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Soft drink industry is profitable because of the market strategies, the competition among companies in the industry, and cost associated with their products. For instance, according to Pepsi, they would not be successful without companies like Coca-Cola. On the other hand,…
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Case Study in Strategic Management
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Download file to see previous pages In the beverage industry, both Coke and Pepsi have been able to achieve their annual growth in the revenue of around 10% due to the rise in the consumption steadily, year after year. In the industry, the profits that each of the companies, Coke and Pepsi depend on each other to come up with the profits as there is stiff competitions between them (Coke, 35). The consumptions of additional more gallons than the 52 per day also brought major profits in the beverage industry despite the challenges that the industries went through. There was also the coming up with several more alternative beverage that led to the consumption of more and more profit.
Based on 2009 comparative cost for United States concentrate bottler and concentrate producers had a cumulative income of thirty two percent while bottlers recorder a net income of eight per cent. Cost of Goods Sold is 0.22 dollars per concentrate case and 2.67 dollars per bottle’s case. In the concentrate producers there was blending of raw materials ingredients, were packed in plastic canisters and the n were shipped through the containers to the bottler (Coke, 89). The difference in the profit comes with the difference in the making of the concentration with the concentrates making artificial sweetener while the regular bottlers added sugar or high fructose corn syrup. Some of the significant expenses include promotions, bottler support, promotions, and record research. The bottlers bought concentrate and added carbonated water and sweeteners, canned the final product and then delivered to stores. The concentrates have the plants costing 25 million dollars to the required 50 million to build. The low investment in the production has led to the low profit in the concentrates as compared to the other bottlers.
Pepsi and Coke are the leading competitors in the CSD market. Coke was established in 1886 ...Download file to see next pagesRead More
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