ASAHI GROUP HOLDINGS (SCHWEPPES AUSTRALIA)

ASAHI GROUP HOLDINGS (SCHWEPPES AUSTRALIA)

Asahi Group are engaged in beer brewing but also produces and markets soft drinks.⁷¹

The four segments the company operates through include alcoholic beverages, soft drinks, food and others. Asahi acquired Australian beverage business owned and operated by Cadbury (Schweeps Australia) later entering into a binding share purchase agreement to acquire 100% of the issued shares of P&N Beverages Australia, the third largest soft drink company by volume in Australia. ⁷²The company enjoys a powerful position in the beverage market through a strong product portfolio and dominates a significant share of the market in the snack and beverage industry with worldwide brands.

The company's mission is:

“Asahi aims to satisfy its customers with the highest levels of quality and integrity, while contributing to the promotion of healthy living and the enrichment of society worldwide.”⁷³
Major products and services include alcoholic beverages and food as well as logistics business and restaurants. Non- alcoholic beverages include: coffee, carbonated beverages, tea-based drinks, water, fruit and vegetable drinks, chilled beverages. Schweppes Australia (under license) manufactures and distributes Pepsi, Pepsi Max, Pepsi Light and Pepsi Light Caffeine Free within Australia.⁷⁴

The company has ownership interest in food manufacturing, processing and bottling plants⁷⁵ with the successful launch of product extensions creating additional revenue streams and growth avenues.⁷⁶

The strengthen such competencies the company heavily invests in corporate social responsibility, resource and development, brand building, and sustainable growth⁸⁵ with a particular focus also on good-for-you portfolio of products.⁸⁶

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  Supply chain management efficiency⁸⁷
  
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  Distribution influence
  
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  Large scale operation units
  
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  Established brand name
  
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  Economies of scale
  

WEAKNESSES

• 
  Late entry into markets where Coke already had established distributor and consumer space.
  
• 
  PepsiCo also lagged behind in the potential growth market of low or no sugar-based beverages.⁸⁸
  

OPPORTUNITIES

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  An opportunity for the Asahi Group Holding Ltd is the strategic acquisitions to expand business ⁸⁹
  
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  Power to negotiate exclusive supply contracts⁹⁰
  

THREATS

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  Main competitor, Coca-Cola has strong brand recognition across the globe with key brands and widespread popularity.
  

THREAT TO VIRGIN

The company launched eco-friendly, recyclable and compostable cups in the US.⁹¹

Threat to industry or Virgin??

PepsiCo Inc:

PepsiCo, Inc, is a global snack and beverage company. ⁹²It manufacturers, markets and sells a variety of salty, sweet and grain-based snacks as well as carbonated and non-carbonated beverages.⁹³

The company has 19 brands in in its portfolio, which generate over $1,000 million each in annual retail sales. Some of these include Pepsi-Cola, mountain dew, diet pepsi, Gatorade, Lay’s and Tropicana.

The company recorded revenue of $57, 838 million during the financial year ending Dec 2010⁹⁴

PepsiCo operates in over 200 countries and has large-scale operations in North America (Canada and the US), Mexico and the UK.⁹⁵A segment of the PepsiCo business unit; FLNA, uses its own as well as third party manufacturing facilities to produce its snack products (including Lay’s potato chips, Dorito’s etc) which are then sold to independent distributors and retailers.⁹⁶ Schweppes Australia was formed on 3 April 2009, when we became a wholly-owned subsidiary of Asahi Group Holdings, Ltd.⁹⁷ Under license, Schweppes Australia manufactures and distributes Pepsi, Pepsi Max, Pepsi Light and Pepsi Light Caffeine Free within Australia.⁹⁸

PepsiCo introduced the first caffeine-free colas in 1982 and was later restructured to focus on soft drinks, snack foods and restaurants.¹⁰¹ The company went global through joint ventures and later merged with Quaker Oats to create a $25 billion food and beverage company.¹⁰² The move not only expanded PepsiCo's position in the market but enhanced its distribution influence, giving it greater power to negotiate exclusive supply contracts.¹⁰³ Cadbury Schweppes, the UK's chocolate and soft drinks group, has kept a low profile, but it voiced its concern when required to comment by the FTC.¹⁰⁴

The company also formed a joint venture with Lipton to expand the marketing and distribution of Lipton’s range in select markets.¹⁰⁵ Key acquisitions include Sakata, the Australian rice snacks manufacturer.¹⁰⁶

2006: PepsiCo and the National Hockey League (NHL) signed a multiyear deal, under which PepsiCo was given exclusive North American rights, as well as select marketing and promotional rights in the beverage, sports beverage, bottled water and snack categories. PepsiCo replaced Coca-Cola, which had a similar deal with the NHL for 17 years. As part of the deal, Gatorade became the official sports drink of the NHL, replacing Coke’s Powerade, and Aquafina became the bottled water.¹⁰⁷

The joint venture between PepsiCo and starbucks allowed Starbucks access to PepsiCo’s established distribution channels.¹⁰⁸

2006 PepsiCo Australia acquired Bluebird Foods, New Zealand’s snack maker for NZ$245 million.¹⁰⁹

Brand of PepsiCo; Aquafina launched a low calorie, vitimin enhanced water beverage in different flavour combinations. ¹¹⁰ PepsiCo made official plan to invest $1 billion in China as part of the company’s strategy to expand in emerging markets and broaden its portfolio of locally-relevant products. ¹¹¹ 2010: PepsiCo completed the strategic acquisitions of its two largest bottlers and invested heavily in CSR and R&D. ¹¹² The company begins to consider the environment with sustainable crop farming technology, and the health conscious consumer with investment in coconut water and decision to ensure their portfolio become more ‘natural ingredient based’. ¹¹³

2011: PepsiCo and Burger King signed multi-year agreement ensuring PepsiCo is the exclusive soft drink supplier.¹¹⁴ The company also launched eco-friendly, recyclable and compostable cups in the US.¹¹⁵ Beverages include: bottled water, carbonated soft drinks, chilled juices and juice drinks, powder drinks, ready-to-use tea, sports drinks.¹¹⁶

Brands include: Alegro, Amp Energy, Aquatina, Aunt Jemima, Cheetos, Cracker Jack, Pepsi, Doritos, Duyvis, Frito-Lay, Fritos, Fruktovy Sad, Frustyle, Gamesa, Gatorade, Izze, Lay’s, Life, Mirinda, Mountain Dew, Mug, Near East, Pasta Roni, Propel, Quaker, Rice-A-Roni, Rold Gold, Ruffles, Sabritas, Sakata, Sierra Mist, Simba, Smith’s, Snack a Jacks, SoBe, Sonric’s, Stacy’s, SunChips, Tonus, Tostitos, Tropicana, V Water, Walkers, Ya. ¹¹⁷

The company recorded revenues of $57, 838 million during financial year ended Dec 2010, an increase of 33.8% over 2009.¹¹⁸All other countries (including Australia) accounted for 27.4% of total revenues in FY2010. Revenues from these countries totalled $15, 830 million, an increase of 24.2% over 2009.¹¹⁹ PepsiCo holds significant market share in the snack and beverage industry with worldwide brands. The complimentary combination of snack and beverage business imparts unique competitive advantages to PepsiCo. However, the carbonated drinks market in the US has witnessed a slow but steady switching trend to low sugar and sodium products, thereby signalling a negative growth trend of carbonated soft drinks product.¹²⁰

Strengths:

1.

2. Combination imparts unique competitive advantage allowing PepsiCo to leverage existing distribution system with the size of its infrastructure providing a barrier to entry for new entrants and competitors since such a model is costly to replicate¹²²

4. Reaches bigger retail and wholesalers through customer warehouse channel by delivering its products directly from manufacturing plants and warehouses to customer warehouses/retail stores.¹²⁴ The diversified product base and multi-channel distribution system protect it from a downturn specific to a market or business line or distribution network, thus reducing business volatility.¹²⁵

5. PepsiCo has established presence in both developed and emerging markets, internationally and domestic. Large international presence allows the company to expand its markets to high growth economies, derive the related synergies of expanded operations and also reduce the business risk.¹²⁶
Opportunities

Acquisitions broaden the company portfolio and also strengthen its geographical reach with international expansion likely to provide long term growth opportunities.¹²⁷

Datamonitor estimates, the soft drinks market in Asia-Pacific grew by 4.1% in 2010 reaching a value of $111, 023.6 million. In 2015 the Asia Pacific soft drinks market is forecast to have a value of $143, 597.2 million, an increase of 29.3% since 2010.¹²⁸
Threats

Coca-Cola has strong brand recognition across the globe with key brands such as Diet Coke, Sprite and Fanta. Coke has a wide geographical reach and widespread popularity. One of the contributing factors for PepsiCo’s decline in beverage industry post 90’s has been its late entry in international markets where Coke already had established distributor and consumer space. PepsiCo also lagged behind in the potential growth market of low or no sugar based beverages.¹²⁹ Company focus on brand building, increasing global presence, R&D, emerging markets infrastructure, sustainable growth.¹³⁰ Focus also on good-for-you portfolio of products.¹³¹

Company operates through 4 business divisions: alcoholic beverags, soft drinks, food and pharmacetucals and others.

Soft drinks division manufactures and sells various drinks such as PepsiCo – one of world leading global beverage, snack and food companies. Pepsi operates through business units (same as mentioned in doc1). PAB sells beverage concentrates, pepsi, Gatorade, Tropicana pure premium, lipton, sierra mist, Tropicana juice, naked juice, etc. PAB also manufacturers or contracts manufacturers to sell ready-to-drink tea, coffee and water products through Unilever (under the lipton brand name) and Starbucks.

­­­­Data Data from datamonitor360:(Already included in research document [diagrams and tables etc]).ß

PepsiCo, Inc.

Company Profile

Publication Date: 11 Jul 2011

www.datamonitor.com

COMPANY:

The company’s headquaters employs 294,000 people.

(FY2010), an increase of 33.8% over 2009. The operating profit of the company was $8,332 million

in FY2010, an increase of 3.6% over 2009. The net profit was $6,320 million in FY2010, an increase

of 6.3% over 2009.

Chairman and Chief Executive Officer: Indra K. Nooyi (executive board)
Data from google scholar: most of the data on scholar needed to be bought however the International Marketing Exemplar Firm Report was one I thought would be good.

Pepsi has 41 brand names

Is constantly struggling with there leading competitior Coke-cola

Epsi holds a 37.5% share in the carbonated drinks market (Coke 42.9%)

Founded as a bottling company in the 1800’s.

PepsiCo’s long-term success has been attributed to their domination of the market and superior reputation for being a stable, quality brand name.

Advertising efforts first marketed Pepsi-Cola as a bargain brand

After changing hands four times and declaring bankruptcy twice in the first part of the 20th century, Pepsi shifted its focus from bargain brand promotions to advertising geared toward young people—this is where the “Pepsi Generation” marketing plan originated from.

PEST ANALYSIS

POLITICAL:

New regulatory pressures regarding health concerns and other global concerns have forced companies in the food/beverage industry to take on new challenges and reevaluate their products to meet new consumer demands,

PepsiCo has developed a Blue Ribbon Advisory Board, made up of leading health and wellness experts and third-party advisors from across the globe in order to help the corporation face these newly strengthened consumer demands. Furthermore, PepsiCo has recently worked alongside the Clinton Foundation, American Heart Association, and the North American beverage industry in order to set policies regarding placement of the correct products in the correct areas.

ECONOMIC:

The major economic issue facing PepsiCo and its subdivisions 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.

Because PepsiCo relies on these industries, inflation costs must be factored into their cost equations. The corporation acknowledges its fortunate ability to navigate through tough economic times in the past.

SOCIAL:

PepsiCo and PBNA have successfully adopted new goals and produced new products in order to follow these growing trends. Not only has PBNA recently began to offer new products such as Diet Pepsi Max, a cola with zero calories, sugars, carbohydrates, or Total Fat, but it has also added new lines of product in order to meet this more health-conscious market.

TECHNOLOGY:

PepsiCo and its subdivisions utilize technology in order to sustain company growth, keep up with the demands of its sustained growth, and perform efficiently.

PepsiCo’s delivery systems provide a strong competitive advantage. In particular, their most powerful distribution system, Directstore-delivery (DSD) allows them to supply all of their retailers and customerdistributors with up-to-date stock. “Directstore-delivery allows us to create maximum appeal and visibility for our brands and support in-store promotions. DSD works well for popular 7 products we restock often, because it allows us to distribute new products quickly. Our DSD system reaches hundreds of thousands of retail outlets this way, from neighborhood convenience stores to large-format supermarkets” (Annual Report, 11).
Data from Data monitor: think the same as Data Monitor360
Data from PepsiCo.com/Annual Report 2012

http://www.pepsico.com/Company/Our-Mission-and-Vision.html

At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do, but the right thing to do for our business.

Our Mission

Our Vision

"PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today."

Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. Data from PepsiCo.com/Annual Report 2012

http://www.pepsico.com/Company/Our-Mission-and-Vision.html
Performance with Purpose

At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society - delivering what we call Performance with Purpose.

Our approach to superior financial performance is straightforward - drive shareholder value. By addressing social and environmental issues, we also deliver on our purpose agenda, which consists of human, environmental, and talent sustainability.

Learn more about Perfor

Data from annual reports:

http://www.pepsico.com/Download/PepsiCo_Annual_Report_2010_Full_Annual_Report.pdf

“Good for all… is good for business”

At PepsiCo, Performance with Purpose means delivering sustainable growth by investing in a healthier future for people and our planet. As a global food and beverage company with brands that stand for quality and are respected household names — Pepsi-Cola, Lay’s, Quaker Oats, Tropicana and Gatorade, to name but a few — we will continue to build a portfolio of enjoyable and healthier foods and beverages, find innovative ways to reduce the use of energy, water and packaging, and provide a great workplace for our associates. Additionally, we respect, support and invest in the local communities where we operate, by hiring local people, creating products designed for local tastes and partnering with local farmers, governments and community groups. Because a healthier future for all people and our planet means a more successful future for PepsiCo. This is our promise.

=

Values of PepsiCo include:

Human Sustainability

Some performance targets include:

increase the amount of whole grains, fruits, vegetables, nuts, seeds and low-fat dairy in our global product portfolio,display calorie count and key nutrients on our food and beverage packaging by 2012.

Some key performance targets include: to improve our their water use efficiency, increase CSR

Work to eliminate all solid waste to landfills from our production facilities.

Encourage our associates to lead healthier lives by offering workplace wellness programs globally.

Our Customers

Our primary customers include wholesale distributors, grocery stores, convenience stores, mass merchandisers, member- ship stores, authorized independent bottlers and foodservice distributors, including hotels and restaurants.

We normally grant our independent bottlers exclusive contracts to sell and manufacture certain beverage products bearing our trademarks within a specific geographic area.

These arrangements provide us with the right to charge our independent bottlers for con- centrate, finished goods and Aquafina royalties and specify the manufacturing process required for product quality.

Our Distribution Network

Our products are brought to market through DSD, customer warehouse and foodservice and vending distribution networks. The distribution system used depends on customer needs, prod- uct characteristics and local trade practices.

Our Competition

Our businesses operate in highly competitive markets. We compete against global, regional, local and private label manu- facturers on the basis of price, quality, product variety and distribution. In U.S. measured channels, our chief beverage competitor, The Coca-Cola Company, has a larger share of CSD consumption, while we have a larger share of liquid refreshment beverages consumption. In addition, The Coca-Cola Company has a significant CSD share advantage in many markets outside the United States. Further, our snack brands hold significant leadership positions in the snack industry worldwide. Our snack brands face local, regional and private label competitors, as well as national and global snack competitors, and compete on the basis of price, quality, product variety and distribution. Success in this competitive environment is dependent on effective pro- motion of existing products, the introduction of new products and the effectiveness of our advertising campaigns, marketing programs and product packaging. We believe that the strength of our brands, innovation and marketing, coupled with the quality of our products and flexibility of our distribution network, allow us to compete effectively.

Other Relationships

Certain members of our Board of Directors also serve on the boards of certain vendors and customers. Those Board members do not participate in our vendor selection and negotiations nor in our customer negotiations. Our transactions with these vendors and customers are in the normal course of business and are con- sistent with terms negotiated with other vendors and customers. In addition, certain of our employees serve on the boards of PBV and other affiliated companies and do not receive incremental compensation for their Board services.

Changes in the legal and regulatory environment could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation.

The conduct of our businesses, and the production, distribu- tion, sale, advertising, labeling, safety, transportation and use of many of our products, are subject to various laws and regulations administered by federal, state and local governmental agencies in the United States, as well as to foreign laws and regulations administered by government entities and agencies in markets

in which we operate. These laws and regulations and interpre- tations thereof may change, sometimes dramatically, as a result of political, economic or social events. Such regulatory envi- ronment changes may include changes in: food and drug laws; laws related to advertising and deceptive marketing practices; accounting standards; taxation requirements, including taxes specifically targeting the consumption of our products; competi- tion laws; privacy laws; and environmental laws, including laws relating to the regulation of water rights and treatment. Changes in laws, regulations or governmental policy and the related interpretations may alter the environment in which we do busi- ness and, therefore, may impact our results or increase our costs or liabilities.

Governmental entities or agencies in jurisdictions where we operate may also impose new labeling, product or production requirements, or other restrictions. For example, studies are underway by various regulatory authorities and others to assess the effect on humans due to acrylamide in the diet. Acrylamide is a chemical compound naturally formed in a wide variety of foods when they are cooked (whether commercially or at home), including french fries, potato chips, cereal, bread and coffee.

It is believed that acrylamide may cause cancer in laboratory animals when consumed in significant amounts. Studies are also underway by third parties to assess the health implications of carbonated soft drink consumption. If consumer concerns about acrylamide or carbonated soft drinks increase as a result of these studies, other new scientific evidence, or for any other reason, whether or not valid, demand for our products could

decline and we could be subject to lawsuits or new regulations that could affect sales of our products, any of which could have an adverse effect on our business, financial condition or results of operations.

We are also subject to Proposition 65 in California, a law which requires that a specific warning appear on any product sold in California that contains a substance listed by that State as having been found to cause cancer or birth defects. If we were required to add warning labels to any of our products or place warnings in certain locations where our products are sold, sales of those products could suffer not only in those locations but elsewhere.

In many jurisdictions, compliance with competition laws is of special importance to us due to our competitive position in those jurisdictions. Regulatory authorities under whose laws we operate may also have enforcement powers that can subject us to actions such as product recall, seizure of products or other sanc- tions, which could have an adverse effect on our sales or damage our reputation.

In addition, we and our subsidiaries are party to a variety of legal and environmental remediation obligations arising in the normal course of business, as well as environmental remedia- tion, product liability, toxic tort and related indemnification proceedings in connection with certain historical activities and contractual obligations of businesses acquired by our subsidiar- ies. Due to regulatory complexities, uncertainties inherent in litigation and the risk of unidentified contaminants on current and former properties of ours and our subsidiaries, the potential exists for remediation, liability and indemnification costs to differ materially from the costs we have estimated. We cannot assure you that our costs in relation to these matters will not exceed our established liabilities or otherwise have an adverse effect on our results of operations.

Maree: should I include competitive strategies (e.g. Low cost defender’s for both) in this section accompanied with brief description (p.68)?

MINOR COMPETITORS

• 
  Bickford's (includes juices, sodas, teas, sparkling water with fruit flavor, energy drinks, bottled water)
  
• 
  Bundaberg (includes diet varieties, flavored CSD includes lemon lime bitters and ginger beer)
  
• 
  Cascade (includes fruit juices, ginger beer, flavored CSD including sparkling apple juice and sparkling blackcurrant)
  
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  Golden Circle Company (includes fruit juices, cordials and CSD)
  
• 
  Kirks (line of sodas marketed by Coca-Cola Amatil) marketing core competency
  
• 
  LA Ice Cola (includes cola available in four varieties including sugar free and diet variety)
  
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  Leed (includes carbonated lemonade) – distributed by coke
  
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  Lido (includes lemonade)
  
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  Leed (includes carbonated lemonade) Kirks (line of sodas marketed by Coca-Cola Amatil)
  

Description:

The key competitors in the Australian CSD industry are extremely efficient and dominant throughout the supply chain. While consumers determine retailer purchases, it is the key competitors that have formed strategic partnerships, own plants and warehouses, determine the degree of new entrant access to raw materials and solely contract bottlers.

Implications:

These players have the resources, capabilities and budgets to defend their market position and employ attack strategies if required.

OPPORTUNITIES	RATING*	THREATS	RATING*
Changing consumer trends	4/5 – 5/5	Competitor dominance	5/5 – 5/5
Limited product innovation	5/5 – 1/5	Competitor synergies in supply & distribution channels	4/5 – 4/5

The rating is based on a double-digit 5-point scale for the degree of significance and for probability of occurrence. The first number/5 represents the degree of significance rating out of 5, 5= extremely significant and 1 = not very significant. The second number/5 represents the probability of occurrence, 5= extremely likely and 1 = low probability.

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