Competition in Energy Drinks, Sports Drinks, and Vitamin-Enhanced Beverages Essay Example for Free

Competition in Energy Drinks, Sports Drinks, and Vitamin-Enhanced Beverages EssayPorters five- sop ups model reveals that the overall alternative beverage industry attractiveness is high. Some beverage companies, such as PepsiCo and Coca-Cola, yield mastered the art of brand building in the alternative beverage market and eat up been rewarded with rapid maturateth rates. The rising population of health conscious consumers is increasingly leaning towards alternative beverages that ar believed to offer greater health benefits. The strongest competitive force, or most important to strategy formulation, is the threat of entranceway of new competitors. Competitive pressure from rival sellers is high in the alternative beverage industry. The number of brands competing in sports drinks, energy drinks, and vitamin-enhanced beverage segments of the alternative beverage industry continue to grow each year. Both giant and small vendors atomic number 18 launching new products and fight ing for minimal retail shelf space. More and more than consumers are moving away from traditional soft drinks to healthier alternative drinks. Demand is expected to grow worldwide as consumer purchasing power increases.Another strong competitive force is buyer talk terms power. Convenience stores and grocery stores have substantial leverage in negotiating pricing and slotting fees with alternative beverage producers repayable to the large quantity of their purchase. Newer brands are very vulnerable to buyer power because of limited space on store shelves. Top brands like Red Bull are almost always guaranteed space. This competitive force does not affect Coca-Cola or PepsiCo as much due to the variety of beverages the stores want to offer to the customer.As a result of this certain appeal, the two companies alternative beverage brands can almost always be found shelf space in grocery/convenience stores. Distributors, like restaurants, have less king to negotiate for deep pricing discounts because of quantity limitations. The weakest competitive force is the bargaining power and leverage of suppliers. intimately of the raw materials desirable to manufacture alternative beverages are basic merchandise such as flavor, color, packaging, etc.The suppliers of these commodities have no bargaining power over the pricing due to which the suppliers in the industry are relatively weak. Raw materials for these drinks are basic commodities which are easily available to every producer and have low cost which makes no difference for any supplier. Low switching costs limit supplier bargaining power by enabling industry members to change suppliers if any one supplier attempts to produce prices by more than the cost of switching.