Industry Analysis and Financial Services of Pan America - Research Paper Example

Industry Analysis and Financial Services Introduction Gasolina Urban blend belongs to the alcoholic beverage industry. This industry is a sector that has matured courtesy of its long history of existence. It comprises various companies that market both alcoholic and non-alcoholic drinks. The history of the alcoholic industry dates far back because drinking of beverages has been claimed to be as old as humanity. In 1950, the consumption of alcohol beverages per capita was 18.45l in France and 2.07 l in Netherlands. According to a 1990 poll, it was found out that 64% of men and 51% women above eighteen years consumed alcoholic beverages in the US. According to 2006 statistics in the industry, more than 133 billion litres are sold per year which raised the global revenue to 294.5 billion. Analysis of the industry In analysing the industry, it is critical to understand Panama, what opportunity it offers and the products that are produced in the country. Panama is a country that shows a great diversity in terms of people who live there. Most of the residents come from different countries. A lot of people in Panama prefer beer compared to other beverages. In the year 2011, its production was reported to have grown by 5.1%. The market in panama is worth more than $390 in a year. Another brand that seems to grow and is on the list is wine (Holmes 45). The prices of beer and wine in Panama which are the popular drinks are $35 for each beer and $40 for each wine. When you compare these prices with Gasolina, they prove to be high because Gasolina normally ranges from $7-10. The high prices in panama come due to high costs of living due to its diversity and that it attracts a lot of people. This means that the company will have to increase its selling price in panama in order for it to beat the competition. Gasoline has an opportunity to grow in Panama because it is a new product that is unique in its own way. It is unique in that it has six flavours. It is made with unique spirits which include Caribbean white rum, filtered and distilled vodka, 100% tequila and 100% natural fruit juices. It is easier for outdoor consumption due to its portability. This is because it is packed in 20ml aluminium pouches that even have a straw inside. Its growth is possible due to the diverse cultures in Panama and the uniqueness of the product. With such a product the people of Panama will not find it difficult to pay for the drink at whichever cost. Looking at the industry in general, the market is dominated by few key players which lead to intense competition (Giesbrecht 55). There exists operating uncertainty due to changing consumer tastes. Margins and pricing are often under pressure. It has three leading industries that account for almost 40% of the overall market share. The leading company is Anheuser-Busch. It holds over 20% of the total volume of the market. This company has 14 brands and each generates over 1 billion USD in a year. The company produces global and regional brands, one of them being Corona. It employs about 11,600 people in 30 countries. The company sales majorly come from North America. Another key competitor in the market is SABMiller. In the market ranking, it is among the top five companies in the industry. Its portfolio contains more than 150 brands. Among its brands are international beers such as Pilsner, Urquell and also local brands like Castle Milk Stout. It operates in 75 countries in Asia, Africa, Europe, North America and also South America. Its sales are around 21 billion litres of lager in a year. Coors is another competitor in the industry which is ranked in the seventh position globally. It operates Colorado brewery that that is the largest brewing facility that operates singly. It was the first company to use the aluminium can and it operates the largest plant that produces aluminium cans. Among its products is Coors Light. The industry is a global business that contains several businesses that are multinationals and thousands of small producers. The growth opportunities of the industry are limited which makes it necessary for various companies to diversify their products. There exists a wide range of wine, beer and spirits that are distilled in the market. In terms of demand, the industry portrays some inelasticity through good and bad economic times. Throughout the globe, there has been an overall trend of rising affluence. Premium alcoholic beverages continue gaining popularity in the industry. Beers have higher prices in the industry because of their rich ingredients while small brewers expand in a slow rate. There has been a tendency of large brewers developing premium beers of their own in order not to lose sales. Huge amount of money is invested in marketing and advertising meant to build brand recognition. The industry has proved to be dynamic and diverse too. Each sector in the industry has its own representatives and traditions too. There exists fluctuation in the liquor market due to seasonality that affects the demand and also the supply. The peak season in the industry is the summer month. This is because a lot of people are on holidays at this time and find fun in relaxing and taking different kinds of beverages. The past few years saw the industry receiving double digits which changed in the year 2012 when there was change of momentum. The greater players in the industry registered a fall in each share during this period. The growth patterns in the industry have proved to be generally good. It is considered to be an achievement of 10 years which further illustrates its success. An example is the china industry that has shown faster developments, its prices have risen; it has expanded in terms of its market coverage where it has acquired more regions which have also led to innovation in its products. Henry notes that the future market is likely to change enormously because there exist forces that are more likely to accelerate the change,(98) .These forces include; on-trade specialization, in-home sophistication, competition, social cost of alcohol, new forces of global demand, polarization of retail and production that is energy efficient. This will lead to the future change where the companies will have to specialize in their products and come out with one product that outdoes the others. This will also mean that there will be globalization of tastes. The companies will occupy many regions around the globe in order to gain the market share. Cook states that another future trend that is likely to occur is carrying out of brand audits, (176). This will be spiked by the huge competition that will exist in the market. This is necessary to ensure that their product has no faults before they release it to the market and that it is of high quality which is meant to lead to greater demands and profits. There will also be creation of innovation workshops which are meant to bring more and more new products to the market in order to keep on staying in the market. More companies will try to link their product to certain rituals in order for them to create a segment for their product. The government has prohibitions to the industry in terms of the age of the consumers, their product placement and also their ways of advertising, (McGowan 252). The government came up with a regulation that whenever these companies advertise, they have to inform the audience that their products have adverse effects. They had to present their advertisement in a way that it did not impact the children in a negative way. In order to receive licensing, there has to be a prove of best practices. There may be hindrance to the growing of the blend because of the growth in populations. There will be a mix of the people both from the countryside and urban and people will have different tastes. Other people will go for only certain brands search as wine due to change of rituals that comes overtime. This proves to be hard for the company to remain competitive in the market. Conclusion Gasolina urban blend is a unique product that has the potential of attracting a lot of people who seek new tastes. With good marketing and advertising strategies, the product can easily penetrate in Panama and several other areas. It is critical for the Pan American Company that produces it to identify a market segment and specialise their products to them for them to continue growing. Works Cited Cook, Philip J.. Paying the tab: the economics of alcohol policy. Princeton: Princeton University Press, 2007. Print. Giesbrecht, Norman. Sober reflections: commerce, public health, and the evolution of alcohol policy in Canada, 1980-2000. Montreal: McGill-Queen's University Press, 2006. Print. Holmes, Pamela. Alcohol. Austin, Tex.: Steck-Vaughn, 1992. Print. Korsmeyer, Pamela, and Henry R. Kranzler. Encyclopedia of drugs, alcohol & addictive behavior. 3rd ed. Detroit, Mich.: Macmillan Reference USA, 2009. Print. McGowan, Richard. Government regulation of the alcohol industry: the search for revenue and the common good. Westport, Conn.: Quorum Books, 1997. Print. Read More