Focal Task - Five Forces Analysis Template

docx

School

Indiana University, Bloomington *

*We aren’t endorsed by this school

Course

J375

Subject

Marketing

Date

Feb 20, 2024

Type

docx

Pages

Uploaded by BaronTeamDog38

Industry Analysis for the Non-Alcoholic Beverage Industry (NAICS: 722515) The template below will help you organize your thoughts as you complete an industry analysis for your focal firm. Some features may not be appropriate for all firms. The template will almost certainly expand on to the next page if filled out completely. Be sure to include all relevant aspects of this framework and complete all steps listed above. Force Strength Force (High, Med, Low) Support & Substantiation Threat of New Entrants Medium Barriers to Entry? 1. FDA regulations 2. Distribution Channels 3. Brand Recognition 4. Economies of Scale 5. Supply Chain Challenges Explanation regarding strength of N.E.? - While a beverage is a simple product compared to something like an airplane, there are many factors that make it difficult to enter the market. Brand recognition is crucial. People buy brands that they have heard of and are unlikely to try a new product. Shelf space is extremely valuable and competitive amongst rivals. Most of these products are sold in retail settings, so creating distribution channels is critical, but it can be difficult due to long-standing relationships between retailers and their competitors. While the FDA regulates all food and drink products in the United States, it does not regulate the sale and labeling of energy drinks. Additionally, there is a risk of a legacy company such as Red Bull or Monster creating a product line tailored towards fitness and health to compete directly with Celsius. New entrants are most at risk here. Threat of Substitutes Low Typical Substitutes for this industry 1. Coffee 2. Health beverages 3. Gatorade 4. Soda Explanation regarding strength of Substitutes? - There are other non-alcoholic beverages on the market, but they do not have the same effects. No other options offer both health benefits for active people as well as caffeine for energy, so the threat of substitutes is low. However, customers may switch to a product in a different industry because they want a cheaper alternative. ©2020 Flip-Ed All Rights Reserved

Force Strength Force (High, Med, Low) Support & Substantiation Threat (Bargaining Power) of Buyers Medium Typical Buyers: Retailers that sell beverage items include supermarkets, health food stores, convenience stores, and online retailers. Distributors: Businesses in charge of providing Celsius to different retail locations. End Consumers: People who buy and consume Celsius for their own consumption and physical well-being. Explanation regarding the strength of buyers: - There is a high buyer volume because they contribute considerably to overall sales. Therefore, retailers or distributors who buy Celsius in volume may have more negotiation influence. The variety of sales channels may also lessen the overall impact. In addition, there is a high presence of alternatives on the market which provide buyers with more options. The industry has a high seller dependence on buyers as well. If Celsius relies heavily on a few key buyers, their bargaining power increases. However, the brand's efforts to diversify its distribution channels and customer base could moderate this dependence. Threat (Bargaining Power) of Suppliers Medium Typical Suppliers: Guarana extract suppliers: providers of guarana extract, a plant- derived source of caffeine used in Celsius. Raw material suppliers: suppliers of raw materials like ginger root and green tea extract, essential components. Packaging suppliers : suppliers of packaging materials such as bottles, labels, and caps Explanation regarding the strength of suppliers: - Providers may have greater bargaining power when few suppliers of essential products are on the market. This is accurate for Celsius, as their reliance on a small number of suppliers gives them greater control over their terms and prices. This industry has low switching cost for suppliers because it is easy for buyers of Celsius to switch suppliers. However, there is low differentiation on one of their ingredients, guarana extract. The guarana extract used in Celsius is a plant-derived source of caffeine. While guarana is a key ingredient in Celsius, it is not highly differentiated, which contributes to a moderate level of supplier power. ©2020 Flip-Ed All Rights Reserved

Force Strength Force (High, Med, Low) Support & Substantiation Threat (Intensity) of Rivalry High Who are the main firms within this industry? 1. Red Bull 2. Monster Beverage 3. The Coca-Cola Company 4. PepsiCo, Inc. Basis of Competition: 1. Low switching costs 2. Low product differentiation 3. Overcapacity in the industry 4. Marketing and Advertising 5. Customer Loyalty Explanation regarding the strength of Rivalry: - Rivalry in this industry is high. There are many legacy companies who have been producing energy drinks for decades. These brands are fighting for limited shelf space in convenience and grocery stores. Each brand uses unique, aggressive marketing tactics to attempt to overtake the others. Each brand is constantly innovating and creating new flavors to keep up with customer's demand. Narrative interpreting the template Please summarizes the key findings from the template on the previous page – 4/5 lines minimum Celsius and its competitors have worked to develop a strong brand and a wide network of distributors in the beverage industry. This makes it hard for new competitors to enter the market. Celsius’ product is unique because it offers energy through caffeine as well as health benefits. This makes customers less likely to switch to substitutes and more likely to stay loyal to the industry. The company also sells its product through different channels, which helps it deal with the bargaining power of buyers. It pays attention to the supply of guarana extract and other raw materials, which are important for its product quality and differentiation. The company faces tough competition from big names like Red Bull and Coca-cola, but it has a smart strategy of pricing, product innovation and marketing. This way, the company keeps a competitive advantage and prepares for future growth in the changing beverage market. ©2020 Flip-Ed All Rights Reserved

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Related Documents

Assignment 6 Your turn_A Sports Plan.pdf

Marketing Task 1.docx

Mark quizzes section 2.pdf

Identify and evaluate marketing opportunities_2.docx

Social Media Marketing Plan Guide_W24.docx

CWA15 - Merkle Guest Lecture.docx

Individual Case Analysis.docx

Week 4 Discussion.docx

Week 1 Discussion.docx

MMK365- Tutorial Solution- Week 9.pdf

INT MARKETING FINAL REPORT.docx

MktStrat Executive Summary 1.pdf

Recommended textbooks for you

Purchasing and Supply Chain Management

Operations Management

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Cengage Learning

Management, Loose-Leaf Version

Management

ISBN:9781305969308

Author:Richard L. Daft

Publisher:South-Western College Pub

Marketing

ISBN:9780357033791

Author:Pride, William M

Publisher:South Western Educational Publishing

MARKETING 2018

Marketing

ISBN:9780357033753

Author:Pride

Publisher:CENGAGE L

Principles of Management

Management

ISBN:9780998625768

Author:OpenStax

Publisher:OpenStax College

SEE MORE TEXTBOOKS

Recommended textbooks for you

Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Management, Loose-Leaf Version
Management
ISBN:9781305969308
Author:Richard L. Daft
Publisher:South-Western College Pub
Marketing
Marketing
ISBN:9780357033791
Author:Pride, William M
Publisher:South Western Educational Publishing
MARKETING 2018
Marketing
ISBN:9780357033753
Author:Pride
Publisher:CENGAGE L
Principles of Management
Management
ISBN:9780998625768
Author:OpenStax
Publisher:OpenStax College