The Energy And Sports Drink Industry

Capabilities of a firm are created through tangible and intangible resources and allow them to perform everyday tasks. These capabilities become core competencies when they develop into a

Capabilities are what a firm does, and represents the firm’s capacity to deploy resources that have been purposely integrated to achieve the desired end state. Capabilities become important when they are combined in unique combinations which create core competencies which have strategic value and can lead to competitive advantage. Capabilities needed for strategic fit are

Soft drink producers have in the recent past faced stiff competition from upcoming substitute products: bottled mineral water, energy drinks, teas, juices and sport drinks. This trend has thrown companies such Pepsi Co. back to the drawing board to regain their grip on the market. Pepsi Co. recently introduced "Pepsi Next" a mid-calorie beverage in their line of products. Success in attracting demand for the product needs a promotional strategy that incorporates consumer needs embracing the global trends in technology and life style. An understanding of the consumer

Capabilities: Schmitz (2012) refers to capabilities as “what the organization can do” to effectively utilize its resources. Some examples of Raytheon’s capabilities are Raytheon’s Six Sigma progress, integrated supply chain management, and a variety of technological capabilities. Raytheon’s Six Sigma is “a disciplined, knowledge-based approach designed to increase

He suggested that sustained competitive advantage derives from the resources and capabilities a firm controls that are valuable, rare, imperfectly imitable, and not substitutable. He further added that the resources and capabilities can be viewed in form of tangible and intangible assets. There are four different categories of resources financial, physical, human, and organization.

Energy drinks and sport drinks are two segments in the larger market of soft drinks. Contrary to popular belief, energy drinks and sport drinks do not compete against each other due to their targeting of different consumer needs. Sport drinks are mainly used for nutritional needs that arise before, during and after physical activity. Sport drinks are based on the oral rehydration therapy, which requires drinking a concoction of water, sugar, and salt for the purposes of rehydration (Cohen, 2013). Although a niche product, sport drinks are beginning to enter into the mass market, where consumers are now purchasing sport drinks for regular consumption unassociated with physical activity. Experts project that the sport drink industry could grow to more than 9.3 billion dollars by the end of 2017 (Cohen, 2013). However, consumers are becoming to a small degree unsatisfied with the recycling of old formulas when it comes to sports drink. Consumers now want sport drinks to have a low calorie count as well as infusion of vitamins and protein. Gatorade recently launched a product line that incorporated whey protein into their drink formula, however, the product extension launch was deemed as unsuccessful due to lack of product awareness.

Moments after the final whistle of the Super Bowl this year, Americans once again witnessed an iconic scene: a giant cooler of orange iced liquid poured over the coach’s head. Gatorade has secured this image year after year through a revolutionary marketing strategy. Gatorade’s advertising campaigns have been convincing, unique, and creative. Gatorade single-handedly created the market of sports drinks, and they were required to create campaigns that would prove to the world that their drinks would not only help them perform better, but that they also taste great. Gatorade was created as a better alternative to water for athletes to hydrate, stay hydrated, and perform better, and they needed fantastic advertising campaigns to convince people of these facts. Gatorade not only invented the sports drink market, but they have stayed at the top through the use of top-tier athletes, creative advertising, and lucrative partnerships with various organizations.

The approach and obstacles to raising capital and managing future change can make or break a new company that is trying to compete for market share in the sports beverage industry. According to a recent monthly labor report, most new businesses have the best chance of surviving during the first two years (Knaup, 2005). The young company must also determine how to best utilize legal services. It is one thing a new business venture should not only consider but plan for. Another area of concern and attention must go to the issue of raising money to fund the business.

Through market research, we have discovered two key findings about this target market that will shape a new marketing strategy for POWERade. Our first key finding addresses what factors are important when choosing between sports drinks. Due to its focus on serious athletes, POWERade advertising has focused on the ingredients and benefits of its sports drink, touting itself as superior to rival Gatorade. This is ineffective for mainstream consumers – the most important factor in the buying decision is taste. This will come into play with promotions for POWERade. The second key finding involves the bottled water market. Bottled water is a $9 billion industry domestically, and expanding into this market could result in substantial financial benefits. However, survey data indicates that over 70% of respondents do not consider sports drinks a substitute for water. Thus, we propose marketing two different products: one aimed at the bottled water market and one at the sports drink market.

As far as marketers are concerned, there are few American companies with marketing campaigns that rival those of Coca-Cola and Pepsi. The longevity and prosperity of these two competitors is enough to inspire countless business’ to model their own companies after these icons. This paper will detail some of the business aspects that have helped Coke and Pepsi to thrive, as well as considering what mistakes have been made in their pursuit of success. Learning from the successes and failures of other companies can help a new business to know which roads of marketing, expansion, etc. to explore and which might best be avoided.

During the 1990s, ideas concerning the role of resources and capabilities as the principal basis for firm strategy and the primary source of profitability coalesced into what has become known as the resource-based view of the firm.1 To understand why the resource-based view has had a major impact on strategy thinking, let us go back to the starting point for strategy formulation: typically some statement of the firm’s identity and purpose (often expressed in a mission statement). Conventionally, firms have answered the question “what is our business?” in terms of the market they serve: “who are our customers?” and “which of their needs are we seeking to serve?” However, in a world where customer preferences are volatile and the identity of customers and the technologies for serving them are changing, a market-focused strategy may not provide the stability and constancy of direction needed to guide strategy over the long term.2 When the external environment is in a

Strategic capabilities are those capabilities of an organisation which provides competitive advantages with competitors and ensures its long term survival on marketplace. Resources are the tangible and non tangible asset of an organisation and competencies are the capabilities and skills that organisation uses to utilize its assets effectively and efficiently

In 1997, the lives of millions of Americans changed after the consumption of one special beverage owned by an Austrian drink company, Red Bull GmbH. Red Bull was founded by International Marketing Director, Dietrich Mateschitz, in the mid 1980’s, who partnered with Thai manufacturer, Chaleo Yoovidhya, who had been selling his caffeinated beverage (KratingDaeng) in Thailand since 1976. Originally selling at $2.19 per 8 ounce can, Red Bull was marketed in the United States as an alternative to soft drinks created by Pepsi and Coca-Cola. Not only did people find this drink an excellent alternative to typical caffeinated beverages, the introduction of this refreshment created the start of the highly marketable and extremely competitive energy

The Coca-Cola Company has a fairly large product mix which contains about 400 brands, including diet and light beverages, waters, juice and juice drinks, teas, coffees, energy, and sports drinks. Since 1960 they have increased their product mix continuously.

Capabilities mean how the company mixes and utilizes all assets to bring the best product offered. These capabilities summarize in company 4Ps, which are listed as below: