ECONOMIC FORCES Hannah: please complete (refer to project guideline).
For example I have used what you had in the table: The inflation in price of PepsiCo.’s supplier chain is an advantage for Virgin Cola as PepsiCo has a concreted supply chain that would cost a huge amount to change.
How does it impact consumer trends and cost of doing business?
Scenario:
1. The soft drink market is so influenced by the markets top 3 companies’ that any new entrant is immediately counter attacked. 2. The global financial crisis has had such an effect on the market that consumers’ are more hesitant to invest in Virgin’s new venture. 3. The global financial crisis has lead consumers to become more spending conscious, reduced spending, reducing the likelihood of consumers trying a new brand. – reference consumer trends
Implications:
Compared to the dominant competitors, our price point will not be as competitive which could influence consumer purchasing decisions however compared to other healthy alternatives within the product category. A slip in consumer confidence as a result of the Global Financial Crisis. This threatens entry into any market and considering the rise in the cost of living which affects the carbonated soft drink market as it is a luxury.
OPPORTUNITIES | THREATS |
MARKET VALUE:
“The Australian soft drinks market grew by 3.3% in 2010 to reach a value of $10,953 million.”6
The growing market value of the soft drink industry in Australia is an opportunity for new entrants.
| The top 3 players in the soft drink market (Coca-Cola, Pepsi and Asahi breweries) hold the largest market share in Australia (54.9%) “Coca-Cola Company, is the leading player in the Australian soft drinks market, generating a 39.4% share of the market’s volume.”7
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MARKET VALUE FORECAST:
In 2015, the Australian soft drinks market is forecast to have a value of $12,721.8 million, an increase of 16.1% since 2010.”8
The increasing market value forecast for the soft drinks market creates an opportunity for new entrants to enter a market with an increasing value forecast.
| “Consumer confidence has slipped in the last quarter with more Australians apprehensive about economic uncertainty, financial security, and rising gas and electricity prices.”9
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“The major economic issue facing PepsiCo is the rising input costs of their businesses due to structural inflation. Agricultural, energy, and some metal industries are going through periods of steady inflation.”10
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The soft drinks segment recorded revenues of $4, 463.9 million in FY2010, an increase of 10.2% over FY2009.11
A 10.2% increase in revenue in 1 year again illustrates that the soft drinks industry in Australia is a valuable market to enter into.
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Hannah: please insert analysis summary here (refer to project guideline).
Please include Socioeconomic trends (including demographic trends), what impact is a multicultural society, where people live and how this impacts industry and strategy, growth of health conscious consumers etc
Multicultural society provides opportunity for niche markets as does the increasing amount of health conscious consumers.
Socioeconomic trends determines the best way to position of our product and product placement
Scenario: The top 3 players each introduce brand new flavours to keep up with the health trend, which expands the market but makes it harder for new entrants to succeed. The ‘healthy’ trend is moving into the later stages of maturity of the product life cycle and consumers’ become bored/skeptical of it. A further population increase will expand the market and develop more opportunities for a niche market to be introduced. An increase in the birth rate will increase the amount of children that are present during the late growth, early maturity stages of a new product.
Implications:
Hannah: please complete (refer to project guideline). Marketing a CSD as a healthy alternative consumers may be sceptical (vitamin water = sugar)
OPPORTUNITIES THREATS Since 1994, household spend on food and non-alcoholic beverages have increased by 14%, with the population spending over $16 a week more on these commodities.12
Coke is looking to introduce another product into its line of cola flavoured soft drinks: “Green Tea Coke”. This will appeal to women who are health-conscious and parallels with the increasing market for health products.
“Meals out and fast foods” (which are both sufficient opportunities to purchase a carbonated beverage such as cola) is the highest-ranking expenditure for households in 1999. 13
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