Soft Drink Industry Essay Example for Free

Soft Drink Industry Essay The global soft drink industry is currently expanding quite rapidly. This is due to two major factors. First, markets are expanding rapidly in developing countries and second people are turning toward natural, healthy, and low-calorie drinks. This so called â€Å"new-age† beverages, such as tea-based beverages, is considerably stimulating the development of the soft drink industry and also creating a major challenge to the carbonated beverage market. In part to address this trend, big soft drink companies, like Pepsi and Coke, are striving to become a â€Å"total beverage company† (Seet and Yoffie 95), in which they will serve the comprehensive soft drink market. Generally speaking, the soft drink off-trade value worldwide is gradually rising ever year, from $231,401 in 2001 to $323,031 in 2006 (Global Market Information Database 2007). The biggest market for soft drinks is still North America and Western Europe, which together consumed 43% of gross soft drink volume worldwide in 2006 (Global Market Information Database ‘07). However, the general developing trend for the North America and Western European market is now shrinking in terms of the global market while the Asian market is expanding very rapidly in recent years to now account for 22% of the global market (Global Market Information Database ‘07). The market volumes of Africa, the Middle East, and Australia are comparatively smaller. However, the Middle East, Africa, Eastern Europe, and Asia-pacific markets are â€Å"emerging markets† and attract many companies, ranging from multinationals to niche specialists, who continue to see volume growth well in excess of the market average (Robinson ‘04). With the growth in volume, the average level of profitability of the soft drink industry remains quite high. First, the concentrate producers (CP’s) have become integrated with bottling companies, thereby reducing production costs. The CP’s and bottlers remain profitable through interdependence, sharing promotional and advertising and marketing costs (Seet and Yoffie 95). For example, Coca-Cola has many bottlers in different regions; therefore, their distribution cost is not as high. Furthermore, the CP’s directly negotiate with the suppliers to efficiently manage qualities for their products. In addition, their product line and distribution chain is now more systemic and integrated. Big soft drink producers increasingly franchise bottlers or buy a share from them rather than controlling bottling totally by themselves. This has activated and developed the capital-intensive bottling business. In spite of these trends competition remains intense, such as between distributors and also between new local labels and international drink corporations. Thirdly, the soft drink industry has several channels to sell to consumers such as vending machines, convenience stores, food stores (supermarkets), and national warehouses. For example after a long work-out, one quenches one’s thirst by going to a soft drink vending machine for a Cola. With this distribution channel, soft drinks are sold directly to consumers without bargaining. In 1993, Coca-Cola sold approximately 45% of their soft drinks through vending machine in the Japanese market (Seet and Yoffie 95). Another reason for the level of profitability of the soft drink industry remaining quite high is because this industry has a nearly 47% market share of the non-alcoholic beverages industry (Deichert ‘06). It is also to be noted that some of the soft drink vendors like Coca-Cola and Pepsi have gotten their logos printed on cups at fast food restaurants so that customers are readily reminded of their brands. Big name soft drinks also promote their brands by getting them placed in the middle shelves of stores to attract customers. With the constant expansion of Pepsi products into foreign countries, it may seem challenging for Coca-Cola Enterprises (CCE) to sustain their status in the soft drink industry. The soft drink industry is one of the industries that we consider mild on the degree spectrum of Michael Porter’s five competitive forces. As we look at the first competitive force, the threats of new entrants, we cannot help but consider the high capital investment in building simply a minimum bottling plant – a good amount of $20 million to $30 million is needed (Seet and Yoffie 95). This means that in the category of the threats of new entrants, bottling plant yields a low to medium degree of intensiveness. Also, a Seet and Yoffie states that in 1980, government policy intervened and established the Soft Drink Inter-brand Competition Act to help preserve the right of CP’s to include certain geographical territories (95). Meanwhile, concentrate businesses, a medium to high intensive business, involve very little capital of machinery, overhead and labor (Seet and Yoffie 95). However, it does required some advertising, promotion, market research and advertising (Seet and Yoffie 95) Another factor is that the bargaining power of suppliers of concentrate business is low. When asked, â€Å"Are they easy to be replaced? † The answer is, â€Å"Yes. † The bottling business, on the other hand, has a high bargaining power of suppliers because it is difficult to replace these businesses since they are one of a kind. There is only one Coca-Cola brand, or one Pepsi or one Seven-Up in this world. It would take years to replace these well known and well established products. On the contrary, the bargaining power of buyers of concentrate business is high while for bottling business is medium. For instance, when a concentrate company bargains with a Seven-Up company regarding their supply of recipe, Seven-Up can decide who they choose to supply their recipe to since currently there is only one Seven-Up recipe in the soft drink market. Therefore, the concentrate business has a low bargaining power of buyers. In terms of fear of threat of substitute products, the bottling business is medium. Coke and Pepsi’s franchise agreement â€Å"allowed bottlers to handle the non-cola brands of other concentrate producers (CP’s)† (Seet and Yoffie 95). The bottling companies seem to be submissive to Coke and Pepsi. Lastly, rivalry among competing firms for concentrate business seems to be quite high. There seems to exist quite a few international brands such as RC Cola, Dr. Pepper/Seven-Up, and Cadburry Schweppes, who produce only concentrate. As for the bottling business, the rivalry among competing firms is low because of certain franchise agreement such as one Coca-Cola and Pepsi presented. Seet and Yoffie reports that with the agreement a coke bottler cannot sell RC Cola, but they can distribute Seven-Up as long as they do not carry Sprite (95) Nevertheless the concentrate producers (CP’s) want to vertically integrate into bottling for two main reasons: to make their operation system more efficiency and to cut costs. These factors are interrelated. First, CP’s can make their operating system more efficient through vertical integration. For instance, if two different sectors, such as bottling business or concentration business, are following the same rules, having the same operating system then it is easier for them to work together. Second, CP’s can reduce some costs by vertically integrating. One example is transaction costs. According to Seet and Yoffie, concentrate producers’ most significant costs include advertising, promotion, market research, and bottler relations (95). For example, if CP’s were to cut down their costs from one of these significant costs, they would earn more profits. Moreover, CP’s are usually in charge of market research, product planning and advertising while bottlers play an important role in developing trade and consumer promotions. In order to have a reliable supply, CP’s have to be in direct contact with the bottlers and monitor them, therefore, CP’s need to employ more staff to work on this part. If CP’s can vertically integrate into bottling, they could save more money and in the same time provide quality with quantity. In recent years, the CCE’s sales volume in China has been growing with rates of averaging at 16 to 17 percent annually. At the same time, China’s retail environment has been changing rapidly. According to president of CCE China division, Paul Etchells, although small retail outlets are still prevalent in China, the number of hyper-marts (larger retail outlets) and supermarkets is rocketing. In China, CCE has to keep up with the rising demand for their brands. They have to continuously increase their production plants, employees, and distribution channels. CCE’s market in the US, however, has been slowing down because US consumers are becoming more health-conscious (Stanford ‘07). They are now consuming less carbonated beverages preferring diet sodas (but these are carbonated), coffee, teas, bottled water, and energy drinks. This is a problem for CCE because the majority of CCE’s products are carbonated drinks (Stanford ‘07). Another factor that slows CCE is the rising commodity cost in the US. This cost then will be passed to US consumers. Historically, the Chinese government wanted to protect the domestic soft drink industry by setting up strict regulations on foreign soft drinks companies (Seet and Yoffie 95). Today, the government is more lenient to foreign businesses (Stanford ‘07). Building new manufacturing plants and selling CCE’s products to Chinese consumers is not as hard as it was in the past. However, doing business in China requires CCE to build a relationship with the government. The concept of Guanxi is an important factor that determines the success of a company (Seet and Yoffie 95). CCE’s managers in China spent a lot of time building relationships with the Chinese officials. Since corruption is common in China and CCE is a US based company, the CCE has a disadvantage doing business in China. In the US, on the other hand, business is done more formally. There is not an urgent need to build a relationship with the government. However, an increasing number of consumers in US is concerned with issues relating to sustainability. Therefore, CCE needs to address issues such as water scarcity and pollution. In other words, China’s growing demand and US’ decreasing demand for Coca-Cola products accounted for CCE’s heavy investment in the Chinese market. Coca-cola was introduced to China in the early 1920s and came back after the declaration of the People Republic of China in 1949 through stiff negotiation with the Chinese officials (Seet and Yoffie 95). Since the 1940s, Coca-Cola dominated the U. S. market, which provided the company with financial leverage to expand into internationally and set the tone and the pricing strategy for Pepsi. At that time Pepsi did not have the matching financial power and resources to face any challenges Coca-Cola could introduce in the beverage market (Seet and Yoffie 95). Therefore, Coca-Cola and Pepsi have been fierce rivals in both domestic and international markets. Each company is using a different strategy to remain in control while increasing their net revenue. Coca-Cola entered China before Pepsi did. However, the soft drink market in China can absorb both products due to the fact that China has one fourth of the world’s population, which provides a great deal of demand for both companies to generate profit. Looking at both company’s strategies, one can see that both companies are aiming to become established in the beverage market in China. Moreover, Pepsi seems to be making better acquisition decisions than Coca-Cola; however, the financial figures reveal the victor. The purchases that Pepsi has recently made will take their toll in the form of long term debt, while Coke can concentrate more on increasing market share, as they are much less leveraged than their largest competitor. Coca-cola and Pepsi control 19% and 9% of the Chinese soft-drink market respectively. Coca-Cola operates in 23 bottling plants with total investment of $500 million, while Pepsi operates on 18 plants with total investment of $ 600 million (Seet and Yoffie 95). Coca-Cola is buying their own assets or entering in a joint venture with the Chinese government. For example in China the government owns plants and distribution centers, while Pepsi is pursuing joint ventures and mergers with local companies. The battle for the soft drink industry in China will require a great deal of financial and marketing resources to cover all aspects of competition in local industry. For example, Coca-cola officials are heavily involved with the government, where they spend almost 50% of their time catering and entertaining the government officials to gain more influence in their operation (since the corruption rate in China is high) (Seet and Yoffie 95). Doing so will provide an advantage over Pepsi because the distribution plants need to be close to the local market to be able to provide the market with competitive products that are cheap and of high quality. In comparison with Coke, Pepsi’s strategy of joint ventures with local industry helps them cut costs and pass the savings to the Chinese consumers (Seet and Yoffie 95). Finally, both companies are investing heavily and using their equity to expand and generate revenue in China, which financial figures show that they will not have any financial liquidity in the near future if they continue at the same rate of investment.

Lesson Plan Background: Pollution and Global Climate Change Essay exam

Lesson Plan Background: Pollution and Global Climate Change Introduction: This lesson about pollution focuses on greenhouse gases. Students will learn about greenhouse gases and how they affect ecosystems. The students will understand the greenhouse affect and how their actions relate increasing concentrations of greenhouse gases. In the lesson, students will define the properties of an ecosystem, learn to identify the ecosystems they live in and how they interact within an ecosystem. The students will be able to apply what they learned on a local and global level. The students will be assessed for understanding throughout the lesson as well as at the conclusion of the lesson through activities and discussion. Because the concepts presented are complicated for 4th – 5th grade students, the lesson requires the teacher to continually check for understanding. More detail on the assessments is provided in the â€Å"Assessment† section. This lesson also develops skills that should help the students meet Colorado State standards. These skills reach the sciences as well as language arts and extend across many specific standards such as reasoning and articulating ideas. The students are encouraged to express ideas and interact with each other through discussion and small group activities while reasoning through challenging concepts. This allows the teacher to engage the students and also allows the students to become more comfortable expressing ideas. The students are also expected to propose actions to reduce pollution at the end of the lesson which allows them to think independently and to feel that they can be leaders and effect change. The first building block of the lesson is to... ...n make a pledge to act on the proposals. The students should realize through this that they can be leaders in effecting change and that they can make a difference. Works Cited Cohen, Jordan, and Nick Hopwood. "Greenhouse Gases and Society." University of Michigan. 26 Sept. 2006 . â€Å"CSI: Climate Status Investigations.† The Keystone Center. 26 Sept. 2006. http://www.keystonecurriculum.org/middleschool/too_cool_for_school.html#top â€Å"Global Warming.† Encarta Encyclopedia. MSN Encarta. 27 Sept. 2006. http://encarta.msn.com/encyclopedia_761567022/Global_Warming.html â€Å"Climatic Variation in Earth History.† Class handout. â€Å"Ecosystem.† Encarta Dictionary. MSN Encarta. 26 Sept. 2006. http://encarta.msn.com/dictionary_/Ecosystem.html

Chemistry and Biotechnology

1. What specific topic did you choose to research and evaluate? I decided to conduct research on stem cells for medical use.2. List the resources that you used in your research of your topic.http://www.ama-assn.org//ama/pub/physician-resources/medical-science/genetics-molecular-medicine/related-policy-topics/stem-cell-research/basics-stem-cell-research.page http://stemcells.nih.gov/info/basics/pages/basics6.aspx3. Describe, in a few paragraphs, the biotechnology that you researched. How is it currently being used and/or what are the hopes for its use in the future?Stem cell research is a fairly new study which has gained a large amount of popularity lately. Stem cells are cells that have the potential to become specialized into different types of cells within the body. What this can do is help replace damaged cells with healthy new cells since stem cells are able to adapt to what is needed. The research going on is to discover how this can be used medically to help cure major disease s out there in the world.There are many ways to acquire stem cells. The most popular form is through the umbilical cord from the birth process. The other way to acquire this is through the bone marrow and from blood. Some other minor methods include germ cells or organs of an aborted fetus, embryos made by in vitro fertilization and mature adult tissue cells reprogrammed to behave like stem cells. Most commonly however, stem cells are acquired through bone marrow and umbilical cords.4. Describe the positive aspects of this biotechnology, being as specific as possible.The positive outcomes of this can include a wide variety of possibilities. This has the potential to create multiple cures for diseases such as Parkinson’s, Alzheimer’s, vision/hearing loss and much more. Also, if a soldier was to be wounded with a burn or fatal injury, stem cells may be able to repair these problems and help lower casualty and death rates in our military. In addition, with how convenient bone marrow can be found (seeing as every person has it), this can help those people, who are in need of stem cells, easily acquire it on such short notice.5. Describe the negative  aspects of this biotechnology, being as specific as possible.There is currently not enough research on stem cells to fully determine their potential as to what they can do. This is bad on both ends of the spectrum. If stem cells were to be proven useless, this would be considered a waste of time and money. If they prove to be extremely powerful and can transform into any cell possible, there may be talk that this kind of technology can be overwhelming. Overwhelming in the sense that what if these stem cells are powerful enough to make a brand new human being? What if people use these stem cells on themselves to make themselves look 21 years old until they die or remodel certain aspects of their body to make it so it fits their desire? It will be a sense of cheating out life by just getting the easy way out of a lot of issues. 6. Based on your research, what is your conclusion about whether or not this biotechnology should be used? Be sure to explain your answer.After conducting my own research I believe stem cells should have more research put into them to discover their complete potential. If proven to be used for medical reasons such as to cure certain diseases, this should definitely be implemented into the medical field (assuming there are no major side effects). This can be a huge advancement in the medical field and may be a breakthrough in saving many lives of dying individuals. I do believe that regardless of its potential, whether stem cells prove to be useful or useless, they should be kept away from the public and should only be kept in medical facilities and only used for medical purposes. I would not feel comfortable having people running around the streets with stem cells in their back pocket not knowing what they can do with them.

Smoke Signals Essay - 785 Words

The movie Smoke Signals is based on the series of short stories written by Sherman Alexie. Just like any movie, there is a meaning to it. Before this movie, when I thought of the phrase Native American I thought of things like feathers and societies that were impeccable. But after watching the movie, Smoke Signals, it portrays what being a Native American really means. It is not all fun and games. The protagonist, Victor Joseph, has many hard aspects of his life, but throughout it all he grows mentally. His personality in the beginning of the movie is mean and despicable, he is filled with wrath, but as the movie goes on his personality grows gradually. By the ending of the movie, he was a nicer and kinder. When the movie begins,†¦show more content†¦Victor has to go to Phoenix to get Arnolds ashes. Thomas offers money to help him get there, but there is one catch, Thomas has to go with him. Victor automatically says no, but after a little while he accepts the offer, having a little change of heart. From here on, Victors personality changes slowly but surely. As they are on their way to get his father’s ashes, two cowboys sit in their seats, but they won’t let them have their seats back, because the boys are Native Americans. This only makes Victor mad, and Thomas confused. When they get to Phoenix, they meet Suzy Song, who is the woman who lived next to Arnold. She tells Victor about how much Arnold talked about him, and how much he wished he could see him. She also told him about how the fire on July 4th was accidently caused by Arnold, because he was drinking. All these years Victor thought his father didn’t want him anymore, but he just didnt want to hurt his son anymore. After the boys got the ashes, and anything else that Victor wanted from his father’s trailer, they left without telling Suzy goodbye. Victor was still in denial about his father passing away, and everything that Suzy had told him. He yelled at Thomas te lling him he didn’t care about him or anything basically. Victor was driving and almost ran into a car parked on the side of the road, and went off the road. When they got out of the truck, it was a car accident caused by a drunk driver.Show MoreRelatedSmoke Signals By Sherman Alexie1051 Words   |  5 PagesIn Sherman Alexie’s film, Smoke Signals, Alexie uses different story telling devices to show the importance of forgiveness. Smoke signals provides a new perspective of Native American culture by submerging us into the lives of two Native American boys, Thomas and Victor. The movie begins with a fire on the Fourth of July on the Coer d’Alene reservation in Idaho, Victor’s father Arnold saves Thomas as an infant by throwing him out a window. The movie jumps ten years forward and Victor receives wordRead More The Smoke Signals Forgiveness Essay1461 Words   |  6 PagesThe Smoke Signals Forgiveness Smoke Signals, written by Sherman Alexie and directed by Chris Eyre, begins on July 4, 1976 on the Coeur d’ Alene Reservation. Arnold Joseph (Gary Farmer), drunk while celebrating the independence, lit off a firework and set the Builds-the-Fire residence on fire, killing the parents of Thomas Builds-the Fire. Many people were already asleep in the house when the fire started, so no one saw Arnold’s mistake, which he kept a secret from the whole reservation. BothRead MoreMovie Smoke Signals By Sherman Alexie And Chris Eyre1175 Words   |  5 Pages The Truth According to Who Writer Sherman Alexie and director Chris Eyre explore the relationship between truth and fiction in storytelling and the complexities of the Indian oral tradition in the movie Smoke Signals. The movie Smoke Signals follows two young Indian men, Victor and Thomas, on a journey to Phoenix, AR. to pick up the ashes of Victor’s father. Along the way many stories are told and truth is often hard to detect. Sherman Alexie and Chris Eyre reveal subtletiesRead MoreArrow Of God And Smoke Signals1042 Words   |  5 PagesArrow of God and Smoke Signals have similar patterns of fiction, archetypes and philosophies. If you notice Campells typical hero sequence of actions can be detected in both Arrow of God and Smoke Signals. â€Å"There is a certain typical hero sequence of actions which can be detected in stories from all over the world from many periods of history. Essentially, it might even be said there is but one archetypal mythic hero whose life has been replicated in many lan ds by many people.†(Archetypes pg 6)Read MoreSmoke Signals3345 Words   |  14 PagesVictor accepted the Tribal Councils offer. What else could he do? So he signed the proper papers, picked up his check, and walked over to the Trading Post to cash it. While Victor stood in line, he watched Thomas Buildsthe-Fire standing near the magazine rack, talking to himself. Like he always did. Thomas was a storyteller that nobody wanted to listen to. Thats like being a dentist in a town where everybody has false teeth. Victor and Thomas Builds-the-Fire were the same age, had grown upRead MoreEssay on Smoke signals847 Words   |  4 Pages The movie Smoke Signal is a story that portrays what a Native American really means. It is a movie based on story written by Sherman Alexie. Thomas is the narrator of the story. It’s just not a simple movie but it has meaning to it, which is the best thing about the movie. It shows the life of Indians and how their life was and what they had to deal with. The movie has two main characters name Victor and Thomas. The movie starts with a house that goes on fire and the man (Arnold Joseph) Victor’sRead MoreAnalysis Of The Movie Smoke Signals 931 Words   |  4 Pagesother than the Inuk people, and this is why this film has become important to First Peoples media, because of the film’s dedication to authenticity, revitalizing interest in long standing traditions. With Smoke Signals , Survivance is demonstrated differently than in Atanarjuat. In Smoke Signals , it was evident that Victor was influenced by stereotypes of Native Americans that were present in th e United States. For example there is the bus scene where Victor and Thomas traveled to retrieve theRead MoreAnalysis Of The Movie Smoke Signals 729 Words   |  3 PagesSmoke Signals The movie, â€Å"Smoke Signals† is about a young Native American man named Victor. Victor grew up on a reservation. His parents, Arnold and Arlene both liked to drink and party. Arnold and his drinking habit spiral out of control. We see Arnold smack Victor and his mother around. This occurs when alcohol is involved. One morning after a night of partying Arlene wakes up to see that her son, Victor, is outside throwing beer bottles at his fathers’ truck. Arlene decides to stop drinking afterRead MoreSmoke Signals Elements Of Symbols790 Words   |  4 PagesClayton J. Walp Mr. Morill American Lit. and Comp. 25 September 2017 Smoke Signals: Elements of Representation Natural elements will often be viewed as symbols to represent a cycle of life changing experiences that will ultimately change the character forever on a deeper, spiritual level than what scratches the surface. Going through life, major events that change that person’s sense of direction and demeanor, for better or for worse, can be visualized as an element. Anger, sadness, loss of hopeRead MoreSmoke Signals By Sherman Alexie939 Words   |  4 PagesIn the movie Smoke Signals by Sherman Alexie; one of the main characters is Thomas Builds-the-fire. It all begins around three in the morning when his parents held the biggest house barbecue for the entire world to see. Thomas Builds-the-fire, he is the child of fire and ashes. Nevertheless, he never had the opportunity to meet his parents from then on. In addition, he lives, talks, and acts like his grandma. Thomas Builds-the-fire has a strong soul and the potential to give hands when needed. I