Change Management Essay Example | Topics and Well Written Essays - 2000 words - 1

Change Management - Essay Example In 1951 they launched BMW 501 which was their first automobile. Since then the company has been one of the frontrunners in producing cars. BMW is one of the â€Å"German Big 3† high end car makers together with Mercedes-Benz and Audi. BMW is actually a house of brands containing brands like Mini, BMW and Rolls-Royce. BMW is present across the world and has its operations adjusted to meet the requirements of respective country. In this report we will analyse the change management of BMW in Thailand. Overview of the analysis tools used SWOT of BMW Thailand BMW was one of the key drivers for growth of the premium segment in whole of Thailand. In 2009, it was the only brand whose market share increased. Through their relentless effort of proving the most advanced technologies in the Thai market, they have created a name for themselves. Due to challenging economic conditions in Thai, coupled with fluctuation of oil prices, world financial crisis, the consumers of Thailand were look ing for more fuel-efficient cars. But they still wanted to have that comfort, safety and smooth driving performance. BMW came out with a perfect solution named BMW Efficient Dynamics technology (BMW Thailand, 2013, p. 1). It gave exactly what the consumers have been looking for and earned BMW group the title of â€Å"The Most Sustainable Car Company in the World.† This shows that BMW has strong innovative strength to cater to Thai customers. The major weakness that BMW faces in Thailand is that their overall servicing process is not good. It takes considerable time to fix or service the car and sometimes it is seen that the problems are not actually resolved. Another weakness is that there is a strong rivalry between the dealers in Thailand (Dealtry, 1992, p. 61). Thailand has approximately 4-5 dealers and they are very competitive to each other. BMW faces major threat from external environment. With world economy in a bad shape so is the economy of Thailand. There is intense competition in the Thai Market. The fuel price keeps fluctuating along with change in exchange rates. The prices of raw materials also keep on increasing. BMW in Thailand has a strong brand presence which enables it to become No.1 in the premium segment. With customer focused strategy adopted they can continue to make exciting additions to BMW group Thailand products (Liu, Akram and Bouguettaya, 2011, p. 82). Lewin Model of Change According to Kurt Lewin model of Change, every organisation has to go through three steps to complete the Change process. They are Unfreeze, Change and Refreeze. In the Unfreeze stage, BMW must try to understand the importance of change and communicate to the employees (Cameron and Green, 2012, p. 215). In Thailand, the customer service is a major issue that needs to be changed. Hence the employees to be told about the issue of long servicing process faced by their customers. During the change process, BMW has to keep on communicating the importance of ch ange in customer service and how it will affect their revenue (Dessler and Phillips, 2007, p. 316). Finally in the Refreeze step once BMW has been able to achieve improved customer service and the employees have themselves adjust to the new servicing

Reasons why Immigrants Fail to Learn English Essay

Reasons why Immigrants Fail to Learn English - Essay Example Some take shorter time to understand than others, while others really have a hard time even grasping basic terminologies. From the onset, it is the teacher who initiates all communication and this can be a very frustrating experience. Obviously, at the start not all the students have equal mastery over the English language. Some will take a bit longer to grasp the introductory advances. To this effect, new teachers are usually barely well – equipped to handle multi – cultural students at once. No matter how many languages the teachers know and speak, there is always the chance that some student will come in whose language the teacher has not grasped. Furthermore, most teachers invest in learning mainstream foreign languages only e.g. French, German and Spanish. So when a Hindu speaking student joins the class for example, the teacher has to reanalyze his / her initial approach to teaching. Even after the basic salutations and pleasantries have been mastered by the stude nts, the accent issue still dominates the learning environment. In some instances the teacher has to repeat the words severally before the students can grasp the pronunciation. Another problem that teachers encounter is dealing with the students’ varying motivation during the lessons. Naturally, the students will have enrolled due to different ambitions. While some undergo the lessons as a compulsory requirement, others enroll just for the sake of familiarizing themselves with a foreign language (in this case, English). In such a scenario, not all students will have the same level of motivation as the lesson proceeds. Shifting focus to the immigrants, most of them portray some reluctance to apply themselves to the learning process when they encounter the initial difficulty in familiarizing with the English language. One would notice some subtle resistance to learning the language. Then again there is the erosion of English in the United States. Dominance of slang confuses the foreign students. In the classroom, the students are taught one thing. When they step out into the street, they hear something entirely different. At some point the students will be bound to get disillusioned. With the language itself, English has very many idioms and other figurative styles of language. Expecting the students to apply and relate to such linguistic features when they are barely grasping the basic language is an uphill task. English literature has a heavy influence in the curriculum and therefore students are expected to familiarize themselves with hundreds of classic literary pieces during learning. They end up complicating matters and students have a hard time registering what they are taught. A student would find it hard to grasp the aspect of symbolism when he / she can barely distinguish between tenses. Rules of exception also act as obstacles to the learning process too. Foreign students take time to establish syntax, sentence structure and word order. Regiona l dialects in the United States also heavily affect the student’s mastery of the language. For instance, a student living in a Latino neighborhood will be affected by the dialect spoken in that area. Some immigrant students have a phobia for resident students because they feel inferior when their English is not as polished as their hosts. Chapter 2 Immigrants

Corporate culture Essay Example | Topics and Well Written Essays - 1250 words

Corporate culture - Essay Example The goal of the essay is to identify what parts of culture are the most important and why it is useful for managers in order to build a worthwhile long-term corporate strategy and keep competitive edge. Here will be described power, diverse attitudes and beliefs, how to effectively manage people, risk and socialisation. The corporate culture There are several success factors for business if the organisation desires to achieve growth and build high human capital development. First, leadership needs to have a very strong vision of what they want to accomplish. â€Å"They know how to set the direction for the organisation and how to build commitment to follow that direction† (DeVries, 1996, p.491). It is necessary for managers to be transformational, using positive personality and charismatic traits, in order to get employees to model themselves after the leader. They need to push for personal growth and add more value to the human resources role to gain this commitment. However, this cannot be done without setting a cultural tone within the business that provides opportunities for employees to be empowered. If the manager considers culture important, they will develop proper training for this effort and always reinforce how important it is for employees to be focused on mission-related goals. ... Managers should not always keep power at the top levels since this breaks down the effectiveness of attempting to build a positive, unified corporate culture. â€Å"If power lies in the strategic coordination of resources rather than mere possession of them, then a strategic conception of power offers the opportunity for subordinate groups to develop coalitions capable of challenging dominant groups† (Alvesson & Willmott, 2003, p.6). If this is true, then employees will work against senior-level power and control and try to combat it by developing their own factions as they try to gain control in certain key areas. If power only resides at the top layers of the business leadership, then it is not a true culture. It is, instead, a business that maintains very high controls and does not provide workers with much flexibility or give them perceptions of value. A business that operates in this condition would be referred to as a centralised organisation dedicated only to making sur e employees perform as they are expected. Social and psychological factors are dismissed in this type of business and no culture exists at all, only one with a Theory X type of focus where employees are always regulated. This could lead to higher turnover rates or generally dissatisfied employee groups who have little to contribute to a cultural whole. In some business environments overseas, such as Saudi Arabia, managers score high on testing related to Hofstede’s power distance scale. This is due to Muslim beliefs that are traditionalist and are common in Islamic societies (Bjerke & Al-Meer, 1993). Power distance is the level of closeness between management and regular employees.

Tessellation Patterns Essay Example for Free

Tessellation Patterns Essay A tessellation is â€Å"the filling of a plane with repetitions of figures in such a way that no figures overlap and that there are no gaps† (Billstein, Libeskind, Lott, 2010) . Tessellations can be created with a variety of figures, including triangles, squares, trapezoids, parallelograms, or hexagons. Tessellations use forms of transformations to show the repetitions of the figures. The transformations can includes translations, rotations, reflections or glided reflections. Any student would be able to create their own original tessellation by piecing together a variety of geometric shapes in a repetitive pattern by a transformation, either by hand or on a computer. The tessellation that I have created includes hexagons, squares, and triangles. I placed the squares and triangles around the hexagon to fill in the open spaces; this is to ensure that it is a complete tessellation. I did that because I found it to be very eye catching and adding the colors makes it a visually stimulating piece. This tessellation has the transformation of translation. Each shape is moved from one point to another in a straight line. The line can either be up or down, left to right, or even diagonally, but the shape itself is a copy of the original. The different colors of the hexagons allow you to see where the repetition occurs. Tessellations have been found in real-life. Soccer balls, plaid clothing, honey combs, and brick lying are examples of tessellations. One of my favorite things as a child was a kaleidoscope. This was a toy the when you held it the light showed a tessellation and if you rotated the scope, the tessellation would change. It was a fascinating toy for a child and it introduced them to the idea of a tessellation without knowing about them. Tessellations are a visual stimulate and cause many of happy days in my childhood and hopefully will be that way for my children as well. Reference Billstein, R., Libeskind, S., Lott, J. (2010). A problem solving approach to mathematics for elementary school teachers (10th ed.). Boston, MA: Pearson Addison Wesley..

Economic Growth and the Environment

Economic Growth and the Environment Will the world be able to sustain economic growth indefinitely without running into resource constraints or despoiling the environment beyond repair? What is the relationship between a steady increase in incomes and environmental quality? Are there trade-offs between the goals of achieving high and sustainable rates of economic growth and attaining high standards of environmental quality. For some social and physical scientists, growing economic activity (production and consumption) requires larger inputs of energy and material, and generates larger quantities of waste byproducts. Increased extraction of natural resources, accumulation of waste, and concentration of pollutants would overwhelm the carrying capacity of the biosphere and result in the degradation of environmental quality and a decline in human welfare, despite rising incomes. Furthermore, it is argued that degradation of the resource base would eventually put economic activity itself at risk. To save the environment and even economic activity from itself, economic growth must cease and the world must make a transition to a steady-state economy. At the other extreme, are those who argue that the fastest road to environmental improvement is along the path of economic growth: with higher incomes comes increased demand for goods and services that are less material-intensive, as well as demand for improved environmental quality that leads to the adoption of environmental protection measures. The strong correlation between incomes, and the extent to which environmental protection measures are adopted, demonstrates that in the longer run, the surest way to improve your environment is to become rich, Some went as far as claiming that environmental regulation, by reducing economic growth, may actually reduce environmental quality. As agriculture and resource extraction intensify and industrialization takes off, both resource depletion and waste generation accelerate. At higher levels of development, structural change towards information-based industries and services, more efficient technologies, and increased demand for environmental quality result in leveling-off and a steady decline of environmental degradation (Panayotou 1993), as seen in the Figure 1 below: The issue of whether environmental degradation (a) increases monotonically, (b) decreases monotonically, or (c) first increases and then declines along a country’s development path, has critical implications for policy. A monotonic increase of environmental degradation with economic growth calls for strict environmental regulations and even limits on economic growth to ensure a sustainable scale of economic activity within the ecological life-support system (Arrow et al. 1995) A monotonic decrease of environmental degradation along a country’s development path suggests that policies that accelerate economic growth lead also to rapid environmental improvements and no explicit environmental policies are needed; indeed, they may be counterproductive if they slow down economic growth and thereby delay environmental improvement. Finally, if the Environmental Kuznets Curve hypothesis is supported by evidence, development policies have the potential of being environmentally benign over the long run, (at high incomes), but they are also capable of significant environmental damage in the short-to-medium run (at low-to-medium-level incomes). In this case, several issues arise: (1) at what level of per capita income is the turning point? (2) How much damage would have taken place, and how can they be avoided? (3) Would any ecological thresholds be violated and irreversible damages take place before environmental degradation turns down, and how can they be avoided? (4) Is environmental improvement at higher income levels automatic, or does it require conscious institutional and policy reforms? and (5) how to accelerate the development process so that developing economies and economies in transition can experience the same improved economic and environmental conditions enjoyed by developed market economies? Policy Response In the OECD countries we observe a strong decoupling of emissions of local air pollutants from economic growth. OECD countries have achieved a strong decoupling between energy use and economic growth over the past 20 years, with the economy growing by 17% between 1980 and 1998 and energy use falling by the about the same percentage. Water and resource use continued to grow but at a rate slower than GDP growth reflecting a weak decoupling of the two. Thus decoupling of emissions in OECD and generally the developed ECE countries has been accomplished through a combination of technological change and a strong environmental policy. The latter consisting of â€Å"greening† of fiscal policy, removing subsidies to environmentally harmful activities and the use of economic instruments to internalise environmental cost. A number of EU policy initiatives, such as the Broad Economic Policy Guidelines 2001, among others have promoted a gradual but steady and credible change in the level and structure of the tax rates until external costs are fully reflected in prices, to cope with most of the fundamental structural problem in all developed countries, the unsustainable patterns of production and consumption. In the energy markets these guidelines aim to uses taxes and other market-based instruments to rebalance prices in favour of reusable energy sources and technologies. Other EU initiatives in this direction are the European Climate Change Programme (ECCP), the directive establishing an EU framework for emissions trading, and the Integrated Product Policy (IPP) all of which aim at realigning price relations and stimulating investments in new technologies that promote sustainable development. Member states are encouraged to improve market functioning by addressing market failures such as externalities through â€Å"increased use of market-based systems in pursuit of environmental objectives as they provide flexibility to industry to reduce pollution in a cost effective way, as well as encourage technological innovations†. Economic instruments such as gradual but steady and credible change in the level and structure of tax rates until external costs are fully reflected in prices are promoted as the most efficient means of decoupling economic growth from pollution, as they alter price relations and thereby also drive changes in technology and consumer behaviour (preference) that lie behind the growth-environment relationship. As exemplified by the energy and transport sectors, the EU decoupling policy consists of demand management through full-cost pricing and development of more environmentally friendly alternatives by promoting technological innovations. Since 1990 all economies in transition have made efforts to restructure their energy and transport sectors along market principles and to raise energy prices closer to economic and international levels. However because of the political sensitivity of energy pricing and the lagging reforms in many transition economies a gap of 20-85% continues to persist between energy prices in economies in transition. For example electricity prices for households in Eastern Europe are only 50 percent of those of the European Union; for industrial consumers, electricity prices are closer to their economic and international levels being 20% lower than those of the EU. The United Nations Economic Commission for Europe has repeatedly called upon its members to raise the prices of various energy sources to their full economic costs and adapt economic instruments to internalise the costs to human health and the environment associated with energy production and consumption. The aim is to decouple emissions from energy use and energy use from economic growth. Despite significant progress towards sustainable development developed countries are still experiencing unsustainable consumption patterns as evidenced by the continued growth of municipal waste and CO ² emissions. As transition economies begin to recover and grow again their emissions and resource use are also growing though less than proportionately. Their GDP energy-intensity, though declining, continues to be several times that of the developed countries while their consumption patterns are tracing the same path as that of their developed counterparts. Further decoupling of growth and environment and progress towards sustainable development calls for action on many fronts by both groups of countries as well as cooperation between them especially in technology transfer: Use of an effective mix of economic instruments such as taxes, charges and tradable permits to correct market and policy failures and to internalise environmental and social costs and induce changes in the composition of consumption and production. Improvement in resource use efficiency and â€Å"dematerialization† of the economy Change in the content of economies growth and this involves adjustments costs which tend to be greater the faster is the rate of change in relative prices; in particular those who lose need to be compensated by those who benefit Introduction of specific policies to preserve the living standards of those directly affected by the required adjustment and to avoid unemployment and social disruption; issues of inequality and social exclusion must be addressed.

Enginnering Ethics Paper -- Engineering

In order for an engineering concept to be considered innovative it must be a new method or product; but it can also be a modification to an existing method or product. Generally the function of innovation is to overcome a new obstacle or to improve upon a current solution to any design. For the purpose of this paper innovation will not be defined only as an improvement. However, the innovation may cause new problems to arise. Given this situation the engineer may not have taken all the necessary steps to ensure the success of the application of the new design. In this paper one such engineer (William LeMessurier) and design concept will be discussed. The definition of innovation in the engineering field will be developed and the question of whether or not there are additional obligations imposed on the engineer as a result of innovation will be addressed. It was previously stated that innovation produces new problems which still holds true, but the statement may cause confusion given the definition of innovation as compared to the definition of invention. Invention is the generation of an idea while innovation is the attempted implementation of that idea. Having established general definitions an expansion on the definition of innovation is needed. An idea cannot be considered innovative if the application is unsuccessful. In order for a concept to be considered innovative it has to meet the design criteria. An innovative design must possess or more of the following characteristics: unusual, ground breaking, novel or a significant transformation from the previous design. In the field of engineering the distinction between innovative and non-innovative designs is based mostly on pioneering. The purpose of an engineer is to improv... ...tated that the night welding was the result of â€Å"an upgrade to reflect a recent change in the NYC building codes†2. This statement was deceitful but not irresponsible. The public health, safety and welfare were not ignored in association with the Citicorp design. Precautions were taken and information was shared among those in a position to make an impact. Informing the public of a design flaw would most likely cause panic and great economic loss. The engineer LeMessurier acted responsibly on his part. As the lead engineer public relations and press releases are not his responsibility. References 1. "Innovation.†. Britannica Family Encyclopedia. Chicago: Encyclopedia Britannica, 2008. 2. E. HARRIS and R. JAMES, ENGR 482 Class Notes, Texas A&M University (Fall 2009). 3. HARRIS,PRITCHARD, RABINS, â€Å"Engineering Ethics†, Wadsworth, Cengage Learning, Belmont (2009)

History of the Soft Drinks Industry Essay

Introduction Soft drinks, more popularly known as sodas, are not exactly referred to as items of necessity. People can live without sodas. In fact, people might be safer if they don’t drink soft drinks so much. And yet, soft drinks somehow make it to the top of the list of items bought by the average consumer. Why is this, exactly? Well, for one thing, sodas are delicious. They stand between liquor and juice. Those who are too young to drink beer but think that fruit juice is too juvenile can order sodas. Those too old and are putting their health at risk by drinking hard drinks can enjoy soft drinks and no one would think any less of them. In short, sodas have a mass appeal. They carry an image with them; an image of a person with a comfortable lifestyle. This report will take a look at the soft drink industry as a whole and particular industry’s leaders, brief history and description of the industry; will show industry characteristics, trends, changes, and competitive factors; will give recommendations for the companies within the industry. My experience of the consumer and the seller of the soft drinks, allowed me to say, that the soft drinks industry deserves attention. It is one of the biggest, fast growing, perspective, and profitable industries in the world. It takes a big place in our life as consumers. Soft drinks, and such big companies as Coca – Cola or PepsiCo, are widely spread everywhere and available in any country in the world. I decided to choose the soft drinks industry, because it illustrates the great production and distribution; and important business innovations, such as product development, franchising, and mass marketing, as well as the evolution of consumer tastes and cultural trends. History of the soft drinks industry. The soft drink industry began in the mid-1880s with the creation of syrup that was mixed with carbonated water and served at drug store lunch counters. During the early years, soft drinks were sold only in stores that could provide fountain service. Increasing distribution was tied to building additional syrup manufacturing plants. With the advent of bottling machinery, soft drinks began to be distributed beyond the town drug store. The first bottled soda water or soft drink in the United States was produced in 1835. These drinks were called soft drinks, only to separate them from hard alcoholic drinks. This drinks do not contain alcohol and broadly specifying this beverages, includes a variety of regular carbonated soft drinks, diet and caffeine free drinks, bottled water juices, juice drinks, sport drink and even ready to drink tea or coffee packs. So we can say that soft drinks mean carbonated drinks. Charles Aderton invented â€Å"Dr Pepper† in Waco, Taxes in 1885. Dr. John S. Pemberton invented â€Å"Coca – Cola† in Atlanta, Georgia in 1886. Caleb Bradham invented â€Å"Pepsi – Cola† in 1892, and so on. Bigger and smaller companies appear on a soft drink market since the greatest profitability (advantage) and cheap manufacturing of this industry was discovered. Today, soft drink is more favorite refreshment drink in the United States then tea, coffee, juice and etc. Soft drinks industry overview in the United States and World Wide. The soft drinks industry is very big, very visible, highly concentrated, and appears to have been very profitable. The leaders of the Soft Drink Industry are the Coca-Cola Company, PepsiCo, Cadbury Schweppes/Dr. Pepper Snapple, Cott Corp. , and National Beverage Corp. There is also noticeable Asian and European influence on a world market of the soft drinks. Leading companies have prominent presence in the soft drink industry. This industry is well established already, and it would be difficult for any company to enter or exit successfully. According to the Coca- Cola annual report (2009), it has the most soft drink sales with 24. 4 billion dollars. The Coca-Cola product line has several popular soft drinks including Coca-Cola, Diet Coke, Fanta, Barq’s, and Sprite, selling over 400 drink brands in about 200 countries. PepsiCo is the next top competitor with soft drink sales grossing 21 billion dollars for the two beverage subsidiaries, PepsiCo Beverages North America and PepsiCo International (annual report PepsiCo Inc. , 2009). PepsiCo’s soft drink product line includes Pepsi, Mountain Dew, and Slice which make up more than one quarter of its sales. Cadbury Schweppes/Dr. Pepper Snapple had soft drink sales of 6 billion dollars with a product line consisting of soft drinks such as A&W Root Beer, Canada Dry, and Dr. Pepper (annual report Cadbury Schweppes/Dr. Pepper Snapple, 2009). Cott Corporation is one of the world’s biggest soft drinks manufacturers, but has a low profile among consumers because it specializes in producing private label products for retailers. In fact the company is largely credited with revitalizing the supermarket own-label beverage market during the early 1990s, scoring a number of important goals including the introduction of Sam’s American Choice cola by Wal-Mart and Sainsbury’s Classic Cola in the UK. Currently, its small portfolio of consumer brands includes RC Cola, Stars & Stripes and Red Rain. National Beverage Corp. (National Beverage) develops, manufactures, markets and distributes a portfolio of beverage products throughout the United States. The Company develops and sells flavored beverage products, including a selection of flavored soft drinks, juices, waters and energy drinks. Its brands include Shasta and Faygo, each of which has over 50 flavor varieties. The Company also maintains a line of flavored beverage products for the health-conscious consumer, including Everfresh, Home Juice and Mr. Pure 100% juice and juice-based products The Coca-Cola Company accounted for 26. 5% of the world’s soft drinks sales and 43 % of the US market, almost double the amount of rival PepsiCo, which holds a 13. 4 % share of the world market and 32 % of the US market. Both companies appear to be keen to extend their focus by expanding into growing segments for soft drink production. In the last month Coca-Cola has revealed it is extending began researching benefits of Chinese herbal remedies to target growing demand for nutritional benefits and functionality in their products. PepsiCo at the same time has increased its focus in production of non-carbonated beverages with juice in particular becoming important to its operations. Both companies remain significantly ahead of their rivals, reflecting the increasingly competitive nature of the soft drinks market. Cadbury Schweppes/Dr. Pepper Snapple takes 15 % of the US market and 3 % of the world market. Cott Corp takes 5 % of the US market. National Beverage Corp. takes 2% of the US market. (Table 1. â€Å"The top 10 Soft Drinks Companies in 2008 by global market share†, Page 21 and Table 1. a. â€Å"The Top 10 Soft Drinks Manufacturers in the US in 2008 by volume†, Page 21 ). At the core of the beverage industry is the carbonated soft-drink category. The dominant players in this area (Coca Cola, Pepsi, and Cadbury Schweppes/Dr. Pepper Snapple) own virtually all of the North American market’s most widely distributed and best-known brands. (Table 4 â€Å"Top Ten Soft Drinks in the US, 2009. † Page 24) They are dominant in world markets as well. These companies’ products occupy large portions of any supermarket’s shelf space, often covering more territory than real food categories like dairy products, meat, or produce. Coca-Cola and PepsiCo continued to dominate the soft drinks market in 2010 accounting for more than a third of global sales in the sector, according to market analytic. Soft drinks industry description. The market size of this industry has been changing. Soft drink consumption has a market share of 46. 8% within the non-alcoholic drink industry. (Table 2, 2. a. â€Å"Global Soft Drinks Market Segmentation: % Share, by Value, 2008†, Page 21). Total market value of soft drinks reached $367. 2 billion in 2008 with a market value forecast of $377. 1 billion by the end of 2010. In 2013, the global soft drink market is forecast to have a value of $456. 3 billion. The 2008 soft drink volume was 325,367. 2 million liters (Table 3 â€Å"Global Soft Drinks Market Volume: liters million†, Page 22). In 2013, the global soft drink market is forecast to have a volume of 474 million liters, an increase of 22. 3% since 2008. Soft drink industry is lucrative with a potential for high profits, but there are several obstacles to overcome in order to capture the market share. Carbonates sales proved the most lucrative for the global soft drink market, generating 46. 8% of the total value. However, the volume of the U. S. carbonated soft drinks declined -3% in 2009. That compares to – 2. 3% decline in 2008; a – 0. 6 % decline in 2007; and a -0. 2% decline in 2006. Top companies, Coke and Pepsi, generated similar results last year. Coke carbonated soft drinks volume was down -3. 1% and PepsiCo’s was down -4%. Both lost share. Dr. Pepper Snapple’s carbonated soft drink volume was down -1. 3%. (See below, Table 5 â€Å"Carbonated soft drink Companies in the U. S. for 2009†). In the U. S. , with the carbonated soft drinks decline accelerating, other categories are slowly growing. (For example, bottled water and energy drinks market. ) The Coca-Cola Company accounts for 22. 6% of the global soft drink market’s volume. Supermarkets and hypermarkets distribute 48. 4% of the global soft drink market’s volume. Table 5. â€Å"Carbonated soft drink Companies for 2009†. Top -10 CSD Companies in the US for 2009| 2009| 2009| 2008| | 2009| 2008| | Rank Companies| Market Share| Market Share| Share Change| Cases (millions)| Cases (millions)| Volume% Change| 1| Coca-Cola Co| 42. 7| 42. 8| -0. 1| 4107. 6| 4241. 1| -3. 10%| 2| Pepsi Co| 30. 8| 31. 1| -0. 3| 2960. 4| 3082. 8| -4. 00%| 3| Dr Pepper Snapple| 15. 3| 15| 0. 3| 1471. 2| 1491. 3| -1. 30%| 4| Cott Corp| 4. 7| 4. 8| -0. 1| 448| 476. 6| -6. 00%| 5| National Beverage| 2. 6| 2. 5| 0. 1| 247. 5| 243. 9| 1. 50%| 6| Hansen Natural| 0. 8| 0. 8| flat| 79| 76. 5| 3. 30%| 7| Red Bull| 0. 7| 0. 6| 0. 1| 67. 2| 63. 9| 5. 20%|. 8| Big Red| 0. 4| 0. 4| flat| 43. 6| 42. 4| 2. 70%| 9| Rockstar| 0. 4| 0. 4| flat| 40. 2| 41| -2. 00%| 10| Other| 1. 6| 1. 6| flat| 156. 3| 160. 3| -2. 50%| | Total Industry| 100| 100| | 9621| 9919. 8| -3. 00%| Statements of leading companies within soft drink industry of the US| | Coca – Cola Company | PepsiCo| Dr Pepper Snapple Group, Inc. | National Beverage Corp| Cott Corp (2008) | Net operating revenue| millions $ 30. 990| 43. 232| 5. 531| thousands $ 575. 177| millions $ 1. 648| Cost of goods sold| 11. 088| 20. 099| 2. 234| 405. 322| 1. 467| GROSS PROFIT | 19. 902| 23. 133| 3. 297| 169. 855| 181|. Selling Expenses| 11. 358| 15. 026| 2. 135| 131. 918| 179. 8| OPERATING INCOME| 8. 231| 8. 044| 1. 085| 24. 742| loss 113. 0| TOTAL ASSETS| 48. 671| 39. 848| 8. 776| 265. 682| 873. 1| LIABILITIES AND EQUITY| 48. 671| 39. 848| 8. 776| 265. 682| 873. 1| OPERATING ACTIVITIES| 8. 186| 6. 796| 865| 35. 829| 66. 9| INVESTING ACTIVITIES| used in 4. 149| used in 2. 401| used in 251| used in 3. 491 | used in 54. 8| FINANSIAL ACTIVITIES| used in 2. 293| used in 2. 497| used in 554| 305| used in 19. 4 | Five Forces of the Soft Drinks Industry. ( Figure 3. â€Å"Five Forces of the Soft Drinks Industry†. Page 24). Threat of New Entrants. Significant barriers exist to entering the soft drink industry. Bottling operations have a fairly high minimum efficient scale and require fixed assets which are specific not only to the process of bottling but also to a specific type of packaging. Entering bottling, meanwhile, would require substantial capital investment, which would deter entry. Exit costs are thus also high. Bottling operations do exist which in theory could be contracted out, but they are tied up in long-term contracts with the major players and thus can only contract with other producers in a limited way. Perhaps the most significant barrier to entry, however, is the strong brand identity associated with the best-selling soft drinks. Placing another cola on the market is not an attractive value proposition. Bargaining Power of Suppliers. Suppliers to the soft drink industry are, for the most part, providing commodity products and thus have little power over the industry. Sugar, bottles and cans are homogeneous goods which can be obtained from many sources, and the aluminum can industry has been plagued by excess supply. The one necessary ingredient which is unique is the artificial sweetener; aspartame is clearly preferred by consumers of diet beverages and for a time was under patent protection and therefore only available from one supplier. However, the patent expired and another producer entered, reducing the market power of NutraSweet. For example, the inputs for Coke and Pepsi’s products were primarily sugar and packaging. Sugar could be purchased from many sources on the open market, and if sugar became too expensive, the firms could easily switch to corn syrup, as they did in the early 1980s. Bargaining Power of Customers. Buyers can be considered at the consumer or the retail level. The soft drink industry sold to consumers through five principal channels: food stores, convenience and gas, fountain, vending, and mass merchandisers, fast food restaurants. For consumers, taste will be an important part of the preference for a particular soft drink; thus although there is no monetary switching cost, there may be a loss of enjoyment associated with a less-preferred brand. Because of this, consumers have historically been brand-loyal and not based purchase decisions on price. Retail outlets have not been able to exhibit much buyer power over the industry, although they can do so more easily than consumers. Traditionally these outlets have been fragmented and have been reliant on the major soft drink brands to increase store traffic. However, at the time of the case there has already been evidence of some buyer power on the part of grocery stores, as they successfully resisted an attempt to price the varieties with more costly inputs higher. As grocery chains increasingly consolidate and as discount outlets continue to grow, buyer power on the part of retailers is likely to increase. Threat of Substitute Products. While the U. S. soft drink market was growing, substitutes did little to interfere. Soft drinks are sufficiently unique that when a consumer wants a soft drink another product is not likely to satisfy. Other cold drinks such as water, juices and iced tea offer similar refreshing qualities, yet they do not have the same taste or properties. Hot beverages and alcoholic beverages are not desirable or appropriate for many of the occasions when one would want a soft drink. The one category which threatens soft drink producers is the â€Å"new age† product which offers (or implies) more natural ingredients and/or health benefits. The soft drink industry’s initial answers to these beverages, in the form of Tab Clear and Crystal Pepsi, are not going to compete effectively with the new age products. Competitive Rivalry within an Industry. The concentration in the industry (mainly between its leaders: Coke, Pepsi and Cadbury/Schweppes) would suggest that internal rivalry is somewhat less than if there were many players of equal size. Although the competition between Coke and Pepsi has become fiercer over time, they traditionally competed primarily on advertising, promotion and new products rather than price (although the explosion of new brands did eventually lead to some price competition). The products are similar but not homogeneous and buyers are fairly brand loyal. Retail buyers have significant costs for switching from the major brands since those are responsible for bringing people into the store. Flattening and potentially declining U. S.demand may be a factor which increases internal rivalry and encourages more price competition and thus erosion of profits. Revenues are extremely concentrated in this industry, with Coke and Pepsi, together with their associated bottlers, commanding 73% of the case market. In fact, the soft drink market can be characterized as an oligopoly, or even a duopoly between Coke and Pepsi, resulting in positive economic profits. As analysis using Porter’s five forces shows that the soft drink industry is very profitable. Suppliers and buyers have not had more power over the industry than it has had over them. Internal rivalry, while seeming intense, has not eroded the profitability of the industry because of its concentration and the fact that the two major players have primarily competed on the basis of advertising and promotion and not price. Entry is difficult both for reasons of scale and the strong brand identity of the current major players. Substitutes have not been close enough to take away significant market share, although the emergence of new substitutes may pose the largest threat to the industry’s profitability. Soft drink industry has an oligopolistic character. SWOT analysis of the main producers in the soft drink industry. Coca – Cola Company. The Coca-Cola Company is the world’s leading manufacturer, distributor and marketer of Non- alcoholic beverage concentrates and syrups, in the world. Coca – Cola has a strong brand name and brand portfolio. Business – Week and Interbred, branding consultancy, recognize Coca – cola as one of the leading brands in their top 100 global brands ranking in 2009. The Business Week – Interbred valued Cocoa – Cola at 67,000 million dollars in 2008. Coca – Cola ranks well ahead of its close competitor PepsiCo which has a ranking of 22 having a brand value of 12,690 million dollars. The Company’s strong brand value facilitates customer recall and allows Coca – Cola to penetrate market. However, the company is threatened by intense competition which could have an adverse impact on the company’s market share. Strengths| Weaknesses| World’s leading brand| Negative publicity| large scale of operations| Sluggish performance in North America| Robust revenue growth in three segment| Decline in cash from operating activities| Opportunities| Threats| Acquisitions Intense competition| Intense competition| Growing bottles water market| Dependence on bottling partners| Growing Hispanic population in US| Sluggish growth of carbonated beverages| Strengths. World’s leading brand: The Company owns four of the top five soft drink in the world: Coca – Cola, Diet Coke, Sprite and Fanta. Strong brands allow the company to introduce brand extensions such as Vanilla Coke, Cherry Coke and Coke with Lemon. Over the years, the company has made large investments in brands promotions. Consequently, Coca – Cola is one of the best recognized global brands. The company’s strong brand value facilitates customer recall and allows Coca – Cola to penetrate new markets and consolidate existing ones. Large scale of operations: With revenues is excess of 24 billion dollars Coca – Cola has a large scale of operation. Of the approximately 52 billon beverage servings of all types consumed worldwide every day, beverages bearing trademarks owned by or licensed to Coca – Cola account for more than 1. 4 billion. The company’s operations are supported by a strong infrastructure across the world. Coca – Cola owns and operates 32 principal beverage concentrates and/or syrups manufacturing plants located throughout the world. In addition, it owns or has interest in 37 operations with 95 principal beverage bottling and canning plants in the US. The company also owns bottled water production and still beverage facilities as well as a facility that manufactures juice concentrates. The company’s large scale of operation allows it to feed upcoming markets with relative ease and enhances its revenue generation capacity. Robust revenue growth in three segments: Coca – Cola revenues recorded a double digit growth, in tree operating segments. These tree segments are Latin America, East/South Asia, and Pacific Rim and Bottling investments. Revenues from Latin America grew by 20,4% during 2007, over 2006. During the same period, revenues from East/South Asia and Pacific Rim grew by 10. 6 % while revenues from the bottling investments segment by 19. 9%. Together, the three segments of Latin America, East/South Asia and Pacific Rim and Bottling investments, accounted for 34. 8% of total revenues during 2007. Robust revenues growth rates in these segments contributed to top-line growth for Coca – Cola during 2007. Weaknesses. Negative publicity: The company received negative publicity in India during September 2006. The company was accused by the Center of Science and Environment (CSE) of selling products containing pesticide residue. These pesticides included chemicals witch could cause cancer, damage to the nervous and reproductive systems and reduce bone menial density. Such negative publicity could adversely impact the company’s brand image and the demand for Coca- Cola products. Sluggish performance in North America: Coca – Cola’s performance in North America was far from robust. North America is Coca – Cola’s core market generating about 30 % of total revenues during 2007. Therefore, a strong performance in North America is important for the company. Sluggish performance in North America could impact the company’s future growth prospects and prevent Coca – Cola from recording a more robust top-line growth. Decline in cash from operating activities: Cash flows from operating activities decreased 7% in 2008 compared to 2007. Decline in cash from operating activities reduces availability of funds for the company’s investing and financing activities, which, in turn, increases the company’s exposure to debt markets and fluctuating interest rates. Opportunities. Acquisitions: Strong international operations increase the company’s capacity to penetrate international markets and also gives it an opportunity to diversity its revenue stream. Coca – Cola made acquisitions in Australia, New Zealand, Germany, and China for the last 3 years. These acquisitions strengthened Coca – Cola international operations. It gives Coca – Cola an opportunity for growth, through new product launch or greater penetration of existing markets. Growing bottled water market: Bottled water is one of the fastest – growing segments in the world’s food and beverage market owing to increasing health concerns. The market for bottled water in the US is forecast to reach revenues of about 19. 3 billion dollars by the end of 2010. The company’s Dasani brand water is the 3rd best-selling bottled water in US. Coca – Cola could leverage its strong position in the bottled water segment to take advantage of growing demand for flavored water. Growing Hispanic population in US: Hispanics are growing rapidly in number and economic power. As a result, they have become more important to markets than ever before. The company can benefit from an expanding Hispanic population in the US, which would translate into higher consumption of Coca – Cola products and higher revenues for the company. Threats. Intense competition: Intense competition Coca – Cola competes in the nonalcoholic beverages of the commercial industry. The company faces intense competition in various markets from regional as well as global players. Also, the company faces competition from various juice drinks and nectars. In many of the countries in which Coca – Cola operates, including the US, PepsiCo in one of the company’s primary competitor. (Other significant competitors include Nestle, Cadbury/Schweppes, Group DANONE and Kraft Foods. ) Competitive factors impacting the company’s business include pricing, advertising, sales promotion programs, product innovation. And brand and trademark development and protection. Intense competition could impact Coca – Cola market share and revenue growth rates. Dependence on bottling partners: Coca – Cola generates most of its revenues by selling concentrates and syrups to bottlers in whom it doesn’t have any ownership interest or in which it has no controlling ownership. Loss one or more of customers by any one of its major bottling partners could indirectly affect Coca – Cola business results. Such dependence on third parties is a weak link in Coca – Cola’s operations and increases the company’s business risks. Sluggish growth of carbonated beverages: US consumers have started to look for greater variety in their drinks and are becoming increasingly health conscious. This led to a decrease in the consumption of carbonated and other sweetened beverages in the US. The performance of the market is forecast to decelerate, with an anticipation compound annual rate of change of -0. 3% for the five-year period 2005-2010 expected to drive the market to a value of 62. 9 billion dollars by the end of 2010. Coca – Colas revenue could be adversely affected by a slowdown in the US carbonated beverage market. PepsiCo. In 2009 PepsiCo estimated that its annual retail sales had reached $92 billion, offering over 100 brands around the globe. The main cash cow of PepsiCo of course being the Pepsi carbonated drink that owned 10% of the US beverage market in 2008. PepsiCo offers the world’s largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that each generates more than $1 billion in annual retail sales. PepsiCo mains businesses – Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade – also make hundreds of other nourishing, foods and drinks. Strengths| Weaknesses| Strong core brand | Concentrated in North America . Strong market position | Health Craze will hurt soft drink | Solid brand portfolio | Negative publicity| | Strong revenue growth | | Economies of scale | | Opportunities| Threats| Food division expansion| Sluggish growth of carbonated drinks | Hispanic growth in the US | Competition with Coca-Cola & others| Bottled water growth | Declining economy/recession | Growing consumer health consciousness | | Cadbury Schweppes/Dr. Pepper Snapple. Dr Pepper Snapple Group Inc. (formerly Cadbury Schweppes Americas Beverages) is an American soft beverages drink company, which was spun off from Britain’s Cadbury Schweppes. Company manufactures, markets and distributes more than 50 brands of carbonated soft drinks, juices, ready-to-drink teas, mixers and other premium beverages across the United States, Canada, Mexico and the Caribbean. Our diverse portfolio includes Dr Pepper, Snapple, 7UP, Mott’s, A&W, Sunkist Soda, Canada Dry, Hawaiian Punch, Schweppes, Penafiel, Squirt, Clamato, Mr & Mrs T Mixers, Rose’s, Yoo-hoo and other consumer favorites. Most of the brands in this segment are CSD brands. In 2009, our Beverage Concentrates segment had net sales of approximately $1. 1 billion. Strengths| Weaknesses| Strong portfolio, consumer-preferred brands| Weak performance in Asian Market| Integrated business model| A substantial amount of outstanding debt| Strong customer relationships| | Strong operating margins and stable cash flows| | Opportunities| Threats| New distribution channels in a market| Changing consumer tastes| Growing consumer health consciousness | Operating in highly competitive markets| Focus on opportunities in high growth and high margin categories| Depend on the 3rd party bottling and distribution companies | Cott Corporation. Cott Corp is one of the leading non-alcoholic beverage companies and retailer brand soft drink providers. The company primarily operates in the US, Canada, the UK and Mexico. It is headquartered in Toronto, Canada and employs 2,803 people. The company recorded revenues of $1,648. 1 million during the financial year ended December 2009, a decrease of 7. 2% compared to 2008. The operating loss of the company was $113 million during 2009, compared to the operating loss of $54. 5 million in 2008. The net loss was $122. 8 million in 2009, compared to the net loss of $71. 4 million in 2008. Strengths| Weaknesses| Leading Producer of Retailer Brand Beverages with Diverse Product Portfolio | Unable to compete successfully in the highly competitive beverage category. | Extensive, Flexible Manufacturing Capabilities | May not be able to respond successfully to consumer trends | | significant amount of outstanding debt| Opportunities| Threats| New distribution channels in a market| Changing consumer tastes| Growing consumer health consciousness | Intense competition| Focus on opportunities in high growth and high margin categories| | National Beverage Corp. National Beverage develops, manufactures, markets and distributes a portfolio of beverage products throughout the US. The company develops and sells a selection of flavored soft drinks, juices, sparkling waters and energy drinks. It is headquartered in Fort Lauderdale, Florida and employed about 1,300 people. The company recorded revenues of $566 million during fiscal year ending April 2008, an increase of 5% over 2007. The increase in revenue was due to 9% growth in case volume of energy drinks, juices, and waters. The operating profit of the company was $172. 6 million during 2008, a decrease of 0. 4% compared with 2007. The net profit was $22. 5 million in 2008, decrease of 8. 9% compared with 2007. Strengths| Weaknesses| Extensive Brand Portfolio| Geographic concentration| | Declining Profits| Opportunities| Threats| Focus on Asia Pacific Market| Limitations on Commercialization of Alcoholic Products| Rise in Demand for bottled Water in the US| Riding Input Costs| Change in Consumer Preferences| Intense Competitive Pressures| Company’s key success factors within the soft drink industry. Key factors for competitive success within the soft drink industry branch from the trends of the microenvironment. Primarily, constant product innovation is imperative. A company must be able to recognize consumer wants and needs, while maintaining the ability to adjust with the changing market. They must keep up with the changing trends. Another key factor is the size of the organization, especially in terms of market share. Large distributors have the ability to negotiate with stadiums, universities and school systems, making them the exclusive supplier for a specified period of time. Additionally, they have the ability to commit to mass purchases that significantly lower their costs. They must implement effective distribution channels to remain competitive. Taste of the product is also a key factor for success. Moreover, established brand loyalty is a large aspect of the soft drink industry. Many consumers of carbonated beverages are extremely dedicated to a particular product, and rarely purchase other varieties. This stresses the importance of developing and maintaining a superior brand image. Price, however, is also a key factor because consumers without a strong brand preference will select the product with the most competitive price. Finally, global expansion is a vital factor in the success of a company within the soft drink industry. The United States has reached relative market saturation, requiring movement into the global industry to maintain growth. Soft drink industry main characteristics, trends and changes. Soft drinks are an integral part of American life and culture and soft drinks have been produced or consumed in nearly every corner of the world. The industry is lucrative with a potential for high profits, but there are several obstacles to overcome in order to capture the market share. Growing consumption trends can be attributed to rising disposable incomes, falling trade barriers, universal product acceptance, and a rising demand for American consumer goods. It would be very difficult for a new company to enter this industry because they would not be able to compete with the established brand names, distribution channels, and high capital investment. Likewise, leaving this industry would be difficult with the significant loss of money from the fixed costs, binding contracts with distribution channels, and advertisements used to create the strong brand images. This industry is well established already, and it would be difficult for any company to enter or exit successfully. The carbonated beverage industry is a highly competitive global industry, and has some characteristics of an oligopoly in the US. Three leading companies have prominent presence in the soft drink industry. The leaders include the Coca-Cola Company, PepsiCo, and Cadbury Schweppes. Leader companies have to hold the highest percentage of the global market share; therefore, companies need to be able to compete globally in order to be successful. Profitability in the soft drink industry will remain rather solid, but market saturation especially.