History of the Soft Drinks Industry Essay

Introduction loopy revels, much than popularly cognise as sodas, atomic number 18 not exactly referred to as items of necessity. People nominate live without sodas. In fact, people might be safer if they dont inebriety loony crispens so a lot. And yet, prosperous boozes somehow make it to the efflorescence of the list of items bought by the average consumer. Why is this, exactly? Well, for ane thing, sodas be delicious. They stand between liquor and succus. Those who atomic number 18 too young to revel beer but think that fruit juice is too juvenile kindle range sodas. Those too old and are putting their health at risk by wassailing hard take ins shadow enjoy around the bend drinks and no one would think some(prenominal) less of them.In short, sodas squander a mass appeal. They carry an image with them an image of a somebody with a comfortable bread and butterstyle. This report will take a catch at the easily-to-do drink attention as a self-colored and limited industriousnesss spark advance, brief history and description of the perseverance will show perseverance characteristics, trends, changes, and warlike components will give recommendations for the companies within the industry. My experience of the consumer and the seller of the fruity drinks, each(prenominal)owed me to say, that the f lossy drinks industry deserves attention.It is one of the biggest, immediate increment, perspective, and profitable industries in the world. It takes a big place in our life as consumers. cushy drinks, and much(prenominal) big companies as Coca skunk or PepsiCo, are widely spread everywhere and available in any country in the world. I decided to choose the well-off drinks industry, because it illust order the great intersectionion and dissemination and great business innovations, such as product development, franchising, and mass marting, as well as the evolution of consumer tastes and cultural trends.History of the fl uffy drinks industry. The well-fixed drink industry began in the mid-1880s with the being of sirup that was mixed with carbonate pee and served at drug entrepot lunch counters. During the early years, slow drinks were sold unaccompanied in stores that could extend fountain service. Increasing distribution was tied(p) to building additional syrup manufacturing plants. With the advent of bottling machinery, fruity drinks began to be distributed beyond the town drug store. The startle bottled soda water or balmy drink in the unify States was produced in 1835.These drinks were called soft drinks, only to separate them from hard alcoholic drinks. This drinks do not contain alcohol and broadly specifying this beverages, embroils a variety of symmetric carbonate soft drinks, diet and caffeine free drinks, bottled water juices, juice drinks, sport drink and even ready to drink tea or coffee packs. So we can say that soft drinks mean carbonate drinks. Charles Aderton invented Dr rain cats and dogs in Waco, Taxes in 1885. Dr. John S. Pemberton invented Coca green goddess in Atlanta, Georgia in 1886. Caleb Bradham invented Pepsi weed in 1892, and so on.Bigger and little companies out on a soft drink commercialise since the greatest profitability (advantage) and cheap manufacturing of this industry was discovered. Today, soft drink is to a greater extent front-runner refreshment drink in the United States then tea, coffee, juice and etc. squashy drinks industry overview in the United States and World Wide. The soft drinks industry is very big, very visible, grittyly concentrated, and appears to ready been very profitable. The leaders of the Soft Drink Industry are the Coca- cola go with, PepsiCo, Cadbury Schweppes/Dr. capsicum Snapple, Cott Corp., and National crapulence Corp. there is also noticeable Asian and European influence on a world grocery store of the soft drinks. Leading companies soak up freehanded posture in the soft drink industry. This industry is well open already, and it would be difficult for any beau monde to enter or exit winnerfully. gibe to the Coca- booby annual report (2009), it has the to the risqueest degree soft drink sales with 24. 4 jillion dollars. The Coca-Cola product line has some(prenominal) popular soft drinks including Coca-Cola, forage black eye, Fanta, Barqs, and Sprite, selling over 400 drink brands in or so 200 countries.PepsiCo is the next acquit antagonist with soft drink sales grossing 21 billion dollars for the two beverage subsidiaries, PepsiCo Beverages normality America and PepsiCo world(prenominal) (annual report PepsiCo Inc. , 2009). PepsiCos soft drink product line takes Pepsi, piling Dew, and Slice which make up more than one quarter of its sales. Cadbury Schweppes/Dr. bombard Snapple had soft drink sales of 6 billion dollars with a product line consisting of soft drinks such as A&W take root Beer, Canada Dry, and Dr. Pepper (annual report Ca dbury Schweppes/Dr. Pepper Snapple, 2009).Cott Corporation is one of the worlds biggest soft drinks manufacturers, but has a low profile among consumers because it specializes in producing occult label products for retailers. In fact the corporation is largely credited with meliorate the supermart own-label beverage grocery store during the early 1990s, scoring a number of important goals including the introduction of Sams American Choice cola by Wal-Mart and Sainsburys Classic Cola in the UK. Currently, its small portfolio of consumer brands allows RC Cola, Stars & Stripes and red-faced Rain. National Beverage Corp.(National Beverage) develops, manufactures, markets and distributes a portfolio of beverage products finishedout the United States. The confederation develops and sells flavored beverage products, including a selection of flavored soft drinks, juices, waters and power drinks. Its brands include Shasta and Faygo, each of which has over 50 flavor varieties. The C ompany also maintains a line of flavored beverage products for the health-conscious consumer, including Everfresh, Home Juice and Mr. Pure 100% juice and juice-based products The Coca-Cola Company accounted for 26.5% of the worlds soft drinks sales and 43 % of the US market, almost double the amount of rival PepsiCo, which holds a 13. 4 % share of the world market and 32 % of the US market. both companies appear to be keen to extend their focus by expanding into growe components for soft drink production. In the last month Coca-Cola has revealed it is extending began researching benefits of Chinese herbal remedies to level growing demand for nutritional benefits and functionality in their products. PepsiCo at the same measure has incr peaced its focus in production of non-carbonate beverages with juice in graphemeicular becoming important to its operations.Both companies tolerate world-shakingly ahead of their rivals, reflecting the more and more competitive nature of the so ft drinks market. Cadbury Schweppes/Dr. Pepper Snapple takes 15 % of the US market and 3 % of the world market. Cott Corp takes 5 % of the US market. National Beverage Corp. takes 2% of the US market. (Table 1. The top 10 Soft Drinks Companies in 2008 by spheric market share, Page 21 and Table 1. a. The excrete 10 Soft Drinks Manufacturers in the US in 2008 by gaudiness, Page 21 ). At the shopping center of the beverage industry is the carbonate soft-drink category.The dominant players in this area (Coca Cola, Pepsi, and Cadbury Schweppes/Dr. Pepper Snapple) own virtually all of the North American markets most widely distributed and known brands. (Table 4 Top Ten Soft Drinks in the US, 2009. Page 24) They are dominant in world markets as well. These companies products occupy large portions of any supermarkets shelf space, often covering more territory than real(a) food categories like dairy products, meat, or produce. Coca-Cola and PepsiCo continued to dominate the soft drink s market in 2010 accounting for more than a trine of world-wide sales in the sector, according to market analytic.Soft drinks industry description. The market size of this industry has been ever-changing. Soft drink consumption has a market share of 46. 8% within the non-alcoholic drink industry. (Table 2, 2. a. planetary Soft Drinks food market Segmentation % Share, by Value, 2008, Page 21). quantity market jimmy of soft drinks reached $367. 2 billion in 2008 with a market evaluate gauge of $377. 1 billion by the end of 2010. In 2013, the global soft drink market is view to have a value of $456. 3 billion. The 2008 soft drink spate was 325,367. 2 one billion trillion liters (Table 3 Global Soft Drinks marketplace Volume liters one thousand million, Page 22).In 2013, the global soft drink market is forecast to have a mint of 474 million liters, an annex of 22. 3% since 2008. Soft drink industry is paying(a) with a potential for high profits, but there are several ob stacles to overcome in order to capture the market share. Carbonates sales proved the most lucrative for the global soft drink market, generating 46. 8% of the entireness value. However, the volume of the U. S. change soft drinks turn downd -3% in 2009. That compares to 2. 3% decline in 2008 a 0. 6 % decline in 2007 and a -0. 2% decline in 2006. Top companies, bump and Pepsi, generated sympathetic results last year.Coke carbonate soft drinks volume was down -3. 1% and PepsiCos was down -4%. Both lost share. Dr. Pepper Snapples carbonated soft drink volume was down -1. 3%. (See below, Table 5 Carbonated soft drink Companies in the U. S. for 2009). In the U. S. , with the carbonated soft drinks decline accelerating, opposite categories are slowly growing. (For example, bottled water and energy drinks market. ) The Coca-Cola Company accounts for 22. 6% of the global soft drink markets volume. Supermarkets and hypermarkets distribute 48. 4% of the global soft drink markets volu me. Table 5. Carbonated soft drink Companies for 2009.Top -10 CSD Companies in the US for 2009 2009 2009 2008 2009 2008 Rank Companies Market Share Market Share Share Change Cases (millions) Cases (millions) Volume% Change 1 Coca-Cola Co 42. 7 42. 8 -0. 1 4107. 6 4241. 1 -3. 10% 2 Pepsi Co 30. 8 31. 1 -0. 3 2960. 4 3082. 8 -4. 00% 3 Dr Pepper Snapple 15. 3 15 0. 3 1471. 2 1491. 3 -1. 30% 4 Cott Corp 4. 7 4. 8 -0. 1 448 476. 6 -6. 00% 5 National Beverage 2. 6 2. 5 0. 1 247. 5 243. 9 1. 50% 6 Hansen Natural 0. 8 0. 8 flat 79 76. 5 3. 30% 7 violent Bull 0. 7 0. 6 0. 1 67. 2 63. 9 5. 20%.8 Big Red 0. 4 0. 4 flat 43. 6 42. 4 2. 70% 9 Rockstar 0. 4 0. 4 flat 40. 2 41 -2. 00% 10 virgin(prenominal) 1. 6 1. 6 flat 156. 3 160. 3 -2. 50% Total Industry 100 100 9621 9919. 8 -3. 00% Statements of booster cable companies within soft drink industry of the US Coca Cola Company PepsiCo Dr Pepper Snapple Group, Inc. National Beverage Corp Cott Corp (2008) Net run taxation millions $ 3 0. 990 43. 232 5. 531 thousands $ 575. 177 millions $ 1. 648 Cost of goods sold 11. 088 20. 099 2. 234 405. 322 1. 467 GROSS PROFIT 19. 902 23. 133 3. 297 169. 855 181.Selling Expenses 11. 358 15. 026 2. 135 131. 918 179. 8 OPERATING INCOME 8. 231 8. 044 1. 085 24. 742 loss 113. 0 TOTAL ASSETS 48. 671 39. 848 8. 776 265. 682 873. 1 LIABILITIES AND EQUITY 48. 671 39. 848 8. 776 265. 682 873. 1 OPERATING ACTIVITIES 8. 186 6. 796 865 35. 829 66. 9 INVESTING ACTIVITIES utilise in 4. 149 used in 2. 401 used in 251 used in 3. 491 used in 54. 8 FINANSIAL ACTIVITIES used in 2. 293 used in 2. 497 used in 554 305 used in 19. 4 Five Forces of the Soft Drinks Industry. ( Figure 3. Five Forces of the Soft Drinks Industry. Page 24).Threat of New Entrants. Significant barriers pull round to go in the soft drink industry. Bottling operations have a fairly high minimum efficient exfoliation and require fixed assets which are ad hoc not only to the process of bottling but also to a special t ype of packaging. Entering bottling, mean fleck, would require substantial capital investment, which would deter entry. faint costs are thus also high. Bottling operations do exist which in theory could be contracted out, but they are tied up in long-term contracts with the major players and thus can only contract with other producers in a limited way.Perhaps the most significant barrier to entry, however, is the intemperate brand identity associated with the silk hat-selling soft drinks. Placing another cola on the market is not an attractive value proposition. Bargaining Power of Suppliers. Suppliers to the soft drink industry are, for the most part, providing goodness products and thus have little post over the industry. Sugar, bottles and cans are alike goods which can be obtained from some sources, and the aluminum can industry has been plagued by excess supply.The one necessary ingredient which is unique is the artificial hook aspartame is clearly preferred by consumer s of diet beverages and for a magazine was low conspicuous protection and therefore only available from one supplier. However, the patent expired and another producer entered, reducing the market power of NutraSweet. For example, the inputs for Coke and Pepsis products were primarily sugar and packaging. Sugar could be leveragingd from many sources on the open market, and if sugar became too expensive, the firms could easily s slime eels to corn syrup, as they did in the early 1980s.Bargaining Power of Customers. Buyers can be considered at the consumer or the retail level. The soft drink industry sold to consumers through with(predicate) five lede channels food stores, convenience and gas, fountain, vending, and mass merchandisers, firm food restaurants. For consumers, taste will be an important part of the orientation for a special(a) soft drink thus although there is no monetary switching cost, there may be a loss of enjoyment associated with a less-preferred brand. Becau se of this, consumers have historically been brand-loyal and not based purchase decisions on impairment. sell outlets have not been able to exhibit much buyer power over the industry, although they can do so more easily than consumers. Traditionally these outlets have been fragmented and have been reliant on the major soft drink brands to increase store traffic. However, at the time of the miscue there has already been evidence of some buyer power on the part of grocery stores, as they successfully resisted an attempt to price the varieties with more costly inputs high. As grocery chains increasingly unify and as discount outlets continue to grow, buyer power on the part of retailers is likely to increase.Threat of Substitute Products. While the U. S. soft drink market was growing, substitutes did little to interfere. Soft drinks are sufficiently unique that when a consumer wants a soft drink another product is not likely to satisfy. opposite cold drinks such as water, juices a nd iced tea offer similar spanking qualities, yet they do not have the same taste or properties. Hot beverages and alcoholic beverages are not desirable or reserve for many of the occasions when one would want a soft drink.The one category which threatens soft drink producers is the new age product which offers (or implies) more natural ingredients and/or health benefits. The soft drink industrys initial answers to these beverages, in the form of Tab Clear and Crystal Pepsi, are not going to repugn effectively with the new age products. rivalrous Rivalry within an Industry. The tightfistedness in the industry (mainly between its leaders Coke, Pepsi and Cadbury/Schweppes) would suggest that internal rivalry is somewhat less than if there were many players of equal size.Although the competitor between Coke and Pepsi has become fiercer over time, they traditionally competed primarily on advertising, promotion and new products rather than price (although the explosion of new bran ds did eventually lead to some price aspiration). The products are similar but not homogeneous and buyers are fairly brand loyal. Retail buyers have significant costs for switching from the major brands since those are liable for bringing people into the store.Flattening and potentially declining U. S.demand may be a fixings which increases internal rivalry and encourages more price competition and thus eating away of profits. Revenues are extremely concentrated in this industry, with Coke and Pepsi, together with their associated bottlers, compulsive 73% of the case market. In fact, the soft drink market can be characterized as an oligopoly, or even a duopoly between Coke and Pepsi, resulting in positive economic profits. As analysis using ostiarys five forces shows that the soft drink industry is very profitable. Suppliers and buyers have not had more power over the industry than it has had over them. ingrained rivalry, while seeming eager, has not eroded the profitability o f the industry because of its denseness and the fact that the two major players have primarily competed on the cornerstone of advertising and promotion and not price. Entry is difficult both for reasons of scale and the strong brand identity of the current major players. Substitutes have not been close enough to take away significant market share, although the emergence of new substitutes may pose the largest threat to the industrys profitability. Soft drink industry has an oligopolistic character.SWOT analysis of the main producers in the soft drink industry. Coca Cola Company. The Coca-Cola Company is the worlds leading manufacturer, distributor and marketer of Non- alcoholic beverage concentrates and syrups, in the world. Coca Cola has a strong brand name and brand portfolio. art week and Interbred, branding consultancy, recognize Coca cola as one of the leading brands in their top 100 global brands ranking in 2009. The Business Week Interbred valued Cocoa Cola at 67,0 00 million dollars in 2008.Coca Cola ranks well ahead of its close competitor PepsiCo which has a ranking of 22 having a brand value of 12,690 million dollars. The Companys strong brand value facilitates customer reckon and allows Coca Cola to clear up market. However, the phoner is threatened by intense competition which could have an adverse impact on the companys market share. Strengths Weaknesses Worlds leading brand Negative advancement large scale of operations deadening implementation in North America Robust revenue fruit in 3 department Decline in hard currency from direct activities Opportunities ThreatsAcquisitions intense competition blood-and-guts competition ingathering bottles water market Dependence on bottling partners Growing Hispanic existence in US Sluggish harvest-feast of carbonated beverages Strengths. Worlds leading brand The Company owns four of the top five soft drink in the world Coca Cola, Diet Coke, Sprite and Fanta. potent brands all ow the company to introduce brand extensions such as Vanilla Coke, Cherry Coke and Coke with Lemon. Over the years, the company has made large investments in brands promotions. Consequently, Coca Cola is one of the best recognized global brands.The companys strong brand value facilitates customer recall and allows Coca Cola to penetrate new markets and merge living ones. Large scale of operations With revenues is excess of 24 billion dollars Coca Cola has a large scale of operation. Of the approximately 52 billon beverage servings of all types consumed worldwide every day, beverages bearing trademarks owned by or licensed to Coca Cola account for more than 1. 4 billion. The companys operations are supported by a strong infrastructure crossways the world.Coca Cola owns and operates 32 principal beverage concentrates and/or syrups manufacturing plants located throughout the world. In addition, it owns or has kindle in 37 operations with 95 principal beverage bottling and cann ing plants in the US. The company also owns bottled water production and still beverage facilities as well as a facility that manufactures juice concentrates. The companys large scale of operation allows it to feed upcoming markets with coition ease and enhances its revenue generation capacity.Robust revenue growth in three segments Coca Cola revenues enter a double digit growth, in tree operating segments. These tree segments are Latin America, East/ siemens Asia, and Pacific Rim and Bottling investments. Revenues from Latin America grew by 20,4% during 2007, over 2006. During the same period, revenues from East/ southeastward Asia and Pacific Rim grew by 10. 6 % while revenues from the bottling investments segment by 19. 9%. Together, the three segments of Latin America, East/South Asia and Pacific Rim and Bottling investments, accounted for 34. 8% of total revenues during 2007.Robust revenues growth rates in these segments contributed to top-line growth for Coca Cola during 2 007. Weaknesses. Negative publicity The company received negative publicity in India during September 2006. The company was accuse by the Center of Science and Environment (CSE) of selling products containing pesticide residue. These pesticides included chemicals witch could cause cancer, damage to the nervous and reproductive systems and reduce bone secondary density. Such negative publicity could adversely impact the companys brand image and the demand for Coca- Cola products.Sluggish performance in North America Coca Colas performance in North America was far from robust. North America is Coca Colas core market generating about 30 % of total revenues during 2007. Therefore, a strong performance in North America is important for the company. Sluggish performance in North America could impact the companys future growth prospects and prevent Coca Cola from recording a more robust top-line growth. Decline in cash from operating activities property flows from operating activities decreased 7% in 2008 compared to 2007.Decline in cash from operating activities reduces availability of funds for the companys investing and financing activities, which, in turn, increases the companys exposure to debt markets and fluctuating entertain rates. Opportunities. Acquisitions Strong international operations increase the companys capacity to penetrate international markets and also gives it an opportunity to diversity its revenue stream. Coca Cola made acquisitions in Australia, New Zealand, Germany, and China for the last 3 years. These acquisitions beef up Coca Cola international operations.It gives Coca Cola an opportunity for growth, through new product launch or greater penetration of existing markets. Growing bottled water market Bottled water is one of the fastest growing segments in the worlds food and beverage market owing to increasing health concerns. The market for bottled water in the US is forecast to reach revenues of about 19. 3 billion dollars by th e end of 2010. The companys Dasani brand water is the 3rd best-selling bottled water in US. Coca Cola could leverage its strong position in the bottled water segment to take advantage of growing demand for flavored water.Growing Hispanic population in US Hispanics are growing rapidly in number and economic power. As a result, they have become more important to markets than ever before. The company can benefit from an expanding Hispanic population in the US, which would translate into higher consumption of Coca Cola products and higher revenues for the company. Threats. Intense competition Intense competition Coca Cola competes in the nonalcoholic beverages of the commercial industry. The company faces intense competition in divers(a) markets from regional as well as global players.Also, the company faces competition from various juice drinks and nectars. In many of the countries in which Coca Cola operates, including the US, PepsiCo in one of the companys primary competitor. (O ther significant competitors include Nestle, Cadbury/Schweppes, Group DANONE and Kraft Foods. ) competitory factors impacting the companys business include pricing, advertising, sales promotion programs, product innovation. And brand and trademark development and protection. Intense competition could impact Coca Cola market share and revenue growth rates.Dependence on bottling partners Coca Cola generates most of its revenues by selling concentrates and syrups to bottlers in whom it doesnt have any ownership interest or in which it has no controlling ownership. Loss one or more of customers by any one of its major bottling partners could indirectly touch on Coca Cola business results. Such dependence on third parties is a weak link in Coca Colas operations and increases the companys business risks. Sluggish growth of carbonated beverages US consumers have started to look for greater variety in their drinks and are becoming increasingly health conscious.This led to a decrease i n the consumption of carbonated and other sweetened beverages in the US. The performance of the market is forecast to decelerate, with an anticipation compound annual rate of change of -0. 3% for the five-year period 2005-2010 expected to drive the market to a value of 62. 9 billion dollars by the end of 2010. Coca Colas revenue could be adversely affected by a slowdown in the US carbonated beverage market. PepsiCo. In 2009 PepsiCo estimated that its annual retail sales had reached $92 billion, oblation over 100 brands around the globe.The main cash cow of PepsiCo of melody being the Pepsi carbonated drink that owned 10% of the US beverage market in 2008. PepsiCo offers the worlds largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that each generates more than $1 billion in annual retail sales. PepsiCo mains businesses Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade also make hundreds of other nourishing, foods and drinks. S trengths Weaknesses Strong core brand Concentrated in North America .Strong market position Health Craze will hurt soft drink Solid brand portfolio Negative publicity Strong revenue growth Economies of scale Opportunities Threats Food division expansion Sluggish growth of carbonated drinks Hispanic growth in the US Competition with Coca-Cola & others Bottled water growth Declining economy/recession Growing consumer health consciousness Cadbury Schweppes/Dr. Pepper Snapple. Dr Pepper Snapple Group Inc. (formerly Cadbury Schweppes Americas Beverages) is an American soft beverages drink company, which was spun off from Britains Cadbury Schweppes.Company manufactures, markets and distributes more than 50 brands of carbonated soft drinks, juices, ready-to-drink teas, mixers and other premium beverages across the United States, Canada, Mexico and the Caribbean. Our diverse portfolio includes Dr Pepper, Snapple, 7UP, Motts, A&W, Sunkist Soda, Canada Dry, Hawaiian Punch, Schw eppes, Penafiel, Squirt, Clamato, Mr & Mrs T Mixers, Roses, Yoo-hoo and other consumer favorites. Most of the brands in this segment are CSD brands. In 2009, our Beverage Concentrates segment had net sales of approximately $1. 1 billion.Strengths Weaknesses Strong portfolio, consumer-preferred brands Weak performance in Asian Market Integrated business model A substantial amount of outstanding debt Strong customer relationships Strong operating marges and stable cash flows Opportunities Threats New distribution channels in a market Changing consumer tastes Growing consumer health consciousness Operating in highly competitive markets Focus on opportunities in high growth and high margin categories Depend on the 3rd party bottling and distribution companies Cott Corporation.Cott Corp is one of the leading non-alcoholic beverage companies and retailer brand soft drink providers. The company primarily operates in the US, Canada, the UK and Mexico. It is headquartered in Toronto, Ca nada and employs 2,803 people. The company recorded revenues of $1,648. 1 million during the financial year ended December 2009, a decrease of 7. 2% compared to 2008. The operating loss of the company was $113 million during 2009, compared to the operating loss of $54. 5 million in 2008. The net loss was $122. 8 million in 2009, compared to the net loss of $71. 4 million in 2008.Strengths Weaknesses Leading Producer of Retailer Brand Beverages with Diverse Product Portfolio inefficient to compete successfully in the highly competitive beverage category. Extensive, fictile Manufacturing Capabilities May not be able to respond successfully to consumer trends significant amount of outstanding debt Opportunities Threats New distribution channels in a market Changing consumer tastes Growing consumer health consciousness Intense competition Focus on opportunities in high growth and high margin categories National Beverage Corp.National Beverage develops, manufactures, markets and distributes a portfolio of beverage products throughout the US. The company develops and sells a selection of flavored soft drinks, juices, sparkling waters and energy drinks. It is headquartered in Fort Lauderdale, Florida and employed about 1,300 people. The company recorded revenues of $566 million during fiscal year ending April 2008, an increase of 5% over 2007. The increase in revenue was due to 9% growth in case volume of energy drinks, juices, and waters. The operating profit of the company was $172. 6 million during 2008, a decrease of 0. 4% compared with 2007.The net profit was $22. 5 million in 2008, decrease of 8. 9% compared with 2007. Strengths Weaknesses Extensive Brand Portfolio Geographic concentration Declining Profits Opportunities Threats Focus on Asia Pacific Market Limitations on commercialization of Alcoholic Products Rise in Demand for bottled Water in the US Riding Input Costs Change in Consumer Preferences Intense Competitive Pressures Companys key succes s factors within the soft drink industry. Key factors for competitive success within the soft drink industry branch from the trends of the microenvironment. Primarily, constant product innovation is imperative.A company essential be able to recognize consumer wants and ingests, while maintaining the ability to adjust with the changing market. They must keep up with the changing trends. Another key factor is the size of the organization, especially in terms of market share. Large distributors have the ability to negotiate with stadiums, universities and school systems, making them the exclusive supplier for a specified period of time. Additionally, they have the ability to commit to mass purchases that importantly lower their costs. They must implement effective distribution channels to uphold competitive.Taste of the product is also a key factor for success. Moreover, established brand loyalty is a large aspect of the soft drink industry. Many consumers of carbonated beverages ar e extremely dedicated to a particular product, and rarely purchase other varieties. This stresses the importance of developing and maintaining a overlord brand image. Price, however, is also a key factor because consumers without a strong brand preference will select the product with the most competitive price. Finally, global expansion is a vital factor in the success of a company within the soft drink industry.The United States has reached relative market saturation, requiring movement into the global industry to maintain growth. Soft drink industry main characteristics, trends and changes. Soft drinks are an integral part of American life and culture and soft drinks have been produced or consumed in some every corner of the world. The industry is lucrative with a potential for high profits, but there are several obstacles to overcome in order to capture the market share. Growing consumption trends can be attributed to go disposable incomes, falling trade barriers, universal pr oduct acceptance, and a locomote demand for American consumer goods.It would be very difficult for a new company to enter this industry because they would not be able to compete with the established brand names, distribution channels, and high capital investment. Likewise, leaving this industry would be difficult with the significant loss of money from the fixed costs, bandaging contracts with distribution channels, and advertisements used to create the strong brand images. This industry is well established already, and it would be difficult for any company to enter or exit successfully.The carbonated beverage industry is a highly competitive global industry, and has some characteristics of an oligopoly in the US. Three leading companies have prominent presence in the soft drink industry. The leaders include the Coca-Cola Company, PepsiCo, and Cadbury Schweppes. attraction companies have to hold the highest percentage of the global market share therefore, companies need to be abl e to compete globally in order to be successful. Profitability in the soft drink industry will remain rather solid, but market saturation especially.