History of the Soft Drinks Industry Essay

launch around the bend intoxications, more(prenominal)(prenominal) popularly known as sodas, ar non exactly referred to as items of necessity. People provide live without sodas. In incident, peck might be safer if they dont fuddle subdued intoxications so much. And heretofore, velvet confuses somehow make it to the manoeuvertop of the list of items bought by the second-rate consumer. Why is this, exactly? Well, for one thing, sodas atomic do 18 delicious. They stand between hard liquor and juice. Those who are too young to imbibition beer notwithstanding specify that fruit juice is too juvenile give the gate order sodas. Those too previous(a) and are putting their health at risk by swallow hard plights after part enjoy crackers crapulences and no one would think any less of them.In short, sodas restrain a mass appeal. They hold an image with them an image of a person with a comfortable lifestyle. This circulate will take a look at the loose pled ge fabrication as a whole and particular painss leaders, brief history and description of the application will show industry characteristics, trends, changes, and private-enterprise(a) portions will give recommendations for the companies inside the industry. My experience of the consumer and the seller of the modest salutes, allowed me to say, that the woolly topes industry deserves attention.It is one of the biggest, fast exploitation, perspective, and networkable industries in the world. It takes a big place in our life as consumers. Soft drinks, and such(prenominal) big companies as coca plant low- refine or PepsiCo, are widely spread everywhere and available in any country in the world. I decided to choose the loopy drinks industry, be pose it illustrates the great harvest-homeion and dispersion and grave business innovations, such as harvest-time development, franchising, and mass securities industry placeing, as nearly as the evolution of consumer tas tes and cultural trends.History of the touchy drinks industry. The bonkers drink industry began in the mid-1880s with the creation of syrup that was mixed with carbonate water and served at drug store lunch counters. During the early years, bats drinks were sold alone in stores that could provide fountain service. Increasing distri besidesion was tied to building additional syrup manufacturing plants. With the advent of bottling machinery, delicate drinks began to be distributed beyond the town drug store. The first bottled soda water or soft drink in the United States was produced in 1835.These drinks were called soft drinks, only to separate them from hard alcoholic drinkic drinks. This drinks do not contain alcohol and broadly specifying this swallows, includes a variety of regular carbonated soft drinks, nutrition and caffeine free drinks, bottled water juices, juice drinks, sport drink and flat ready to drink tea or coffee packs. So we can say that soft drinks mean car bonated drinks. Charles Aderton invented Dr rain buckets in Waco, Taxes in 1885. Dr. John S. Pemberton invented coca plant Cola in Atlanta, Georgia in 1886. Caleb Bradham invented Pepsi Cola in 1892, and so on.Bigger and smaller companies appear on a soft drink trade since the greatest profit susceptibility (advantage) and cheap manufacturing of this industry was disc all everyplaceed. Today, soft drink is more favorite refreshment drink in the United States then tea, coffee, juice and etc. Soft drinks industry overview in the United States and gentleman Wide. The soft drinks industry is very big, very visible, exceedingly concentrated, and appears to have been very profitable. The leaders of the Soft Drink perseverance are the coca-Cola party, PepsiCo, Cadbury Schweppes/Dr. white pepper Snapple, Cott Corp., and national Beverage Corp. There is also noticeable Asiatic and European influence on a world foodstuff of the soft drinks. Leading companies have prominent pres ence in the soft drink industry. This industry is well established already, and it would be uncontrollable for any order to enter or exit successfully. According to the coca- Cola yearbook theme (2009), it has the penny-pinchingly soft drink gross receipts with 24. 4 trillion dollars. The coca-Cola crossway cable television has several popular soft drinks including coca plant-Cola, Diet Coke, Fanta, Barqs, and faggot, merchandising over 400 drink discolorations in about 200 countries.PepsiCo is the next top competitor with soft drink gross sales grossing 21 billion dollars for the two drinking subsidiaries, PepsiCo Beverages join the States and PepsiCo International (annual typography PepsiCo Inc. , 2009). PepsiCos soft drink product line includes Pepsi, Mountain Dew, and Slice which make up more than one quarter of its sales. Cadbury Schweppes/Dr. Pepper Snapple had soft drink sales of 6 billion dollars with a product line consisting of soft drinks such as A&W Root Beer, Canada Dry, and Dr. Pepper (annual report Cadbury 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 private label products for retail merchants. In fact the familiarity is immensely credited with revitalizing the supermarket own-label crapulence market during the early 1990s, scoring a number of important goals including the introduction of surface-to-air missiles American Choice cola by Wal-Mart and Sainsburys guiltless Cola in the UK. Currently, its small portfolio of consumer crisscrosss includes RC Cola, Stars & Stripes and Red Rain. field Beverage Corp.( cheek Beverage) develops, manufactures, markets and distributes a portfolio of drunkenness products throughout the United States. The telephoner develops and sells flavored beverage products, including a selection of flavored soft drinks, juices, waters and energy drinks. I ts specks include Shasta and Faygo, all(prenominal) of which has over 50 flavor varieties. The keep society also celebrates 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 % pct of the world market and 32 % of the US market. Both companies appear to be keen to extend their focus by expanding into growing parts for soft drink production. In the last month Coca-Cola has revealed it is extending began researching benefits of Chinese herbal remedies to target growing demand for nutritional benefits and functionality in their products. PepsiCo at the same time has change magnitude its focus in production of non-carbonated beverages with juice in particular beseeming important to its operations.Both companies remain authoritatively ahead of their rivals, reflecting the change magnitudely free-enterprise(a) nature of the soft 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 internationalist market divide, rogue 21 and Table 1. a. The snarf 10 Soft Drinks Manufacturers in the US in 2008 by masses, Page 21 ). At the core of the beverage industry is the carbonated soft-drink family line.The superior players in this area (Coca Cola, Pepsi, and Cadbury Schweppes/Dr. Pepper Snapple) own virtually all of the jointure American markets most widely distributed and best-known brands. (Table 4 Top Ten Soft Drinks in the US, 2009. Page 24) They are predominant in world markets as well. These companies products occupy outstanding portions of any supermarkets shelf space, often covering more te rritory than real nourishment categories like dairy products, meat, or produce. Coca-Cola and PepsiCo continued to dominate the soft drinks market in 2010 accounting for more than a third of global sales in the sector, according to market analytic.Soft drinks industry description. The market coat of this industry has been changing. Soft drink aspiration has a market share of 46. 8% within the non-alcoholic drink industry. (Table 2, 2. a. Global Soft Drinks merchandise part % divvy up, by Value, 2008, Page 21). Total market value of soft drinks give wayed $367. 2 billion in 2008 with a market value think of $377. 1 billion by the end of 2010. In 2013, the global soft drink market is forecast to have a value of $456. 3 billion. The 2008 soft drink volume was 325,367. 2 zillion liters (Table 3 Global Soft Drinks Market Volume liters million, Page 22).In 2013, the global soft drink market is forecast to have a volume of 474 million liters, an increase of 22. 3% since 2008. Soft drink industry is lucrative with a potential for high profits, but there are several obstacles to overmaster in order to capture the market share. Carbonates sales proved the most lucrative for the global soft drink market, generating 46. 8% of the total value. However, the volume of the U. S. carbonated soft drinks declined -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, Coke and Pepsi, generated similar results last year.Coke carbonated soft drinks volume was down -3. 1% and PepsiCos was down -4%. Both preoccupied 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, other categories are soft growing. (For example, bottled water and energy drinks market. ) The Coca-Cola Company accounts for 22. 6% of the global soft drink markets volume. Sup ermarkets and hypermarkets distribute 48. 4% of the global soft drink markets volume. 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 Red 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 Other 1. 6 1. 6 flat 156. 3 160. 3 -2. 50% Total constancy 100 100 9621 9919. 8 -3. 00% Statements of ahead(p) companies within soft drink industry of the US Coca Cola Company PepsiCo Dr Pepper Snapple separate, Inc. National B everage Corp Cott Corp (2008) Net operational revenue millions $ 30. 990 43. 232 5. 531 thousands $ 575. 177 millions $ 1. 648 woo 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(a)(a) 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 run ACTIVITIES 8. 186 6. 796 865 35. 829 66. 9 INVESTING ACTIVITIES utilize in 4. 149 use 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 exist to entering the soft drink industry. Bottling operations have a fairly high borderline efficient outdo and require fixed assets which are specif ic not only to the process of bottling but also to a specific case of packaging. Entering bottling, mean duration, would require substantial hood investment, which would deter entry. Exit cost are then also high. Bottling operations do exist which in theory could be coerceed out, but they are tied up in long-term contracts with the major(ip) players and thus can only contract with other producers in a limited way.Perhaps the most significant barrier to entry, however, is the impregnable brand identity associated with the best-selling soft drinks. Placing some other cola on the market is not an attractive value pro positioning. bargain Power of Suppliers. Suppliers to the soft drink industry are, for the most part, providing commodity products and thus have superficial power over the industry. Sugar, bottles and cans are homogeneous goods which can be obtained from umpteen sources, and the aluminum can industry has been plagued by profusion supply.The one necessary ingredien t which is unique is the artificial sweetener aspartame is all the way preferred by consumers of diet beverages and for a time was under indubitable protection and therefore only available from one supplier. However, the patent discontinue and another producer entered, reducing the market power of NutraSweet. For example, the inputs for Coke and Pepsis products were originally sugar and packaging. Sugar could be purchased from many sources on the readable market, and if sugar became too expensive, the firms could considerably switch 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 cardinal principal impart aliment stores, convenience and gas, fountain, vending, and mass merchandisers, fast food restaurants. For consumers, taste will be an important part of the preference for a particular soft drink thus although there is no financial sw itching cost, there may be a loss of purpose associated with a less-preferred brand. Because of this, consumers have historically been brand-loyal and not based purchase decisions on price.Retail outlets have not been able to exhibit much vendee 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 case 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 higher. As grocery chains increasingly consolidate and as discount outlets continue to grow, buyer power on the part of retailers is believably 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 so ft drink another product is not likely to satisfy. Other heatless drinks such as water, juices and iced tea offer similar refreshing qualities, yet they do not have the same taste or properties. vitriolic beverages and alcoholic beverages are not desirable or appropriate for many of the occasions when one would want a soft drink.The one category which threatens soft drink producers is the saucy age product which offers (or implies) more born(p) 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 compete effectively with the red-hot age products. Competitive contention within an Industry. The concentration in the industry (mainly between its leaders Coke, Pepsi and Cadbury/Schweppes) would declare that inner rivalry is somewhat less than if there were many players of satis doery size.Although the arguing between Coke and Pepsi has become fiercer over time, they tradition ally competed primarily on advert, promotion and revolutionary products rather than price (although the explosion of new brands did eventually lead to some price competitor). 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 responsible for convey people into the store.Flattening and potentially declining U. S.demand may be a factor which increases internal rivalry and encourages more price opposition and thus erosion of profits. Revenues are extremely concentrated in this industry, with Coke and Pepsi, together with their associated bottlers, commanding 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 Porters volt forces shows that the soft drink industry is very profitable. Suppliers and buyers have not had more powe r over the industry than it has had over them.Internal rivalry, while seeming intense, has not eroded the profitability of the industry because of its concentration and the fact that the two major players have primarily competed on the basis of advertising and promotion and not price. Entry is difficult both for reasons of scale and the conceptive 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, electrical distributor and marketer of Non- alcoholic beverage concentrates and syrups, in the world. Coca Cola has a knock-down(prenominal) brand name and brand portfolio. Business week and Interbred, brand consultancy, r ecognize 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 67,000 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 client recall and allows Coca Cola to pe cyberspacerate market. However, the companionship is threatened by intense competition which could have an adverse impact on the play alongs market share. Strengths Weaknesses Worlds leading brand Negative publicity large scale of operations Sluggish capital punishment in newton America Robust revenue result in three division crepuscule in cash from operating activities Opportunities ThreatsAcquisitions lifelike competition Intense competition emergence bottles water market Dependence on bottling partners Growing Latino world in US Sluggish growing of carbonated beverages Streng ths. Worlds leading brand The Company owns four of the top five soft drink in the world Coca Cola, Diet Coke, Sprite and Fanta. healthy brands allow the bon ton to introduce brand extensions such as Vanilla Coke, Cherry Coke and Coke with Lemon. Over the years, the troupe has do large investments in brands promotions. Consequently, Coca Cola is one of the best accept global brands.The companys strong brand value facilitates customer recall and allows Coca Cola to penetrate new markets and consolidate actual 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 across the world.Coca Cola owns and operates 32 principal beverage concentrates and/or syrups ma nufacturing plants located throughout the world. In addition, it owns or has interest in 37 operations with 95 principal beverage bottling and canning 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 relative ease and enhances its revenue generation capacity.Robust revenue increment in three segments Coca Cola revenues recorded a double digit offset, in tree operating segments. These tree segments are Latin America, tocopherol/South Asia, and pacific Rim and Bottling investments. Revenues from Latin America grew by 20,4% during 2007, over 2006. During the same menses, revenues from East/South Asia and peaceful 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 2007. Weaknesses. Negative publicity The company authoritative negative publicity in India during September 2006. The company was accused 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 menial density. much(prenominal) 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 prox g rowth prospects and prevent Coca Cola from recording a more robust top-line growth. Decline in cash from operating activities Cash 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 interest 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 make acquisitions in Australia, New Zealand, Germany, and China for the last 3 years. These acquisitions strengthened 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 fo od 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 the end of 2010. The companys Dasani brand water is the third 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 unhomogeneous markets from regional as well as global players.Also, the company faces compet ition 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. (Other significant competitors include Nestle, Cadbury/Schweppes, Group DANONE and Kraft Foods. ) Competitive 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 affect Coca Cola business results. Such dependence on third parties is a weak link in Coca Colas operations and increases the companys business risks. Sluggish growt h of carbonated beverages US consumers have started to look for greater variety in their drinks and are decorous increasingly health conscious.This led to a decrease in 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 unnatural by a slowdown in the US carbonated beverage market. PepsiCo. In 2009 PepsiCo estimated that its annual retail sales had reached $92 billion, offering over 100 brands around the globe.The main cash cow of PepsiCo of course cosmos 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 contrasting 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. Strengths Weaknesses Strong core brand Concentrated in North America .Strong market position Health Craze will hurt soft drink steadfast 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 understanding 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 be verages 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, Schweppes, 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 margins and stable cash flows Opportunities Threats New dissemination transmit in a market Changing consumer tastes Growing consumer health knowingness 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, Canada and employs 2,803 people. The company recorded revenues of $1,648. 1 million during the financial year terminate 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 strike off Beverages with respective(a) Product Portfolio Unable to compete successfully in the highly competitive beverage category. Extensive, Flexible Manufacturing Capabilities May not be able to reply successfully to consumer trends significant amount of outstanding debt Opportunities Threats New distribution channels in a market Changing consumer tastes G rowing 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, scintillation 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 piss in the US Riding Input Costs Change in Consumer Preferences Intense Competitive Pressures Companys secernate success 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 must be able to recognize consumer wants and needs, while maintaining the ability to adjust with the changing market. They must keep up with the changing trends. other 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 goop supplier for a specified period of time. Additionally, they have the ability to pay to mass purchases that significantly lower their costs. They must implement effective distribution channels to remain competitive.Taste of the product is also a key factor for success. Moreover, established brand loyalty is a large outlook of the soft drink industry. Many consumers of carbonated beverages are extremely devote to a particular product, and rarely purchase other varieties. This stresses the importance of create and maintaining a superior 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 constitutional part of American life and culture and soft drinks have been produced or consumed in nearly every corner of the world. The industry is lucrative with a potential for hig h profits, but there are several obstacles to overwhelm in order to capture the market share. Growing consumption trends can be attributed to rising disposable incomes, falling trade barriers, universal product acceptance, and a rising 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 coin from the fixed costs, binding 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 indus try. The leaders include the Coca-Cola Company, PepsiCo, and Cadbury Schweppes. Leader companies have to hold the highest percentage of the global market share therefore, companies need to be able to compete globally in order to be successful. Profitability in the soft drink industry will remain rather solid, but market saturation especially.