Dr.Pepper Snapple Company's Vision and Mission - Case Study Example

Dr. Pepper Snapple Group Inc. case study analysis Part A: Analysis of the industry and competition Dr. Pepper Snapple Group Inc. (DPS) operates in the soft drinks industry, which has proven to be one of the most competitive and dynamic industries. The industry has a number of players all of whom continue to compete for nearly the same market. As such, the various companies strive to devise new strategies in order to sustain their profitability and longevity. The industry is twofold consisting of both the manufacturing and the bottling segment. Each segment has intense competition and promises substantial profitability to the company. Key among Dr. Pepper Snapple Group’s main competitors includes Coca Cola, Nestle, S.A, Pepsi Inc. and Kraft foods, Inc. among many others. Each of the above companies enjoys a substantial market share that sustains their profitability (Kotler and Kevin 87). Additionally, they constitute Dr. Pepper Snapple Group’s competition in the manufacturing segment. The major competitors in the bottling segment of the business are the Pepsi Bottling group and Coca Cola enterprises and numerous other small-scale companies. The soft drinks market is large a feature that motivates the various competitors to employ various production and marketing strategies in order to grow their market share. Coca Cola and Pepsi are arguably the largest companies in the world. They enjoy a relatively larger market share both locally and internationally does Dr. Pepper Snapple Group does. In North America, DPS is the third largest soft drinks manufacturing after the two. Additionally, the company does not enjoy a significant share of the global market. It generates more than 85% of its revenue from the local market. This arises from the various manufacturing, distribution and marketing difficulties the company continues to encounter in its attempt to globalize the brand. As such, the company concentrates in growing its local market in North America. Just as is the case in any other industry, operations in the soft drinks industry is dynamic with the various companies changing their production, distribution and marketing strategies in order to resonate with the changing tastes and preferences in the market. The various companies therefore struggle to build recognizable brands since brand recognition is a major factor in competition. DPS is not any different; the company has strived to develop various recognizable brands, which it continues to position both locally and internationally. Key among its major brands are 7Up, Clamato, Crush, Diet Rite and Dr. Pepper among many others. The company carries out extensive marketing with the view to acquiring a profitable market share for its various brands (Blick 55). The development of various brands is the company’s major marketing strategy; most of the other companies operating in the industry employ the strategy in their attempt to grow their markets. Diversification is an effective strategy of marketing. The company advertises the various brands differently thereby ensuring that each brand enjoys a significant rate of success. This helps safeguard the profitability of the company since the success of a brand helps overcome the failures of another brand. Bothe Pepsi and Coca Cola also use diversification of their brands to grow their market shares. The two companies have various brands that compete against each other thereby increasing their market shares. DPS uses the strategy as a competitive advantage. As explained earlier, diversification helps increase a company’s market share by increasing the reach of the products in a particular industry. Through successful marketing of 7up for example, DPS managed to position the product competitively in the global market thereby enjoying increased profitability. However, the company encountered a number of marketing difficulties in accessing the global market. Competition among the soft drinks manufacturers is on such product features as quality, price, taste, availability and selection among others (Russo and David 54). Part B: Analysis of Dr. Pepper Snapple Group Inc. Dr. Pepper Snapple Group is a resilient company that has strived to maintain its market share throughout the period of its existence. The longevity of the company continues to show its profitability. The company has a number of strengths that help sustain its profitability. Additionally, the company has a number of weaknesses that continue to hinder its growth and expansion initiatives thereby limiting its operations to North America. Key among its strengths is its innovation and diversification of products. Success in any industry relies on the creativity of the company. Dr. Pepper Snapple Group has achieved creativity by formulating appropriate brands. As explained earlier, DPS ha a number of brands such as the 7Up, A&W root beer and Big Red among others. Some of the company’s brands are household names in North America where the company enjoys substantial market share. The company has an integrated business model a feature that reduces its operational costs thereby improving its profitability. The integrated business model includes such vital features as bottling, brand ownership and distribution. Some companies can often outsource such services thereby increasing their operational costs. With such vital services, DPS enjoys a degree of convenience and control of the market. The company regulates the quality and quantity of the products to resonate with the dictates of demand and supply. This cushions the company from the shocks from the market. Furthermore, bottling and distribution are respective businesses. The company therefore ears additionally revenue from undertaking such services for other small-scale businesses in the region. The company has a wide scope of diversification. While key competitors such as Coca Cola and Pepsi continue to sell conventional brands, DPS continues to exhibit creativity in the development of its brands. The range of the company’s products exhumes confidence and innovation both in the packaging and in the taste and quality. This way, the products strive to ensure that they offer competitive advantage in such facets of competition as price, selection, quality and taste among the others (Solomon 90). Through packaging for example, the company maintains a degree of disparity in the price of its products. Price is a major marketing element that the company continues to employ strategically with the view to growing its market share. Each of the various brands has respective price range based on the size of the packaging. This way, the company avails products that fit every segment of the market. Another fundamental strength in the structure of the company is its financial capacity. The company has access to a large amount of cash owing to its large revenue given the fact that it operates in a small market segment. As such, the company can undertake any production, distribution and marketing activity in order to enhance its productivity. The company for example takes pride in the manufacture of high quality products. Such is a vital reputation that continues to safeguard the company’s profitability. The company’s ability to manufacture and distribute high quality products arises from its financial strength. As explained earlier, quality is a major factor that influences the competitiveness of the various companies operating in the soft drinks industry (Hitt, Ireland and Robert 102). Additionally, the company has not exhausted its target market. The company has a number of products including bottled water that can help grow its profitability. Despite the various strengths discussed above, Dr. Pepper Snapple Group has a number of weaknesses that limit its market share. Key among the company’s weaknesses is the fact that it limits its operations to North America. North America is a limited segment of the world. This implies that the company has left the rest of the world for its other competitors such as Coca Cola and Pepsi. The two companies have succeeded in building international brands thereby growing their revenues. While DPS claims to have accessibility to a large amount of cash, the company has failed to build successful international business models that would help introduce its products to the global market. The company has a limited budget and does not undertake extensive market researches and analyses with the view to expanding its market. Coca Cola for example has perfected its marketing. The company spends billions of dollars annually in advertising thereby succeeding in developing globally competitive brads. DPS has failed in doing so thereby limiting its operations to North America. Part C: Mission and Vision The mission and vision statements are vital organizational strategies in any company since they portray the company’s current operations and aspirations for the future (Pride and Ferrell 32). The two influence every aspect of company. Dr Pepper Snapple Group just as any other company has a mission and vision statement. The company’s vision is to become the best beverage business in the Americas. The company’s mission and vision validates some operations. As explained earlier, the company has limited its operations to North America with some of its products enjoying immense popularity in Canada and Mexico. The mission and vision shows this since the company seeks to limit its market to the Americas. However, the Americas are two large continents consisting of numerous countries. The company has limited its operations to North America thereby leaving significant sections of the Americas for other players. Dr. Pepper Snapple Group has a number of competitors key among which are Coca Cola and Pepsi. The two companies operate globally with their products being popular even in North America among other parts of the Americas that DPS seeks to monopolize. The difference between DPS and the two companies lie in their mission and vision. Coca Cola’s mission for example is to refresh the world, inspire optimism and happiness. Pepsi’s mission on the other hand is to be the world’s premier food company. The two companies make it clear in their mission and vision statements that they want to operate globally. They therefore employ aggressive measures some of which overshadow the existence of the DPS because they aspire to gain a large share of the global market. By limiting its operations to the Americas, DPS limits its profitability and growth since it shares the limited market with the other aggressive companies thereby reducing its profitability even further. Part D: Evaluation of the strategy Dr. Pepper Snapple Group employs various strategies in its attempt to become the best beverage company in the Americas. In line with such a mission, the company builds and enhances leading brands in the region. As discussed earlier, the company’s main strengths are in the quality of its brands. The company has a number of brands each of which enjoy a substantial market share in the region. The success and reputation of the brands portray the quality of the company’s products (Paley 77). Additionally, the company focuses on strategic opportunities in high growth and high margin sections of the market in the region. The company carries out systematic market analyses and researches in the region with the view to obtaining opportunities in the various categories in the market. Such categories include energy drinks and ready to drink teas among others. Such products have a high demand in the regions thereby aligning the company’s operations to its vision and mission of becoming a leading company in the Americas. The company aspires to leverage on its integrated business model. The model enhances the company’s efficiency thereby ensuring that its produces appropriate products that appeals to the market. In doing this, the company increases its operational efficiency. While Dr. Pepper Snapple Group continues to do this, its main competitors such as Coca Cola and Pepsi both of which have larger financial might and operates globally continue to align their operations to their missions and visions thereby intensifying competition in the Americas for the DPS. Coca Cola for example has a holistic operational strategy that promotes productivity for the company. The company aspires to be the best company to work for globally such is a vital aspiration that continues to increase the company productivity. The company strives to create a competitive yet friendly working environment for its employees. This way, it seeks to develop a highly motivated workforce that will ensure that it operates efficiently (Prahalad and Yves 88). Furthermore, Coca Cola and Pepsi have the integrated business model thereby ensuring that they have the same degree of efficiency as DPS, if not more. Furthermore, the two companies continue to carry out extensive market researches and analyses coupled with equally aggressive advertising. Such are operational strengths that make the two company acquire larger shares of the market in North America. As discussed earlier, Dr. Pepper Snapple Group is the third largest company in the region. Work cited Blick, Dee. The Ultimate Small Business Marketing Book. Surrey: Filament Publishing, 2011. Print. Hitt, Michael A, R D. Ireland, and Robert E. Hoskisson. Strategic Management: Competitiveness & Globalization. Mason, OH: South-Western Cengage Learning, 2013. Print. Kotler, Philip, and Kevin L. Keller. Marketing Management. Upper Saddle River, N.J: Pearson Prentice Hall, 2009. Print. Paley, Norton. The Manager's Guide to Competitive Marketing Strategies. London: Thorogood, 2005. Internet resource. Prahalad, C K, and Yves L. Doz. The Multinational Mission: Balancing Local Demands and Global Vision. New York: Free Press, 1987. Print. Pride, William M, and O C. Ferrell. Marketing: Concepts and Strategies. Boston: Houghton Mifflin Co, 1989. Print. Russo, David, and David Russo. Align Your Company's Vision and Mission with Your Employees' Values. Upper Saddle River, N.J: FTPress Delivers, 2010. Internet resource. Solomon, Michael R. Conquering Consumerspace: Marketing Strategies for a Branded World. New York: AMACOM, 2003. Internet resource. Read More