This document provides a strategic audit of Dr Pepper Snapple Group (DPS) conducted by a business strategy class. It begins with an overview of DPS's history through acquisitions and mergers. It then analyzes DPS's current financial performance and compares it to competitors Coca-Cola and PepsiCo. Coca-Cola leads the industry in revenue and brand recognition. PepsiCo generates more total revenue but less from soft drinks. The audit also examines DPS's board of directors, management, external environment, internal strengths and weaknesses, strategic alternatives, and plans for implementation and evaluation.

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2014 STRATEGIC
AUDIT
BUSINESS 109 – SECTION 023
COMPETATIVE AND STRATEGIC ANALYIS
SCHOOL OF BUSINESS ADMINISTRATION
UNIVERSITY OF CALIFORNIA, RIVERSIDE
PROFESSOR: DR. SEAN D. JASSO
TEACHING ASSISTANT: ANDREW MONROE

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CREATED BY:
TEAM EXCELLENCE
TEAM LEADER: VICTORIAN BARNES
NATHAN ANDERSON
MATTHEW CHAVEZ
WILLIAM CRENSHAW
LAN GIANG
JACOB LEE
YALI LUO
DEBORAH NGHIEM
DANIEL PERRY
CHAWIT WEJJAKUL
BRANDON WILLIAMS

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TABLE OF CONTENTS
I. CURRENT SITUATION ....................................................... 1
A. History ........................................................................ 1
B. Current Performance .................................................... 3
C. Competitor Comparison ............................................... 5
D. Industry Comparison .................................................. 14
E. Strategic Posture ....................................................... 20
II. CORPORATE GOVERNANCE .......................................... 29
A. Board of Directors ..................................................... 29
B. Top Management ....................................................... 34
III. EXTERNAL ENVIRONMENT ........................................... 38
A. Natural Physical Environment ..................................... 38
B. Societal Environment ................................................. 40
C. Task Environment ...................................................... 45
D. Summary of External Factors ...................................... 49
IV. INTERNAL ENVIRONMENT............................................ 49
A. Core Competencies ................................................... 49
B. VRIO Analysis ............................................................ 51
C. Business Model.......................................................... 53
D. Value Chain ............................................................... 54
E. Corporate Structure ................................................... 59
F. Corporate Culture ...................................................... 61
G. Corporate Resources ................................................. 62
H. Summary of Internal Factors....................................... 85

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V. ANALYSIS OF STRATEGIC FACTORS............................... 86
A. Review of Mission and Objectives ............................... 86
VI. STRATEGIC ALTERNATIVES AND RECOMMENDED
STRATEGY .......................................................... 88
A. Tows Matrix .............................................................. 88
B. Strategic Alternatives ................................................ 88
C. Recommended Strategy ............................................. 93
VII. IMPLEMENTATION ...................................................... 94
A. Implementation Programs .......................................... 94
B. Procedures ................................................................ 95
C. Action Plans .............................................................. 95
D. Matrix of Change..................................................... 104
VIII. EVALUATION AND CONTROL ................................... 107
A. Measuring Performance............................................ 107
B. Balanced Scorecard.................................................. 108
IX. APPENDIXES .............................................................. 114
X. REFERENCES .............................................................. 118

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TABLE OF GRAPHS AND CHARTS
Ratio of Analysis ................................................................. 3
DPS Annual Financials .......................................................... 4
Coca-Cola Financial Reports................................................. 8
Pepsi 10-Year Revenue ...................................................... 10
PepsiCo Financial Reports.................................................. 11
Valuation Chart ................................................................. 66
Profitability Chart ............................................................. 66
Efficiency Chart................................................................. 66
Capital Structure Chart ...................................................... 66
Liquidity Chart .................................................................. 66
Comparison: Industry and Market ....................................... 66
Annual Income Statements ................................................. 66
TOWS Matrix..................................................................... 88
Matrix of Change Chart ................................................... 107
Balanced Scorecard Chart ................................................ 113
EFAS Chart ..................................................................... 114
IFAS Chart ...................................................................... 115
SFAS Chart ..................................................................... 116
IECP Chart ...................................................................... 117

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I. CURRENT SITUATION
A. History
The history of Dr. Pepper Snapple Group (DPS) goes all the way back to the
creation of the very first soft drink, through mergers, acquisitions and changes,
into the number one flavored beverage company.
The story begins in 1783, when Jean Jacob Schweppes invented the
very first soft drink when he perfected a way to make carbonated water,
leading to the creation of the original carbonated mineral water (DPS Website -
History, 2014).
In 1885, a pharmacist named Charles Alderton, in Waco, TX,
invented Dr. Pepper. Selling it at a pharmacy he was working for,
locals began calling the drink a “Waco” (DPS Website - History,
2014). The first official soft drink in the United States was
born. The beverage’s name would later be changed to Dr.
Pepper, after an alleged friend of the pharmacy owner, Dr.
Charles Pepper, although the actual story is one of much
debate and mythology (DPS Website - History, 2014).
In the early 1970s, three New York-area health clubs invented an apple
soda they named Snapple. Eventually, the company that owned the Snapple
beverage became the Snapple Beverage Company (DPS Website - History,
2014).
In 1969, the two companies would merge together forming Cadbury
Schweppes. In the next three decades, they would amass the third largest
share of the beverage market through various mergers and brand acquisitions
(DPS Website - History, 2014).

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In 1982, Cadbury Schweppes purchased the Duffy-Mott Company that
would later be known as Mott’s. Mott’s was one of the largest apple juice
producers in the world. Through the remainder of the decade, Cadbury would
purchase Canada Dry, a leading ginger ale brand, Sunkist sodas, and Crush
sodas (DPS Website - History, 2014).
In 1993, Cadbury Schweppes made another major purchase in the
beverage industry, purchasing the A&W Brands, which included the extremely
popular A&W root beers and cream sodas, along with Squirt and Vernors
ginger ale. Two years later, DPS made their most important purchase, buying
Dr. Pepper/ Seven Up, Inc. (DPS Website - History, 2014).
In 2003, Cadbury Schweppes once again made a major splash in the
beverage industry, buying the Snapple Beverage Company, including Snapple
beverages, RC Cola and Diet Rite, the original diet soda (DPS Website -
History, 2014).
In 2003, after the acquisition of
Snapple, all four of the beverage
companies owned by Cadbury
Schweppes: Snapple, Dr. Pepper/
Seven Up, Mott’s, and Bebidas
(Mexico), were combined into one
company, becoming Cadbury
Schweppes Americas Beverages (DPS Website - History, 2014).
By 2006, Cadbury Schweppes began expanding into the purchasing of
various large and small bottling companies, including Dr. Pepper/ Seven Up
Bottling Group (the largest independent bottler in the U.S.). The company

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soon after changed its name to the Dr. Pepper Snapple Group (DPS), after a
separation from Cadbury (DPS Website - History, 2014).
Now, in 2014, DPS is the number one flavored beverage company in
North America, driven by over 50 diverse and distinct brands. These brands
include 6 of the top 10 non-cola soft drinks and 13 of DPS’ 14 leading brands
are either number one or number two in their flavor categories (DPS Website -
History, 2014).
B. Current Performance
According to Hoover statistics, for
the fiscal year end of December 2013
the Dr. Pepper Snapple Group
declined in total net income and
operating income compared to the
previous year. With total net income
dropping from $629 million in 2012 to
$624 million 2013 and operating
income dropping from $1.09 billion to
$1.04 billion. DPS also reported
earnings of 0.74 USD per share in
comparison to 0.62 USD per share
from 2013. At the end of the financial
year, it has earned revenue of $6
billion, a gross profit of $3.5 billion,
operating income of $1.05 billion, a
net income of $624 million, and
diluted earnings per share of $3.05. In
Current Ratio 1.086
Quick (Acid Test) Ratio 0.892
Inventory to Net Working Capital 2.247
Cash Ratio 0.149
Net profit margin 11.09%
Gross Profit Margin 59.23%
Return on Assets 7.60%
Return on Equity 27.40%
Earnings Per Share $58.43
Inventory Turnover 2.92
Days of Inventory 29,209.87
Net working Capital Turnover 67.38
Asset Turnover 0.732
Fixed Asset Turnover 5.115
Average Collection Period 35
Accounts Receivable Turnover 10.42
Accounts Payable Period 1,621.56
Days of Cash 1,590.92
Debt to Asset Ratio 33%
Debt to Equity Ratio 120%
Long-term debt to capital structure 120%
Times Interest Earned 431.96
Coverage of fixed charges 429.01
Current liabilities to equity 27%
Price Earning Ratio 18.08
Dividend Payout Ratio 49%
Dividend yield on common stock 3%
1. Liquid Ratio
2. Profitibility Ratio
5. Other Ratios
4. Leverage Ratios
3. Activity Ratios
RATIO ANALYSIS

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general, the carbonated soft drinks industry has experienced a decline, as
consumption habits undergo drastic changes, but the Dr. Pepper Snapple
Group still remains profitable with a revenue growth of .03%, earnings per
share of 2.99%, and net profit margin of 10.41%. The company has reported a
Return on earnings of 27.39% and a Return on Asset of 7.29%, giving a market
cap of $10,371.29 million and shares outstanding of $197.40 million.

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C. Competitor Comparison
1. Coca-Cola
Dr. Pepper Snapple group’s sole objective, according to their mission
statement, is “to be the best beverage business in the
Americas.” Currently they are the third highest revenue grossing business

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in their industry. According to their mission of becoming the number one in
the beverages industry, DPS must focus their efforts toward superseding
the number one leader, which is currently Coca Cola. Globally recognized
for their iconic authentic flavored beverages, Coca Cola has established the
highest grossing revenue organization in the beverages industry. There are
a multitude of factors that play into Coca Cola’s long-lived success such as
their history, their brand, their innovation, etc. As CEO of DPS group, it is
vital that our energy is directed toward our mission of becoming number
one in the beverage business, doing so by learning from and overcoming
the number one competitor, Coca Cola.
Recognized in more than 200 countries worldwide, the iconic brand is an
American staple fulfilled with a renowned
foundation and history. As of the year 2000,
Coca Cola endured three different CEOs whilst
maintaining their status of being the number
one beverages business with a commanding
market share of 42.8%. Worldwide,
approximately 1.7 billion servings of Coca Cola products are consumed
daily, meaning nearly 4% of all flavored beverages consumed around the
globe are Coke products. Coca Cola has established a superior line of
products within their portfolio consisting of more than 3,500 beverages and
500 brands. Coca Cola is far ahead in the beverage industry because they
are worth more than other top competitors such as Budweiser, Pepsi,
Starbucks, and Red Bull combined at a net worth of approximately $74
billion. Coca Cola is purely focused on the beverages industry in order to
perfect and sustain their status as number one, although their rival PepsiCo

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generated 38% more in total revenues (2012), Coke produced more
revenue in regards to soft drinks at $28 billion in comparison to PepsiCo’s
$12 billion.
Coca Cola has strategically positioned themselves to reach the highest
amount of people possible through the innovation of vending
machines. With 2.8 million vending machines around the globe, Coke is
able to generate a vast amount of its revenue through automated
machines. One significant distinction that Coca Cola exudes from the rest
of its competition is their iconic brand;
the red and white logo is reported to
be recognized by 94% of the world’s
population meaning that their brand is
essentially a universal term such as
saying okay or hello. Coca Cola is
striving to be number one with their 33 different brands that gross over $1
billion in revenue worldwide; Coke owns nearly half of them. Coca Cola is
constantly geared toward providing people around the world with the
ability to enjoy their products. In terms of marketing, Coca Cola’s
advertising budget alone was $2.9 billion in comparison to other profound
organizations such as Microsoft and Apple combined at only $2
billion. Coke has established and sustains a secure and prosperous financial
position as you can see in their four year financial data reports and charts:

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Coca Cola assures that its product is made only with the highest quality
of authentic ingredients to keep their consumers’ loyal. Coca Cola spends
an extensive amount of time researching which markets of the world
consume the majority of their products and continuously provides
excellence to them. This is based on market research of consumer’s
preferences. As their biggest consumers, Mexico’s citizens drink on
average nearly 665 servings of Coke products annually. Coca Cola

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discovered through research that consumers in Mexico prefer their Coke
products because natural sugar is used opposed to artificial sweeteners. As
a consumer of 300,000 tons of aluminum for its cans annually, Coke assures
that its operations and productions are the highest efficiency for optimal
utilization of necessary commodities. Coca Cola sustains an array of
differentiating products within their portfolio of beverages aside from just
carbonated drinks, consisting of more than 1000 kinds of juice drink such as
Minute Maid, Fruitopia, Hi-C and Odwalla. With all areas Coca Cola is
currently building on; it is critical that Dr. Pepper Snapple group pay close
consideration to their vision in an effort to overtake the number one spot in
their industry, according to their mission.
2. PepsiCo, Inc.
PepsiCo, Inc. Dr. Pepper Snapple Group’s second largest competitor was
established in 1919; arguably not first because of the comparison between
companies is only based upon
beverage performances. They are a
global company providing consumer
goods to Europe, Asia, the Americas,
the Middle East and Africa. Their
headquarters are based in New York
and have an approximate 278,000
employees working for them. PepsiCo’s primary operations range from
marketing and sales, to production of snack and fast foods, and beverages-
both carbonated and non-carbonated. PepsiCo currently holds the 49th
position in the Fortune 500, with 2013 revenues at “$66,415,000,000” and

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net profits at “$6,787,000,000”. (PepsiCo Inc.: EBSCOhost, 2014) They
currently have approximately 75 subsidiaries and produce over 100 product
lines ranging from foods to beverages.
According to the Market Line Report, PepsiCo’s revenues by region that
Dr. Pepper Snapple Group operates in are as follows:
• “The US, PepsiCo's largest geographical market, accounted for 50.9%*
of the total revenues in FY2012. Revenues from the US reached
$33,348 million in FY2012, an increase of 0.9% over FY2011”.
(PepsiCo, Inc.: EBSCOhost, Market Line Report, 2014)
• Mexico accounted for 6% of the total revenues in FY2012. Revenues
from Mexico reached $3,955 million in FY2012, a decrease of 17.3%
compared to FY2011”. (PepsiCo, Inc.: EBSCOhost, Market Line Report,
2014)
• Canada accounted for 5% of the total revenues in FY2012. Revenues
from Canada reached $3,290 million in FY2012, a decrease of 2.2%
compared to FY2011”. (PepsiCo, Inc.: EBSCOhost, Market Line Report,
2014)
Out of PepsiCo’s $66,415,000,000 generated revenues for fiscal year (FY)
2012, the America’s
account for 61.9% of their
total revenues for FY
2012. This percentage
totals to the amount of
$41,110,885,000.00
generated revenue for
PepsiCo in the America’s alone. This however does not differentiate

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between their food, snack, and beverage products. However, it is a well-
known fact the in the United States PepsiCo commands the majority of
shelf-space for their beverages products in most stores across the United
States. As we can see, PepsiCo’s Revenues have increased over the last 10
years, from the high $20 billion to $66 billion.
(GuruFocus-Pep financial, 2014)
Earnings Est Current Qtr. Next Qtr. Current Year Next Year
14-Jun 14-Sep 14-Dec 15-Dec
Avg. Estimate 1.23 1.31 4.54 4.89
No. of Analysts 17 17 21 22
Low Estimate 1.19 1.28 4.5 4.66
High Estimate 1.26 1.36 4.6 5
Year Ago EPS 1.31 1.24 4.37 4.54
Revenue Est Current Qtr. Next Qtr. Current Year Next Year
14-Jun 14-Sep 14-Dec 15-Dec
Avg. Estimate 16.78B 17.23B 67.20B 69.93B
No. of Analysts 14 14 20 20
Low Estimate 16.57B 17.00B 66.58B 69.23B
High Estimate 17.01B 17.53B 68.20B 70.96B
Year Ago Sales 16.81B 16.91B 66.42B 67.20B
Sales Growth (year/est) -0.20% 1.90% 1.20% 4.10%
Earnings History 13-Jun 13-Sep 13-Dec 14-Mar
EPS Est 1.19 1.17 1.01 0.75
EPS Actual 1.31 1.24 1.05 0.83
Difference 0.12 0.07 0.04 0.08
Surprise % 10.10% 6.00% 4.00% 10.70%
EPS Trends Current Qtr. Next Qtr. Current Year Next Year
14-Jun 14-Sep 14-Dec 15-Dec
Current Estimate 1.23 1.31 4.54 4.89
7 Days Ago 1.23 1.31 4.54 4.88
30 Days Ago 1.23 1.31 4.54 4.89
60 Days Ago 1.28 1.31 4.53 4.9
90 Days Ago 1.28 1.31 4.52 4.89
PepsiCo Financial Statistics (Current and Estimates)

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PepsiCo Operations are a strong and diverse component of PepsiCo. They
have a strong network of manufacturing, bottling and distribution networks
spanning countries they operate in. They rely heavily upon PepsiCo owned
manufacturing plants, bottling plants and distribution networks; however, in
North America and South America PepsiCo relies heavily upon third party
distributors, bottlers, and manufactures. Their leadership considers this to
be a part of several reasons why their revenues have dropped in these
regions. (PepsiCo, Inc.: EBSCOhost, Market Line Report, 2014)
PepsiCo is currently holding a strong market position through
their diverse product portfolio and strong brand management that has built
enormous equity. They are currently focused on increasing local focus, the
changes in customer
preference for healthier
food and beverage
options, and focusing on
widening their presence
in emerging markets.
PepsiCo is currently
concerned with the
reduction and availability of fresh water supplies, sustainability for the
future, increased competition, labor cost, and consumer confidence over
recent controversies. Overall, under their current leadership and track
record, it is foreseeable that PepsiCo will remain a competent and
aggressive opponent in the market for years to come.
Let’s look from an outside perspective, concerning PepsiCo
competition with Dr. Pepper Snapple Group. First and foremost, we have to

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address the stigma- isn’t Dr. Pepper a PepsiCo Product? Due to our mass
connection with PepsiCo our brand has lost its ability to differentiate itself
from PepsiCo. Yes, DPS teamed up with PepsiCo to share in PepsiCo’s
manufacturing, bottling, and distribution networks; which are massive in the
United States compared to DPS. Secondly, DPS shares not only fountain
serving stations at restaurants, convenience stores, but also vending
machines. The effects of our collaboration with PepsiCo, is truly causing an
issue for DPS’s ability to maintain a strong customer position and distribute
DPS full line of products. Currently DPS only
commands 1:10th
of the shelf space in
convenience stores compared to PepsiCo.
In fact, DPS is commanding less shelf space
for all their beverage brands compared to
Arizona teas, Rock Star, and Monster. In
many cases, DPS products are shelved with
PepsiCo products and share the same marketing
visual aids in vending machines fountain, serving
stations, and store placements.
In many cases while PepsiCo is able to provide top selling items,
introductory items, and displays for consumer ease of access, DPS products
lines are limited to top selling items, and one slot to promote new product
lines. This is a problem because customers do not have full access to our
new product lines, due to shelf availability, and stock quantity of retailers.
DPS is in desperate need of brand management, a full re-facing of the
brand, and repositioning with customers and retailers, market
entrenchment, and further product exposure through mass availability.

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It may be wise for DPS to take on small competitors that currently
are not an immediate threat but are commanding relative market share of
the beverage industry. These small competitors have PepsiCo and Coke
worried because of their growing impact on the market. DPS is in desperate
need of developing their vending machine availability and a full separation
from PepsiCo, to combat their brand position with customers. While,
PepsiCo has offered availability opportunities at reduced costs, DPS is
losing more than PepsiCo gains from our partnership in the America’s.
Lastly DPS needs to take advantage of PepsiCo’s and DPS’s Core weakness
of third party manufacturers, distributors, and bottlers in north and south
America. This can be accomplished through acquisition of companies, to
combat PepsiCo, and turn the tables of lost revenues to third parties.
D. Industry Comparison
1. Carbonated Beverages
7-Up is a line of citrus non-caffeinated soft
drinks. Dr. Pepper Snapple Group releases
variations in diet form and also a ten-calorie
variant. With an extensive history, 7-Up became
the third highest selling soft drink in the world
by the late 1940’s. One of 7-Up’s biggest competitor is Sprite, which is
owned by Coca-Cola and controls a wider grasp of the market due to its
international operations.
Canada Dry’s rise in popularity during the
prohibition era was due to its pleasant
ability to mask the flavor of home-brewed

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alcohol. DPS released variants including club soda, tonic water, sparkling
water and flavors such as pineapple and wild cherry. Its products reach all
parts of the world including North America, South America, Asia and
Europe.
Crush is a line of artificially flavored,
caffeine-free carbonated sodas. Its major
competitor is Coca-Cola’s Fanta, which
controls a larger portion of the market due
to its worldwide availability. Crush is
available in diet, grape, cherry, strawberry
and peach all over the nation. Acquired in
1989 from Cadbury through merger
acquisition.
Dr. Pepper is a considered brand of root beer most noted for its unique
23 flavors, but many place it in a
category all in itself. Dr. Pepper is
America’s oldest soft drink at 129
years old and holds a firm grip on the
market with brand variants being
distributed throughout the world. It
includes many brand variants such as
diet and regular as well as unique
flavors, which include cherry,
chocolate and vanilla.
Current issues with Dr. Pepper Snapple Group right now include that
many of their products are not distributed internationally. In order to grab a

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larger portion of the market and be seen as a serious competitor to top
brands producers such as Coca-Cola, DPS needs to operate internationally.
It needs to revise its mission of being the best beverage company in the
Americas and strive for bigger goals. With its small ambitions, Coca-Cola
and PepsiCo will remain in the lead with their international presence.
2. Non-Carbonated Beverages
There are many varieties of non-
carbonated beverages offered by DPS.
Clamato is a spicy drink that was the
first of its kind. Its creation resulted in
an entire new category of blended
juices called “seafood blends.”
Clamato has three flavor variations,
which include Clamato Original, Clamato Picante, and Clamato Shrimp
Tomato Cocktail. The original drink is made from tomato juice, clam broth
and spices.
Another non-carbonated beverage
that we choose to discuss is Peñafiel.
Peñafiel was created in 1938 in
Tehuacan, Puebla by the Peñafiel
family. The brand is popular in Mexico
and has been flourishing in that
market for years. Peñafiel contains 7
differences in flavor which

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include: Peñafiel Aqua, Peñafiel Fresca, Peñafiel Madarina, Peñafiel
Manzanita, Peñafiel Pina, Peñafiel Toronja, and Peñafiel Tuti Fruti.
In conclusion, Dr Pepper Snapple Group has a lot of non-carbonated
beverage products compared to other companies in the industry. Their
products such as Deja Blue, Peñafiel, and Clamato are well known in the
market of Mexico. Dr Pepper Snapple needs to improve non-carbonated
products to be well known in the U.S. For example, the company needs to
come up with a new brand of water such as Coca-Cola’s Dasani and
PepsiCo’s Aquafina. This will help the company gain more consumers and
increase their profits. Overall, DPS needs to improve their non-carbonated
products in order to become the best beverage company in the Americas.
3. Bottled Tea
One of the most popular products made by DPS is its Snapple line.
Consisting of various flavors of iced teas and juice beverages, Snapple is
one of the highest grossing brands in
the DPS lineup. Snapple is the #4
brand in the bottled and canned iced
tea industry, holding a 7.7% market
share (bevindusty.com, 2012).
Snapple gets its origins back in
1970’s, when health clubs began
selling an apple-flavored soda that
was named Snapple. In 1987,
Snapple began selling bottled iced teas, starting with the infamous Snapple
Lemon Iced Tea.

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Now, Snapple has over 70 different flavors of juices, iced teas, juice
beverages, and flavored waters; and is sold in all 50 states.
The primary competitors to Snapple are the Arizona Iced Tea brand
owning holding over 25% of the market share, owned by Arizona-
International, Lipton bottled iced teas owned by Unilever that hold 10.3%
of the market share, and Brisk Iced Tea, owned by PepsiCo, that holds
11.8% of the market share (bevindustry.com, 2012).
4. Others
Dr Pepper Snapple Group also has other products excluding carbonated
and noncarbonated beverages, such as Country Time Lemonade, Mott’s,
ReaLemon, Venom, and Yoo-Hoo.
Country Time Lemonade was first created as a powder mix in 1975,
signing a license with Kraft Foods. In 1982, it was introduced in cans and
bottles. The powder drink is still being
sold today by Kraft. Many additional
lineups were created after the first
lemonade, such as the Country Time
Pink Lemonade in 1995, Country Time
Iced Tea with Lemon in 2003, the
Country Time Strawberry Lemonade in
2004, and the Country Time Light
Lemonade in 2005. When the Country Time Strawberry Lemonade was
released in May 2004, it became a new favorite with its perfect blend of
sweet, sun ripened strawberries and lemonade. Although the Country Time

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Lemonade Drink Mix was released in 1975, it has become one of the top
selling lemonade products in the United States today.
Mott’s is currently the number one apple juice and number one
applesauce brand in the United States. Some of its products include apple
and other fruit juices such as Mott’s
Plus and Mott’s for Tots. The
products come in varieties ranging
from regular, unsweetened and
flavored. In April 2005, Mott’s Plus
for Kid’s Health and Mott’s Plus
Light was introduced. In 2007,
Mott’s for Tots was released, giving
a great tasting pre-diluted juice
drink that is made from one hundred percent juice and purified water that
contains forty percent less sugar compared to regular apple juice. In 2010,
Mott’s Medleys was added to the portfolio, containing full fruits and veggie
servings in every eight-ounce container, which helps moms to ensure her
kids are getting the fruits and veggies they need.
Since 1842, Mott’s has been dedicated to giving
moms easy ways to help their families be healthy.
Another DPS product that is not a carbonated
or non-carbonated product is ReaLemon Lemon
Juice From Concentrate was first introduced in
1934 by Irving Swartzburg. ReaLemon is basically
regular strength juice offered in a more convenient form that requires no
slicing or squeezing. ReaLime Juice from Concentrate was then created in

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1947 offering the same convenience as ReaLemon. Both ReaLemon and
ReaLime have been trusted by consumers ever since due to the premium
quality taste of lemons and limes. These products offer a more convenient,
more economical and more consistent taste compared to fresh fruits. The
two brands have grown to dominate their product category by the year of
2000. Today, these products are in distinctive; fruit shaped squeeze bottles
that are familiar and recognizable to consumers.
In conclusion, Dr Pepper Snapple Group has strong brand presence
outside of the carbonated and noncarbonated soft drink industry. Their
products such as Mott’s and ReaLemon are well known in the market
compared to other brands. Mott’s for example, is currently the number one
apple juice and sauce in the United States. ReaLemon and ReaLime, are well
known to consumers who frequently shop at grocery stores. Overall, DPS is
doing a splendid job at achieving its goal of becoming the best beverage
company in the Americas.
E. Strategic Posture
1. Background and Mission
A mission statement is a formal summary of what the company is aiming to
accomplish. The Dr Pepper Snapple
Group has been serving a delicious
taste of non-alcoholic refreshments
that varies from flavored
carbonated beverages to non-
carbonated beverages, such as tea
and juice. Their mission and vision has been to “be the best beverage

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business in the Americas.” DPS is the number one flavored carbonated soft
drink company in the Americas and a leading innovator and marketer of
functional or non-carbonated beverages. It serves its consumers throughout
North America via a broad and flexible route to market, which includes a
combination of direct store delivery and warehouse delivery capabilities
supported by their twenty-one manufacturing centers and more than 115
distribution centers across North America, in addition to their operations of
hundreds of third-party bottlers and distributors. Therefore, the company is
in the manufacturing business. A manufacturer takes raw materials and
creates a product from the raw materials, or assembles pre-made
components into a product, like car manufacturers. A manufacturer may
also sell its products directly to its customers, or it can outsource sales to
another company. In this case, Dr. Pepper Snapple Group mixes its own
formulas and packages the product into bulk or wholesale to distributors
such as superstores or vending machines.
2. Objectives
As previously stated, the corporate objective is to create a better
environment and better serve its consumers and their well-being. The
company’s mission is to be the best beverage business in the Americas, and
in order to do that, it must first win the hearts of its consumers. By
protecting and attempting to create a better world for everyone, the
company is able to persuade their consumers that their products are
created in the consumer’s best interest. Consumers are slow to believe that
Dr Pepper Snapple Group’s products are beneficial, or at least more
beneficial than other competitive brands. Helping consumers believe that
the company is not only profit based, but it is also consumer based, will

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result in DPS reaching its goal of becoming the best in the Americas. A
company is only best if the consumers believe it is the best. Dr Pepper
Snapple Group created a five-year plan for their corporate social
responsibility in 2010 to implement their objective of serving the needs of
the society that we all share. “Setting and achieving long-term goals to
improve our environment and social performance is a vital part of achieving
sustainable growth, because these goals reflect the best interests of the
people who make, sell, buy, invest in, and enjoy our brands everyday,” says
Larry Young, DPS president and chief executive officer. The company’s
objectives focus on the areas of environmental sustainability, health and
wellness, philanthropy, workplace environment and ethical sourcing.
Environmental sustainability focuses on improving energy efficiency
while reducing water usage and wastewater release ratio in manufacturing
operations by ten percent per gallon of completed product, increasing
product shipment per gallon of fuel by twenty percent, replacing roughly
sixty thousand vending machines and
coolers with Energy-Star rated
equipment; leading towards around
thirty percent more energy efficiency,
recycling eighty percent of solid waste
in manufacturing, and sustaining more
than sixty million pounds of PET plastic
through package reengineering by growing the usage of post-consumer
recycled material. Health and wellness focuses on providing a full variety of
products with fifty percent of product innovation in the channel focused on
reducing calories, offering smaller sizes and refining nutrition; while

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supporting local and national programs that inspire active routines and
fitness. The company’s philanthropy bases itself on contributing a total of
one hundred thousand volunteer hours and conquering an annual giving
level of ten million dollars in charitable cash donations, with the
mainstream of support focused on fit and active lifestyles,
environmental sustainability, emergency assistance and
communal celebration. In the workplace atmosphere,
DPS plans to preserve team leader engagement
scores comparable to or better than those of other
high-performing companies, and to lessen lost time to
injury incidence rate by twenty five percent. Ethical sourcing is also an
imperative part of the five-year plan, the company’s objective is to conduct
annual third-party risk valuations of all providers and review any high-risk
suppliers to guarantee complete compliance with our Ethical Sourcing Code
of Conduct.
3. Current Strategies
As Jack Welch mentioned in his book “Winning,” you create strategies and
then implement it like hell, and that is what Dr Pepper Snapple Group did.
The company created a list of strategies and continued to implement it,
which clearly reflects upon their success today.
1. Building and enhancing our leading brands
2. Pursuing profitable channels, packages and categories
3. Leveraging our integrated business models
4. Strengthening our route to market
5. Improving operating efficiency

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A functional strategy is an approach taken by a functional area such
as Research and Development, Marketing, or Operational to achieve
corporate and business unit objectives and strategies by maximizing
resource productivity. Every successful company has a type or mix of
strategies that they follow and implement, which has lead to their success
today. Business strategies usually occur at the business unit or product
level, and it emphasizes improvement in the competitive position of a
corporation’s products or services in the specific industry market segment
served by that business unit. The
Dr Pepper Snapple Group follows
six key elements of their business
strategy: to build and enhance
leading brands, to focus on
opportunities in high growth and
high margin categories, to
increase presence in high margin
channels and packages, to leverage our integrated business model, to
strengthen our route to market through acquisitions, and to improve
operating efficiency. In order to build and enhance leading brands, the Dr
Pepper Snapple Group identifies key brands that they believe to have the
greatest potential for profitable sales growth by strengthening consumer
awareness, developing innovative products and brands extensions to take
advantage of evolving consumer trends, improving distribution and
increasing promotional effectiveness. The company also plans to focus on
profitable and emerging categories such as energy drinks, ready to drink
teas and other functional beverages to capitalize on opportunities through

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brand extensions, new product launches and selective acquisition of brand
and distribution rights. DPS strategizes on improving product presence in
high margin channels such as convenience stores and vending machines
through increased selling activity and investments in cold drink equipment,
while attempting to increase consumer demand by increasing promotions
and innovations.
Corporate strategy describes a company’s overall direction in terms
of its general attitude toward growth and the management of its various
businesses and product lines. Dr Pepper Snapple Group believes that their
integrated brand ownership, bottling and
distribution business model is a great
opportunity to generate net sales and
profit growth by aligning economic
interests of their brand ownership with
their bottling and distribution businesses.
Therefore, the fourth key element to their
business strategy is to leverage their
integrated business model to reduce costs by creating greater geographic
manufacturing and distribution coverage and to be more flexible and
responsive to the changing needs of their large retail customers by
coordinating sales, service, distribution, promotions and product launches.
The company also plans to strengthen their route to market through their
long-term initiative from acquisition and creation of their Bottling Group
because the additional acquisitions of regional bottling companies will
broaden their geographic coverage and enhance coordination with their
large retail customers. Lastly, since the integration of recent acquisitions

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into their Bottling Group has created the opportunity to improve their
manufacturing, warehousing and distribution operations, DPS believes that
their recent announced restructuring will reduce their selling, general and
administrative expenses and improve their operating efficiency. Overall, the
six key strategies consistently work with each other to help DPS become
the best beverage business in the Americas through building its business
and strengthening its brand among consumers. With the five-year plan and
objectives of making the planet a better place for all, these strategies are
slowly implemented and achievable, helping the consumers while helping
the company. While the corporate objective aims to improve the company’s
growth and management through expansion of distribution centers and
leading brands, the business objectives aim to improve against its
competitors. DPS business objectives are to increase their marketing
through a new marketing campaign that aims to increase their
advertisements to make their leading brands better known.
4. Policies
Dr Pepper Snapple Group has a Human Rights Policy that lives on their
philosophy of respecting the rights of their employees and the people with
which they do business. It is their fundamental way of conducting their
operations. The philosophy and values of their workplace, as well as their
accountability for sustaining the environment and strengthening the
communities where they operate is guided by the United Nation’s Universal
Declaration of Human Rights. As for the employees, the company respects
the rights of their employees in the workplace, and they strive to ensure a
safe and healthy work environment that is free from harassment of any kind.

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27
They work to ensure equal opportunity for all employees and comply with
all applicable laws and regulations wherever they operate or work. DPS
broadly communicates their Human Rights Policy as part of their annual
Core Business Policies or Code of Conduct training to enable their business
to operate in a responsible manner. To their suppliers, the company
ensures that their suppliers operate businesses in a manner that supports
their Supplier Code of Conduct. As part of DPS responsible and sustainable
sourcing strategy, they are committed to working in partnership with their
suppliers to ensure compliance with the supplier code of conduct and to
minimize risks in their supply chain.
Aside from the Human Rights Policy, Dr Pepper Snapple Group also has
a Privacy Policy linking the information collected through web sites, web
pages, interactive features, applications, widgets, blogs, Facebook, Twitter,
and so on. The Privacy Policy explains what information may be collected
through the sites, how such information may be used or shared with others,
and how the information is safeguarded. DPS automatically collects
information from cookies and web beacons. The company uses cookies to
collect data files placed on devices when it is used to visit the sites. Web
beacons help monitor how users navigate the sites, while also counting how
many emails sent to consumers were actually opened or viewed. Some of
the rules included in the policy are that no personal information will be
shared or provided to third parties without the consumer’s consent. But,
the company may share non-personal information such as aggregate user
statistics, demographic information, and usage information. Consumers will
always have the right to disable DPS from sharing their personal
information with third parties, to send them information and offers, and to

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send newsletters through any communication methods. DPS may also have
third party advertisements, where the advertisements may have their own
cookies and web beacons. Consumers will also always have the option to go
through a procedure to opt out of certain third party ad servers the
company may use on their site. The company does not collect every
consumer’s information. Children who are under the age of thirteen will not
have their information collected. Upon collection, if the consumer is
identified, as under the age of thirteen, their information will not be
maintained without their parent’s consents, which without consent will be
deleted from the system. Dr Pepper Snapple’s policies are definitely
consistent with each other, which links to their guarantee of satisfying
customers, employees, and partners. Through satisfying consumer’s needs,
DPS is another step closer to its mission of being the best beverage
business in the Americas. Overall, when everyone is satisfied, the company
is operating at its best. As Welch stated in his book Winning, when the
people are doing well, the company is doing well, and vice versa.

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II. CORPORATE GOVERNANCE
A. Board of Directors
Wayne Sanders – Chairman
Mr. Sanders has been with The Dr. Pepper
Snapple Group (DPS) since May, 2008 and is
currently the chairman of the board of directors,
serving as an external member. In addition to
being the chairman of the board Mr. Sanders is
also the chairman of the corporate governance
nominating committee. Mr. Sanders dealings
outside of DPS includes serving on the board of
Texas Instruments and the board of the Belo
Corporation. The Belo Corporation owns and
operates many television stations throughout the
state of Texas and the Mid-west. (DPS Website -
Directors)
John Adams
Mr. Adams has been a member of the DPS board
of directors since April 2008 and is a member of
the audit committee, serving as an external
employee. Before he was part of the DPS team
he served as the executive vice president of
Trinity Industries, Inc. from January 1999 to June
2005. Trinity Industries, Inc. is one of North
America’s largest manufacturers of
transportation, construction and industrial
products. Mr. Adams is still serving on the boards
of Trinity Industries, Inc. and Group 1
Automotive. Mr. Adams also brings a plethora of
knowledge from his time served on the boards of
American Express Bank Ltd. and the Phillips Gas
Company. (DPS Website - Directors)

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David Alexander
Mr. Alexander has been a member of the DPS
family since November 2008. He is currently
serving as an external employee and is the
chairman of the audit committee. Like the other
members of the board Mr. Alexander brings
invaluable experience from his extensive job
resume that includes time as a national trustee
on the board of Boys & Girls Clubs of America
and as a board member of the American Heart
Association. Furthermore, Mr. Alexander has
served as an executive member on the board of
Southern Methodist University’s Cox Business
School giving him insight into the quality of
business students that entering the work force.
(DPS Website - Directors)
Pamela H. Patsley
Ms. Patsley has served as an external member of
DPS board of directors since April 2008 and is a
member of the audit committee. She is presently
serving as the CEO of MoneyGram International,
bringing needed leadership skills to the DPS. Ms.
Patsley serves with Wayne Sanders on the board
of directors for Texas Instruments, Inc. and is the
chair of the audit committee. A skill that Ms.
Patsley brings to the DPS group is her time spent
on the board of Molson Coors Brewing Company
from 1996 – 2009. This experience could prove to
be invaluable if DPS chooses to expand its
portfolio into the alcoholic beverage industry.
(DPS Website - Directors)

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Joyce Roche`
Ms. Roche` has served as an external member of
DPS groups board of directors since February
2008 and is a member of the compensation
committee. Ms. Roche` brings valuable
experience from her time as president and CEO
of Girls, Inc. which she was a part of from 2000 –
2010. Additionally Ms. Roche` brings marketing
experience from her time spent on senior
marketing positions with Carson Products
Company, Revlon, Inc. and Avon, Inc. Like Ms.
Patsley, she brings experience in the alcoholic
beverage industry from her time spent on the
board of Anheuser-Busch Companies From 1998
– 2008. (DPS Website - Directors)
Ronald Rogers
Mr. Rogers has been an external employee
serving on the board of directors at DPS since
May 2008. He is currently a member of the
compensation committee and draws from his
time spent in various positions with the Bank of
Montreal from 1972 – 2005. Considering that
DPS’s primary market is North and South
America, it is very important for DPS to have
directors with international experience. (DPS
Website - Directors)

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Jack Stahl
Mr. Stahl has been serving on the DPS group’s
board of directors as an external employee since
May 2008. He is currently a member of the
corporate governance and nominating
committee and brings valuable experience from
serving on the board of one of DPS group’s
competitors. Mr. Stahl Was the president and
CEO of The Coca-Cola Company from February
2000 to Mach 2001 and before that he was
president of the Coca-Cola Company’s Americas
group and the CFO of The Coca-Cola Company.
When building a strategy to combat the huge
portion of the carbonated soft drink industry that
Coca-Cola has a firm grasp on, Mr. Stahl will be a
valuable DPS asset, having first and knowledge
of their operations. (DPS Website - Directors)
M. Anne Szostak
Ms. Szoztak has been a member of the DPS
group since May, 2008 and has been serving as
an external employee on the board of directors
and also been the chairman of the compensation
committee. Ms. Szoztak brings a strong financial
background to the DPS group from her time
spent with FleetBoston Financial Corporation
(now Bank of America) from 1998 until her
retirement in 2004. She is currently also governor
and chairperson emeritus of the Boys & Girls
Clubs of America, a chairperson of the Women
and Infants’ Hospital of Rhode Island as well as,
serving as a member on numerous board
committees of the Rhode Island Foundation.
(DPS Website - Directors)

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1. DPS B.O.D. Sustainability
The Dr. Pepper Snapple Group (DPS) board of directors have taken huge
steps towards environmental sustainability and set stringent goals based on
their simple principle, “Say what you’re going to do, and do what you say”
(DPS Website - Sustainability, 2014). DPS’s first sustainability report was put
forth in 2010 and with it a number of goals.
The first goals were to “improve energy efficiency and reduce CO2 from
emissions in manufacturing by 10% per gallon of finished product,” and to
“increase product shipments per gallon of fuel used by 20%” (DPS Website
- Sustainability, 2014). DPS has been striving towards this goal by devoting
resources to aligning operations with customers efficiently, resulting in a
reduction in energy and fuel consumption. Next comes a goal that is
focused solely on energy consumption, which is to “replace 60,000 vending
machines and coolers with Energy Star-rated equipment” (DPS Website -
Sustainability, 2014). The exchange of these coolers will boast a 30% higher
rate of energy-efficiency.
Additionally DPS has set large goals to recycle “90% of solid waste,”
and to “reduce manufacturing water use and wastewater discharge by 10%
per gallon of finished product (DPS Website - Sustainability, 2014). The
recycling of solid waste is being implemented with a multi tier approach
that ranges from delivery drivers to warehouse employees all participating
in the push to recycle solid waste. In regards to water consumption, DPS
started tracking wastewater discharge in 2008 to use as a guide to reach
the 2015 goal. Finally, DPS plans to “conserve more than 60 million pounds
of plastic through PET package light weighting and redesigns.” (DPS
Website - Sustainability, 2014). This goal is being pursued through
alignment with other producers within the carbonated soft drink (CSD)
industry in the “Full Circle Recycling Initiative” (DPS Website -
Sustainability, 2014). Also, DPS is investing resources into designing new
and innovative packages that will reduce plastic consumption.

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B. Top Management
Larry D. Young - Chief Executive Officer (CEO) and President
Mr. Young has been the President and CEO of
DPS since 2007, after serving as the CEO of the
Bottling Group division starting in 2005. Mr.
Young played a central role transitioning the
company’s business model into that of a fully
integrated beverage company; allowing DPS to
have a more reliable, sustainable and secure
route to market through the integration of the
bottling group and several smaller bottling
companies into DPS.
Mr. Young has over 30 years of experience
in the beverage industry, working within the
United States, Russia, and many different European countries. Before being
hired by DPS, Mr. Young was an employee of PepsiCo for over 25 years,
starting as a truck driver and working his way up to CEO and President of
PepsiAmericas. In 2008, Mr. Young was inducted into the Beverage World Soft
Drink Hall of Fame and was named as the Executive of the Year by Beverage
Industry magazine in 2010. This extensive experience as a worker through all
levels of the beverage industry will help propel DPS into the next level of
beverage excellence. (DPS Website - Leadership)
Marty Ellen - Chief Financial Officer (CFO)
Mr. Ellen has been the CFO for DPS since 2010,
being responsible for DPS’ finances and IT
departments.
Mr. Ellen has over 25 years of corporate
experience; serving as the CFO for companies in
the manufacturing, distribution, franchising, and
services industries. Prior to becoming the CFO of
DPS, Mr. Ellen was the CFO and senior vice
president (VP) for Snap-On Incorporated, a global
manufacturer of tools, diagnostics, equipment, and
software for professionals. Mr. Ellen also brings
previous experience in the beverage company,

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having served as the senior VP and CFO of Whitman Corporation, which at the
time owned Pepsi Cola General Bottlers, Inc. Mr. Ellen began his career as a
senior audit manager at the international accounting firm, Price Waterhouse.
(DPS Website - Leadership)
Jim Baldwin - Executive Vice President and General Counsel
Mr. Baldwin has served as the executive VP and
general counsel for DPS since 2003, and is
responsible for all legal issues facing the company.
Mr. Baldwin started with DPS in 1997 as
assistant general counsel, providing support to the
Licensing department. In 1998 he was promoted
to general counsel of Mott’s, overseeing all legal
aspects of the finished goods. In 2002, he was
relocated to the corporate headquarters in Dallas
to run the legal department for Dr Pepper/ Seven
Up as senior VP and general counsel. The next
year he was promoted to his current position.
Prior to working for DPS, Mr. Baldwin was a
partner of the Houston based law firm, Hutcheson
& Grundy. Mr. Baldwin began his career with the law firm Berman, Mitchell,
Yeager and Gerber. (DPS Website - Leadership)
Rodger Collins - President of Packaged Beverages
Mr. Collins has been the president of packaged
beverages since 2007, and is responsible for all
company owned routes to the market for both
direct to stores delivery (DSD) and warehouse
direct businesses. Additionally, Mr. Collins leads
the national account selling teams and all related
support groups.
Mr. Collins has been with DPS for his entire
career, dating back to 1978, working in route
sales. From 1991 to 2005, Mr. Collins held regional
VP and division VP roles in different locations and
departments of the companies that now make up
the Dr Pepper Snapple Group. In 2005 he was
promoted to the president of the Midwest division, being promoted again in
2007 to his current position. Mr. Collins has also served in various other

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management positions in sales and marketing within DPS. His experience in all
of the different levels of DPS and its subsidiaries makes him the ideal person to
run the packaged beverages division. (DPS Website - Leadership)
Derry Hobson - Executive Vice President of Supply Chain
Mr. Hobson has held the role of executive VP of
supply chain since 2007. He is responsible for all
supply chain functions; including but not limited to
manufacturing, engineering, packaging,
environmental health and safety, and logistics.
Mr. Hobson has more than 40 years of
senior operations and general management
experience, having been with DPS since 1999,
when he served as executive VP of supply chain
for the Dr Pepper/ Seven Up Bottling
Group. Before working for DPS, Mr. Hobson was
the CEO and President of Sequoia Pacific
Systems, which developed election systems used in elections around the
world. Mr. Hobson also has extensive experience in the beverage industry
prior to his employment with DPS. Before working for Sequoia Pacific
Systems, he held the roles of VP of operations for Coca-Cola Enterprises and
also managed manufacturing for the Southern region of Pepsi-Cola Bottling
Group. Mr. Hobson began his operations career in 1974 working for Kellogg.
Mr. Hobson’s extensive experience in the beverage industry, primarily with the
main competition, as well as a long list of management experience makes him
the right man to oversee our manufacturing, bottling and distribution
departments. (DPS Website - Leadership)
James Johnston - President of Beverage Concentrates and Latin
American Beverages
Mr. Johnston has served as the president of beverage
concentrates since 2007 and president of Latin
American Beverages since 2009. He is responsible for
the route-to-market and fountain foodservice teams in
the U.S. and Canada; while also being responsible for
all brands and business in Latin America.
Mr. Johnston joined DPS in 1992, hired as the
manager of marketing services. From 1992 until 2005,
he progressed through the company as division

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marketing manager and VP of field marketing, before being promoted to
senior VP over system marketing, franchise and licensing strategy. In 2005, he
was again promoted to executive VP of sales. Before being hired by DPS, Mr.
Johnston spent 14 years with New York 7-UP Bottling Company, working in
sales and marketing. (DPS Website - Leadership)
Lain Hancock - Executive Vice President of Human Resources (HR)
Mr. Hancock has served as executive VP of HR
since 2012. He is responsible for DPS’ HR
department.
Mr. Hancock has been with DPS since 2007,
when he was hired in the supply chain department,
where he focused on improving safety, product
quality and productivity. From 2007 to 2012, Mr.
Hancock served as senior leadership for different
departments such as supply chain strategy,
manufacturing operations, and procurement. Prior
to his employment at DPS, Mr. Hancock served in
the United States Army as an officer after
graduating from the West Point Military
Academy. After his time in the Army, Mr. Hancock worked as a consultant for
McKinsey and Company. (DPS Website - Leadership)
David Thomas - Executive Vice President of Research and
Development (R&D)
Mr. Thomas has served as the executive VP of R&D
since 2010. He is responsible for all aspects of
research and development, including product
development, nutrition, and flavor and concentrate
technology.
Mr. Thomas has been with DPS since 2006,
when he was hired as the senior VP of R&D. Mr.
Thomas has extensive experience in research and
development, having served R&D roles for Gerber
Products Company, General Mills, Pillsbury, and
Unilever; progressing from project leader roles into
senior director positions.
Mr. Thomas’ experience in R&D has led to him holding 15 patents across a
range of ingredients, processes, and product related technologies. He holds a

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B.S. in microbiology as well as a M.S. and Ph.D. in food science, concentrating
in flavor biochemistry. He also serves on the Board of Advisors for the Center
of Food Safety. (DPS Website - Leadership)
James Trebilcock - Executive Vice President of Marketing
Mr. Trebilcock has held the position of executive VP
of marketing since 2008. He is responsible for all
areas of brand management and marketing;
including market research, graphics, merchandising,
and advertising.
Mr. Tebilcock has been with DPS for 27 years,
starting in 1987 as the Cherry 7UP brand
manager. Since then, he has progressed through
the company serving as the director of promotions,
VP of marketing, and senior VP of marketing
services. In 2003, Mr. Trebilcock was promoted to
senior VP of consumer marketing; being responsible for all consumer-
marketing operations for the entire portfolio of brands. Prior to joining DPS,
Mr. Trebilcock held numerous different marketing and sales positions with
Coca-Cola Bottling Company. Mr. Terbilcock began his marketing career with
General Mills Inc. (DPS Website - Leadership)
III. EXTERNAL ENVIRONMENT: Opportunities and
Threats (SWOT) (See Appendix A for EFAS Chart)
A. Natural Physical Environment: Sustainability Issues
The Dr Pepper Snapple Group warehouses are located directly next to bottling
plants. This works to the company’s advantage by providing a great
opportunity for the firm to quickly produce products for their customers. This
guarantees high product efficiency to meet the customer demand. The Dr.
Pepper Snapple Group warehouses are located in St. Paul Minnesota. Due to
this, warehouses are in risk of being damaged due to floods, tornadoes, and
wildfires. Solar panel technology is very popular in Minnesota. In fact the
financial assistance company NCB launched a solar electric project on August

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2008, which used 525 solar panels in the process. Dr. Pepper Snapple Inc.
would easily be able to benefit from the use of solar panel technology in
Minnesota.
These factors have different effects on other regions of the world. The
Dr Pepper Snapple warehouses are located safely within the United States,
more specifically in St. Paul, Minnesota. However, other areas around the world
may suffer from natural disasters. For example, warehouses placed in Japan
are in risk of falling victim to tsunamis or earthquakes, while warehouses on the
east coast of the United States may fall victim to tornados.

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B. Societal Environment
At Dr Pepper Snapple group, we strive to provide excellence to our consumers
as well as the rest of the world in any way we can. We understand that what
we do as a business has a tremendous impact on the environment in which we
practice. One of our core action plans we abide by as an organization is the
STEEP concept. STEEP is acronym that stands for all the dynamics of our
environmental concerns including: Social, Technological, Economical,
Environmental, and Political (Hunger & Wheelen, 2012). This allows us to take a
macro approach to dealing with the external environment in which we do
business.
We start with S (social) which correlates directly to what we exude the
most here at DPS, social developments in areas as demographics, social value,
individual lifestyles, cultural values, consumer behaviors, and even
advertising. It is our priority to sustain a healthy social environment as an
organization and therefore it is our first letter in STEEP. Innovation is always a
dynamic for institutions to expand from and here at DPS we strive on it
(Hunger & Wheelen, 2012).
The next letter of the STEEP analysis is T (technology). The rate at which
technological development is executed here at DPS is vital to our business to
keep up with an evolving marketplace. In general we understand that the
speed of technological innovation is very rapid and therefore we make it one of
our leading priorities to sustain. Essentially every day new services and
products have an immense impact on the way we do business and learn,
therefore, changes in technology greatly influences economical, social, and the
political fields. When we think about technology, we consider factors such as

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innovation, energy, transportation, communication, research, and development
(Hunger & Wheelen, 2012).
A more moderate dynamic of the STEEP analysis which we abide by is E
(economical). Here at DPS, although we are vastly concerned with who in the
economy is prevailing, we understand we have less of an impact on major
economical factors such as interest rates, taxes, international trade, availability
of jobs, and entrepreneurship. Therefore while we do our best to prepare for
economic hardships, we try not to be steered away from what we do as a
business by not investing all our energy in this aspect being that the economic
situation is directly correlated to the buying position the consumer (Hunger &
Wheelen, 2012).
Our next E (environmental) is another factor of the STEEP analysis in
which we have little control over. Generally environmental concerns are
ecosystem related such as soil, water, food, and energy which although a vital
dynamic in our business, we realize that we cannot dedicate most of our efforts
toward this field as we have little control over it. Rather we steer our energy
regarding this factor toward abiding by it rather than trying to reshape it
(Hunger & Wheelen, 2012).
Lastly, there is P (political). Political developments can definitely
influence our consumers as well as the rest of the world in which we do
business. The political landscape changes dramatically as other political parties
gain power and therefore, at DPS we make sure to keep up to date with what’s
going on in our government in effort to combat any sudden changes or new
laws to abide by. We make it our priority to consistently be aware of possible
upcoming shifts in power during elections in all dynamics of politics. Political
developments affect different types of laws for example anti-trust,

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environmental, trade markets, and financial markets (Hunger & Wheelen,
2012).
1. Economic
The corporation and industries in which Dr. Pepper Snapple group
competes is least affected by its current economic standing. General
environmental forces such as the consumers within the regions that DPS
serves are more than likely to continuously buy their beverages. In fact,
DPS will inevitably grow as our economy grows as a whole being that
population growth rate in America is nearly one percent, therefore more
people means more growth for DPS. The Economy within the regions that
DPS serves is all
in the Americas,
which mostly
consist of strong
standing
economies. The
consumers of DPS
consist of a broad
range of
demographics
including people of all ages and race. Some threats imposed by the
economies within the areas DPS serves are the fact that if DPS wants to
further expand its organization worldwide then it has to consider that there
are a multitude of poor economies outside the Americas. Poor economic
standing countries could significantly impact DPS in a negative way being

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that their #1 competitor is globally superior. Competition amongst DPS can
easily overpower their products outside the Americas being that their
beverages are already well established and DPS main products are more
unique as oppose to what is generally accepted by consumers.
2. Technological
In effort to continuously grow Dr. Pepper Snapple group’s main objective
currently is to expand their products through technological innovations
such as utilizing the latest and greatest vending machines to directly sell
their beverages and keeping their manufacturing facilities up to date with
the most efficient method of producing their products. DPS developed its
own delivery system, which enables for immediate delivery of their
beverages as they are produced from the manufacturing sites throughout
the Americas. The opportunity presents itself to increase productivity by
means of technologically advancing both their delivery system to work
more effectively with their manufacturing process.
3. Political-legal
The political-legal aspect with regards to Dr Pepper Snapple group is not so
much of a threat in comparison to the other societal environment
issues. Therefore, DPS is not necessarily concerned with potential threats
and opportunities concerning political-legal attributes. At DPS one of the
pillars of integrity is to undoubtedly abide by all the legal codes associated
to their bottling services. DPS has not had any major issues regarding legal
mishaps within the last ten years. Any mistake within the political-legal

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aspect of their organization could definitely pose a threat to DPS therefore
they understand good intentions lead to a superior integrity status.
4. Sociocultural
Dr. Pepper Snapple group has dedicated a vast amount of funding toward
campaigns geared to positively impact their consumers. DPS understands
that their consumers’
loyalty is dire in
terms of competing
with other beverages
that offer completely
different qualities
and taste. DPS has
established a social aspect that exudes positive outcomes and energy from
the consumption of their products. DPS products are consumed amongst a
wide variety of social dynamics that all share the same needs, which is a
unique product.
DPS can be negatively impacted within their sociocultural standing if
they do not sustain their positive energy focused means of advertising,
which brings people of any demographic together in the sense that they all
enjoy a unique tasting beverage. With their two main competitors gaining
the relationships of many consumers, DPS needs to overcome this threat by
creating opportunities to build long lasting relationships to establish
lifelong customers.
Although Dr Pepper Snapple group is constantly focused toward
superseding the issues that come along with the Societal environment in

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which it operates, globally DPS is not necessarily affected by these
objectives concerning environmental, societal, political, and
technological. The fact that DPS is currently geared purely toward being
the best beverage business in the Americas, they are not in conflict with the
rest of the world. Therefore, these forces are essentially non-existent in the
rest of the world. However, if DPS wants to become the greatest then
these factors would have to become the focal point.
C. Task Environment
1. Threat of New Entrants: Low. Well-established companies, such as
Coca-Cola, PepsiCo., Nestle, other food brands, and DPS make it hard for any
new business to enter the market when these other leading brands already
have advanced technology and high profits. (O)
2. Bargaining Power of Suppliers: High. DPS relies heavily on
commodities, such as sugar, plastic and aluminum. The bargaining power of
suppliers is high because DPS does not have many alternatives if suppliers
choose to raise prices. (T)
3. Threat of substitute products or services: High. Consumers may
not be in the mood for a Dr Pepper or 7-Up, but may prefer a coke from either
Coca-Cola or Pepsi Co, simply because they prefer the tastes to those
opposed to what DPS offers. (T)
4. Bargaining power of Buyers: High. Consumers can just as easily pick
another soda brand purely by the availability in stores. Since Coke and Pepsi
dominate most of the shelf-space in stores, Dr Pepper Snapple depends on its
customer’s loyalty. Aside from consumers, DPS also depends on bottlers and
distributors; and retailers. (T)

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5. Rivalry Among Existing Firms: High. Coca-Cola and PepsiCo., have a
larger consumer base than DPS. Their drinks are more sought after and
preferred by consumers versus DPS’s own Dr Pepper drink, 7-Up or other
brands. (T)
6. 6th
Force (Stakeholders): High. In recent years, DPS’s cash flows have
increased, allowing them to invest in their business, repurchase shares of their
common stock, and pay dividends to stockholders to reduce debt. In 2013
particularly, DPS had planned productivity to be $150 million through
reductions by laughing Rapid Continuous Improvement (RCI). They exceeded
their goal, which allowed DPS to increase amount of cash returned to
stockholders. (O) (DPS, 2013 annual report)
With today’s generation geared
toward a healthier lifestyle, Dr
Pepper Snapple Group has
recently dedicated an extensive
amount of funding toward
research and development of
health conscious beverages such
as the new 10-line. The new 10-
line is a set of their more
popular brands with a drastic
drop in calories, therefore
making a healthier choice of
beverage. Customers in this sense pose a future threat because there are a
multitude of other substitutes to choose from. This allows the opportunity to

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develop and add to our portfolio new beverages and more customer oriented
products such as low calorie drinks.
Dr Pepper Snapple Group has made a strong commitment to environmental
stewardship on every level of their business. Creating and distributing such a
wide portfolio of brands from their locations across North America gives them
an opportunity to make a real difference. Over the past five years, the
company has invested resources into aligning and integrating their operations
to serve their customers and consumers more efficiently and consequently
reducing their energy and fuel consumption per unit of production. At the
same time, they have pursued a multi tier approach to reducing waste by
ramping up recycling, developing innovative packaging solutions and
collaborating with the industry on the Full Circle Recycling Initiative. Water
conservation has also been one of their primary concerns, and in 2008 they
began tracking their consumption and wastewater discharge to help them
measure the success of their ongoing production and facility improvements. In
their first sustainability report in 2010, they set big goals in a number of
categories – fuel conservation, energy consumption, recycling, reducing waste
with innovative packaging, water conservation, and creating sustainable
processes in all their manufacturing locations.
Competitors pose a huge threat toward Dr Pepper Snapple group for
the sheer fact that their two superior rivals are in a position to produce what
DPS produces. DPS holds a unique portfolio of beverages however; both
PepsiCo and Coca Cola possess many, if not all similar tasting
beverages. Their competitors are focused toward a worldwide approach, while
DPS is currently geared toward the Americas. DPS lacks the ability to branch
out to the rest of the world because their portfolio of beverages are easily

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mocked and therefore a substantial establishment has not been made
throughout the rest of the globe. In consideration to the competitors strong
array of beverages offered, such as sports drinks and vitamin drinks, DPS holds
the opportunity to develop similar products in an effort to combat it’s
competition. In doing so, DPS opens up a wide range of beneficial possibilities
such as marketing to the sports industry, where sports drinks are number one.
At DPS, they owe the quality,
strength and integrity of their
company and brands largely to
the people who support their
business. This includes their
19,000 employees across North America and the Caribbean as well as the
people working for companies around the world who supply them with the
materials, ingredients, resources and equipment that bring their brands to life.
Now more than ever, beverage consumers are holding products to a higher
standard. Not only do they base their purchasing decisions on whether
beverages are safe and of the highest quality, but increasingly, they’re also
focused on whether the ingredients and packaging materials are ethically
sourced.
DPS is committed to upholding what they expect of their suppliers. They
ensure their brands are produced at high standards of quality and safety
throughout their supply chain and are committed to using suppliers that
operate in a way that provides safe working conditions, dignity and respect for
their employees. We seek commitment to their Ethical Sourcing code of
conduct and require their suppliers to adhere to this code or participate in the
Supplier Ethical Data Exchange (SedEx).

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D. Summary of External Factors
A moderately important factor to the Dr. Pepper Snapple Group is the threat
of new entrants into the market. At the moment, it is somewhat easy for new
competitors to enter and compete in the marketplace and to challenge the Dr.
Pepper Snapple brand name. An even heavier threat at the moment is the
threat of substitutes. There are many alternatives to the Dr. Pepper Snapple
products. Consumers can buy bottled water, fruit juices, sports and energy
drinks, or other carbonated drinks out of the Dr. Pepper Snapple’s target
market. The most important factor that the Dr. Pepper Snapple Group should
keep in mind is the threat of their target audience shifting to the healthy drink
market. The world, especially America, is becoming more health conscious and
this will be reflected in the items that they purchase which will be healthy
drinks, which are outside of Dr. Pepper Snapple’s target product range. So as a
result, if the Dr. Pepper Snapple group wishes to compete in the near future, it
should invest in producing health drinks.
IV. INTERNAL ENVIRONMENT: Strengths and Weaknesses
(SWOT) (See Appendix B for IFAS Chart)
A. Core Competencies
Core competencies, described by Wheelen and Hunger, is a collection of
corporate capabilities that cross divisional borders and are widespread within a
corporation, and is something that a corporation can do exceedingly well
(Hunger & Wheelen, 2012).

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1. R&D Spending:
In the past three years (2013, 2012, and 2011) DPS allocated $15 million
dedicated to just R&D. The focus of such spending helps DPS develop
better product development, process engineering, and nutrition, which in
turn helps the research team to experiment with new flavors and enhance
already established products.
2. Manufacturing:
In addition to concocting their own flavors, DPS also manufactures their
own drinks. As of now, DPS has 18 manufacturing locations and 113
principal distribution centers in the U.S., as well as two manufacturing
facilities and eight principal distribution centers and warehouses in Mexico.
(DPS annual report, 2013).
3. Flavors:
With a focus in research and development, DPS has shown an expertise in
sweeteners and beverage flavors that gives their products unique flavor
and styles. DPS puts much of its time and
effort into enhancing and creating
delicious flavors for their consumers.
The company does well with its
consumers for its likeability,
uniqueness and value, performing
well in brand relevance, brand
strength and brand equality among CSD consumers in 2013. In the last
year, DPS launched their 10-calorie version of their top 4 flavors- 7UP TEN,
A&W TEN, Sunkist TEN soda, and Canada Dry TEN, which has successfully

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started bringing back consumers who had previously stopped drinking soft
drinks or were drinking fewer servings. (DPS annual report, 2013)
4. Management Team:
Experienced executive management team. DPS’s crew has over 200 years
of experience in the food and
beverage industry. They have broad
experience in brand ownership,
manufacturing and distribution, and
enjoy strong relationships both in the
industry and with customers (DPS
annual report, 2013).
B. VRIO Analysis
1. Value
DPS provides customers value by ensuring that products are always
conveniently located at local retailers. This is made possible by DPS’s
“geographic manufacturing and distribution coverage.” (DPS SWOT, 2014)
Currently, DPS has “18 manufacturing facilities and 113 principal
distribution centers and warehouse facilities in the US.” (DPS SWOT, 2014)
Additionally there are two manufacturing facilities, with eight distribution
centers in Mexico. All of these facilities and warehouses are geographically
dispersed in a manner that allows DPS to have their products available to
consumers with minimal travel time. The manufacturing plants are all next
to a distribution warehouse and from there “DPS utilizes its own fleet of

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approximately 6,000 delivery trucks,” to get the product to market. (DPS
SWOT, 2014)
2. Rareness
Other competitors produce similar products to DPS’ but 14 of DPS’s
beverages are number one or two in their respective flavor category. For
example, the “Dr. Pepper brand holds the number one position in its flavor
category and number two position in overall flavored CSD. (DPS
SWOT,2014) A&W, Sunkist and Squirt also maintain leading positions in
their flavor categories. However even though they lead many of the flavor
categories in the CSD industry, there are still major competitors for many of
their flavors. To stay ahead of other companies within the CSD industry,
DPS allocated “$15 million on research and development during FY 2013.”
(DPS SWOT, 2014) Research and development is one of DPS’s competitive
advantages and employs a range of disciplines including “product
development, microbiology, analytical chemistry, process engineering,
sensory science, nutrition, knowledge management and regulatory
compliance.” (DPS SWOT, 2014)
3. Imitability
It is relatively easy for companies to make alternatives to DPS’s products.
Giants like Pepsi and Coca-Cola “together represent about 60% of the
liquid refreshment beverages market by volume. (DPS SWOT, 2014) Within
the large portion of the market they command, there are substitutes for
many of DPS’s products. Fortunately for DPS, much of their sales are
dependent on consumer preferences. No matter how close the substitute
is, there is always a noticeable difference between the two products and

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that differentiation is what propels DPS into the first and second spots in
their flavor categories.
4. Organization
DPS uses all resources to its advantage
during business operations. For example,
the wide geographic coverage of its
manufacturing and distribution network,
coupled with its own fleet of 6000 trucks,
maximizes DPS’s ability to get products
to market quickly and efficiently. The strategically placed infrastructure
allows “DPS to coordinate new product launches in an effective way.” (DPS
SWOT, 2014) For example, DPS’s “TEN” line of products did not take long
to get to market because of the strong distribution network DPS has
established.
C. Business Model
According to Wheelen and Hunger, a business model is the mix of activities a
company performs to earn a profit. Put simply, the business model explains
how a firm earns revenue and makes money. The simplest model, which is the
one DPS operates under, explains how the company provides goods that can
be sold, so that revenues exceed costs and expenses (Hunger & Wheelen,
2012).
Dr Pepper Snapple Group maintains an integrated business model. The
business model includes both company-owned direct-store-delivery (DSD)
distribution, as well as third-party distribution. Within the model,

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approximately 40 percent of the company’s volume is distributed through
company-owned networks, another 40 percent through third-party distributors
in the Coca-Cola, Pepsi-Cola and independent bottler systems, and the
remaining portion is split between warehouse
direct and foodservice distributors. Dr Pepper
Snapple groups serves consumers and
businesses around the Americas, from bottlers
and distributors to national retailers, large food
service and convenience store customers,
different carbonated soft drinks and non-carbonated soft drinks. 88% of the
company’s consumers are located in the U.S. Individuals of all ages and
backgrounds enjoy DPS’s products. DPS differentiates and sustains a
competitive advantage through its expertise in sweeteners, which create
distinctly flavored soft drinks. Essentially, DPS follows a simple business model.
D. Value Chain
Value chain is a linked set of value-creating activities that begin with basic raw
materials coming from suppliers, moving on to a series of value-added
activities involved in producing and marketing a product or service, and ending
with distributors getting the final goods into the hands of the ultimate
consumer. The focus of value chain analysis is to examine the corporation in
the context of the overall chain of value-creating activities, of which the firm

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may be only a small part. Value chain can be separated into two parts the
primary activities and support activities.
1. Primary activities:
a. Inbound logistics:(raw materials, handling and warehouses)
Aluminum cans, glass bottles, PET bottles and caps, paper products,
sweeteners, juice, fruit, water and other ingredients are the raw
materials for DPS. Although the company has contracts with a relatively
small number of suppliers, it has generally not experienced any
difficulties in obtaining the required amount of raw materials. And
keeping suppliers in a small amount help the company to ensure the
quality of raw materials.
b. Operations: (machining, assembling, testing)
DPS is a highly automated manufacturer with limited employees and
support staffs. DPS
requires the same up to
date automated systems
of its select third-party
bottlers. This automotive
system requires a
relatively low number of
employees to feed it raw
materials and resources to produce the end product. These systems
allow employees to keep a high level of supervision of manufacturing of
their products and also increase the efficiency and lower the costs.

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c. Outbound logistics: (warehousing and distribution of finished
products)
The company has 21
manufacturing centers and
more than 115 distribution
center across North
America. Our warehouses
are generally located at or
near our hundreds of third-
party bottlers and
distributors in the U.S. Moreover, we actively manage the sale,
merchandising and transportation of our products using a combination
of our own fleet of approximately 6,000 delivery vehicles and third party
logistics providers.
DPS’s manufacturing/bottling plants and distribution networks
are vulnerable to many weather conditions, from floods, earthquake,
tornadoes, and hurricanes to heavy rain. The company has set
contingencies for such vulnerabilities to ensure high levels of product
availability.
d. Marketing and Sales: (advertising, promotions, pricing,
channel relations)
Our marketing strategy is to grow our brands through continuously
providing new solutions to meet consumers’ changing preferences and
needs. They are working hard in providing customers with new
beverages, which are healthier, and taste better. Also, the company is

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now working with some of their retailers to
come up with promotions to increase the
volume sales. They are now focusing mostly
on the dollar channels, which are the fastest
growing channel in the past year, to win the
shelf space from other competitors and also earn profits.
e. Service:(installation, repair, parts)
As a beverage company, there is no need for installation or repair.
2. Support Activities:
a. Firm infrastructure:(general management, accounting,
finance, strategic planning)
DPS was facing a decline of net income years before. Despite that the
company is still in good standing considering its gross profit has not
declined since last year and remains at an impressive $3.5 billion. For
strategies, the main strategy for the company in the following year is to
enhance the leading brands by investments to chase the customer’s
loyalty for the company.
b. Human resource management: (recruiting, training,
development)
Dr Pepper Snapple group has workshops to train and
learn before they start working with the company in
order to create good employees with high skills
and moral. The company is managing the diversity

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of its workforce very well by creating an equal opportunity for their
employees and leaders to be involved in the business. Employees are
recruited regardless of gender, race or belief and everyone has the
same chance of promotion as long as they work hard.
c. Technology development: (R&D, product and process
improvement)
The Research and Development team is composed of scientists and
engineers, which ensures the corporation is creating new flavors and
perfecting its current line of drinks to make them healthier, lowering the
calories while still retaining great taste. DPS uses a variety of IT systems
and networks configured to meet our business needs. DPS developed its
own delivery system, which enables for immediate delivery of their
beverages as they are produced from manufacturing sites. Also, the
company utilizes the latest and greatest vending machines to maintain
efficiency.
d. Procurement: (purchasing of raw materials, machines,
supplies)
DPS has few suppliers for raw materials but they are not facing
problems of purchasing raw materials since their materials are easily
found in the market. In addition, to emphasize on the environmental
protection, DPS uses various refillable and non-refillable, recyclable
bottles and cans. DPS is not the kind of company that requires high-level
technology.

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E. Corporate Structure
After the corporate restructuring of 2008, which lead to “the creation of Dr
Pepper Snapple Group as a separate entity,” DPS reorganized into three
operating segments; manufacturing, distributing and marketing. (Cadbury,
2008) Currently there are 21 manufacturing centers in the U.S., accompanied
by 115 distribution centers, being operated by approximately 19,000
employees. (DPS Website, 2014) A rigorous marketing campaign is being
undertaken by DPS, including the new health conscious beverages of the “TEN
Line,” which is DPS’s leading brands being offered in a low ten calorie
alternative to the full flavored counterparts.
Decision making for DPS was previously carried out by the board of
Cadbury-Schweppes, however since the corporation split in 2008 “ DPS’
independent board has been charged with “regularly
evaluating the strategic direction of the Company,
management's policies and the effectiveness with which
management implements its policies and overseeing
compliance with legal and regulatory requirements.” (DPS
Website, 2014) DPS is organized on the basis of
geography and projects. It is based on geography
because as DPS strives to“ be the best beverage business
in the Americas,” it is constantly growing manufacturing
and distribution operations through acquisitions and mergers of existing
bottling companies and distribution centers.
The corporate structure is clearly understood from top to bottom of
DPS through it’s “call to ACTION” plan (DPS Website, 2014) Within this “Call
to ACTION,” DPS outlines for its employees guidelines to drive towards

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efficient business operations and includes; being accountable, customer-
centric, transparent and honest, to inspect what we expect, own decisions that
are made and no blame fixing. DPS being accountable means “we say what we
are going to do and we do what we say,” which builds into being customer-
centric where employees focus on customers’ and consumers’ needs. (DPS
Website, 2014) Being transparent and honest means that DPS operates by
sharing knowledge and information and never maintains a hidden agenda.
Inspect what we expect is an accountability measure and states that
expectations are set forth by DPS and the progress and results are evaluated
internally. Owning decisions that are made exemplifies DPS’s confidence in
decisions because they are not made lightly and rely heavily on facts and input.
No blame fixing is DPSs motto for when something goes wrong, instead of
pointing fingers at whose fault it is, DPS strives toward finding a solution to
remedy the situation.
This corporate structure is consistent with corporate strategies, which
are “building and enhancing leading brands, pursuing profitable channels,
packages and categories, strengthening route to market and improving
operating efficiency.” (DPS Website, 2014) Marketing caters to building and
enhancing leading brands. Pursuing profitable channels, packages and
categories, strengthening route to market and improving operating efficiency,
are all supported by the corporate structure of manufacturing and distributing.
Internationally, DPS only operates in North and South America and outside of
the U.S. DPS relies heavily on third party manufacturers and distributors.

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F. Corporate Culture
The culture of a business revolves around all the values it instills within all of its
employees. The culture of a corporation could include its mission, objectives or
even values. With DPS, there is a well-defined or emerging culture composed
of shared beliefs, expectations and values. This is done by encouraging each
employee to take effective action, minimize environmental impacts and
transforming society to
have positive impacts. The
culture is consistent with
the current objective,
strategies, policies and
programs because Dr
Pepper Snapple Group
strives to implement a
culture that revolves around what they refer to as “action”. This belief is
derived from each and every aspect of the business down to society, which
include employer, manufacturer, marketer and neighbor.
As of environmental sustainability, the company currently is initiating
their five-year plan that started back in 2007 to help the environment and their
consumers. According to the company, since we all share this Earth, their goal
is to help everyone live better by creating a better environment for everyone
to live in, and by creating products that will benefit consumer’s health and
lifestyle. The company has made a strong commitment to environmental
stewardship on every level of their business. Over the past five years, DPS has
been working towards reducing their usage on energy and fuel per unit of
production. They are also pursuing a multi-tier approach to reduce waste by

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increasing their recycling rate through developing packages that are better for
the environment by collaborating with the industry on Full Circle Recycling
Initiative. Overall, DPS sets big goals in a number of categories ranging
through fuel conservation, energy consumption, recycling, reducing waste with
innovative packaging, water conservation, and creating sustainable processes
in all manufacturing locations.
Dr Pepper Snapple Group understands the influence it has on many
different aspects and strives to positively influence each point. It prioritizes
environmental sustainability and corporate responsibility. It moves towards
protecting the environment through strategically controlling production to
maintaining efficient transportation. It maximizes resources through strategic
inventory management, manufacturing formulas and handling efficient
transportation to and from warehouse to distribution centers and finally
distribution to retailers. Dr Pepper Snapple group encourages employees to
take appropriate action in all situations. They are responsible for their own
work all the way from employees to top management. “Say what you’re going
to do, and do what you say” is a simple principle employees are supposed to
live by. Currently, Dr Pepper Snapple Group handles its operations only in
North America and Mexico.
G. Corporate Resources
1. Marketing
DPS is focused on providing all kinds of beverages in the U.S., Canada and
Mexico. Their products are average price but high quality in both taste and
nutrition. They do not have typical groups of target consumers since they
provide tons of choices, but each of their product lines may concentrate on

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a certain group. For example, TEN lines focus on people who care a lot
about healthy lifestyles and pay much attention to their calorie intake.
According to the product life
cycle, the company is mature
but there are still many small
brands, which are growing or
facing the decline. That is the
reason why DPS built their
strategy to enhance the
leading brands in the
following year.
The marketing strategy of
DPS is to “grow their brands through continuously providing new solutions
to meet consumers’ changing preferences and needs.” In recent years, with
customers’ growing concentration on healthy diets, beverage companies
are faced with a severe test to adjust the calorie content of products. DPS,
however, provided the consumers with a brand new idea to adopt active
lifestyles by balancing their calorie intake. The company produces a large
amount of beverages aiming at low-calories, including the TEN Line for men
and Diet Dr Pepper for woman. They continue to expand product lines into
different categories, but the tendency that non-carbonated beverages, like
water and juice, have higher sales makes the overall sales of the company
suffer a lot. Compared with its competitors’ strategies to expand the
market outside the U.S, DPS is having trouble to do so since they never
reached the market outside North America. They have to find a way out of
this social stress. It will take a lot of effort to reach the market outside since

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they have no idea of the consumers’ preference in Asia or Europe. The
company should also make an effort to launch new non-carbonated
beverage products.
By following the strategy to “increase presence in high margin channels
and packages”, DPS did a great job in manufacturing and distribution
coverage. Before Dec. 31st, 2013, the company owned 115 distribution
centers in its operational front United States. Moreover, these warehouses
are usually near the bottling factories to reduce the fee of transportation.
Also, they have multi-product producing facilities to reduce the fees
from transportation and co-packing process. However, bottling remains to
be a severe problem for the group because they are not independent
enough in this area. Bottler systems affiliated to Coca-Cola or PepsiCo are
undertaking 63% of the distribution assignment for DPS, which makes the
company less proactive in business. Since cooperative strategies are
unlikely to appear due to the conflict of interest among these three top
companies. Bottling system are powerful methods for Coca-Cola, as well as
PepsiCo, to restrict the development of DPS.
Also the company works closely with their retail partners in increasing
sales. DPS sells their products in millions of stores all around, but they still
keep an excellent relation with the main retailers. For example, in 2013,
DPS worked with Sam’s Club to provide promotions and, in return, earned
nearly 4% more of the volume sales that year. Another major channel for
the corporation is the dollar channel including the Dollar General and so on.
Due to the economic situation, which remains pessimistic, the dollar channel
turns out to be the fastest-growing channel for the company. Hence, the

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company is working on providing more flavor lineups in these kinds of store
to increase sales.
However, consumers’ loyalty has been a great competitive advantage
for DPS to continue their market performance. Being #1 in the U.S.
flavored CSD beverage industry; DPS always receives high scores from
questionnaires for its likeability, uniqueness and value. Even though, DPS’s
market share is much lower than Coca-Cola and PepsiCo, they still get
credit by providing a variety of products including ready- to-drink tea, low-
calories alternatives and so on. The TEN Line is a huge success for DPS
since it brings back many consumers who already abandoned soft drinks for
the sake of health. Therefore, the following year, they are ready to “build
and enhance the leading brands ” and they want to strengthen position in
the minds of consumers and push other brands forwards.
2. Finance

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According to Wheelen and Hunger’s Strategic Management and Business
Policy, the financial manager is responsible for allocating funds to the best
and most appropriate resources and areas of the business. Finance deals
with all strategic issues and controls the funds that go into as well as out of
the business. A firm must use financial leverage, which is the ratio of total
debt to total assets, in determining how debt is used to increase the
Company Industry Median Market Median
Price/Sales Ratio 1.92 2.39 1.47
Price/Earnings Ratio 17.18 20.53 20.83
Price/Book Ratio 5.03 5.01 2.27
Price/Cash Flow Ratio 12.59 4.85 11.59
Comparison to Industry & Market
13-Dec 12-Dec 11-Dec
Revenue $6.00B $6.00B $5.90B
Gross Profit $3.50B $3.50B $3.42B
Operating Income $1.05B $1.09B $1.02B
Total Net Income $624.00M $629.00M $606.00M
Diluted EPS (Net Income) 3.05 2.96 2.74
Annual Income Statements

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earnings available to common shareholders. Financial managers must also
perform capital budgeting, which entails analyzing and ranking possible
investments in fixed assets like land, buildings and equipment. DPS uses
both financial leveraging and capital budgeting concepts.
Dr Pepper Snapple Group continues to be the number one flavored
Carbonated Soft Drink (CSD) company in the U.S. as nearly 83% of the
company’s volume accumulates from brands that are either number one or
number two in their categories; brand CSD categories include flavors like
lemon-lime, orange, grapefruit, carbonated mineral water, and citrus while
brand non-carbonated soft drinks categories (NCSDs) consist of shelf-stable
fruit punch, apple juice, and applesauce (DPS 2013 Annual Report). Since all
competitive businesses desire to win and lead the industry, it can be
assumed that DPS would strive for its number one brands to remain in that
position and for its number two brands to capture first place in their
respective markets. By way of retail sales, DPS maintained a 20.7% share in
the U.S. CSD market in 2012 and 2013 so, just like any leading company,
DPS desires to increase that market share.
From 2011 to 2012, the company was in good standing, with a net profit
of $629 million, which led to an increase of 3.8% over the 2011 financial
year. The net profit, unfortunately, declined to $624 million in the following
year; a loss of $5 million compared to the previous year. Despite Dr. Pepper
Snapple Group’s small decline this past year, the company is still in good
standing, as its gross profit has not declined since last year and remains at
an impressive $3.50 billion. Such a large amount of profits could potentially
provide the company with exponential resources towards continuing to
excel in business for many years to come. The Dr Pepper Snapple Group

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reported revenues of $5,995 million by the end of the 2012 financial year,
which was an increase of 1.6% from the 2011 financial year. The operating
income of the Dr Snapple Group for the 2012 financial year was $1,092
million, which was a 6.6% increase over the 2011 financial year. The net
profit for the 2012 financial year was $629 million, which was an increase in
3.8% over the 2011 financial year. According to Bloomberg BusinessWeek,
Dr Pepper Snapple Group Inc. has experienced minimal variation in their
bottom line (net income to common excluding extra items), which declined
to $624 million at the year-end of 2013. However total revenues has
nominally increased by only 0.03336 percent between years 2012 and 2013.
Unfortunately, their net income has faced a deficit pursuant to the fact
that net interest expense and other operating expense totals variance of
increase are greater each year (2010-2013) while total revenues are not
increasing as abundantly. As suggested by the hoover statistics, this past
year, the Dr. Pepper Snapple Group has declined a bit in terms of the
money that it has brought in, more specifically its total net income and
operating income which have both decreased since the 2012 financial year.
With total net income dropping from $629 million in 2012 to $624 million
2013 and operating income dropping from $1.09 billion in 2012 to $1.04
billion in 2013. Dr Pepper Snapple Group reported earnings of 0.74 USD
per share in comparison to 0.62 USD per share in the previous period (2012-
2013). Year-to-date DPS has endured a downturn of diluted shares to fall at
a rate of 4.386 percent from 1.14 to 1.09. According to the statistics on
hoovers.com, the Dr Pepper Snapple Group at the end of the 2013 financial
year has earned revenue of $6 billion, a gross profit of $3.5 billion,
operating income of $1.05 billion, a net income of $624 million, and a

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diluted EPS (net income) of $3.05. In general, the CSD industry has
experienced a decline, as consumption habits undergo drastic changes, but
DPSG still remains profitable.
For the first quarter of 2014, Dr Pepper Snapple Group, Inc. EPS of
$0.78 compared to $0.51 in the prior year period. Core EPS were $0.74
compared to $0.53 in the prior year.
Also, reported net sales increased 1% as a sales volume increase of 1%,
favorable product and package mix and net pricing were partially offset by
unfavorable segment mix and 1 percentage point of foreign currency.
Reported segment operating profit (SOP) increased 14%, or $40 million, on
net sales growth, lower commodity costs, including an unfavorable year-
over-year LIFO comparison, and ongoing productivity improvements.
Reported income from operations for the quarter was $260 million,
including $12 million of unrealized commodity mark-to-market gains.
Reported income from operations was $197 million in the prior year period,
including $7 million of unrealized commodity mark-to-market losses. Core
income from operations was $248 million, up 21.6% compared to the prior
year period.
Dr. Pepper Snapple Group remained focused and executed the strategy
in a highly competitive and challenging environment. It maintained
distribution and availability across key CSD brands and packages and
gained distribution on the key juice and tea brands and packages. DPS
continued to invest behind its well-loved brands and engaged with
consumers and shoppers through innovative marketing programs. Rapid
Continuous Improvement (RCI) continues to be embedded throughout the
organization as the company makes good progress on its lean tracks.

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Its 2014 priorities remain unchanged and its teams will continue to build the
TEN platform with programming focused on driving awareness and trial,
provide consumers with a range of products that meet their evolving needs
and execute with excellence in the marketplace.
Overall, DPS is performing under the industry’s financial standards.
3. Research and Development (R&D)
Research and development (R&D) is working towards the improvement of
products and processes through innovation. In regards to Dr Pepper
Snapple, their R&D is conducted by scientists in well-equipped laboratories
where the focus is on theoretical problem areas and on improving the taste
of their beverages. The company’s objectives and strategies come from an
annual report, dated 2010, Jim Trebilcock (executive vice president of
Marketing) and David Thomas (executive vice president of Research and
Development) commented that “developing consumer insights is the key to
building brands... [DPS] has to understand firsthand consumers' wants,
needs and beliefs.” From then on, their annual reports up to 2013, have
reported that they have scientists and engineers in the U.S and Mexico
“who are focused on developing high quality products which have broad
consumer appeal,” which are sold at competitive prices and consistently
produced. Their research and development team is engaged in a variety of
product developments, such as: microbiology, analytical chemistry, process
engineering, sensory science, nutrition, knowledge management and
regulatory compliance. They focus on sweetener development, thanks to
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Included in the research and development section, the annual report
showed incurred costs of $15 million in each year of 2013, 2012, and 2011.
Also, in the same years, the company incurred costs from package
engineering of $6 million that were reported in general and administrative
expenses in their Consolidated Statements of Incomes.
DPS's mission is to “Be the best beverage business in the Americas”,
and with R&D paying close attention to what consumers want, and
continuously improving their products to be better, while offering more
choices, both sweet and healthy. It is evident in their beverage selection
where they have included teas, juices, and energy drinks.
a. R&D Manager:
Dr. David Thomas is the current executive vice president of research and
development at Dr Pepper Snapple Group.
His role oversees responsibility for all
aspects of R&D, including product
development, regulatory, nutrition, sensory
and consumer guidance, flavor and
concentrate technology, chemistry,
functional ingredient technology, process
development engineering and knowledge
management. For testing new products, Thomas and his team may put
together as many as 40 prototypes for a single beverage, testing all of
the qualitative and quantitative data available. He and the team test
location and test consumers before coming down to the last five

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samples, and then one before the final product is launched as an official
new drink.
In 2012, Thomas and his team managed to cut the Dr. Pepper Snapple
Group’s top beverages to a mere
10 calories, known as the TEN line it
included Dr. Pepper, 7-Up, Sunkist,
A&W, Canada Dry and RC. Many of
the beverages have “no aftertaste
and a more full-bodied mouth feel”
(Bhasin, 2012).
b. Technology:
DPS invests much into its Information Technology (IT) resources “to
improve route productivity and data integrity and standards”. With third
party bottlers, they continue to deliver programs that maintain priority
for their brands in the systems (DPS annual report, 2013). They use a
variety of IT systems and networks configured to meet their business
needs. The primary IT data center is hosted in Toronto, Canada by a third
party provider. They also make use of a third party vendor for application
support and maintenance, which is based in India and provides resources
offshore and onshore (DPS annual report, 2013).
c. Advantages:
DPS competitive advantage is that it focuses most of its R&D into
perfecting their flavored drinks and sweeteners. The Dr Pepper drink is
unique only to that of the company. Since its humble beginnings from its
conception in 1885 in Central Texas of Waco, the new soda drink had

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established itself with its unique taste among new consumers and took
off from there. Since then, to now in 2014, the company has continued to
focus its R&D department into creating new flavors and perfecting its
current line of drinks to make them healthier, lowering the calories while
still retaining that great taste.
4. Operations and Logistics
DPS’s overall mission to “Be the Best Beverage Business in the Americas” is
supported in DPS Operations through goals to strengthen their route to
market and improve operational efficiency. Their “Call to Action” program
focuses upon several aspects including operational, environmental,
resources, company sustainability, and an Operational “Rapid Continuous
Improvement” (RCI) program. As a basis of growth in DPS’s operational
efficiency these programs and policies have become the foundation
towards providing leverage in accomplishing its overall mission, of “Being
the Best” and recognizing that in order to be the best they must continually
improve and find ways to improve upon and focus their efforts on safety,
productivity, delivery, and growth. What are most notable about these
policies and programs are the time, resources, and commitment DPS has
put into solidifying each component within their operations and employees.
DPS mandates employee’s to include subsidiaries, and outside suppliers,
manufactures/ bottling companies, and distribution providers, trained to
implement these policies and procedures. They are truly focused on the Call
to action program, safety, sustainability, and RCI programs and policies.
DPS’s Director of Operations is Derry Hodson the Executive Vice President
of Operations. In his role as the Executive Vice President of the Operations-

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Supply chain he is responsible for the entire supply chain function including
all forms of logistics, distribution, manufacturing, quality, efficiency,
environmental sustainability, health and safety, supply chain planning,
manufacturing and engineering. He is also responsible for non-franchise
sales across the America’s. In addition, he is also directly responsible for the
implementation of the above practices that is currently leading DPS
forward.
DPS’s focus on the America’s has set DPS into three major divisions-
Canada, United States, and South America. These three divisions operate
under the same mission, policies, and objectives. However, each division’s
operational makeup is different. The operational capabilities and structure
differs per division in these ways:
a. United States:
DPS- The United States is the main Operational front of the
organization. The corporate offices and board of directors are
stationed in the US which adhere to a strict set of values, ethics, and
business behaviors derived from the strictest most critical culture, in
way of people management, environmental care/concerns, and
ethical business practices. This division sets the minimal standards;
values, ethics, and practices for each of its major divisions to ensure
DPS products stay strong in a competitive market.
DPS-United States current operations include 115 warehouses
and distribution centers strategically placed that respond to burning
issues such as demand and logistical efficiency. These factors reduce
cost and deliver a high value product to both vendors and

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consumers. They also maintain and run 18 manufacturing facilities
centrally placed within their distribution network. In order to increase
cost efficiency, DPS strives to reduce transportation costs, facilitate
and coordinate new product launches, and better control on time
delivery of supplies to the manufacturers.
DPS-United States logistically is geographically dispersed-
warehouses are located near bottling plants, which are near suppliers
to insure that the product availability can meet on time consumer
demand. They have 6000 plus trucks to deliver their products to
manage it’s overall transportation needs of products. Many times, it
may be too costly for DPS to rely upon its own distribution network
in satisfying demands. In addition, DPS relies upon third party
transportation/logistic providers that are selected to help reduce
costs. This extensive network provides the company with a
competitive edge to accomplish its mission.
DPS-United States also relies upon Coca-Cola and PepsiCo’s
affiliated bottler systems in their beverage concentrates division with
dependence at 30% and 18% respectively. This reliance is a negative
strength, but allows DPS to reduce costs of employing more
resources and developing their own unaffiliated bottler systems. The
primary negativity of this dependence lies in the substantial impact a
limited group of suppliers can inflict upon DPS revenue. If third party
organizations increase cost of use above profitable margins, DPS
could see a major reduction in revenues. Subsequently, due to
affiliation with these competitors if there is a price differentiation
that makes the other affiliates a priority, DPS will experience a

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decline in ready inventory, which will impact their ability to meet
demand. Ultimately, this will cause a reduction in revenues, unless
they are willing to enter a price war, which will drive up
manufacturing costs.
b. South America:
South-America DPS (SA-DPS) is comprised of Mexico, Caribe, and
Latino-Americana. The SA-DPS Mexico division is classified as Grupo
Penafiel. They manufacture and sell DPS brands through their own
bottling plants/operations and rely on third party bottlers. However,
while DPS relies heavily on third party logistics and delivery for
Mexico distribution; which can be considered a weakness for the
company. They also rely exclusively upon third-party bottlers and
distributions networks in Caribe and Latin America. This heavy
reliance on third party bottlers and distributors supplemented with
the limited number of competing companies which DPS typically
relies upon for bottling and distribution, may have large impacts on
revenue. Therefore, DPS cannot fully ensure compliance with its
mission, objectives, company policies, procedures, and practices;
which could increase cost, and greatly reduce their ability of
continuous improvement.
c. Canada:
DPS’s subsidiary, Canada Dry Mott’s, Inc. is based in Ontario Canada
and services the entire Canadian market. They rely primarily upon
outside distributors and bottling companies to help service the
extensive market. This heavy reliance on third party networks has the
potential to cause DPS the same weakness and issues as SA-DPS. The

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biggest concerns regard DPS’s ability to maintain continuous
improvement, satisfy its “Call to action” program and improve the
mission of strengthening route to market.
d. Vulnerabilities:
DPS’s manufacturing/bottling plants and distribution networks are
vulnerable to many natural conditions such as floods, earthquake,
tornadoes, and hurricanes to heavy rain and snow fall. Each location’s
vulnerabilities are different, depending on the climate and physical
location. However, DPS has set strict contingencies for such
vulnerabilities through an extensive network as well as their ability to
rely upon other distributors and bottlers to pick up the slack.
However, if extremely severe situations do occur, DPS does not
posses the ability to deliver its products to areas that are being
afflicted by natural disasters.
e. Machine/ People mix:
DPS relies upon automated manufacturing and assembly lines to
formulate and bottle its
products with a low
number of employees
and support staff. DPS
requires the same up to
date automated systems
of its select third-party
bottlers. This automotive
system requires a relatively low number of employees to feed it raw

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materials, and resources to produce the end product. It can
manufacture several flavors and unique beverages simultaneously,
with only a few minutes of employee re-calibration and uploading
manufacturing data into the machinery to begin the next
manufacturing process. These machines notify and alert bottle mix
variations, quality control measures, safety, and alerts to deviations
outside the limits set. These abilities provided by the machines allow
for employees to keep a high level of supervision of manufacturing
over products that meet the demands of high quality, low variations,
and high volumes.
f. Environmental Sustainability:
Environmental sustainability is not only a social responsibility to DPS,
but also an opportunity for DPS to help reduce their footprint on the
environment. They employ a “reduce, reuse, and recycle” program
to recycle resources that can be returned to the market for reuse.
(www.DRPepperSnappleGroup, 2014) They actively recycle
aluminum, plastics, paper, and other materials to reduce landfills and
return resources to the market. This allows DPS to make a difference
in the communities that they operate in. They have recycled and
diverted approximately 30,000 tons from waste disposal sites. This
also affords DPS with an opportunity to diminish cost in waste, by
recycling aluminum, plastic, and other materials. The recycling value
of unusable materials can be transferred into cost savings for
customers by reducing the cost of materials through lower depletion
of resources, and through replenishment of cost from funds received

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from recycled reusable wasted materials. In many ways this will help
DPS with cost reduction, and community/consumer appeal.
g. Current Operations Analysis
As of the fourth quarter in 2013 Dr Pepper Snapple Group “reported
net sales were flat. Reported income from operations was $1,046
million, compared to $1,092 million in the prior year period. Core
income from operations was $1,123 million, up 3.7% compared to
the prior year period. For the year, the company reported earnings
of $3.05 per diluted share compared to $2.96 per diluted share in the
prior year period. Excluding a $16 million unrealized commodity
mark-to-market loss in the current year and a $17 million unrealized
commodity mark-to-market gain in the prior year period, and certain
items affecting comparability in both years, Core EPS were $3.20
compared to $2.92 in the prior year period.”
(News.drpeppersnapplegroup.com, 2014)
CEO, Larry Young reported that Dr Pepper Snapple group
was able to remain focused and execute the Strategy for DPS over
the last year, even during challenges. DPS Continues to gain
distribution availability across many key brands in the corporate
network, allowing DPS to hold dollar share in the highly competitive
Market of carbonated soft drinks and the Rapid Continuous
Improvement program that has strengthened the organizational
capabilities of DPS in the Americas. While the Operations
Managers/Supply Chain Presidents do not hold strategic decision-
making, they provide valuable input of the current operations of their

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respective distribution areas. Ultimately the role of the Supply Chain
Presidents is to implement the strategic plan for the Operations of
DPS.
During 2013’s fourth quarter DPS’s Bottler Case (BCS) Sales
has declined 2% overall, with carbonated and noncarbonated
beverages. U.S. and Canada volume per BCS decreased 2% and
South America increased 3% BCS. DPS is maintaining a distribution
efficiency of 98% respectively in the United States, 92% respectively
in South America, and 88% in Canada, maintaining a balanced
inventory across DPS bottling and distribution networks, with the use
of DPS Bottling plants, Transportation networks, Distribution
Networks, and third party additions to these networks. The use of
PepsiCo for help in this area has greatly extended the reach of DPS
operations in the United States, while maintaining reduced cost in
accordance with DPS third Party Bottling and Distribution policies.
DPS requires that all third party Bottling and Distribution companies
insure alignment with DPS mission, and strategy. DPS also only
considers third party operation from those vendors that can do what
is needed for a cost less than that of what it would cost DPS to
perform the same operations.
The key issue affecting DPS’s BCS is the efficiency of DPS Canada
distribution efficiency. Their bottling plants, hubs, and warehouses
are located in one location that cares for a large region of consumers
and retailers. During the winter it becomes harder for DPS Canada to
fully service the market. Secondly, the U.S. Market is saturated with

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the top two competitors in the market, leaving DPS with little shelf
space due to DPS’s reduced popularity, greatly effecting DPS BCS in
the United States.
5. Human Resources Management (HRM)
Dr pepper Snapple Group currently employs a Human Resources
Management team that allows them to control and set up an efficient work
force. In order to do so, they need to create strong employees ready to
serve their customers. The objective of Human Resources Management is to
create good employees with high skills and
strong moral values. DPS conducts
workshops for potential employees to train
and learn before they start working with the
company. The strategy is that they welcome
all people and recruit individuals around the
world so they can get viewpoints from all
sorts of different individuals. An important
component to the successful
implementation of Human Resources
Management is to ensure the highest level
of performance by properly recruiting and
training the correct individuals.
DPS’s highest objective in regards to
Human Resources Management is to train
its employees. This is important because it instills the values of DPS and
also provides employees the proper protocols in accordance to company

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guidelines. This program helps employees by spelling out the quality of
work employees are expected.
The company supports their employees and leaders to become more
involved with the company and expand their understanding of their
individual cultures into DPS culture awareness workshops. They also work
with cross-functionally to solve business challenges. DPS is committed to
maximizing organizational effectiveness and individual contribution through
the diversity in the workforce. Every employee has equal opportunity and
rights in the work environment. DPS welcomes all their employees
disregarding color, race, national origin, sex, ancestry, creed, age, religion,
gender, marital status, disability, military status, medical condition, genetic
information, sexual orientation, or any other status protected under the
federal law. This applies to everyone in the company including hiring,
recruitment, compensation, promotion, benefits, termination, discipline,
and all other privileges, terms, and condition of employment.
6. Information Systems (IS)
Information systems are critical towards managing and organizing data. Dr
Pepper Snapple Group currently
employs information technology
that allows them to organize and
mitigate risks efficiently. Most
businesses aren’t able to fully
customize systems tailored to their
unique visions. By doing so, Dr
Pepper Snapple Group is actually able to better define risk management
strategies more in line with their business missions and objectives. Dr.

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Pepper Snapple Group employs Aon’s RiskConsole, which has the
capabilities to analyze massive amounts of data and report the most viable
options to adapt to changing trends. An important component to the
successful implementation of this information system is having accurate
data, identifying cost components and transmitting vital options to top-
level executives.
These strategies, policies and programs are not clearly stated and are
rather more implied from performance and budgets. While the RiskConsole
does provide upper management with a wide array of alternatives,
ultimately it is up to individuals to select which strategies to implement. The
information system is only responsible for outputting analyzed data while
providing options and alternatives.
The information systems are consistent with the corporation’s mission,
objectives, strategies and policies because RiskConsole analyzes all aspects
of the business infrastructure. It factors in the adapting business climate Dr.
Pepper Snapple Group must compete in to contend with the internal and
external environments. Prior to this, Dr. Pepper Snapple Group had to rely
upon many sources such as third parties but now with RiskConsole it is easy
to depend on a single reliable source for data.
The corporation is doing very well in terms of providing a useful
database, automating routine clerical operations and providing information
necessary for strategic decisions. DPS’s information systems is now
responsible for identifying and analyzing risks for all 24 manufacturing
facilities, 200 distribution centers and 20,000 employees. Pertinent to this
issue includes consolidating coverage and losses spanning across the entire
organization.

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The trends that emerged from this analysis include the advantage of
being better able to control risk. Previously, information had to manually be
uploaded into the IS, but now with the implementation of Aon’s
RiskConsole, information is automatically uploaded in the same format with
automated data transfers on monthly, quarterly or an annual basis.
These trends have had an enormous impact on past performance
because before the implementation of such an advanced IS, Dr Pepper
Snapple Group had to reach out to each of its third party members to
retrieve information. After this information was retrieved, it would have to
be formatted and uploaded manually into the system. However, now since
all these processes are automated with the use of Aon’s RiskConsole, Dr
Pepper Snapple Group can focus on the logistical aspects of the business.
The analysis does support the corporations past and pending strategic
decisions of striving to be the best beverage business in the Americas.
Through efficient information systems, Dr Pepper Snapple Group is able to
focus on its primary business strategy while reducing overall risk for the
organization.
The IS does provide the company with a competitive advantage because
many businesses do not rely upon a sophisticated IS such as RiskConsole.
Most businesses have a IS manager responsible for ensuring information
and data are up to date and reliable.
Dr Pepper Snapple Group holds a firm grip in managing its risks, but
many other businesses such as Pepsi and Coca Cola also implement third
party information systems that are automated. These automated
information systems also include the ability to analyze and disseminate data
while providing the best possible options in accordance with internal and

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external data. Dr Pepper Snapple Group does not have a global IS because
of the fact that it conducts it business only in the Americas. However, it
does have operations that span into Mexico, which is also governed by
Aon’s RiskConsole systems. The role of the IS manager in the strategic
management process is to oversee all computer system hardware and
software are operating properly and updated. Previously, Dr Pepper
Snapple Group had an IS manager responsible for these tasks, but now with
the implementation of RiskConsole, Aon electronic solutions now holds
those responsibilities.
H. Summary of Internal Factors
The most important current factors to the company and industry are DPS’s
strengths of Research and Development (R&D), and Sustainability Initiatives.
R&D is DPS’s core strength. Through the innovation of their R&D, DPS has
developed diverse product and brand lines to service their markets. These
brands are able to serve the wide variety of consumer needs and tastes; which
provides DPS with higher competitive power against it competitors in the
industry. DPS Sustainability Initiatives are key too not only DPS but also the
industry. As waste fills landfills and pollutes the environment, the resources
DPS and the industry uses are continually being depleted. Currently the
industry is concerned with the amount of drinkable water for use in
manufacturing and the amount of waste the industry and their products
containers and packages are contributing to the landfills. Each company is
looking for better ways to manufacture their products by using fewer resources
and reducing waste. These initiatives for each company is greatly contributing
to cost reducing practices. If DPS is not on board with sustainability, it will not

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be able to competitively keep up with other firms due to cost and the
reduction of resources available; making sustainability the most important
future factor for DPS and the industry,
The most important weaknesses that DPS is facing are DPS’s reliance on
PepsiCo for distribution and Product Availability. Currently DPS has a fraction
of the shelf-space available in retail locations. Their reliance on PepsiCo has
caused DPS to be able to deliver products more effectively, but DPS has not
been able to use the advertising on distribution trucks, on fountain dispensers,
and in stores due to their reliance on PepsiCo. Customers continually think of,
DPS, as a PepsiCo brand. Their inability to remain differentiated from PepsiCo
is causing DPS to lose attention and shelf-space. If DPS wants to remain a
separate entity from PepsiCo, they need to differentiate from PepsiCo. The
future of DPS is dependent on their ability to be different.
V. ANALYSIS OF STRATEGIC FACTORS (SWOT) (See Appendix
C for SFAS Chart)
A. Review of Mission and Objectives
The current mission and objective are appropriate in light of the key strategic
factors and problems. The current mission is to be the best beverage business
in the Americas. As the objectives are to create a better environment and
community for all consumers because we all share the same Earth. According
to a strategist, Richard Rumelt, a good strategy is often unexpected due to the
fact that most companies do not have one. It is said that good strategies are
obvious and simple. They are built to resolve critical problems, where their
purpose is to overcome a challenge that involves many analyses and thorough

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planning. It should focus on solving the fundamental issues. By focusing on
improving consumer’s lifestyles through environmental sustainability and
improving our healthy product lines, we are slowly getting closer to our
mission. According to Cynthia Montgomery from the Strategist, change is
constant. It is said that an effective strategy is based on the realization and
comprehension that change is continuous and organizations should change and
adapt accordingly to the modifications in order to retain their relevancy. As
changes are constantly made, it is important that a strategist leads the
company through all the ongoing changes. DPS recognizes that consumers are
heading towards living a healthy lifestyle, and it adapts to it. It began creating
healthier drinks such as the 10 Line, where sodas are ten calories. It also sees
that eating well is simply not enough, consumers must also live well. As a
result, they created programs that added value to the company, such as Let’s
Play, ACTION Nation, and the Five Year Environmental Sustainability Plan. By
creating a better living environment for consumers, DPS is able to adapt to the
changes and be consistent with consumer’s lifestyles.
The mission and objectives can be changed to benefit the firm and give it a
greater competitive advantage against Coca Cola and PepsiCo. As of now, Dr.
Pepper Snapple Group’s mission is to be the best beverage firm in the
Americas. However, this goal is small compared to its leading competitors. In
order to rise above its competition, DPS needs to consider globalization. By
globalizing its operations, it can expand and penetrate into a diversity of
market segments. If DPS chooses to adopt this, it can expect to be a strong
contender against its primary competition. It can expect to increase market
share abroad while also increasing its annual revenue. However, one key factor

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hindering this is all the valuable resources and coordination it requires to
expand outside of its current market.
VI. STRATEGIC ALTERNATIVES AND RECOMMENDED
STRATEGY (See Appendix E for TOWS Chart)
A. TOWS Matrix for Dr Pepper Snapple Group, 2014
B. Strategic Alternatives
1. Strength/ Opportunity Alternatives
a. Take advantage of research and development investments to
enhance leading brands, diversify new categories, and
enhance healthy brands
PRO: Continued investments in R&D will improve the quality of the
leading products, improve efficiency in manufacturing, and
Sustainability Iniatives Lack of globalization
Brand diversity (Portfolio)
Employee basse
Strong brand Distribution Net vs Prime Competition
Brand Rep Difficulty in decision making
Lack of shelf space
R&D Lack of distribution in Canada & Central/South America (wt1)
Internal bottling Too many brands
Competition of internal brands (wo1)
Reliance on Pepsi for distribution (WO2)
Rapid continuous
Improvement initiative
Marketing to new
Streghten cola
Enhance position as "cola alternative"
Expansion of distirbution outside of USA (WO2)
Acquistions: -Bevarage companies, -Bottlers/distribution (wo2)
Diversifying new categories(?)-Sports drink, -Water, -coffee, -energy drink (so2)
Enhance top brands (so1)(wo1)(wo2)
DP/7UP bottling of west (wo2)
Enhance healthy brands (SO1)
Health concerns
Resources & sustainability (st1)
Labor costs (st1)
Competitive price- comp. lower profit margin
Strengths Weaknesses
WT1: Increase product availability in new Americas (Canda & South/central
Amerca) through expansion of distribution network tapping into markets
untouched by competitors
Competition: -Coca-Cola, -Pepsi/ 66% of revenue from americas, -smaller companies
(wt1)
ST2: Use R&D and brand diversity to introduce cost efficient, at
home beverage dispenser, offering all of the DPS brands for
the machine. Takes advantage of a market untouched by
competition and has only limitied competition. "Keurig for soft
drinks. (RECOMMENDED STRATEGY)
WT2: eliminate weaker brands and enhance marketing and pricing strategies
to eliminate threat of generic brands
Taxes (Government) (st1)
Generic Brands (wt2)
Threats ST1: Improve efficiency and reliance on resources through the
5 year sustainability; decreasing tax exps., labor costs &
resource expense
Opportunities SO1: Take advantage of R&D investments to enhance leading
brands, diversify new categories, and enhancing healthy
brands
WO: Eliminate smaller brands to enhance leading brands
WO2: Weaken reliance on Pepsico & 3rd parties to increase product
availability, improve brand position to increase distribution outside of the US
and enhance leading brandsSO2: through R&D and susatainability initiatives create &
disburse innovative new vending & fountain machines to
Product availability (wo2) (wt1)
Brand position and Management (wo2)
Wide geography manufacuturing and disribution
"Constant improvement Program"
13 and 14 top brands #1 or #2 in worldwide category
TOWS
MATRIX

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ultimately lead to higher revenue and brand enhancement. To
be the best beverage company in the world will require
regular R&D to stay current with the market. This also allows
DPS to enter into markets it currently either does not have a
position or has a weak position, such as the sports drink
industry, growing energy drink industry, and bottled water
industry. Finally, we live in a nation that is moving towards a
more health conscious lifestyle, and for DPS to survive it must
also adapt with these changes. Developing and enhancing
healthier brands, like the Ten Line, keeps DPS current with the
market and the ability to survive as “unhealthy soft drinks”
become more and more scrutinized as unhealthy.
CON: Research and development will be expensive, so it might take
a while for the return on R&D investments to become positive.
b. Through research and development and sustainability initiatives create
and disperse innovative new vending and fountain machines to enhance
top brands, corporate position, and expand product availability.
PRO: With the rising frequency of energy star rated vending
machines and innovative fountain machines, DPS can raise
brand awareness while setting a positive company image of
environmental sustainability.
CON: DPS has much lower capital than the leading competition, and
convincing storeowners and other locations to carry DPS
vending machines instead of Pepsi or Coca-Cola vending
machines will be extremely difficult, if not completely
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2. Weakness/ Opportunity Alternatives
a. Eliminating smaller brands to enhance leading brands
PRO: DPS will gain more market share as the leading brands
generate more revenues.
CON: Eliminating smaller brands may, to some extent, hurt the sales
volume of the company no matter how small the brands.
b. Weaken reliance on PepsiCo and 3rd parties to increase product
availability, improve brand position and increase distribution, therefore
enhancing leading brands.
PRO: DPS is already dedicated to enhancing its route-to-market
through continued expansion within the U.S. by buying
regional and small business bottling and distribution
centers. By expanding in the Canadian, Southern, and
Central American regions, it will also enhance its route-to-
market there as well. Eliminate reliance on third parties will
increase quality control of products and delivery, while
decreasing profits to outside companies, especially
competitors like PepsiCo.
CON: DPS will have to find other sources of bottling supply, which
might lead to greater costs.
3. Strength/ Threat Alternatives
a. Improve efficiency and reliance on resources through the five-year
sustainability; decreasing tax expenses, labor costs, and resource
expenses

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PRO: This will allow for DPS to set a better brand image that is more
concerned with societal issues rather than purely focused on
profits.
CON: Costs to replace inefficient vending machines and retrofitting
bottling and manufacturing plants might outweigh the
benefits received from the initiatives.
b. Use R&D and brand diversity to introduce cost efficient at home
beverage dispenser, offering all of the DPS brands for the machine.
Takes advantage of a market untouched by competition and has only
limited competition. “Keurig for soft drinks”.
PRO: Take advantage of a growing market that has little to no
competition. Currently, only one major brand makes an at home
soda machine, Soda Stream. By entering into this market, DPS jumps
at an opportunity to capitalize before the competition
does. Additionally, if DPS can work out a way to team up with the
already established coffee brewing company Keurig, DPS could use
an already known and strong brand name to market this new soda
machine.
CON: Entering a new and untouched market requires a significant
amount of research and preparations. Even though, competitions are
limited, the company still cannot guarantee high profits since they
have no strength in new areas and there are already some
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4. Weaknesses/ Threats Alternatives
a. Increase product availability in Canada and South/Central America
through expansion of distribution network, tapping into markets untouched
by competitors.
PRO: Decreases reliance on competitors, such as PepsiCo to
distribute our fountain products. By expanding distribution,
we reduce our reliance on PepsiCo, picking up our game,
which brings us closer to our goal and mission of becoming
the best beverage business in the Americas.
CON: To create and expand our distribution centers, it involves a
huge investment and risk, where there is no guarantee that
our profit would be greater than our cost. The cost of
expanding our distribution rather than relying on PepsiCo is a
huge cost.
b. Eliminate weaker brands and enhance marketing and pricing strategies
to eliminate the threat of generic brands
PRO: High risk high reward. Due to the strength of stronger brands,
and concentration on stronger brands DPS will be able to
narrow focus on their strong brands and increase revenues.
CONS: DPS will lose the revenue of weaker brands for the off
chance that they can cover the lost revenue through
enhancement of stronger brands. They are taking a large risk
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C. Recommended Strategy
Recommended Strength/ Threat Alternative b: Use R&D and marketing
strategic to create an at home beverage dispenser, offering all of the DPS
brands as flavors for the machine.
The at home soda brewing market is still in its
infancy. Currently there is only one real competitor in
this market, the Soda Stream. As it was the first to
introduce the product, it does have a solid position.
The disadvantage that the Soda Stream gives to
consumers is the lack of brand named beverages
usable through the machine. This is where DPS can
take advantage of this rising market. By offering a
similar or better version while providing flavors of the
over 50 DPS brands, we can offer a convenient, cost
friendly, product that provides the tastes and flavors
consumers love about DPS.
Another major advantage to this strategy is that DPS’ two biggest
competitors; Pepsi & Coca-Cola have no presence in this market. They neither
sell their flavors or sell at home brewing machines. This DPS an opportunity to
get there first, be the first to promote this new product before they have a
chance to gain a position.
This also provides consumers with a discount on the beverages they love.
By brewing at home, they save money on containers, beverage taxes, and
disposal of spoiled or old drinks. With the new at home brewer, you can make
the soda you want right when you want it, without worrying about wasting
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There is also an opportunity to work with Keurig Green Mountain, Inc. They
are the creators of the most popular brand of at home coffee brewers today.
By teaming with this already established at home
brewing company, we can utilize their strong brand
name to help push the sales our new soda machine.
Consumers will see the Keurig logo, know that the
coffee makers have an amazing reputation, and be
intrigued and curious about also owning a Keurig
soda machine as well.
Finally, there is a sustainability initiative that
comes with the new machine. By allowing consumers to make their own drinks
into their own containers, DPS can drastically cut down on reliance on
commodities such as drinking water and plastics, while drastically decreasing
production waste.
VII. IMPLEMENTATION
A. Implementation Programs
Implementation is the process that turns strategies and plans into actions in
order to accomplish strategic objectives and goals. It has been said that
strategy implementation is as important, or even more important, than a
company’s strategy. Strategic implementation is the activities performed
according to a plan in order to achieve an overall goal. For instance, a business
strategic implementation may involve developing and executing a new
marketing plan to increase the company’s sales. As for Dr Pepper Snapple
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to further market our products. Some programs that will be implemented to
help us reach our goals are to develop flavored syrup that can be delivered
directly to consumer’s homes, to create mobile applications that allows
consumers to monitor or manage the device and order supplies, to create a
division to develop a Keurig soda machine, to launch opportunities that
encourage consumers to create and suggest new flavors, and to create
marketing campaign to promote the new Keurig machine.
B. Procedures
A new operating procedure will definitely need to be developed in order to
accommodate Dr Pepper Snapple Group’s strategy implementation to expand
its distribution and leading brands. Some procedures that will be taken in order
to implement the programs are to team with Keurig to utilize their established
brand name, to create the best and low cost machine through Research and
Development, to market and research to find out what flavors and brands to
promote, and to establish a new manufacturing process for creating smaller
packaged syrups.
C. Action Plans
1. Program objective: Customer
Dr. Pepper Snapple Group’s program objective is to focus, develop, and
implement a marketing campaign for Dr. Pepper Keurig soda fountain,
application program as well as a direct buy and delivery program. The
program activities consist of seven unique processes. One of the program
activities includes identifying the best three possible advertising agencies
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advertising agencies from the beginning to the end of September. At the
beginning of October until the fifth of October, potential agencies will be
discussed with upper management; where the final decision on the top
three agencies should be decided by the fifth in order to move onto the
next program of determining specifications for advertisement and contact
agencies on the sixth of determining specifications for the advertisements.
If everything goes as planned, a draft for the advertisement request should
be done on October 8th and the advertising agencies will be contacted the
following day. The third program activities are to ask for bid and proposal
for new advertising campaign to be submitted to the Marketing Manager.
The first action plan is to prepare proposals for advertising agencies
starting from November ninth until December ninth. Beginning December
tenth, the next step is to present the proposals for advertising agencies.
The fourth program activity includes selecting the best proposal for a
new ad campaign to be submitted to the marketing manager. Beginning
December fifteenth, the marketing manager will select the best proposal,
which is imperative towards getting the product on the correct path. The
following day the manager will meet with the agency and inform the others
of the decision made. While the manager makes decisions, it is necessary to
inform others of the logic and reasoning behind the selected proposal. The
fifth program activity consists of fine tuning and preparing for all
advertising media. The first step towards this process will take place on the
December 16th and last until January 4th, which begins with fine-tuning the
proposal. The following day will involve presenting the final proposal and
ad campaign to the Board of Directors for review. After the review is
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the campaign the following day. The sixth program activity is to air the ad
on radio, TV and promotions in stores, billboards and other promotional
opportunities. After the proposal has been created, reviewed and
implemented, it is now time to select the most viable media outlets to
disseminate the ad campaign. Beginning February first, we will begin to air
the ad on TV and radio. Next, we will display the advertising in stores to
promote the new fountain. Finally, we will display advertising in other
selected outlets.
Lastly, the seventh program activity will consists of measuring the
results of campaign in terms of view, recall and initial sales. The first action
step for the program will begin on April first, by gathering recall data of all
advertising media. Then, an evaluation of the sales data will begin the
following day until April tenth. A preparation of analysis for the advertising
campaigns will begin between the tenth until the fifteenth. In conclusion,
these are the seven program activities and their steps in order to achieve
DPS’s objective of marketing a campaign for Dr Pepper Keurig Soda
Fountain, App Program, and Direct Buy and Delivery program.
2. Program objective: Internal Business Process
DPS’ program objective for the internal business process is to improve
distribution and route to market operations. This will be accomplished
through six program activities. The first activity will be to identify strengths
and weaknesses of current manufacturing and distribution processes. The
action steps that will be taken during this program activity will be to create
a visual layout of the current distribution and route-to-market process and
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The next program activity is to choose two teams of DPS employees to
create alternative plans. The steps to accomplish this activity are to employ
top DPS performers in supply chain management and to ensure that the
plans created exploit strengths to improve weaknesses.
The third program activity is to compare existing and proposed
plans. This will be accomplished by putting all three distribution and route-
to-market plans side by side for comparison and then evaluating them
based on time to market, fuel consumption, emissions and resources
expended. The next program activity is to present the winning plan to top
management. The team that produces the most efficient alternative to the
current distribution and route-to-market plans will give a presentation of
their findings to top management. The program will be put into action upon
approval of top management. The next program activity is the
implementation of the approved distribution plans. The action steps that
will be use to implement this activity are to give briefings on new
distribution plan to applicable personnel and make necessary changes to
distribution process. Finally an evaluation of the new plans efficiency will
need to be completed. This will be done through a before/after comparison
of time to market, fuel consumption, emissions and resources.
3. Program objective: Learning and Growth
Dr. Pepper Snapple Group’s program objective for learning and growth
includes creating and implementing a direct buy/home delivery program.
The objective contains 7 separate program activities. The first program
activity is to design and determine the needs for the program. The first
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networks, which should begin on June tenth until the end of the month. At
the beginning of July, the top three alternatives should be picked. The
request for alternatives to draft and submit proposals should be completed
by the second of July. The following program activity is to determine
distribution network that should be used. The first action plan for this is to
begin drafting the alternative proposals between July 2nd till the thirtieth,
and the proposal will be submitted the following day. At the beginning of
August to the eighth, operations manager will select the best proposal and
submits their decision to management. The third program activity is to
establish policies and procedures. A draft policies and procedures for
implementation will operate between the tenth to the end of August. A
submission to the upper management will be submitted at the beginning of
September. On the second to the sixth, policies and procedures will be
refined.
The fourth program activity includes initiating stock and preparing for
distribution. From September six to the fifteenth. This first begins with
determining initial stock needs. The following day, we will acquire the initial
flow of stock. This entire process will be succinct with preparing for full
distribution until January. The fifth activity consists of beginning advertising
campaign and implementing an ordering application. This step involves
implementing an ad campaign, which will begin on February first. The sixth
activity is to distribute to customers. This process is about planning and
coordinating distribution to our consumers. Lastly, the seventh activity is
evaluation. We must begin by collecting sales data and distribution data.
This will give us a more detailed look and clear insight as to what is
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to the end of May. The following day, we must evaluate the data. The raw
data must be processed in order to provide useful and valuable information.
B June eleventh, we will present our findings to upper management.
4. Program Objective: Mobile App
In effort to reach a vast array of consumers and allow for a more virtually
convenient experience, Dr Pepper Snapple Group will provide users with
the ability to utilize a mobile app in conjunction with the Keurig
machine. We aim to give consumers the accessibility to virtually monitor
and manage their machine wherever they are. Giving users the ability to do
so gives them convenience for the fact that they can essentially control their
machine without having to physically be there. The mobile app will have a
simple to use interface in effort to appeal to a broad range of consumers,
which our target age range is from 13-50 years old. The app will consist of
multiple options including the ability to monitor dispensing usage, which
will automatically alert users when to refill ahead of time. For users’
convenience, we will establish a subscription to users who would like the
opportunity to be notified via mobile app when new flavors are out or
special pricing is available. The advertising campaign will incorporate
promotion of both android device users as well as Apple users.
The necessary action steps we will take include researching and
developing the actual app to be easy to operate. Surveying consumers’
choice of what app format to use will be used to create the most universal
template. The app will be appealing to our targeted consumers through
hiring a sophisticated design team. A developing team will be hired to
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will enable capabilities of sending information automatically from the
machine to the app. Easy to understand videos will be created as
directional steps to follow to assist our users. We will hire an advertising
agency o promote the app to impact both Apple users and Android
users. We understand that Apple users and Android users have different
preferences, therefore we’ll be sure to assist to their specific taste be
establishing custom interfaces in accordance with their operating
server. Within the app itself, users will automatically be prompt with the
option to sign up for the free subscription option upon downloading the
app. A team will be established to manage the subscription and
continuously update as necessary with promotions as well as potential
savings for our consumers.
5. Program objective: Financial
Dr. Pepper Snapple Group’s program objective for Financial. The objective
contains 4 steps. The first one is design and determine how to increase the
profit. First, The company will come up with promotions to try to increase
their profit. This program can start at the end of the first period so DPS can
know what promotion they should come up with in order to increase their
profit. Second, expand more about company activities through R&D by
advertising so consumers can buy more products from DPS. To show what
the company has, this will increase the profit and reduce a cost for
advertising in other ways. This program will help DPS to make more profit
and see the weakness of the sales. The program should start at the
beginning of the second period. This can help financial become more
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Third, DPS should try to increase stock value per share, this will enable
DPS to control their budget through their stock and maintain the position
from stock. In order to do that, DPS will contribute a total of 100,000
volunteer hours and attain an annual giving level of $10 million in charitable
cast donation, with the majority of support in finance. This will help DPS
become the first beverage in the Americas. This program will start between
second and third period so DPS can help their consumers on financial and
make them trust in DPS brands. Lastly, DPS needs to evaluate on their
performance so they can know how well they perform throughout the year.
This can help the board and company see the strength and weakness from
the number of revenue. This evaluation can help on how to improve the
sales and DPS can see what they need to fix to make it better. This will help
DPS fix from their mistake and make it become better in the next year. This
program can start at the end of fourth period so they can evaluate from the
beginning until the end of the year. At the same time, DPS can implement
their program objective and make it stronger for the next year program.
The DPS team will be help and established to manage the financial for our
consumers.
6. Program Objective: Environmental and Production Resource
Sustainability (WRC)
Dr. Pepper Snapple Group’s (DPS) program objective of Environmental and
Production Resource Sustainability is to help DPS reduce resource
consumption, reduce waste, and recycle waste for future resource use.
Currently DPS is concerned with the amount of solid waste from their
manufacturing going to landfills. This is not good for the environment nor

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DPS' cost efficiency. DPS wished to increase the percentage of material use
per unit, and reduce the overall waste. DPS also realizes that resources are
being depleted and are in need of replenishment. Through the recycle and
reuse that resource material instead of sending it to landfills, they can
replenish resource supplies available and reduce cost of production. These
actions will also lead DPS into a new position within their customer’s minds-
Environmentally friendly. While this is a political position, it is the right way
of doing business, plus it helps DPS remain competitive through cost
reducing practices like this.
This program is a part of our learning and growth strategies and
requires 5 Action Steps- Evaluation of current production resource use,
policy, program, and procedure development, employee training,
implementation and review. From evaluation to implementation this
program should take an approximate time frame of seven months. The
Director of Manufacturing will be in charge of this program and the Director
of Operations will review the success of the program. To be considered
successful this program must reduce the cost of production by the cost of
implementation and 10%. It also needs to increase material use efficiency
by a min of 5% annually in all process of manufacturing. Lastly, the program
must reduce DPS solid waste discarded by 50%. These numbers may seem
extreme, but the environment requires extreme action to insure we will still
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7. Program Objective: R&D Design and Build for Keurig soda
dispenser
Dr. Pepper Snapple Group’s (DPS) program objective to use R&D to design
and build a Keurig soda dispenser is an internal business practice objective
to help fulfill the business strategy of DPS. This dispenser is the next big
thing in the market, and it offers environmental stability by reducing
packaging needs, and reduces distribution of in home products from
consumption. Customers will be able to produce more beverage per
volume through the machine than a six or twelve pack of beverage will
offer, and at a reduced cost.
This is a highly feasible program that requires 7 Program activities:
Research, team up with Keurig, contract licensing, develop dispensers, test,
and distribute. This program is a supplement to other R&D programs and
Marketing Programs that are aligned with the development of this product.
The biggest obstacle in this program is the DPS ability to team up with and
use the brand Keurig. We believe that due to their success in coffee
dispensers, their brand will help offer greater success in this new product
area.
D. Matrix of Change
The Matrix of Change is a tool that is used to help managers anticipate the
complex interrelationships that surround change, and identify critical
interactions among processes. It provides a simpler understanding of the
issues of feasibility, sequence, location, pace, and stakeholder’s interest. In
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change should proceed, the order that the changes should take place, and
whether the systems that were proposed are stable and coherent.
1. Existing Practices
a. Sustainability & efficiency: It is the practice about operating responsibly
and minimizing our environmental impact and having a positive influence
on society.
b. Corporate philanthropy: Through grant giving, program partnerships
and disaster relief, DPS is committed to driving meaningful change by
doing good things with flavor.
c. Health & wellness: DPS is going to provide a full range of products, with
at least 50% of innovation projects in the pipeline focused on reducing
calories, offering smaller sizes and improving nutrition, which encourage
people to adopt into active lifestyle and fitness.
d. RCI: Rapid Continuous Improvement (RCI) efforts will focus on safety,
quality, delivery, productivity and growth. All business activities align to
these five key areas, and improvements within them will create value not
just for DPS, but also for customers and other stakeholders. Almost
every location and function within DPS will house a full-time RCI
professional.
e. DPS campus/ call to action: Getting employees active in taking actions
to win a changing market. In details, it is the program to get employees
accountable, customer-centric, transparent and honest, and also keep
them unified behind our vision and purpose. The program includes a
daylong training course designed to educate employees on every aspect
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more than 6000 employees at more than 75 locations have taken the
class throughout the U.S., Canada and Mexico.
f. Let’s play: DPS aims to remodel and build more playgrounds for children
to encourage a healthy and active lifestyle.
2. Target Practices
a. R&D design and build for Keurig: DPS plans to license with Keurig to
develop a soda stream style machine using DPS products for consumers
to use conveniently at home.
b. Create and implement direct buy/home delivery program
c. Develop mobile app designed to establish convenience for the user:
With the mobile application, consumers are able to keep track of their
machine and make orders when it is needed.
d. Environmental and production resources sustainability: DPS currently
has a Five Year Environmental Sustainability Plan that started back in the
year of 2007. If everything that was planned is achieved or shows great
progress by 2015, we will continue to implement and enhance the
sustainability through improvement and reevaluations.
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VIII. EVALUATION AND CONTROL
A. Measuring Performance
The current information system is capable of providing sufficient feedback on
implementation activities and performances. For instance, RiskConsole by Aon
has the capabilities of data aggregation and providing viable solutions to
burning key issues. However, it is not proficient at measuring critical success
factors. Top management and executives must personally analyze the external
environment and then decide which options are the most beneficial for the
business. The performance results are automatically mapped out and split into
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Management can use these separate areas to pinpoint critical issues afflicting
each unique division. The information that is collected is considered timely
because it is analyzed and aggregated on a monthly basis.
B. Balanced Scorecard
The Balanced Card is a business tool that gives managers a better
understanding of how their companies are really doing. It supplements
traditional financial measures of performance from three different
perspectives, those of customers, internal business processes, and learning and
growth. It was developed because companies around the world transformed
themselves for competition that is based on information, their ability to exploit
intangible assets has become far more decisive than their ability to invest in
and manage physical assets. The balanced scorecard supplements traditional
financial measures with criteria that measure performance from three
additional prospective- customer, internal business processes and learning and
growth. This enables managers to track financial results while simultaneously
monitoring progress in building capabilities and acquiring the intangible assets
they need for future growth. It also introduced four new management
processes that separately or in combination link long-term strategic objectives
with short-term actions. The processes are translating vision, communicating
and linking, business planning, and feedback and learning.
This Strategic Plan’s Balanced Card for DPS is centered upon the current
mission- To Be the Best Beverage Company in the Americas, and the corporate
strategy of this plan- To expand Company Activities, and the business strategy
to use R&D and brand diversity to introduce cost efficient, at home beverage
dispenser, offering all of the DPS brands for the machine. Takes advantage of a

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market untouched by competition and has only limited competition; "Keurig
for soft drinks". The objectives for each aspect of the scorecard- Financial,
Customer, Internal Business Process, and Learning and Growth, are aligned
with each other and build upon each other to ultimately Increase Shareholder
and customer confidence in DPS. Employee moral builds Employee confidence
and they become more willing to make suggestions to help the company be
more proficient, efficient, and increase product quality; which also leads to
higher more moral. Employee suggestions lead to company and environmental
sustainability which also increases morale. Company and environmental
sustainment allows DPS to operate more efficiently, increase productivity,
reduces cost, reduces waste, and allows the DPS to use more resources to
improve products and process; which leads to high quality, lower defects, and
lower rework; which provides the customer with higher satisfaction due to
quality and cost reduction. As customers become more satisfied and purchase
more product, DPS gains the ability to gain more shelf space, allowing for
more products to be available to our customers for consumption driving up
sales, revenue, and profits; which gain shareholder confidence, increasing DPS
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1. Finance
Objective1: Maximize shareholder’s wealth to the highest level possible.
Measure 1: Increase stock value per share
Target 1: Increase price per share from $57 to $65 per share by the end of
fourth quarter of 2014
Initiative 1: Expansion of company activities increasing R&D activities and
developing innovative new products, increasing revenue and
decreasing cost through product innovation.
Objective 2: Maximize Shareholders confidence
Measure 2: Increase stock Value Per Share
Target 2: Increase price per share from $57 to $65 per share by the end of
fourth quarter of 2014
Initiative 2: Expansion of company activities increasing R&D activities and
developing innovative new products, increasing revenue and
decreasing cost through product innovation.
Objective 3: Highly Profitable
Measure 3: Amount Dividend increase relative to Profit Increase
Target 3: Profit increase by 10% annually, Dividend increase by 10%
annually
Initiative 3: Expansion of company activities increasing R&D activities and
developing innovative new products, increasing revenue and
decreasing cost through product innovation.

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2. Customer
Objective 1: DPS Brands to become the preferred beverage and flavors
Measure 1: Market Industry Report, Industry Brand Rank
Target 1: 14 DPS Brands rank #1
Initiative 1: Product quality and position improvement
Objective 2: Highly available and Exposed
Measure 2: Increased Shelf Space available for DPS and Increase Marketing
media output
Target 2: Shelf space available increase by 20% and Marketing media
output by 30%
Initiative 2: Marketing
Objective 3: Brand Choice Availability
Measure 3: Increased Shelf Space
Target 3: Shelf Space available and used Increase by 20%
Initiative 3: R&D for regional Brand Choice and Marketing
Objective 4: DPS is the premier provider of in home soft drink dispensers
Measure 4: Market Industry Report, Industry Ranking, for In Home Soda
Dispensers and Revenues
Target 4: #1 ranking in Home Soda Dispensers and Revenue increase by
20%
Initiative 4: R&D Co Op with Kuerig- Soda Dispensers

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3. Internal Business Process
Objective 1: Manufacturing and Bottling Productivity, Efficiency, and Zero
Defects
Measure 1: Daily Production Reports
Target 1: a) Increase Daily production by 10%, b) Increase efficiency by
15%, c) Decrease waste by 20%, d) decrease defects by 18%
Initiative 1: Rapid Improvement Initiative
Objective 2: Enhance Distribution and Route to Market
Measure 2: Amount of Third party reliance
Target 2: Decrease Third Party Reliance 100%
Initiative 2: Expand DPS Internal Distribution Network
Objective 3: Product Flavor and Health Innovation
Measure 3: Number of DPS quality Flavors and Healthy Alternatives
available to consumers
Target 3: Increase quality flavors and health alternatives by 4%
Initiative 3: Flavor and Healthy Alternatives R&D
4. Learning and Growth
Objective 1: Environmentally Friendly Production
Measure 1: Reduce DPS Production Solid Waste
Target 1: Reduce Solid Waste by 25% in Production Process
Initiative 1: Environmental and Production Resource Sustainability/ Recycle,
Reuse, Reduce Initiative
Objective 2: Environmentally friendly Distribution Network
Measure 2: Amount of Fossil fuels consumed in Distribution Network
Target 2: Reduce Fossil Fuel Consumption By 20%
Initiative 2: Environmental and Resource Distribution Sustainability

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Objective 3: Process and Procedure Improvement
Measure 3: Operations Annual Cost
Target 3: Annual Operational Cost Reduced by 15%
Initiative 3: Call to Action
ACTION PLAN
Process:
Theme:
FINANCIAL
1. Maximize Shareholders
wealth to highest level
possible
1, 2. Increase stock Value
Per Share
1,2. Increase Price per
share from $57.00 to
$65.00 per share by the
end of fourth quarter
2014
2. Maximize Shareholders
confidence
3. Highly Profitable
3. Amount Dividend
increase relative to Profit
Increase
3. Profit increase by 10%
annually, Dividend
increase by 10% annually
CUSTOMER
1. DPS Brands to become the
preferred beverage and
flavors
1. Market Industry Report,
Industry Brand Rank
1. 14 DPS Brands rank #1
1. Product quality and
position improvement
2. Highly available and
Exposed
2. Increased Shelf Space
available for DPS and
Increase Marketing media
output
2. Shelf space available
increase by 20% and
Marketing media out put
by 30%
2. Marketing
3. Brand Choice Availability 3. Increased Shelf Space
3. Shelf Space available
and used Increase by
20%
3. R&D for regional
Brand Choice and
Marketing
4. DPS is the premier provider
of in home soft drink
dispensers
4. Market Industry Report,
Industry Ranking, for In
Home Soda Dispensers and
Revenues
4. #1 Ranking in Home
Soda Dispensers and
Revenue increase by 20%
4. R&D Co Op with
Kuerig- Soda
Dispensers
INTERNAL
1. Manufacturing and Bottling
Productivity, Efficiency, and
Zero Defect
1. Daily Production Reports
1. a) Increase Daily
production by 10%
b) Increase efficiency by
15%,
c) Decrease waste by
20%, d) decrease defects
by 18%
1. Rapid Improvement
Initiative
2. Enhance Distribution and
Route to Market
2. Amount of Third party
reliance
2. Decrease Third Party
Reliance 100%
2. Expand DPS Internal
Distribution Network
3. Product Flavor and Health
Innovation
3. Number of DPS quality
Flavors and Healthy
Alternatives available to
consumers
3. Increase quality flavors
and health alternatives by
4%
3. Flavor and Healthy
Alternatives R&D
LEARNING and Growth
1. Environmentally Friendly
Production
1. Reduce DPS Production
Solid Waste
1. Reduce Solid Waste by
25% in Production
Process
1. Environmental and
Production Resource
Sustainability/ Recycle,
Reuse, Reduce
Initiative
2. Environmentally friendly
Distribution Network
2. Amount of Fossil fuels
consumed in Distribution
Network
2. Reduce Fossil Fuel
Consumption By 20%
2. Environmental and
Resource Distribution
Sustainability
3. Process and Procedure
Improvement
3. Operations Annual Cost
3. Annual Operational
Cost Reduced by 15%
3. Call to Action
Balanced Score Card
STRATEGY MAP
Measurement Target
BALANCED SCORECARED
1,2, 3. Expansion of
company activities
through R&D,
Marketing and,
Internal Business
Processes
InitiativeObjectives
Increased Accounts Recievable,
Lowered Operating Expence, Higher
return on capital
Employee Morale
Employee Suggestions
Company and Enviromental
Sustainment
Process and Product
Improvement
Customer Satisfaction
Higher Quality, Lower
Defects , & Lower Rework
Increased Divident Paid
Increased Stock
Value
Increased shelf space

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APPENDIXES
Appendix A: EFAS Chart for Dr Pepper Snapple Group, 2014
EXTERNAL FACTORS Weight Rating Weighted Score Comments
Enhance Customer Interactions 0.11 4 0.44
There is an opportunity to expand through
technology and social media to enhance
customer intaction. Opens up a two way route
for information from the consumer to us, and
marketing and promotions from us to them.
Enhance top brands 0.1 5 0.5
Enhancement of top brands will drawl in more
consumer focus
Expansion of distribution outside of USA 0.08 4 0.32
By gaining a better foot hold in distribution
outside of the US DPS can strengthen their
performance abilities and distribute for other
brands.
Acquisitions: Brands, bottling companies,
and distibution centers
0.08 4 0.32
Through acquisitions DPS can gain stronger
brands, and improve their network
Diversifying new categories 0.08 3 0.24
DPS can gain market share of these perspective
markets and gain higher revenues through a
more diversified product and brand portfolio.
DP/7UP Bottling Company West 0.06 5 0.3
DP/7UP west is the last US DP bottling
subsidiary not fully under DPS control.
Marketing to new markets 0.06 3 0.18
New American Markets that are untouched by
the industry provide new consumers without
brand preferences
Strengthen cola brand 0.04 2 0.08
DPS cola RC Cola has lost its appeal with
customers and is in need of strengthening with
in the market
Enhance position as "cola alternative" 0.04 2 0.08
DPS strengths of providing cola alternatives
have given DPS a distinct advantage by
providing alternative products to the norm,
creating a distinction between DPS and
competitors
Health concerns 0.1 5 0.5
Americans have been transitioning to healthier
lifestyles, creating a stigma that soft drinks are
unhealthy
Resources & sustainability 0.09 4 0.36
Resources are in danger of depletion and
threaten sustainability
Labor costs
0.06 3
0.18
Labor cost are on the rise and threaten DPS
ability to maintain competitive pricing
Taxes (Government) 0.04 2 0.08 Increased Taxes threaten price/ cost strategies
Competition: -Coca-Cola, -Pepsi/ 66% of
revenue from Americas, -smaller companies
0.04 4 0.16
Top Competitors own majority of the market in
the Americas
Generic Brands
0.02 3 0.06
Some DPS brands are heavy considered and
compared to Generic Brands
Competitive price- comp. lower profit
margin
0.02 4 0.08
Due to intense competition extensive price
threatens DPS ability to maintain competitivness
and maintain profits
Total Scores 1.00 3.88
OPPORTUNITIES
THREATS

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Appendix B: IFAS Chart for Dr Pepper Snapple Group, 2014
INTERNAL FACTORS Weight Rating Weighted Score Comments
R&D 0.1 5 0.5 Core competency
Sustainability Initiatives 0.09 5 0.45
Through these initiatives DPS replenishes
resources to the market, reduces cost, and
insure future ability to remain competitive
Brand diversity (Portfolio) 0.08 4 0.32
DPS Portfolio gives DPS larger market presence
and consumers increased variety
Employee base 0.05 4 0.2
DPS maintains high quality and talented
Employees, giving DPS higher ability to remain
competitive
Strong brand 0.05 3 0.15
Strong Brands increase company presence,
market position, and consumer recognition
Brand Rep 0.04 3 0.12
DPS has an established a good Brand reputation
that Shareholders and consumers recognize.
Wide geography manufacturing and
distribution
0.04 2 0.08
Gives DPS market advantage and ability to
service multiple markets
Internal bottling 0.03 3 0.09 Helps DPS reduce cost and insure quality
13 of 14 top brands #1 or #2 in worldwide
category
0.03 5 0.15
These brands help DPS maintain exposure,
market presence and allows DPS to remain
highly competitive
"Constant improvement Program" 0.02 5 0.1
Insure DPS increases proficiency, efficiency,
reduce variation and continual improve to
remain cost efficient and competitive
Reliance on Pepsi for distribution (WO2) 0.1 5 0.5
Cost DPS differentiation from PepsiCo in the
market place
Product availability (wo2) (wt1) 0.09 4 0.36
DPS is unable to maintain full availability of their
products due to limited shelf space and reliance
on third party distributers, bottlers, and
manufactures
Brand position and Management (wo2) 0.08 4 0.32
Brand position appears to be decreasing as
more consumers affiliate DPS products with
generic or PepsiCO Product
Competition of internal brands (wo1) 0.06 2 0.12
Each brand DPS offers to consumers adds
competition to both external and internal
brands.
Lack of distribution in Canada &
Central/South America (wt1)
0.04 5 0.2
DPS has to rely heavily on third party co ops,
which increases cost and reduces control
Too many brands 0.04 3 0.12 DPS focus is diverse and concentrated
Lack of shelf space 0.03 5 0.15
DPS brands are not considered to be in as much
demand as competition brands, which affects
availability of products and reduces the number
DPS can place in view of the consumer
Difficulty in decision making 0.02 4 0.08
Leads DPS to fall behind competition costing
market position and decreases DPS ability to
compete effectively
Distribution Net vs Prime Competition 0.02 3 0.06
DPS distribution network is inferior compared to
competitors, which effects DPS overall
competitiveness
Lack of globalization 0.01 2 0.02
Limits the number of markets and revenues
available to DPS
Total Scores 1.00 4.09
STRENGTHS
WEAKNESSES

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Appendix C: SFAS Chart for Dr Pepper Snapple Group, 2014
Short Intermediate Long
S1 R&D 0.15 5 0.75 X X Core competency
S2 Sustainability Initiatives 0.10 5 0.5 X
Through these initiatives DPS
replenishes resources to the
market, reduces cost, and insure
future ability to remain
competitive
W1 Reliance on Pepsi for distribution 0.05 5 0.25 X X
Cost DPS differentiation from
PepsiCo in the market place
W2 Product availability 0.12 4 0.48 X X
DPS is unable to maintain full
availability of their products due
to limited shelf space and
reliance on third party
distributers, bottlers, and
manufactures
O1 Enhance Customer Interaction 0.15 4 0.6 X X
There is an opportunity to
expand through technology and
social media to enhance
customer intaction. Opens up a
two way route for information
from the consumer to us, and
marketing and promotions from
us to them.
O2 Enhance top brands 0.20 5 1 X X X
Enhancement of top brands will
drawl in more consumer focus
T1 Health concerns 0.13 5 0.65 X X
Americans have been
transitioning to healthier
lifestyles, creating a stigma that
soft drinks are unhealthy
T2 Resources & sustainability 0.1 4 0.4 X
Resources are in danger of
depletion and threaten
sustainability
1.00 4.63Total Score
STRATEGIC FACTORS Weight Rating
Weighted
Score
Duration
Comments

125.
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Appendix D: Implementation, Evaluation and Control
Plan for Dr Pepper Snapple Group, 2014
Strategic Factor Action Plan
Priority
System
(1-5)
1 = Top
Priority
Who will
Implement
Who Will
Review
How
Often to
Review
Criteria Used
R&D R&D Design and Build for Kuerig Soda 1 Director of R&D CEO Quarterly Product Consumer reviews
Sustainability Initiatives Environmental and Production Resources Sustainability 2
Director of
Operations
CEO Quarterly
Solid Waste Rate, Recycling Rate, and Resource Rate
of use
Reliance on Pepsi for distribution Improve distribution and route to market operations 2
Director of
Distribution
CEO Quarterly Efficiency rate, and Cost of Distribution
Product availability Create and implement direct buy/home delivery program 4
Director of
Distribution
CEO Quarterly Sales, Revenues, and Cost evaluation
Enhance Customer Interaction Develop mobile app designed to establish convenience for the user 4 R&D Director CEO Quarterly Cost of Implementation vs.. Revenues generated
Enhance top brands
Develop and Implement Marketing Campaign for Dr Pepper Keurig
Soda Fountain, App Program, and Direct Buy and Delivery program.
1 VP of Marketing CEO Quarterly Sales, Revenues, and Cost evaluation
Health concerns
Enhance focus on marketing the innovative and healthier alternatives
DPS is producing and selling. Many of the top brands now come in a
tem calorie version
2 VP of Marketing CEO Quarterly Sales of new products, changes in market share
Resources & sustainability Environmental and Production Resources Sustainability 2
Director of
Operations
CEO Quarterly
Solid Waste Rate, Recycling Rate, and Resource Rate
of use
Implementation, Evaluation and Control Plan

126.
118
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