Dr Pepper Analysis
Case study - Group 8
EXECUTIVE SUMMARY: DR PEPPER SNAPPLE
Following analysis performed for the external and internal environment, we have identified various important aspects that need to be considered while shaping the overall strategy for DPS. First of all, our internal analysis surfaced an important weakness of DPS; 40% of DPS’s distribution strat egy depends on its competitors.
This creates strong dependence on the competitors for the company to prosper, which limits their competitive capacity, especially when low cost leadership strategies are concerned. These strategies are not via ble for DPS and present a retaliation risk. Also, considering the threats and opportunities of the industry, we believe that a differentiation strategy would be the most suitable.
We observed changes in the lifestyle of consumers and rise in interest for healthier products, as well as for those that reinforce well-being. There are also changes in the regulations concerning health laws. While these are threats for the high calorie drinks within the DPS portfolio, it also presents an important opportunity for the industry, as the market for healthy and low calorie products have not been completely exploited yet. For examp le, in 2013, flavored and functional waters are estimated to grow by 71%. We believe that the company is in a strong position to take advantage of this opportunity, given its strength in developing new products and versatile production line. Furthermore, the Corporate Social Responsibility report that was published, as well as the road map designed for the company are also aligned with health and well-being values, creating a consistent approach.
More concretely, as an action point, we recommend DPS to differentiate its product portfolio by incr easing the focus on development and marketing soft drinks with low or no calories, as well as flavored or funct ional waters.
As it will be discussed later on, marketing and brand image will be very
EXECUTIVE SUMMARY: DR PEPPER SNAPPLE
Following analysis performed for the external and internal environment, we have identified various important aspects that need to be considered while shaping the overall strategy for DPS. First of all, our internal analysis surfaced an important weakness of DPS; 40% of DPS’s distribution strat egy depends on its competitors.
This creates strong dependence on the competitors for the company to prosper, which limits their competitive capacity, especially when low cost leadership strategies are concerned. These strategies are not via ble for DPS and present a retaliation risk. Also, considering the threats and opportunities of the industry, we believe that a differentiation strategy would be the most suitable.
We observed changes in the lifestyle of consumers and rise in interest for healthier products, as well as for those that reinforce well-being. There are also changes in the regulations concerning health laws. While these are threats for the high calorie drinks within the DPS portfolio, it also presents an important opportunity for the industry, as the market for healthy and low calorie products have not been completely exploited yet. For examp le, in 2013, flavored and functional waters are estimated to grow by 71%. We believe that the company is in a strong position to take advantage of this opportunity, given its strength in developing new products and versatile production line. Furthermore, the Corporate Social Responsibility report that was published, as well as the road map designed for the company are also aligned with health and well-being values, creating a consistent approach.
More concretely, as an action point, we recommend DPS to differentiate its product portfolio by incr easing the focus on development and marketing soft drinks with low or no calories, as well as flavored or funct ional waters.
As it will be discussed later on, marketing and brand image will be very