Competition in Energy Drinks Sports Drinks and Vitamin Enhanced Beverages Case Study

Pages: 2 (956 words)  ·  Bibliography Sources: ≈ 14  ·  File: .docx  ·  Level: College Senior  ·  Topic: Energy

Beverage Company Analysis

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 most strategically relevant components of the global and U.S. industry microenvironment include the annual per capita drink consumption of consumers, the demand for food services at drinking and entertainment establishments, and the demand for beverages from grocery stores and other retail outlets. Additional relevant components include the price of each ingredient that goes into the beverage, with sugar being one of the most pervasive and dependent on outside markets. While the overall beverage industry continues to consolidate and shows signs of being in a rapidly declining phase of its lifecycle, the alternative beverage industry is growing rapidly as consumers look for healthy, high energy alternatives to traditional forms of caffeinated beverages. The alternative energy segment is quickly capitalizing on this trend, using advanced forms of branding and marketing to underscore the unique value of these drinks and the healthy, high energy benefits to consumers. The combination of healthy attributes and exceptionally good marketing is leading to a growing, highly profitable market.

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2. What is competition like in the alternative beverage industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants? Analyze all five forces.

Case Study on Case Study Competition in Energy Drinks Sports Drinks and Vitamin Enhanced Beverages Assignment

The competition in the alternative beverage market is intensifying rapidly, as each of the five forces that comprise the Porter Model are undergoing significant transformation in this market. Figure 1 shows the Porter Five Forces Model. The strongest of the five forces in the market is Buyer Power today, hence the very aggressive marketing going on across all competitors in this market. The Threat of New Entry is also exceptionally high right now, yet the Buyers are actually driving even greater change overall. The Threat of New Entry is seeing barriers to the production fo new drinks becoming more expensive to overcome. Supplier Power initially was very strong in this market as there were differentiated, and often highly customized ingredients. Over time this specific force has become more dependent on Buyer Power to drive profitability. The fourth factor, Threat of Substitution, is ever-present across the many substituted energy-inducing beverages consumers can purchase. It is more at a steady-state however; it will never be as strong as Buyer Power for example. Finally, the fifth factor is Competitive Rivalry, and that will continue to accelerate and gain momentum over time in the beverage market. None will emerge however as strong as Buyer Power over time.

3. How is the market for energy drinks, sports drinks and vitamin-enhanced beverages changing? What are the underlying drivers of change and how might those forces individually or collectively make the… [END OF PREVIEW] . . . READ MORE

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"Competition in Energy Drinks Sports Drinks and Vitamin Enhanced Beverages."  Essaytown.com.  October 13, 2012.  Accessed January 25, 2021.
https://www.essaytown.com/subjects/paper/case-study-competition-energy-drinks/8127102.