2. Agenda
Introduction
• Market Analysis
• Market Share and Growth for Categories
• Industry Lifecycle
• Business Model Canvas
External and Internal Analysis
• Porter’s 5 forces
• Perceptual Map
• Resources and Capabilities
Strategy formulation
• Competitive Advantage
• Segmentation Targeting Positioning
• Building blocks of Competitive Advantage
• Advertisement Campaign
Conclusion
• Business Model Canvas: Complete
3. Introduction
• FizzGo is a new ready-to-drink beverage
• We will be facing competition from
– Carbonated Soft Drinks
– Fruit Beverages
– Bottled Water
– Ready-to-drink Tea
– Sports and Energy Drinks
4. Market Analysis - India
• We all know about soft drink beverages
– 50-Billion-rupee soft drink industry is growing at 5.6% annually
– Coke and Pepsi have a combined market share of 95%
– Campa Cola has 1% share
– And rest 4% is divided among local players
• But what about other substitutes?
5. Market Share and Growth rate of Categories
47%
20%
18%
10%
4% 1%
Market Share 2012
Carbonated Soft Drinks Fruit Beverages
Bottled Water Ready-to-drink Tea
Sports and Energy Drinks Others
5.6%
6.6%
9.5%
10.1%
11.6%
7.0%
CAGR
Note: Fruit Beverages has Market Share of 20% and CAGR of 6.6%
6. Industry Lifecycle
• Overall, the Beverage Industry in India is in Growth
• Soft drinks Market is particularly hard to enter but still
growing
• It is relatively easier to enter other categories like Fruit
Beverages
Time
Demand
Embroynic GrowthInroduction Maturity Decline
7. We will use “Business Model Canvas” for
strategy formulation
KEY PARTNERS KEY ACTIVITIES
VALUE
PROPOSITIONS
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
KEY RESOURCES CHANNELS
COST STRUCTURE REVENUE STREAMS
8. Porter’s 5 forces model
2
• Rivalry Among
Established Players
1
• Risk of Entry by
Potential
Competitors
5
• Threat of Substitute
products
3
• Bargaining Power of
Suppliers
4
• Bargaining Power
of Buyers
9. Porter’s 5 forces model
Risk of Entry by Potential Competitors- LOW
• Well known brand identity
• Absolute Cost is moderate- not very low or high
• Well established distribution network, Existing
players enjoy economies of scale
• There are licenses, insurances, and other difficult
qualifications required in this industry.
Rivalry Among Established Players- HIGH
• Consolidated competitive structure
• Decreasing demand
• Exit barriers are high due to high capital
investment
Bargaining Power of Buyers- LOW
• Few sellers and many buyers. (Buyers can switch
between sellers but due to brand loyalty this does
not happen frequently)
• A soft drink is a hard thing to duplicate in your
house and is time consuming. The inconvenience
is not worth the time when compared to its low-
price and availability.
Bargaining Power of Suppliers- LOW
• Firms can switch between suppliers very
quickly and easily.
• Soft drink companies own a portion of
their own supply companies.
Threat of Substitute products- HIGH
• There are substitutes for carbonated beverages, like water, tea, sports drinks, etc.
• Customers would not incur costs in switching to substitutes.
10. Porter’s 5 forces model
Findings:
Market is not that attractive for Cola Carbonates but from the growth
rates we have seen for the past years we can understand it is fairly
attractive for the non-Cola Carbonates.
Forecast is that Soft drinks will continue to experience steady sales,
mostly in non-cola and non-carbonated drinks.
Product innovation is necessary to fill the buyers’ need for a variety of
tastes and we have identified that there is a market gap in Mango
flavored carbonates. Customers purchase products mainly based on
taste and are open to trying out new tastes.
Need to have a strong plan/strategy in place for building
Supplier/Distributor relations.
Coca-Cola and PepsiCo continues to be the 2 major players in this
market. We will need to have a strong launch and advertising plan.
11. Perceptual map
Coca Cola
Pepsi
MazzaSlice
Mountain Dew
Nimbooz
Minute Maid
Sprite
Appy Fizz
Perceptual Map of the Beverages (Soft Drinks, Packaged Drinks) in India
HighAerated
Less Artificial
HighAerated
Less Artificial
More Artificial
LowAerated
A sparkling drink as a
substitute of a
carbonated drink yet
with natural flavours/
sweeteners
FizzGo
12. Resources and Capabilities
• Use of natural sweeteners like Stevia Leaves (Meethi Patti
grown in Gujarat), Yacon Syrup grown/produced indigenously in
India
• Healthy and natural compared to Splenda or Aspartame –
major artificial sweetener used in all aerated drinks.
• Mango- to start with Mango for Fizzgo; India is a major
producer of Mango.
Resources
• R&D- creating sparkling Mango flavoured water with natural
sweeteners;
• Marketing- Marketing focused to the corporate group. Test
Market- as a group always looking for a different drink yet remain
healthy.
• Sales and Distribution- Focused promotion and distribution
to respond to increasing need of healthy sparkling drinks.
• Manufacturing- Units to be built near belts where the natural
raw materials are grown. Gujarat and Madhya Pradesh belt
produce Mangoes and Stevia Leaves. Cheap labour.
Capabilities (Functional)
13. Resources and Capabilities
Resources and Capabilities Differentiation
Value Yes – Taste of Mango and Fizz
Rarity
Yes- Natural Sweetener used in
sparkling drinks.
Imitability
Low- Current market players
being big, cannot switch over to
this combination of natural
sweetener + mango + sparkling
beverages
Organization
Yes, Exploit brand value of
differentiation; ‘Taste Tests’ in the
corporate industry; Corporate
Brand Image for healthy living
18. Building Blocks of Competitive Advantage
• Natural
sweetener
• Mango Syrup
• Mango juice
with Fizz
• Sparkling
Drinks
• Cost Structure
• Wide
distribution
Superior
Efficiency
Superior
Innovation
Superior
Quality
Superior
Customer
Responsiveness
26. Business Model Canvas: Complete
KEY PARTNERS KEY ACTIVITIES
VALUE
PROPOSITIONS
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
Bottlers Bottling A sparkling health Brand Advertising Corporate Sector
Distribution Centres Distribution drink with natural Sponsored events Innovators
Producing syrup sweeteners Health Awareness Health conscious people
Supply Supermarkets
KEY RESOURCES CHANNELS Fast food restaurants
Syrup recipe Direct Sales
Bottling Plant Sales Team
Distribution centre Distributors
COST STRUCTURE REVENUE STREAMS
Marketing Bulk sales
Production Retail Price
Bottling
Aspartame though considered safe by FDA has serious heath implications on prolonged use such as obesity, heart ailments etc. Coke and Pepsi might get into natural sweeteners however cola and natural sweeteners may not give a good taste
The aerated drinks will be launched in PET bottles of 150 ml, 500 ml and 1 litre– easy portability
There are hundreds of generic colas on the market. While the type of product is easily imitated, the specific product of FizzGo is not imitable.
Organization:
