Chapter 11, Problem 35C

Summary Introduction

To determine: Factors that are important to understand the decision situation

Case summary: CCompany- A soft drink manufacturing company faced a challenging situation when the consumer's attitude towards sugar-sweetened and diet drinks started to change. The US saw an increase in the number of cases of obesity, diabetes, and other weight-related cases. In the year 2014, Disease Control and Prevention got to know that 35% of US adults were dealing with obesity. Even children were also becoming obese and the main blame was given to soft drink manufacturer CCompany. Because of the shift of people towards a healthy lifestyle, the company said a decrease in revenues by more than 25% since 1990.

People started questioning the soft drink manufacturers about the usage of artificial sugar and many shifted themselves from regular soft drinks to diet sodas and even to water.

Ironically, CCompany was considered as a health and wellness drink during its initial phase because it shifted people from drinking alcohol to drink a non-alcoholic alternative.

But because of C-Company increasing obesity among people, the politicians proposed ‘soda taxes” to reduce the amount of consumption of sugar. The soft drink manufacturers are winning the political battle but are losing everything on the same side because the obesity concerns may reduce the demand for some of their products. It has become a risk for their growth and sustained profitability.