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Case Study Vitamin Water, Energy Drinks, Other Beverages

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Submitted By jdenaro
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Vitamin Water, Energy Drinks, other Beverages

Case Study 2

The beverage industry has been rapidly growing for many years now. New products are being produced, as well as old products being refined. One of the largest markets thus far, beverages are continuously changing and being tinkered with. We look at a few different types such as, energy drinks, sports drinks, and vitamin-enhanced beverages. With different corporations comes different success factors. Some success factors for the beverage industry consist of rapid growth in category, premium prices, and high profit margins. Coca Cola and PepsiCo have been expanding on numerous different flavors, holding to the same products and production line. By expanding the “line up”, companies can expand their production, as well as profit and the business as a whole. “As consumer preferences shifted during the 2000s, sports drinks, energy drinks, and vitamin- enhanced drinks had grown to become important segments within the industry in 2010.” [Gamble C 76]. Noticing that most of the energy drinks are vitamin based, the growth of these products has been positive. Looking at Exhibit 1, we understand and can see the growth and volume sales over the years between 2005 and 2014. This chart pictures a constant growth based on the growth determined within prior years.
The Five-Forces Model of Competition, is a key analytical tool in organizing a model based on buying and selling. The Five Forces are considered to be: firms with substitute products, rivalry among competing sellers, buyers, potential new entrants, and suppliers. This tool can be used to organize any type of business, for example, if I were to sell PowerAde, my competitors would be Gatorade, vitamin water, and regular flavored water. Because I sell PowerAde, I am competing amongst many different flavors and products, which means I have to sell my…...

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