Competition in Energy Drinks , Sports Drinks, and Vitamin Enhanced Beverges

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’s external environment are as follows:

Economic * 2008/2009 sports drinks declined by 12.3%. * 2008/2009 Vitamin enhanced water declined by 12.5%. * Part of the decline was due to market maturity and part was because of the economic downturn. * The global beverage industry is expected to grow from $1.58 trillion in 2009 to 1.78 trillion in 2014. |

Market Shift * Worldwide sales of sports and energy drinks grew by more than 13% annually from 2005 and 2007 before slowing to 6% annually in 2009. * The U.S accounted for 42.3% of the beverage consumption rate. * Consumers consisted of teens in sports that needed sustainable energy and any middle-aged man or woman in a high paced job environment. * This market shift was attractive to retailers because sports and energy drinks carried high price points. |

Competitors * The main competitors are Pepsi Co, Red Bull and Coca Cola * Red Bull is the world’s largest seller of energy drinks, which made it the third largest producer of alternative beverages worldwide and the number two seller of alternative beverages in the United States and Europe. * |

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2. What is competition like in the alternative beverage industry? Which of the five competitive forces is strongest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants?

3. How is the market for energy drinks, sports drinks and vitamin-enhanced beverages changing? What are the underlying drivers of change and how might those forces individually or collectively make the industry more or less attractive?

4. What does your...