Essay on Abl Case Study

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Extended Case Study
Australian Beverages Ltd (ABL)

1. What type of organisation is ABL?
ABL was established by a group of enterprising pharmacists who made carbonated soft drinks in their pharmacies. ABL was listing on the Australian Stock Exchange (AXS) on 1996.The current managing director of the company is Tom Dwyer, who has been with the company since 2008. 2. Identify the industry, product segments and value chain.

The industry is the Australian non-alcoholic beverages industry. In this case study, it is focused on the Australian bottled water manufacturing industry.

Product segments :- Carbonated soft drinks (CSD), bottled water, milk drinks, fruit drinks, sport drinks, ready to drink tea/coffee, energy drinks.
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5. What are the key issues affecting industry future profitability?

Threat of new entrants to the industry is low.
- Huge capital required to entry into the market

-Four largest competitors accounted for approximately 83% of the industry revenue

-New competitors need to spend heavily on marketing to promote their brand

-Difficulties of accessing to distribution channels as large retail buyers prefer to deal with large manufacturers or suppliers that can provide a large product range

-Economies of scale are very important for a low-value product, which is more difficult for new entrants to compete with existing manufacturers

-High switching cost because of specialize equipment that cannot be used to produce other products

-Government will imposed penalties on those schools that failed to comply with the policy which ban selling full-calorie CSDs in schools.

-Low threat from imports due to high transportation cost

Power of suppliers is medium.
-Purchases include water supplies, labels and other packaging materials such as glass and plastic resin bottles and closures which are generally purchased on five year contracts. Hence the bargaining
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