Bijay K.C., the Dean of
Kathmandu University School of Management, for giving his valuable insights, suggestions, and
time to us throughout the trimester. Without his support, we would not be able to complete this
report on time with the obtained findings.
Lastly, our sincere gratitude to our colleagues who helped us with their suggestions and
resources while finding the information, analyzing the obtained information and inferring from
the information. Their support has been commendable in bring out this report.
Sincerely,
Group C
Carbonated Beverage Industry

ABSTRACT
The study is conducted to assess the attractiveness of carbonated beverage industry in
Nepal. In order to assess the attractiveness, the study has conducted a thorough analysis of the
environmental forces and the industry and competition within the industry. The study has found
that the macro environmental forces have opportunities to offer to new entrants in the industry.
The forces have shown good-to-enter signs. On top of that, the industry’s SWOT analysis has
shown that there is potential to mitigate threats and convert them into opportunities. The
industry’s value chain, driving forces, competitive forces analysis, and change trajectory all hint
that the new entrants can potentially earn greater revenues and succeed in the industry. However,
the dominant market traits show some concerns as the established players in Nepalese market:
Coke and Pepsi have created greater entry barriers over the years with their expertise, brand
image, integration strategies, and economies of scale and product standardization. Moreover, the
existing companies have well established business intelligence system. Hence, the study
concludes that the new entrants can succeed only if they strategize beforehand to mitigate these
challenges and threats. The study has extended recommendations to meet the challenges and
grasp the opportunities by doing so.
Keywords: Business Intelligence, Competitive Forces, Dominant Market Traits, Economies of
Scale, Industry’s Value Chain, Integration Strategies, Macro Environmental Forces,
SWOT

TABLE OF CONTENTS
ACKNOWLEDGEMENT.............................................................................................................. 2
ABSTRACT.................................................................................................................................... 3
TABLE OF CONTENTS................................................................................................................ 4
LIST OF TABLES.......................................................................................................................... 6
LIST OF FIGURES ........................................................................................................................ 7
ABBREVIATIONS ........................................................................................................................ 8
CHAPTER 1: INTRODUCTION ................................................................................................... 9
1.1 Background........................................................................................................................... 9
1.2 Statement of Problem............................................................................................................ 9
1.3 Objective of the study......................................................................................................... 10
1.4 Organization of the study.................................................................................................... 10
1.5 Limitation of the Study....................................................................................................... 11
CHAPTER 2: ENVIRONMENT ANALYSIS ............................................................................. 12
2.1 External Environmental Analysis ....................................................................................... 12
2.1.1 PESTEL Analysis......................................................................................................... 12
2.2 SWOT Analysis .................................................................................................................. 15
2.3 Industry Change Trajectory ................................................................................................ 17
2.4 Industry Value Chain Analysis ........................................................................................... 18
CHAPTER 3: INDUSTRY AND COMPETITIVE ANALYSIS ................................................. 22
3.1 Dominant Industry Traits.................................................................................................... 22
3.2 Porter’s Five Forces Model................................................................................................. 25
3.3 Industry Driving Forces ...................................................................................................... 28
3.4 Strategic Mapping............................................................................................................... 29

3.6 Key Success Factors ........................................................................................................... 31
CHAPTER 4: MAJOR FINDINGS .............................................................................................. 33
4.1 Findings from PESTEL Analysis........................................................................................ 33
4.2 Findings from Industry Change Trajectory......................................................................... 34
4.3 Findings from Value Chain Analysis.................................................................................. 34
4.4 Findings from the Dominant Industry Traits ...................................................................... 34
4.6 Findings from Strategic Group Mapping............................................................................ 36
4.7 Findings from Business Intelligence and Key Success Factor Analysis ............................ 36
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS .................................................. 37
5.1 Conclusion of Industry Attractiveness ........................................................................... 37
5.2 Recommendations for Probable New Entrants .............................................................. 38

LIST OF TABLES
Table 1: SWOT Analysis of Carbonated Beverage Industry in Nepal ......................................... 15
Table 2: Findings from PESTEL Analysis ................................................................................... 33
Table 3: Findings from Industry Dominant Traits........................................................................ 35
Table 4: Findings from Porter's Five Forces Analysis.................................................................. 36

LIST OF FIGURES
Figure 1: Industry Change Trajectory......................................................................................... 156
Figure 2: Value Chain of Carbonated Drinks Industry................................................................. 19
Figure 3: Strategic Group mapping in Carbonated Beverage Industry......................................... 28

ABBREVIATIONS
CSR Corporate Social Responsibility
GMO Genetically Modified Organisms
PESTEL Political, Economic, Socio-cultural, Technological, Environmental, and Legal
R&D Research and Development
SWOT Strengths, Weaknesses, Opportunities, and Threats

CHAPTER 1
INTRODUCTION
1.1 Background
When the human body becomes dehydrated, it experiences the sensation of thirst, leading
to an instinctive need to drink. Beverage is a liquid intended for human consumption with a basic
function of satisfying thirst. Throughout the centuries, drinking has been a large part of
socialization, In Ancient Greece, people used to have a social gathering for the purpose of
drinking, also known as a Symposium. The category of drinks includes water (flat or
carbonated), juice, soft drinks, sports and energy drinks, alcoholic beverages, coffee, and dairy
products like milk. Beverage is mainly categorized into two major categories: alcoholic and non-
alcoholic nature of the drink. Non-alcoholic beverages are further of two types based upon
carbon content. These beverages contain soft drinks, fruit juices, soda and so on. The
alcoholic beverages are based upon the fruit content and grain. It may be Wine, Brandy, Whisky
or Beer.
The carbonated beverage industry comprises companies that manufacture non-alcoholic
beverages, especially carbonated drinks. These company produce soft drinks which is mixture of
carbonated water, sugar, coloring, preservation and other ingredients. They are made by mixing
dry or syrup with carbonated water (carbon dioxide are dissolved into water). The beverage
industry in the world is dominated by two major brands: “Coca cola” from The Coca Cola
Company and “Pepsi” from PepsiCo. These two companies are the market leaders. In context of
Nepal as well, these two brands have covered the whole market share. Looking back, carbonated
drinks were imported to Nepal from India. The local production began from 1979. In Nepal
production of Coco Cola is done by Bottlers Nepal Limited and Pepsi is manufactured by “Varun
beverages Nepal Pvt. Ltd.
1.2 Statement of Problem
There are a number of non-alcoholic carbonated beverage companies in the world,
namely Coca Cola, PepsiCo, Suntory, DR Pepper Snapple, and Danone. However, Coca Cola
and Pepsi dominate the market with almost entire market share of beverage industry covered by
these two multinational giants. In Nepal, none of the other aforementioned beverage companies

except Coca Cola and Pepsi are found. There is a tough competition intensified further by new
and innovative marketing techniques between these companies.
Moreover, Nepalese market is lucrative for other beverage companies to enter into. Due
to globalization, many companies like Red Bull and Sponsor have entered into the industry in
recent years. Although the industry is experiencing new entrants, the new entrants have not been
able to give tough competition to the two major players Coca Cola and Pepsi in Nepal. From
years after years, these companies have been taking over the Nepalese market. Increasing
consumer diet consciousness in foreign market have introduced successful sugar-free diet drinks
using the artificial sweetener cyclamate. Environmentalists consider the packaging of carbonated
drinks as a source of waste and litter adding to the pollution. But such incidents have no any
significant impact on Nepalese market. In this study, we are going to examine the Nepalese
carbonated beverage industry and try to find out different forces that influence the industry.
Based upon these macro environmental analysis and competitiveness of the industry, the study
will identify the attractiveness of carbonated beverage industry in Nepal.
1.3 Objective of the study
The major objective of the study is to assess the attractiveness of carbonated beverage
industry in Nepal.
1.4 Organization of the study
The whole study will be divided into following five chapters:
Chapter 1: First chapter deals with an introduction. This includes background, statement of
problem, objectives of the study, limitation of the study and organization of the
study.
Chapter II: Second chapter deals with an Environment analysis of the industry. It includes
Pestle analysis, SWOT analysis, Industry change trajectory and value chain
analysis.
Chapter III: Third chapter explains the Industry and competitive analysis. It includes
Dominant traits, driving force, strategic mapping, key success factor etc.

Chapter IV: The fourth chapter is one of the most important chapters of the study. The chapter
will include the major findings of the study.
Chapter V: The fifth chapter summarizes the main conclusion that flows from the study and
offers a suggestion for further improvement and conclusion of the study.
1.5 Limitation of the Study
The study will have some limitations. Basically, the study is done for the partial fulfillment
of masters of business administration. Time constraints and lack of research experience will be the
primary limitation and other limitations are as follows:
1. The study is based on the assessment of the performance of only two major players in the
carbonated beverage industry.
2. This research study is mainly based on secondary data, which have been collected from
books, magazines, articles etc.
3. Non-carbonated beverage products and firm have been ignored.
4. The study is subject to time and resource constraints.

CHAPTER 2
ENVIRONMENT ANALYSIS
Environment consists of all the factors and forces that have direct and indirect bearings
on the operations, performance, and outcomes of the firm within an industry. The business
environment can be classified into Internal and External environment. Internal environment
consists of all the forces that can be controlled and managed through interventions and discretion
from the management. Such forces are rules, regulations, plans and policies, organizational
system and structure, etc.
The external environment on the contrary consists of forces that have direct and indirect
bearing upon the companies and are beyond the control of management. Such forces pose greater
risk of failure if not managed on time. Hence, companies need to be proactive in identifying
these forces, their probable impacts based upon the probability of occurrence, and strategizing to
mitigate or manage the adverse impacts of these forces.
2.1 External Environmental Analysis
The impact of external environmental forces on a particular industry is country-specific.
In other words, some forces can have extremely precarious impact in some countries while in
other countries, the forces might not be as relevant. It is, therefore, necessary to assess the
external environment of each country, especially for multinational companies like Coca Cola and
Pepsi, before deciding to enter into the territory. To assess the external environmental forces,
PESTEL Analysis is an appropriate method.
2.1.1 PESTEL Analysis
PESTEL analysis consists of the assessment of political, economic, socio-cultural,
technological, environmental, and legal forces that affect the firms within an industry. Based on
the analysis, the attractiveness of the industry can be identified from macro perspective.
1. Political Factor
Government is an external factor that imposes requirements and regulations on
carbonated drink industry. The political analysis considers the effects of governmental actions on

companies’ remote or macro-environment. It looks like the political environment of Nepal will
remain stable for some period of time after the unification of CPN UML and CPN Maoist.
Moreover, with the establishment of federal system in the country, the businesses are expecting
the enforcement of conducive environment and supportive policies from the side of the
government.
The stable political environment can create growth opportunities for all the industries
including carbonated drinks. There are not any regulations in Nepal which impose difficulties in
producing soft drinks. However, government initiatives against sweetened carbonated drinks can
be possible threats as they may reduce the revenues of carbonated drink industry from related
segments. Notwithstanding, federal system may lead to different regulations in different states
and inhibit the functioning of such industry by making the compliance cumbersome in different
states.
2. Economic Factor
Performance of carbonated drink industry is directly linked to the economy. In Nepal,
manufacturing is still at the developmental stage and it represents less than 10% of the GDP.
This can be taken as an opportunity as there is relatively less competition in the manufacturing
sector. Nepalese economy is growing slowly and GDP per capita income is also growing which
can also be taken as good opportunity for this industry. However, interest rate is rising which
may setback the growth of the industry but inflation now seems to be controlled which is positive
sign. Also, there are less strikes now-a-days and this also helps to uplift the economic situation of
the country. So from the economic perspective also, this industry has lots of opportunities.
3. Social Factor
Many consumers of carbonated drinks follow socio-cultural trends. The population of
health conscious people is increasing. This may be a threat to carbonated drinks companies
because of people’s concerns about the sugar, salt, and fat content of such products. However,
this external factor also presents the opportunity for the company to improve its products to
address such concerns. The lifestyle of Nepalese is also becoming busy, especially in the urban
areas which can also be seen as opportunity as carbonated drinks are quick-pick and walk-and-
consume products for busy people. Moreover, Nepal has more population of youths and

consumption of this type of drinks are mostly concentrated to the youth which is a good sign for
this industry.
4. Technological Factor
Beverage industry is partly dependent on the technology. The industry uses technology to
gain economies in production and standardization of the products. The industry can further boost
its own R&D investment to improve its competencies (production volume, quality). Now-a-
days, technology is used everywhere and no business, whether big or small has remained
untouched by technology. The growing use of internet and advertising through social media is
very popular and successful nowadays. So, if this type of industry can invest more in digital
marketing in Nepal, it has positive prospect.
5. Environmental Factor
The supply chain and brand image of carbonated soft drinks are linked to environmental
concerns. This element of the PESTEL/PESTLE analysis considers the ecological trends and
issues that affect consumers, employees, and companies’ macro-environment. This focuses on
the sustainability which can be taken as opportunities. The carbonated drink industry can
improve its waste disposal strategies, such as recycling, to gain more support from customers.
Nepalese are now more concerned about environment due to increase in pollution. This creates
pressure for the companies in the industry to invest in environment conservation, waste
minimization and water control through rain harvesting process.
6. Legal Factor
The legal factors play greater role and have greater importance in the 21st
century. This is
mainly because of growing consciousness of health and product quality. Labor health and safety
is a critical area where compliance is essential. The law of Nepal is one of the most
sophisticated. However, many companies try to bend or avoid the law because of lack of strict
rules and punishments for law violation. Genetically modified organisms (GMOs) are now
increasingly regulated worldwide. Carbonated drink industry has the opportunity to reduce its
use of GMO ingredients to satisfy these regulations. Similarly, the companies can improve
products to address regulations about product safety and health effects. Brands like Coco Cola
and Pepsi have to maintain a clean image. Otherwise, there will be a negative effect on brand

image and then on sales globally. Even if a supplier is violating the labor laws or any other
important law or regulation, it can prove damaging for the brand.
Moreover, Monetary Policy 2075/76 has increased tax levied on alcohol and tobacco
products. This is an incentive to non-alcoholic carbonated drinks like Coke and Pepsi as
increased taxation in alcoholic products will discourage consumption of such products and will
create incentive for carbonated drinks.
2.2 SWOT Analysis
The SWOT analysis considers both industry specific internal factors as well as external
environmental factors to assess the industry attractiveness. The internal factors create strengths
and weaknesses while the external factors create opportunities and threats. Companies try to
strengthen themselves by managing their weaknesses and by mitigating risks through appropriate
strategies.
The SWOT analysis for the carbonated beverage industry is presented in Table 1.
Table 1: SWOT Analysis of Carbonated Beverage Industry in Nepal
Strength Weakness
 Product diversity
 Extensive distribution channel
 Successful marketing and
advertising campaigns
 Brand equity
 Strong leadership
 Clear target audience
 Competition pressure due to industry
duopoly
 Product perceived as unhealthy
 Low quality in Nepal
Opportunities Threats
 Healthy drinks and flavours
 CSR
 Growing beverages and snack
consumption in Nepal
 Growing middle class people
 Change in customer taste
 Water scarcity
 Health factors
 Economic slowdown

Nepalese carbonated beverage industry is dominated by two major players: Coca Cola
and PepsiCo. These companies have equally been competitive in the market. However, Coca
Cola has slight upper edge in terms of market share in Nepal. The strength of these companies is
in their product diversification and distribution. Coke and Pepsi are available at almost all the
terrains of Nepal. With strong leadership, these companies have created industry entry barrier.
The marketing campaigns of the companies are highly innovative and have helped in developing
the brand equity.
However, the duopoly in the market has made the company more intense. The
competitive move of Coke is quickly countered by Pepsi and hence the sustainability of the
strategies formulated is always at risk. Moreover, carbonated drinks are considered to be
unhealthy. With increment in the number of followers of Baba Ramdev, the population dejecting
these carbonated drinks is also increasing. On top of that, the Coke and Pepsi manufactured in
Nepal taste different than that of India. Despite the same formula, taste is different due to water
quality and processing capabilities. People often perceive carbonated drinks in Nepal as being
low quality.
Nonetheless, carbonated beverage industry has a lot of opportunity to grasp in Nepal. The
legal framework is supportive for carbonated beverages while taxation on alcoholic drinks has
been increased. The fast moving population is increasing in the country and so is the culture to
consume ready to eat and drink food items. Hence, carbonated drinks’ demand is increasing with
the change in lifestyle. With new flavors and health- centric products like Diet Coke, these
companies have been gaining customers’ loyalty and usage rate more. Moreover, these
companies are making themselves known through extensive CSR activities.
Despite the widespread opportunities, threats within the industry are also obvious. The
industry is getting slowed down due to less use of innovative technologies. Moreover, the
economy is slowing down creating financial pressure upon denizens and decreasing consumption
 Further Diversification
 Changing lifestyle
 Celebration of many festivals when
carbonated drinks are consumed.
 Changes in innovation and
technology
 Strikes
 Continuous Labor problems

of delight products like Coke and Pepsi. During economic slowdown, people act rationally and
these products are not basic subsistence product and hence their sale is affected. Moreover, with
increased labor union activities and labor scarcity, the industry has been suffering largely. Given
the strengths and opportunities, the industry can be a very attractive arena to enter into if the new
entrants can manage the weaknesses and threats prevalent within the industry. However, the
entry barrier created by Coke and Pepsi in the form of huge capital requirement might pose
greater barrier to potential new entrants. New entrants need to invest extensively to be equally
competitive if they want to win the market share of these two giants in the industry.
2.3 Industry Change Trajectory
A firm/ company cannot make intelligent investments within the organization unless it
understands how the whole industry is changing. Since there are only two main companies in the
carbonated drink industry, their brand name is their core asset and their core activities include: I)
dealing with distributor and suppliers and II) producing and selling soft drinks.
Figure 1: Industry Change Trajectory
The carbonated drink industry is still in its growth stage because the sales of carbonated
soft drinks is still increasing as a result of increasing number of youths. Another reason for

increasing sales is that the perception of people about carbonated drinks representing enjoyment
has still not changed.
This industry is in “Progressive Change”. This is the most favorable situation for any
industry. Neither the core activities nor the core assets of carbonated drink industry are
threatened. The core asset (Brand Image) is still relevant and important to suppliers and
customers and there have not been too many changes in the core activities too. The changes in
technology have not vastly changed the way that carbonated soft drinks conduct their core
activities and these activities are still generating value for the stakeholders.
2.4 Industry Value Chain Analysis
The term “Value Chain” describes a way of looking at a business as a chain of activities
that transform inputs into outputs that customers’ value. The value chain describes all the
activities that make up the economic performance and capabilities of the firm. It portrays
activities required to create value for customers. Value chain analysis is an excellent tool by
which senior management can determine the strength and weakness of each activity and compare
it with other competitors or industry average. The analysis consists of primary and
supplementary activities as shown in Figure 2.
Primary Activities
Primary activities consist of processes and activities that directly gets transferred to the
customers in the form of final product or services and after sales support. The major primary
activities for Nepalese carbonated beverage industry are as below:
Inbound logistics
It deals with the handling of raw materials and inventory received from the suppliers.
Warehousing, storage and raw material control are some of activities involved in the inbound
logistics.
Carbonated water, high fructose corn soup, caramel color, phosphoric acid, natural flavor,
and caffeine are some of the raw materials that carbonated drinks buy from the suppliers. They
can benefit by locating their production sites within close geographical proximity to the main

sources of raw materials in order to save transportation costs. Warehouse layout and design also
helps to increase the efficiency of operations for incoming materials.
Figure 2: Value Chain of Carbonated Drinks Industry
Support
activities
Firm
infrastructure
Financial and accounting services, IT services, legal services,
quality management
Human
resource
management
Recruiting, payroll, education and training, administration,
compensation
Technology
development
Product development, process development, Market research
Procurement Billing systems, information system about raw materials, ERP
systems, supplier vendor relationships
PRIMARY
ACTIVITIES
Warehouse,
Storage
Raw
Material
Control
Consumer
Group,
Bottling
operation,
Canning
operations
Customer
order
management,
Inventory
control,
Warehousing,
Storage
transportation
Advertising,
Promotion,
Product
mix,
Pricing,
distribution
Customer
service
Inbound
logistics
operations Outbound
logistics
Marketing
& sales
Service MARGIN

Operations
Operations are activities and procedures that transform raw materials into finished
products. The carbonated beverage industry conducts its productions operations with use of
sophisticated operational systems and advanced technologies since both the leaders in this
industry (Coke and Pepsi) are huge multinational companies. They adjust their products to local
tastes and preferences and this is reflected on operations. Some of the main activities are
producing syrup and concentrating it, selling syrup to authorized bottling and canning
companies, combining concentrated syrup with carbonated water, packaging bottle and cans.
Success in managing and improving operations represent a source of leverage in building ability
to compete in a sustained manner.
Outbound logistics
Outbound logistics is the process of storing, transporting and distributing goods to
customers that are produced from the operation. Specifically, outbound logistics of carbonated
drinks integrate the following two formats of product distribution:
 Direct-Store-Delivery: This distribution format is especially popular with product
categories that are re-stocked very often. Direct-Store-Delivery provides them advantages
of merchandizing with maximum visibility and appeal within stores.
 Using distributor networks: Third-party distributors are needed in order to facilitate the
distribution to locations far from firm manufacturing plants and warehouses.
Effective shipping process and finished goods warehousing process helps to minimize
damages and minimize transport costs.
Marketing and Sales
This types of industry must have a solid advertising budget and the marketing strategy of
the companies in this industry includes making an extensive use of print and media advertising,
social media marketing, celebrity endorsement and product placement. The marketing message
should attempt to associate the consumption of carbonated drinks products with the perceptions
of enjoying life to the full extent, staying active and spending quality time together with friends

and loved ones and it should be targeted to the youths in Nepal. Some of the main activities of
marketing are shown in the figure of value chain analysis.
Service
Customer service is the most important among different value additions. Customer
feedback and to act on information, quick response to customer needs and quality of service
personnel are some of the main activities in sales. Although they do not directly provide
customer service at the point of purchase, they perform it through calls and websites. Customer
service is the main competitive weapon for every industry and for carbonated drink industry too.

CHAPTER 3
INDUSTRY AND COMPETITIVE ANALYSIS
The industry and competitive analysis is the most essential assessment needed to identify
the attractiveness of any industry. From the analysis, the competitive pressure and the ease of
entry and success within an industry can be identified. To do so, it is important to follow a seven
component framework as presented in the chapter.
3.1 Dominant Industry Traits
The patterns within the industry play pivotal role in deciding whether the industry is
worth entering into. These traits can be classified as emerging industry practices that have
significant bearings upon the success and failure of any firm within the industry. For carbonated
beverage industry in Nepal, the dominant industry traits are as below:
1. Scope of Competitive Rivals
The competitive rivalry in the carbonated beverage industry is fierce between the two
giant companies Coca Cola and PepsiCo. Coke entered Nepalese market with Bottlers Nepal in
1979, while PepsiCo entered Nepal on 1990s with Varun beverage both producing and
distributing a wider range of beverages including carbonated beverages.
Coca Cola enjoyed 70-80 percent of market share in Nepal till a few years ago. That
figure is now reduced to 66 per cent due to aggressive marketing from the competitor. Higher
percentages are very difficult to attain when there are two competitive companies operating in
the same market. The reality is that when two companies are working competitively, market
shares settle down somewhere between 60 and 40 with their strategies and aggressive marketing
campaigns and it’s the same with Coke and Pepsi here. There is aggressive competition in Nepal
in this industry within the rival products and even the substitute products but this is good since it
not only helps their category to grow, but also provides consumers with a choice of high quality
beverages.
2. Market size
The market size of this industry has been changing. Soft drink consumption has a market
share of 46.8% within the non-alcoholic drink industry globally, followed by bottled water and

juices. (Datamonitor, 2005). The study also found that the total market value of soft drinks
reached $307.2 billion in 2004 with a market value forecast of $367.1 billion in 2009. Clearly,
the soft drink industry is lucrative with a potential for high profits, but there are several obstacles
to overcome in order to capture the market share.
Unlike the global market, the size of Nepalese market for carbonated beverage is small.
Since the per capital income of Nepalese is still low, an ordinary Nepali citizen would not spend
much on beverages. It has been discovered through our consumer researches and direct
discussion with the consumers that for the people living in European countries and Western
territories, carbonated drinks are a part of their regular life whereas in Nepal, there is still a trend
to consume beverage during particular events and festivals or in the presence of guests. The per
capita soft drink consumption of the Nepalese is less than eight bottles a year in comparison to
other South Asian countries where it is anywhere from 24 to 48 bottles a year.
3. Number of rivals and their sizes
While there are many rivals in the entire beverage industry, there are only two rivals in
the carbonated beverage industry –Coca Cola Company and PepsiCo. Bottlers Nepal Limited
(BNL) is the only bottler of Coca-Cola products in Nepal, and has two bottling plants; namely
Kathmandu (Bottlers Nepal Limited – BNL) and Bharatpur (Bottlers Nepal (Terai) Limited,).
They currently offer Trademark Coca-Cola, Diet Coke, Fanta, Sprite and Kinley Soda in Nepal
in a variety of pack sizes. Similarly, Varun Beverage is the second largest franchisee in the world
(outside US) of carbonated soft drinks and non-carbonated beverages sold under trademarks
owned by PepsiCo and a key player in the beverage industry of Nepal as well. They produce and
distribute a wide range of CSDs, as well as a large selection of NCBs, including packaged
drinking water. PepsiCo CSD brands sold by us include Pepsi, Diet Pepsi, Seven-Up, Mirinda
Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Evervess Soda,
Sting and Gatorade. PepsiCo NCB brands sold by us include Tropicana, Tropicana Slice, Seven-
Up Nimbooz and Quaker Oat Milk as well as packaged drinking water under the brand
Aquafina.

4. Market growth rate and place of industry in the growth cycle
Despite solid growth in consumption, the global soft drinks market is expected to slightly
decelerate, reflecting stagnation of market prices. Unlike other growing sectors in the non-
alcoholic sector including tea and coffee, which has grown by 11.8% and bottled water, which
has grown by 9.8% the growth of carbonated drinks has remained rather solid depicting market
saturation. Because of this, soft drink leaders are establishing themselves in alternative markets
such as the snack, confections, bottled water, and sports drinks industries (Barbara Murray,
2006c). In order for soft drink companies to continue to grow and increase profits, they will need
to diversify their product offerings.
Talking about the Nepalese market carbonated beverage is still at a very early stage. Still
they have less than 8-10 bottles per year per person consumption. They are still restricted to
limited flavours and packs, whereas, internationally, people talk of hundreds of brands. So the
market still has a long way to go to grow. Firms in the industry are focused on leveraging the
growth opportunity that the Nepalese market provides and they are constantly researching and
evaluating need states to grow their business and expand their portfolio of products.
Leading firms in the carbonated beverage industry are trying to build a market for itself.
But the good thing is that the share of the market pie is becoming bigger with the growth in the
market size. As an industry, they are less dependent on trying to eat each other’s pie. Instead,
they are trying to increase the total size of the market.
5. Prevalence of backward and forward integration
There is prevalence of backward and forward integration in the carbonated beverage
industry. If the companies operate in a large scale like Coke and PepsiCo, they can themselves
indulge in bottling and packaging which can be more profitable than buying from suppliers. The
beverage industry can also possess portion of their own supply companies like Coca Cola
Company and PepsiCo is doing with Bottlers Nepal and Varun Beverage.
6. Ease of entry and exit
It would be very difficult for a new company to enter this industry because they would
not be able to compete with the established brand names, distribution channels, and high capital

investment. Likewise, leaving this industry would be difficult with the significant loss of money
from the fixed costs, binding contracts with distribution channels, and advertisements used to
create the strong brand images. This industry is well established already, and it would be difficult
for any company to enter or exit successfully.
7. Economies of scale
Bottler’s Nepal and Varun Beverage are the leaders in the Nepalese beverage industry
because they have been successful in achieving economies of scale. They have been looking to
drive revenue growth and improve market share through the increased economies of scale found
through product diversification and capacity expansion.
8. Extent of product differentiation among rivals
Both of leading companies are still innovating, evolving and striving to be relevant to
new generations. They constantly strive to stay relevant to our consumers by focusing on their
needs and consumption patterns and connecting with them through our products. Providing
consumers with choice and value continues to be the cornerstone of our business strategy. Both
the companies try to differentiate their product by offering a range of products in different packs
at varying price points. To ensure this, they are investing in their distribution, innovation and
marketing investments to continue to drive differentiation in the industry among the rivals.
3.2 Porter’s Five Forces Model
Porter’s Five Forces Model identifies the five forces of competition for any company.
The recognition of the strength of these forces helps to see how the carbonated beverage industry
is operating in Nepal. The carbonated drink industry is very competitive for all corporations
involved, with the greatest competition being that from rival sellers within the industry.
1. Rivalry among existing competition: High
The current brands in the industry from leading companies like Coca Cola and Pepsi Co.
are posing a very competitive and challenging environment. Coke’s market share, which stood at
85 per cent on 2005, has come down to an alarming 65 per cent today due to the competitive
strategies and threats imposed by Pepsi and its carbonated brands. Brand names are significantly
important for competition among all the players. They are always coming up with new and

strategic ways to position and promote their drinks and in order to capture a larger magnitude of
the customers so that the market share in the industry can be increased. While Coke has a big
lead in cola market share over Pepsi, but Pepsi's multiple product lines haul in more cash. So
even when the number of competitors is primarily just two with Coke Company and Pepsi Co.
the rivalry is intense and in fact legendary.
2. Threat of new entrants: Low
The growth rate of the overall beverage industry is not very high. Plus due to various
factors like health hazards associated with carbonated drinks the consumption of soda beverages
has been trending downwards as per the beverage digest. Due to this factor of industry’s medium
level of attractiveness, the chance of new comers to enter into the industry is low.
Existing companies Varun Beverage of Pepsi Co and Bottler’s Nepal of Coke Company
have already acquired massive expenditures and possess economies of scale as they have a direct
supply. There is a high proportion of the fixed costs required so in order to enter in this industry,
an ample amount of money is required for the sake of manufacturing, bottling, distribution and
storage.
The current brands in the industry are posing a challenging environment for the new
entrants because of the high reputation and promotion of the bran among the customers. Plus, the
major difficulty when starting a carbonated beverage business is of distribution channels, as the
leading brands are retaining many of the main distribution channels including, restaurants,
groceries, department stores etc. The top brands in the industry have their ways which are
required to drive out the new entrants due to which the threat of new entrants is low.
The ease of entry and exit does not cause competitive pressure on the major soft drink
companies. It would be very difficult for a new company to enter this industry because they
would not be able to compete with the established brand names, distribution channels, and high
capital investment. Likewise, leaving this industry would be difficult with the significant loss of
money from the fixed costs, binding contracts with distribution channels, and advertisements
used to create the strong brand images. This industry is well established already, and it would be
difficult for any company to enter or exit successfully.

3. Threats of substitutes: Medium
The substitutes for the carbonated beverages are water, tea, sports drinks and many more.
There are some loyal group of customers don’t switch to alternatives easily because of the brand
name and the reputation the companies have earned in the industry over the time. However, on
the other hand there is decreasing per-capita consumption of carbonated soft drinks volumes
which can be attributed largely due to health concerns. Soda’s high sugar and caffeine content is
alleged to cause several health issues, like obesity, diabetes, osteoporosis, and tooth decay.
Hence, carbonated beverages are also facing competition from growth substitute categories like
bottled water, sports drinks, and ready-to-drink tea.
4. Bargaining power of buyers: High
The buyers of the carbonated beverage industry are mainly groceries, department stores,
super markets and restaurants. The soft drink companies distribute the beverages to these stores,
for resale to the consumer. The bargaining power of the buyers is very evident and strong. Large
grocers and department stores buy large volumes of the soft drinks, allowing them to buy at
lower prices however small restaurants and groceries have less bargaining power because they
do not order a large volume.
Talking about the end consumers since it is not a basic necessity and it has perfect
substitute like water and juice which are easily available and cheap at price their bargaining
power become high. The end consumers can change brands or switch to substitutes and
competing products upon how expensive it is. Plus, with the number of people drinking
carbonated beverages is decreasing because of health issues, the bargaining power of buyers
could start increasing more due to decreasing buyer demand.
5. Bargaining power of suppliers: Low
The suppliers of carbonated beverages basically include bottling manufacturers and
packing suppliers. As it is easier to switch among the suppliers so the bargaining power of
suppliers is low. Furthermore, the leading firms Coke and Pepsi effectively further negotiate on
behalf of their bottlers i.e. Bottlers Nepal and Varun Beverage, thereby reducing the number of
major contracts available to the suppliers to only two. With more than two companies vying for
these contracts, Coke and Pepsi were able to negotiate extremely favorable agreements.

While the beverage companies have the capacity and ability to apply backward
integration and be their suppliers while the suppliers can’t do the same in the name of forward
integration. In fact they can also possess a portion of their own supply companies. Like for e.g.
Coca-Cola does not do any bottling, but it owns about 36% of Coca-Cola Enterprises which is
the largest Coke bottler in the world and that particular supplier does not hold much bargaining
power. In terms of equipment manufacturers, the suppliers are generally providing the same
products. The number of equipment suppliers is not in short supply, so it is fairly easy for a
company to switch suppliers if they want. This takes away much of suppliers’ bargaining power.
So, the bargaining power of suppliers is low.
3.3 Industry Driving Forces
Driving forces consist of the forces that dictate the nature of change in the industry
structure and competitive environment. These forces either create pressure or provide incentive
for change. The major industry driving forces for carbonated beverage industry in Nepal are as
explained below:
1. Changes in the long-term industry growth: Incentive to Change
With the low per capita income of the Nepalese, an ordinary Nepali consumer would not
spend much in beverages. Nepalese consume beverage even carbonated beverages during
particular events and festivals or in the presence of guests. The per capita soft drink consumption
of the Nepalese is less than eight bottles a year in comparison to other South Asian countries
where it is anywhere from 24 to 48 bottles a year. The industry will certainly grow and be safe
for introducing new range of products as and when they becomes a part of the Nepali people’s
everyday lives. But both the leading firms of the industry are focusing on making their products
part of daily life of Nepalese customers and being successful in doing so will increase the pie, the
total size of the market.
2. Changes in the buyers’ composition and the use of the product: Pressure to Change
With increased urbanization and the impact of globalization westernization there is a
growing trend of consuming beverages and this is not limited to special occasions only. Plus, the
youths want to consume food and beverages that is popular in the western market. Thus, the
firms are offering variety of products to the consumers across Nepal like Bottlers Nepal is

producing and selling Trademark Coca-Cola, Diet Coke, Fanta, Sprite and Kinley Soda in Nepal
in a variety of pack sizes across channels. They are focusing on leveraging the growth
opportunity that a market like Nepal provides and they are constantly researching and evaluating
need states to grow their business and expand our portfolio of products.
3. Product Innovation: Incentive to Change
Product innovation also drives the industry and increases the demand. With the changing
taste and preferences customers want new and variety of flavours and products and attractive
packaging and volumes. Thus, there have been researches and innovations and number of plans
for Nepalese market in terms of beverage choices and packaging varieties.
4. Changing societal concerns, attitudes, and lifestyles: Incentive to Change
The Nepalese lifestyle is getting influenced by the west. So they are accepting products
like carbonated beverages. These beverages reflect higher status and position in the society to
them thus the level of consumption of increasing especially in the urban areas. For health
conscious people the firms in the industry also offer diet products and energy drinks.
3.4 Strategic Mapping
The carbonated beverage industry contains one strategic group since the two rivals have
essentially the same strategies.
Price
Innovation and marketing
Varun
Beverage
Bottlers Nepal
Low
Low
High
High
Figure 3: Strategic Group Mapping in Carbonated Beverage Industry

Both Varun Beverage and Bottlers Nepal have similar competitive approaches and
positions in the market. With the same pricing they are trying to innovate product wise as well as
communication wise to cater the changing and growing needs of the Nepalese market. These
firms in the industry are still innovating, evolving and striving to be relevant to new generations.
They are constantly striving to stay relevant to our consumers by focusing on their needs and
consumption patterns and connecting with them through our products and thus are investing
massively on innovation and marketing while their economies of scale is resulting in medium
level of pricing. Since they fall in the same position they face an aggressive competition. But,
this is good since it not only helps the category to grow, but also provides consumers with a
choice of high quality beverages. Both firms in the industry are investing in innovation and
marketing to provide consumers with choice and value. They are focused on offering a range of
products in different packs at varying price points and serve the market. That is why they are the
closest competitors and within the same Strategic Group and they may be viewed by customers
as substitutes for each other.
3.5 Competitive/ Business Intelligence
On 2010, Phil Humphreys was elected as the Chief Operating Officer (COO) of the
Northern Division of Coca Cola Sabco and he started leading developing markets in the form of
franchises of Vietnam, Combodia, Nepal, Srilanka, and Ethiopia. During 2010, Coke and Pepsi
were following almost entirely same advertising campaign in Nepal. Coke needed to do
something different than Pepsi to win the marketing war and to claim larger market share. Phil’s
analysis of Pepsi’s marketing gimmick showed that Pepsi and Coke both were centric more on
electronic and print media for advertisement. By assessing Pepsi’s advertising pattern, Phil
Humprhreys decided on a new marketing campaign through hoarding boards. The hoarding
board based marketing was the part of Coke’s 360 degree integrated marketing campaign to
increase its visibility all over the country.
The marketing campaign was sought after assessing the strategy of the neck competitor
Pepsi and it was possible through Coke’s Business Intelligence system. Furthermore, the
intelligence system notified extensive use of water in Varun Beverage and hence, Bottlers Nepal
came up with the idea to give more water back to the ground through rainwater harvesting
process. The decision was socially responsible decision because Kathmandu faces precarious

water situation. (New Business Age, 2010). Like Coca Cola Company, PepsiCo has also invested
in developing a competitive intelligence system. The system was able to track the strategies of
Coca Cola Company to use hoarding boards and rain water harvesting. Following the results of
the business intelligence system, Pepsi also followed hoarding board gimmick and today, Varun
Beverage (Pepsi Manufacturer) is marked better in its water management practices than Bottlers’
Nepal. (New Business Age, 2010).
For any new company wishing to enter into the industry, it is important that they equally
invest on developing the competitive intelligence system to be able to proactively able to detect
competitive moves of the established two major giants in the Nepalese carbonated beverage
industry.
3.6 Key Success Factors
In order to maintain a successful position in a industry, any firm must have some strategic
actions/ approaches that a firm must be competent at doing. Managers must know the industry
well to distinguish important factors from that of irrelevant factors. These factors are known as
key success factors and are the cornerstones for the development of the company within an
industry.
For carbonated beverage industry in Nepal, the major success factors are as below:
1. Full Utilization of the Capacity
In order to achieve the scale economies, it is important that the beverage companies
operate at optimal capacity, that is, optimal utilization of their manufacturing plant. Coke and
Pepsi have achieved economy of scale over the years with full utilization of their manufacturing
plant. With optimal capacity utilization, the firms/ companies can offer standard products to the
customers at the most reasonable price possible.
2. Strong Distribution Nepal
Distribution channel makes the products available at customers’ stop. With a strong
network of dealers and suppliers, Coke and Pepsi have been supplied to almost all the places in
Nepal. The existing companies in the industry have a very reliable distribution Network. The
dealers are contracted and are rewarded for their achievements. If any company intends to enter

into the industry, the company has to make sure that it acquires access to the distribution link that
these two companies have created over the years. Without proper distribution network, the new
company cannot serve the market right and sustain competition.
3. Appropriate Marketing Approach
The business intelligence system of Coke and Pepsi in Nepal has helped them design
innovative and competitive marketing campaigns. Coke has come up with innovative concept of
bringing in family ties in the product during festivals like Dashain and Tihar with Coke Jumbo
packs printed as “Aama”, “Buwa”, “Didi”, etc. The ad campaign uses emotional appeal to target
the customers during festival season. The marketing gimmick has been very successful for Coca
Cola in Nepal. This shows that marketing plays a very crucial role in bringing about successful
outcomes for the companies within an industry.
4. Strong Brand Image
A stronger brand image ensures greater customer loyalty and market acquisition.
Building brand further creates greater market acceptance. Hence, branding is an integral
component to create a successful beverage company and in a country like Nepal where beverage
consumption is limited to festivals and due to low per capita income during other times, brand
plays even stronger role in inducing purchase intention among the potential customers.

CHAPTER 4
MAJOR FINDINGS
The study has given various relevant insights about the impact of macro forces in
carbonated beverage industry and the competitiveness within the industry. These insights are
useful in determining the industry attractiveness as under the seven component framework. The
major findings of the study has been summed up as below:
4.1 Findings from PESTEL Analysis
The PESTEL analysis has found that carbonated beverage industry has many
opportunities that can be achieved if the existing companies and potential new entrants manage
the threats arising from these forces. More precisely, the findings have been presented in Table 2.
Table 2: Findings from PESTEL Analysis
Forces Positive Impact Negative Impact Finding
Political
 Political Stability
 Not many regulations
 Less political strikes and
interferences
 Initiative against sweetened
carbonated drinks
 Federal system might pose
compliance difficulties
Neutral
Economic
 Manufacturing sector at
early stage
 GDP per capita rising
 Inflation under control
 Rising interest rates
Huge
opportunities
Socio-cultural
Many festivals for beverage
consumption
Busy lifestyle
Increasing youth population
 Increasing health conscious
people
Opportunities
Technological
 Technology not widely
adopted
 Technology is costly and
difficult to manage
Opportunities

 Opportunities to innovate
flavours and marketing,
achieve scale of economies
Environmental
 Proper recycling and
disposal practices
 Water management through
rain water harvesting
 Concern for exploitation of
water resource
Opportunity
Legal
 Less restrictive regulations
 Opportunity to supply GMO
less products
 Increased restrictions on
sweetened carbonated
products.
Opportunity
Overall Finding Opportunities within the industry
4.2 Findings from Industry Change Trajectory
Carbonated Beverage industry in Nepal is in Progressive change. There has not been any
dramatic and drastic change within the industry demanding massive investment and adoption for
core assets and core activities. The change is gradual and organic, making it easier for the
companies to adapt. This is a good sign for new entrants as the industry does not experience
radical change.
4.3 Findings from Value Chain Analysis
The industry has two major players that have extensively used forward and backward
integration strategies to enhance their value chain. These strategies have given the existing
companies greater edge in the competition. For probable new entrants, the challenge is to match
their integration strategies by pursuing similar strategy. However, backward and forward
integration strategies can be cumbersome, expensive/ costly, and might require greater expertise.
The challenge from the industry value chain is menacing.
4.4 Findings from the Dominant Industry Traits
The dominant industry traits of carbonated beverage industry in Nepal shows neutral
results and the findings are summarized in Table 3.

Table 3: Findings from Industry Dominant Traits
Industry Traits Characteristics Findings
Market size
Small market with only 8 bottles consumed
per year per Nepalese; sales more during
festivals.
Opportunity
Number of rivals
Only two players in the market but the players
are dominant and leading the entire market.
The duopoly, if broken with right strategies,
creates market opportunities.
Opportunity
Market growth rate and
industry life cycle
Industry in early stage of life cycle with
limited flavours available in Nepal in
comparison to other countries.
Opportunity
Backward and Forward
Integration
Existing companies have been extensively
following these strategies, making it difficult
for the new entrants to reap the benefits.
Threat
Ease of entry and exit
High implicit entry barriers created by the
existing giants in the market
Threat
Economies of scale
Over the years, with due experience, the two
existing companies have gained economies of
scale and product standardization. New
entrants will have to struggle to reach to their
level.
Threat
Overall Findings Neutral
4.5 Findings from Porter’s Five Forces Analysis
The competitive analysis has shown low to moderate level of competitive pressure within
carbonated beverage industry in Nepal. The findings have been summed up in Table 4.

Table 4: Findings from Porter's Five Forces Analysis
Competitive Forces Impact
Rivalry among the existing firms in the industry High
Threat of new entrants Low
Threat of substitutes Moderate
Bargaining power of the buyers High
Bargaining powers of the suppliers Low
Overall Finding Low to Moderate
4.6 Findings from Strategic Group Mapping
The strategic group mapping has shown a very close competition between the only two
players in the Nepalese market: Coke and Pepsi. These companies fall in the same strategic
group and have been characterized by duopolistic nature of competition. The competition is very
tough making it difficult for new entrants to break their domination. However, when the
competition is less, chances of success for new entrants is also higher provided that they duly
consider and strategize to manage the pressure from the existing giants.
4.7 Findings from Business Intelligence and Key Success Factor Analysis
The existing companies have developed market intelligence and have invested heavily on
preserving it from several years now. For new entrants, there is going to be huge challenge of
coping up with their existing intelligence system by designing equally competitive and proactive
intelligence system.
The key success factors for the companies within the industry are achievable. However,
these factors require greater deliberation, investment, and expertise. Hence, if any company
wants to enter into the industry, it has to make sure that it brings in the needed to achieve the key
success factors.

CHAPTER 5
CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion of Industry Attractiveness
The study’s conclusion is based on the seven component framework of which conclusion
about whether the industry is attractive or not is the seventh and final component. The
attractiveness of the industry can be assessed by analysing the aforementioned six forces:
dominant industry traits, competitive forces, driving forces, strategic group mapping, competitive
intelligence, and key success factors and their impacts in the industry. From the assessment of
the forces, the industry seems lucrative and worthwhile.
With duopolistic characteristics, the beverage industry in Nepal creates opportunities for
new companies to break the duopoly and offer new products, flavours at the most competitive
prices to the customers. This is beneficial from consumerism view point. Furthermore, the
carbonated beverage industry in Nepal is in early stage in comparison to other countries. There
are only two players in the market, which makes the competition less lethal. However, the
competition will be from the entry barriers created by these companies over the years in the
market. The capital requirement, product differentiation, and economies of scale set in by these
companies are very difficult to be matched in by the potential new entrants. Despite the
possibility of growth, the entry barriers pose restrictions on the entrance. Nevertheless,
considering the industry life cycle and market growth rate, the huge investment on the entrance
into the industry will pay off well if the new entrants focus on differentiating and creating scale
economies.
The competitive analysis using Porter’s five forces shows that the industry is Low to
Moderate, which means that the industry can be profitable if entered into as the competition is
not much fierce.
The driving forces create both incentive and pressure to change to existing industries. The
incentive and pressure can be attractive to new entrants as well. If the potential entrants identify
the incentives or the pressure to change existing in the industry, the new entrants can compete
fiercely with the existing giants Coke and Pepsi in the Nepalese market.

Considering the business intelligence built up by Coke and Pepsi over the years, the new
entrants will have to struggle and invest hugely to rise up to their level. Else, the new entrants
will be thrashed by the market and competitive knowledge of the existing players.
If the key success factors are duly considered, new entrants have the possibility of doing
exceptionally good within the beverage industry in Nepal as the industry is still in the early
stage. During early stage, the potential of growth of the industry is high and room of new
entrants is also present.
All in all, the industry seems attractive to enter into. However, the new entrants will
definitely face competitive pressure due to the Business intelligence of existing companies,
implicit entry barriers created by the existing companies in the form of huge capital
requirements, scale economies, acquisition of efficient distribution network and a stronger brand
image. If the new entrant wants to be successful, it must strategize to manage these challenges.
5.2 Recommendations for Probable New Entrants
Although the industry shows potential of profits and growth for new entrants, the industry
has observable challenges for potential entrants. The existing companies have built such brand
image and market recognition that it is very difficult for a new company to catch up to their
speed. Nevertheless, being in the early stage of industry lifecycle and with immense potential of
growth, the industry can offer benefits to new entrants provided that they strategize properly
considering the challenges. Doing so, the new entrants can convert the threats into opportunities
and capitalize from them. The study has the following recommendation to make to the potential
new entrants of carbonated beverage industry in Nepal:
1. In comparison to other markets, Nepalese market has relatively less flavours of
carbonated drinks. Thus, the probable new entrants are recommended to invest on
innovating flavours. This can create product differentiation and help the companies
achieve competitive edge over existing players in the market.
2. Brand building is a crucial success factor for carbonated beverage industry. Hence, the
new entrants are suggested to be more extensive in their marketing efforts. They can
follow pirate model of Awareness, Acquisition, Retention, Referral, and Revenue.

Furthermore, the marketing budget should be based on parity with the marketing efforts
of existing firms.
3. The new entrants are recommended to foresee the possibility of long term contracts with
the most efficient Distributors in Nepal. To lure the distributors, the companies must
design contracts in such a way that the distributors feel they can be benefitted from the
contract in the long run.
4. Only if the new entrants are ready to invest heavily to enter into the industry can they
succeed in carbonated beverage industry. It is because existing players: Coke and Pepsi
have created huge entry barrier by raising their capital invested by many folds over the
years. If new companies want to be competitive, they should be able to operate at the
level of existing firms. Else, they will be kicked out from the market by larger market
base and recognition of exiting firms.
5. Furthermore, the new entrants are suggested to build a Business Intelligence System right
from the start. With a competitive intelligence system, the entrants can possibly foresee
or predict the competitive moves from the players in the industry and formulate strategies
accordingly to counter the competitive pressure.

REFERENCES
Bailey, S. (2016, March 29). Market Realist. Retrieved May 25, 2018, from marketrealist.com:
https://marketrealist.com/2016/03/insight-transition-us-nonalcoholic-beverage-choices
Datamonitor. (2005, May). Global Soft Drinks: Industry Profile. New York. Reference Code:
0199-0802.
Himalayan News Service. (2007, April 27). Retrieved from The Himalayan Times:
https://thehimalayantimes.com/business/soft-drink-majors-slug-it-out/
Kasi, A. (2017, May 9). Porter Analysis. Retrieved May 25, 2018, from porteranalysis.com:
https://www.porteranalysis.com/porters-five-forces-model-of-beverages-industry/
Market Research.com. (2018, June 01). Beverage Market Research Reports and Industry
Analysis. Retrieved from www.marketresearch.com:
https://www.marketresearch.com/Food-Beverage-c84/Beverages-c165/
Meghan Deichert, M. E. (2006). Industry Analysis: Soft Drinks.
New Business Age. (2010). newbusinessage.com. Retrieved from www.newbusinessage.com:
http://www.newbusinessage.com/Articles/view/741
New Business Age. (2012, january). Salman Rafit Rawn. Retrieved from
www.newbusinessage.com: http://www.newbusinessage.com/Articles/view/649

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