Competition in Energy Drinks, Sports Drink, and Vitamin-Enhanced

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1. What are the strategically relevant components of the global and U.S. beverage industry macro-environment? How do the economic characteristics of the alternative beverage segment of the industry differ from that of other beverage categories? Explain. The strategically relevant components of the global and U.S. beverage industry macro-environment: • Global beverage companies such as Coca Cola and PepsiCo had relied on such beverages to sustain in volume growth in mature markets where consumers were reducing their consumption of carbonated soft drinks. • Coca-Cola, PepsiCo, and other beverage companies were intent on expanding the market for alternative beverages by introducing energy drinks, sports drinks, and vitamin drinks in…show more content…
The cost of items bought from suppliers can have a significant impact on company’s profitability. If suppliers have high bargaining power over a company, then in theory the company’s industry is less attractive. The competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants is the rivalry among competing sellers which is the strongest force, the new entrants who consider barriers to entry and expected response of current competitors, and the substitute that consider price attractiveness, quality comparison by buyers, and relative ease of substituting. When the five competitive forces are moderate to weak, an industry is attractive in the sense that the average industry member can reasonably expect to earn good profits and a nice return on investment. The ideal competitive environment for earning superior profits is one in which both suppliers and customer are in weak bargaining positions, there are no substitutes, high barriers block further entry, and rivalry among present sellers generates only limited competitive pressures. Also launches of new energy drink brands had grown steadily from 172 in 2005 to 380 in 2008, but energy drink introductions fell to 138 in 2009 as the segment matured and financially squeezed consumers became more price conscious. Overall, the relative strength of the energy drink, enhanced beverage,

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