Analysis Of The Dr. Pepper Snapple Group

[Name of the Writer] [Name of the Institution] [Subject] [Date] Analysis of the DR.PEPPER SNAPPLE G.P. Overview of the Company Dr Pepper Snapple Group is involved in the manufacturing and distribution of the non-alcoholic beverages in Canada, Mexico and United States. The head-quarter of the company is located in Plano, Texas. It comprises of three distinctive segments including Latin America Beverages, Packaged Beverages, and Beverages Concentrates. In addition, it offers a wide range of both carbonated as well as non-carbonated drinks including mixers, water, juice drinks and ready-to-drink teas. Flavored carbonated soft drinks of the company are primarily sold under the Dr Pepper, Schweppes, Sunkist soda, Squirt and Canada Dry. On the other hand, the non-carbonated products are primarily sold under the Bai Brands, Clamato, Mott's, Hawaiian Punch and Snapple (Colbert, p.n.d.). The two potential competitors of Dr Pepper Snapple are Coca-Cola and Pepsi-co with an average share of 47% and 21% respectively. Furthermore, the company acquires 24 production plants. Company History The evolution of Dr Pepper Snapple Group can be attributed to the amalgamation of collaboration, invention and discovery. Along these lines, the rich history of the group entails birth of the soft drink in the year 1783 when the process of carbonated water was enhanced by Jean Jacob Schweppe. Correspondingly, Snapple as well as Dr Pepper the flagship brands of Dr Pepper Snapple Group have origins that share the entrepreneurial essence of Schweppe's. Dr Pepper was invented by a young pharmacist named Charles Alderton in the year 1885. After approximately 100 years, the owners of three New York area health food store invented a unique soda named as Snapple. In the year 1973, this soda was started selling in health clubs. All through the era of the 1970s, the company named Unadulterated Food Corporation owned Snapple; however, in the later times the company developed into Snapple Beverage Corp. Company Products Following Pepsi Co and Coca-Cola, Dr Pepper Snapple Group is the third largest manufacturer of the refreshing beverages in the United States. As mentioned earlier, the company manufactures both carbonated as well as non-carbonated beverages (Official Site for PepsiCo Beverage Information). The following figure demonstrates the key products of the Dr Pepper Snapple Group. Carbonated Soft Drink brands The carbonated soft drink brands of Dr Pepper Snapple are extensively consumed in Canada and United States. Sun Drop, Schweppes, Sunkist, A&W, Crush, Squirt, 7UP, Canada Dry and Dr Pepper are some of the key brands within this category. Nevertheless, Sunkist, A&W, 7UP and Canada Dry are the 4 core brands of Dr Pepper Snapple. Among these products, Canada Dry is a most prominent ginger flavored drink in Canada and United States (Christopher, 526). On the other hand, 7UP is a lemon-lime flavored drink, whereas Sunkist is famous soda drink available in the flavors of grape, strawberry, and orange. Across its 4 core brands, Dr Pepper Snapple Group had also introduced lower calorie versions of drinks. Non-CarbonatedBrands Dr Pepper Snapple is also a manufacturer of the non-carbonated drinks including mixers, juice drinks as well as ready-to-drink teas. In the United States, the key brands of the company include Clamato, Mott’s and Snapple. External and Internal Analysis of Dr Pepper Snapple Group SWOT Analysis Strengths The company acquires a strong management team with member having extensive experience in the LRB industry. Following the separation from Cadbury Schweppes, Dr Pepper Snapple have intensified their focus on the beverage business. Another strength of the company is its strong association with the customers and stakeholders. Moreover, the company acquires a strong brand image since the majority of its brands are leading in the markets. Weaknesses The continuous focus of the Dr Pepper Snapple group on the carbonated soft drinks has limited its capacity to produce functional beverages. Moreover, when compared to Pepsi Co and Coca Cola, the market share of the company is less. Most importantly, Dr Pepper Snapple group lacks sufficient international exposure (Esterl, Mike, p.n.d).. The company greatly relies on a few market players. Opportunities The exposure of Dr Pepper Snapple Group to international markets represents significant growth and development opportunities to the company. In fact, by forming joint ventures or acquisitions, Dr Pepper Snapple Group can boost its profitability. Similarly, the company can also focus on increasing the production of the bottled water in order to fulfill the needs of the market. The company can consider penetrating in the new emerging markets such as China, India, Russia and Brazil since the consumers in these nations have a growing appetites for low caloric drinks, purified water and carbonated drinks. Furthermore, Dr Pepper Snapple Group can also focus on introducing innovative products apart from beverages as per the demands and taste of the native people. Along these lines, the management of the company can focus on inventing juices and non-carbonated drinks specifically for the individuals falling into the health conscious groups. Rapid advancements in the global communication and technological innovation can facilitate the company in enhancing its collaboration with both international and global markets. Threats Esterl, Mike highlighted that the government regulations as well as policies influence the business growth and development. Hence, the companies should ensure that all their products are in line with the dietary guidelines put forward by the USDA. In addition, they must also comply with the health standards suggested by the FDA. In the current post -rescission period, the growth of Dr Pepper Snapple Group is projected to be relatively slow for the reason that consumers demand patterns are changing as they are becoming more health conscious. As discussed earlier, the biggest competitors of Dr Pepper Snapple Group are Coca-Cola and Pepsi Co. During 2010, the net revenue of Coca-Cola was approximately $35.119 billion, while the revenues of Pepsi Co increased by 30% in the same year. In contrast, the revenues of Dr Pepper Snapple Group increased by only 1.89% in the same year. Moreover, the decline in the consumption of the carbonated drinks may adversely affect the profitability of the company. Likewise, the sales of the company can also be affected by the limiting marketing opportunities. Lastly, the growing transportation cost along with the increase in the cost of other commodities can affect the pricing of the products of Dr Pepper. Porter’s 5 Forces Analysis Suppliers ‘Power – High In the case of Dr Pepper Snapple Group, the power of suppliers is high. The main input materials of the company include apple juice concentrations, aluminum, fuel, PET, corn and sugar (Christopher, 526). Hence, Dr Pepper Snapple acquires less control over the fluctuations in the prices within the commodity market. Barrier to Entry- High In the view of the fact that brand recognition is exceptionally significant in the beverage industry, the barriers to entry for Dr Pepper Snapple Group are comparatively high. In addition, Dr Pepper Snapple Group being a leading brand experience noteworthy benefits from the economies of scale and scope; thereby, making it challenging for the new entrants to match their operational efficiencies. Buyers’ Power – Range from low to medium The buyers power range from low to medium in the case of Dr Pepper Snapple Group particularly because both Pepsi Co and Coca-Cola acquire a large market share and are even larger in size than DPS.  Threat of Substitutes- Range from low to medium Perhaps, there are three major players in the soft drinks and beverages industry, including Dr Pepper, Pepsi Co and Coca-Cola. Hence, the major competition is among these three players. Along these lines, all the three companies constantly strive to produce substitute products in order to gain a competitive edge in the global market (Esterl, Mike, p.n.d). Nevertheless, given that integrated beverage producers can gain significant benefits from the economies of scale, all the three companies:Dr Pepper, Pepsi Co and Coca-Cola present an assortment of beverage options.   Degree of Rivalry- High The degree of rivalry is extremely high as there are only three major players in the integrated beverage industry. Dr Pepper Snapple Group, Pepsi Co and Coca-Cola have a line of products in all non-alcoholic categories that compete directly with each other. Furthermore, all the three brands present products with pricings that successfully attract and retain loyal customers. In the view of the fact that brand loyalty plays a crucial role in this industry, all the three major players compete on brand image instead of pricing. In fact, advertising and marketing are crucial aspects of these three companies. Company Marketing Key strategies The chief focus of the Dr Pepper Snapple Group is on sustaining its positioning as the leading ...