kasus energy drink

7/24/2019 kasus energy drink

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Group Summary

Business StrategyMM-6056

COMPETITION IN ENERGY DRINKS, SPORT DRINKS AND

VITAMIN-ENHANCED BEVERAGES

Lecturer :

Dr. Mohammad Hamsal

Developed by :

Deru R. Indika 29110301

Nisham Fiksriyoso 29110309

Erika Paraminda 29110310

Josia Pranaa !. 291103

Master of Business and Administration

Bandung Institute of Technology

Bandung

202


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1. "ase #yno$sis

At this time! in the global beverages industry! carbonated soft drin" mar"et has reached a

mature stage# This occurs because the demand shift from carbonated soft drin" to alternative

beverages# $ince the mid 2000s alternative beverages product became product%brand line that

important for beverages company because its mar"et gro& rapidly and give high profit

margins due to the premium price# This is not only affect to e'isting beverages

manufacturers! but also encourage the emergence of ne& sellers that focus solely on

alternative beverages#

Alternative beverages segment is divided over several segments of the energy drin"s!

sports drin"s! vitamin(enhanced beverages! t&o(once concentrated energy shots and

rela'ation drin"s# )ach segmen has different consumer types and different distribution

channel# In term of mar"et! global beverages company also began to shift to consumers in

developing countries than develop country &here the mar"et began to decline! e'acerbated by

&orse economic condition in *$ &hich is the largest mar"et of beverages industry#

2. Issues and Pro%lem

There are several Issues and problem that appear on alternative beverage Industry such as:a# $everal alternative beverage Industry begin to mature that could be seen from this graph

belo& that sho& the gro&th of global alternative beverage become slo&er every years#

200+ 200, 200- 200. 200 20 202 20/ 20

#001

+#001

-#001

0#001

2#001

#001

+#001

&lo%al 'lernai(e )e(era*e

alue gro&th

b# There are several research that sho& the negative effect from the alternative beverage

products#c# 3lobal economical crisis that ma"e customer became more price sensitive#

3. 'nalysis

&eneral En(ironmen dari 'lernai(e )e(era*es +PE#! 'nalysis,

# 4olitic 5actor


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( *$ government policy about suprime mortgage( 6itigroup relieve act that allo& ban" to merger 7ban" merger8( The 6ommodity 5utures Moderni9ation Act desember 2000( )conomic $timulus Act of 200-( ousing and )conomy ;ecovery Act of 200-

( )mergency )conomic $tabili9ation Act of 200- 7


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image! benefit! lifestyle! health! and others factors that

they get from the products# $o! company that have

innovation and can meet consumer &ant! &ill be success

in this industry 7$ustainable 6ompetitive Advantage8

Technology Lo& The technology in alternative beverage industry do not

change too much in recent year#

"om$eii(e En(ironmen +Porer-s "om$eii(e 'd(ana*e,

# 6ompetitive rivalryThe number of sellers in the alternative beverage industry until the year 200. is @uite

a lot but can be grouped into t&o groups# 6ompanies that operating globally! such as

4epsi6o! The 6oca6ola 6ompany! ;ed Bull 3mb! ansen atural 6orporation and

company that operate regionally or use a speciality brand of alternative beverages such

as 3la'o$mithCline! ;oc"star! tsu"a 4harmaceutical and hundreds of other sellers#

$ome company in this industry go into all segments of alternative beverages and some

focus their product only on a particular segment! as &ell as the different distribution

system of each company# Although the &orld&ide mar"et share dominated by large

companies such as 4epsi! 6oca6ola and ;edbull but &hen seen on a regional basis! per

segment! or channel distribution! the level of competition among company are thightenough cause the consumen buy the product base on flavour! content! image and benefit

offered by the product%brand or their purpose to consume alternative beverages#Top Brand in each segment of alternative beverages

)nergy Drin" )nergy $hot $port Drin" itamin(

)nhanced

;ela'ation

Drin" 7iche8

(;ed Bull(Monster(;oc"star($

(Amp(Double$hot(5ull throttle

( >(our )nergy($tac"er2 +(hour

4o&er( ;ed Bull )nergy $hot

( Monster itman( $ )nergy $hot

( 3atorade( 4o&erade( 4ocari $&eat

( 5u9e( $obe( Bloodshot( idration

(acation in

Bottle(Dream Eater

In alternative beverage! product innovation is an important thing that became the

differentiation in competition# As an e'ample! for energy drin" brand! innovation in

flavour! the energy(boosting properties! and image# )fficient distribution system also

became "ey differentiation in competition#

These are several descriptions about four ma=or players on alternative beverage industry:

4epsi 6o


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4epsi is the &orld fourth(largest food and beverage company in 200 and the largest

seller of beverage in *$ 7200.8# The reason &hy 4epsi become leading in food and

beverage industry isn?t because selling carbonated soft drin"s but by leading in most

other beverage categories such as A@uafina as the best brand &ater in *$! 5rappucino as

the best ready to drin" cofee! Tropicana as the best orange =uice sales and 3atorade as the

best sport drin"s# To e'pand their mar"et share in 200. 4epsi e'pand their product line in

alternative drin"s by launch 6harge! ;ebuild! Defend and Bloodshot#

The 6oca(6ola 6ompany

The 6oca(6ola 6ompany &as the &orld?s leading manufacturer! mar"eter! and

distributor of non(alcoholic beverage concerates by selling 6oca(6ola! Diet 6o"e! 5anta

and $prite# The biggest strength from 6oca(6ola is from the strong distribution channel as

an e'ample! multilayer distribution agreement &ith ansen atural 6orporation#

;ed Bull 3mb

;ed Bull &as the &orld?s number one seller of energy drin"s# To increase their brand

value ;ed Bull sponsored not only athletes and teams competing in sports such as auto

racing! free style bi"ing! &a"eboarding! sno&boarding and golf but also support several

music event#

ansen atural 6orporation

ansen atural 6oproration 768 is a company that sell variety of alternative

beverages such as natural sodas! blended fruit =uices! energy drin"s! sport drin"s! fruit

=uice smoothies! ready to drin" teas and vitamin enhanced drin"s# The strongest brand

from 6 is Monster! energy drin"s that launched in 2002# Monster is the the biggest

revenue ma"er for 6 &hich contribute .01 of 6 revenue to increase their sales

ansen imitated ;ed Bull strategy by support both sports and music events especially

roc" music#

2# Threat of ne& entryThe high profit margins &ill ma"e alternative beverage mar"et attract more ne&

entrants both globally and regionally! it is also supported by rising demand for the

alternative beverage# $ports drin" and vitamin(enhanced beverage carry >0 F ,01 of the

retail price than traditional drin"s! &hile in energy drin"s pricing is 001 higher than

carbonated soft drin"s# In other hand to create an alternative beverage business need


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medium(high capital investment and it?s an unfair competition if the ne& competitor

should compete &ith the ma=or player#

/# Buyer po&erAlthough it is &orld&ide sales volume of beverage alternatives continous to rise every

year but &ith poor global economic conditions create a demand for the premium beverage

price decreased# 6onsumers &ill be more price sensitive and &ill s&itch to other product

or even other segment# The currencies in one country also affect the buying po&er from

one to other country#

# Threat of substitutionearly the same benefits offered by each type of alternative beverages to ma"e each

product! can substitute each other as in sports drin"s and vitamin(enhanced beverages#

># $upplier po&erThe number of suppliers in the alternative beverage industry is large# These supplier

consist of an ingredient ma"ers! manufacturers of alumunium cans! plastic bottles and

caps! label printers and secondary pac"aging material e'cept for uni@ue supplements li"e

taurine &hich only a fe& suppliers# Therefore! suppliers are more aggresive in offering

partnership in providing business to alternative beverages company! especially secondary

pac"aging material suppliers#

Base on 4orter?s 5ive 6ompetitive 5orce! &e found that "ey competitiveness in alternative

beverages industry is:

4roduct innovation

In this factor! the "ey competitiveness of company product is form by ho& innovative

company create the product# Innovation can be done by customi9ing product ingredient!

flavour! pac"aging! or the benefit that product offer to consumer# ;esearch from industry

analyst sho& that e'otic flavour li"e cardamon! hibiscus! and cupuacu might prove to be

hits in 20 and 202# 6ostumi9e product ingredient that can give greater benefit &ithout

brea" the rule of country regulator e': 5DA 75ood and Drugs Administration8 prove to be

success in the competition! li"e &hat happen in energy shot segment# 4roduct innovation

also can create a ne& type of mar"et that is rela'ation drin" mar"et#

$egment

ne of the "ey competitiveness in this industry is related to the decision that company

ma"e related to the broad and the right segment to serve# This factor is determined by the

resource that company have# 5or big company! they can compete in all segments &ith the


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resource that they have! this happen to company li"e 4epsi6o and The 6oca6ola

6ompany# In other hand! focus in one segment can be the best strategy! such as ;edBull

strategy to focus only in energy drin"s segment ma"e them became the mar"et leader in

energy drin" mar"et

The use of channel distribution

6hannel distribution that the companies choose is depends on the company resource#

4epsi6o and 6oca6ola &ere dominating convenience store and special event channel#

There are many type of channel distributor! li"e supermar"ets! natural foods store!

&holesale clubs! convenience store! restaurant and delis# 5or company &ith limited

resource! it is &ise to use third parties channel distribution! by choosing the production

plant that has lo&est cost in both transportation and labor# In mar"et of alternative

beverage product! 6oca(6ola 6ompany uses their private carbonate distribution channel

around the &orld to reduce cost and increase mar"et penetration#

*se the ;ight $upplier

Although there are many suppliers in this industry! the largest sellers tend to have

e'clusive contract that can reduce production cost#

Brand image

ne of the "ey to &in the competition! the sellers needs to communicate about their

product image to the consumer# The right promotion that really connect &ith the productimage &ill ma"e the brand%product can penetrate the mar"et# )ach company has different

&ay to create their brand image &hen ;ed bull becoming the sponsor for various sport

events! Monster prefers to support roc" music event#

"onlusion and Reommendaion

Alternative beverage industry already mature! the competition on this industry is very

tight &ith so many ma=or players that compete in several segments# )ach player has their o&n

strategy to compete in this industry but the common strategies to compete in this industry are

price! taste! ingredients! volume and product diversification# 5rom this case &e recommend

that each company should be a&are about changes that occurs in general and competitive

environment by using 4)$T! 4orter five competitive forces! and try to create a scenario

planning to face both best and &orst situation#

/esson /earn


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a# $ocial factors are the strongest factor that determines the successful from one product

because it determines consumer demand especially: Demographic factor and $ocial

Issue factor 7health Issues8#b# )ach product should choose the right brand endorsement according their target mar"et

to support the product sales#c. *sually &e only analy9e the internal factor from the industry but no& &e learn to

analy9e the e'ternal factor that consist of general and competitive environment

kasus energy drink

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