Monster Beverage Essay

Decent Essays
Coursework 1

Monster Beverage Corp.

Module: International Sales Management

Matriculation Number: 40218166

Monster Beverage Corporation produces energy drinks and alternative beverages, which the company develops, distributes, sells and markets as well. According to (2015), the Monster Beverage ranks 13th in the list of The World’s 100 Most Innovative Companies. In the global energy drink market, Monster Beverage holds a second place with 39% market share, right after Red Bull with 43% (Euromonitor International, 2014 cited in Mitchell, 2015). Despite the number of media scandals concerning health risks of the consumers, this public company has been growing rapidly, increasing their sales consecutively every year
…show more content…
In their report (2015), the company states four key value drivers: International Growth, Profitable Growth, Cost Management and Efficient Capital Structure. As their annual report explains (2015), when it comes to the International Growth, the Monster Energy brand energy drinks are the main focus, as it represents around 93% of company’s net sales. Currently, the products are sold in 116 countries, with further plans for expansion in the near future. With tailor branding, packaging, pricing and distribution channel strategies, the company strives to achieve profitable growth. To lower the costs, the company will continue to reduce production costs (material and packaging costs), along with decrease promotional budget, including sponsorships, sampling, etc. In 2014, the company decreased its sales and marketing programs by 6.3% compared to 2013. Further in their report, the Monster states that costs of sales include costs of raw materials, co-packing and repacking costs, warehouse expenses, international transfer costs and certain quality control costs. Raw materials (including bottles, cans, containers, ingredients, flavours and packaging) account for the largest portion of the sales costs. To be able to continue expanding and follow their fourth value, the capital structure is intended to optimize the working capital to…show more content…
Monster sold 16.5% of their equity stake for $2 billion, and received ownership of Coke’s existing energy drinks (including the Burn and Relentless brands) (Investopedia, 2015). In return, Coca-Cola received ownership of Monster’s non-energy drinks and brought 10 of its members to Monster’s board (Zacks Equity Research, 2015). Moreover, Coca-Cola has become Monster’s preferred distributor, allowing to access to Coca-Cola’s extensive global distribution network (Investopedia, 2015). The CEO Rodney C. Sacks stated (2015), “the Coca-Cola Company transaction presents a unique opportunity for us. We anticipate that this relationship will provide us with complementary product offerings in many countries as well as access to many new geographies.” Not only will this increase the distribution in existing markets, but it will also open new door into emerging markets. Even though Monster uses distributors and retailers, they are still responsible for the marketing of their products themselves, and even partner with their retailers and wholesalers to assist their marketing
Get Access