Competition in Energy Drinks Case Essay

Within the boozing industry companies standardized Pepsi and Coca low-down were using alternative potables as a way to income tax return the effect of the decline of consumption of carbonated beverages. This in turn pass on economic aid them sustain volume. These two large companies were working hard to expand their alternative marketplace line by introducing sports drinks, energy drinks, and vitamin drinks. One of the largest issues at exceed is the pressure to stop producing these harmful drinks, people felt that they had a disallow impact on your body and believed their strategies promoted reckless behavior. Even though this was occurrent they had to keep push through to be very successful. Sales began to maturation as well as market sh atomic number 18 which introduced several sweet brands to the alternative beverage industry.In the alternative beverage industry competitor is fierce. Some of the major factors that play a role are crossroad innovation, different iation create brand loyalty based on taste, the drinks image, advertising, and sponsorships. many of these companies like Hansen and Red bull sponsored events to promote their brand. The strongest of the 5 competitive forces deep down the industry is that of substitution. Pepsi and Coca booby made their products available to customers with ease pushing some other companies out of business. The weakest of the 5 forces is buyer bargaining power. Buyers do non have much control over the prices at which these beverages are existence sold. If they were looking for an energy drink they would have to pay the high prices. Buyers are starting to become more brand loyal so they testament buy at high prices more often.Companies like Coca sens and Pepsi frontm to make the industry less attractive for new entrants. earth is because they both are well established with good brand recognition. Consumers will most likely always choose the brand they are known than new unfamiliar brands. Th e market for energy drinks is declining, sales are down, and the market has matured. Over the next 5 years drivers of change will non slow down companies like Coca Cola, Pepsi, or Red Bull. preferably of looking to compete on price, volume, or market share gains it looks like they will look into product innovations to increase sales. At this point judgment of conviction drivers of change will most likely keep the alternative beverage unattractive for smaller companies. Pepsi and Coca Cola are able to counter the downturn the economy because of the broad range of products they have.Red Bull on the other hand has only a few products and sales are suffering. A few recommendations for the larger companies are as follows. Coca Cola does very well in the carbonated beverage industry save is way behind in the alternative beverage industry. They can do some research on countries where they want to sell their product and see what consumer actually want. By doing this they could create a product that will call down to local consumer tastes. Pepsi Co. has done really well in the alternative beverage industry but has introduced a new line of energy drinks (Charge, Rebuild, Defend, and Bloodshot) that I have never heard of. It would be in their best delight to do an ad campaign to consumers. Red Bull on the other hand just needs to expand their product line. They are centering mainly on their original flavor still and that may be a reason why sales are decreasing.