Competition in Energy Drinks, Sports Drinks, and Vitamin-Enhanced Beverages
1. What are the strategically relevant components of the global and U.S. beverage industry macro-environment? How do the economic characteristics of the alternative beverage segment of the industry differ from that of other beverage categories? Explain.
The strategically relevant components of the global and U.S. beverage industry macro-environment are essentially the expansion of the market for alternative beverages by introducing energy drinks, sports drinks, and vitamin drinks in international markets, and increasing the market size of alternative beverages by extending current product lines and developing new products.
Numerous factors affect the
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Bargaining power and buyer leverage are also among the strongest. Individuals who purchased the alternative beverages for convenience stores, grocery stores and wholesale clubs have the advantage of negotiating prices with the producers of the alternative beverages because of the fact that they are purchasing such large quantities of the products. Even though the majority of energy drinks were purchased in convenience stores, sports drinks and vitamin-enhanced beverages were also available in most delis and restaurants and were also sometimes sold at sporting events and in vending machines. The weakest competitive force in the alternative beverage industry appears to be the bargaining power and leverage of sellers. Due to the fact that there are many suppliers in this niche, the competition is quite intense it becomes important to have features such as ingredients, more attractive packaging etc. to differentiate them from other brands. The competitive force that seems to have the greatest effect on industry attractiveness and potential profitability of new entrants is the threat of new competition. Since the alternative beverage industry is a very lucrative one and tends to carry high price points, this profitability becomes very attractive to new entrants because of the possibility of being able to achieve success in the industry.
3. How is the market for energy drinks, sports drinks and vitamin-enhanced beverages changing? What