Extended Case Study
Australian Beverages Ltd (ABL)
1. What type of organisation is ABL?
ABL was established by a group of enterprising pharmacists who made carbonated soft drinks in their pharmacies. ABL was listing on the Australian Stock Exchange (AXS) on 1996.The current managing director of the company is Tom Dwyer, who has been with the company since 2008. 2. Identify the industry, product segments and value chain.
The industry is the Australian non-alcoholic beverages industry. In this case study, it is focused on the Australian bottled water manufacturing industry.
Product segments :- Carbonated soft drinks (CSD), bottled water, milk drinks, fruit drinks, sport drinks, ready to drink tea/coffee, energy drinks.
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5. What are the key issues affecting industry future profitability?
Threat of new entrants to the industry is low.
- Huge capital required to entry into the market
-Four largest competitors accounted for approximately 83% of the industry revenue
-New competitors need to spend heavily on marketing to promote their brand
-Difficulties of accessing to distribution channels as large retail buyers prefer to deal with large manufacturers or suppliers that can provide a large product range
-Economies of scale are very important for a low-value product, which is more difficult for new entrants to compete with existing manufacturers
-High switching cost because of specialize equipment that cannot be used to produce other products
-Government will imposed penalties on those schools that failed to comply with the policy which ban selling full-calorie CSDs in schools.
-Low threat from imports due to high transportation cost
Power of suppliers is medium.
-Purchases include water supplies, labels and other packaging materials such as glass and plastic resin bottles and closures which are generally purchased on five year contracts. Hence the bargaining
As a member of management Clive Jenkins is responsible for boosting employee morale to ensure that company goals are met
Competition within the carbonated drink categories, as well as other categories such as water and sport drinks.
regulation, cost and availability of raw materials, and cost of labor. A business may have the best idea for
Suppliers in the industry seek buyers who can move a lot of merchandise in a short period of time. The threat of substitution is a big deal in this industry. Most retail stores carry the same types of products with little differentiation. This makes it difficult for companies in this industry to keep customers coming back. This places an emphasis on the need to build a good reputation with customers.
The bargaining power of buyers stands in a direct relationship with the bargaining power of suppliers. If the bargaining power of buyers is substantial it increases the opportunity cost of suppliers. The greater the buyers concentration the greater their bargaining power. This bargaining power is also increased in markets where the suppliers’ concentration is high. The bargaining power is also increased when the cost of switching from one supplier to another is low. In instances where backward vertical integration is possible i.e. buyers setting up their own chains of suppliers the bargaining power of the buyer increases in that their prices may become more competitive. In a market where the buyers are more concerned over quality than price their bargaining power decreases as they are less inclined to shop
New, high-tech product. Could be destabilized by introduction of much lower cost alternative in a few years.
In an industry dominated by two heavyweight contenders, Coke and Pepsi, in fact, between 1996 and 2004 per capita consumption of carbonated soft drinks (CSD) remained between 52 to 54 gallons per year. Consumption grew by an average of 3% per year over the next three decades. Fueling this growth were the increasing availability of CSD, the introduction of diet and flavored varieties, and brand extensions. There is couple of reasons why the industry is so profitable such as market share, availability and diversity and brand name and world class marketing.
Have you ever had a colonoscopy or endoscopy – where they take a camera and look through your mouth down into your stomach; or a camera that goes in your rectum that looks through your bowel and intestines?
A young man has established himself in his workplace as a great team worker with an overall positive contribution to the team. The zoo has employees from all walks of life with a common passion for animals. Abram lived in Mexico before moving to America for the zoo internship. Intercultural conflict is a clash between people of different cultures that focus on the contrasting aspects of the two cultures (Neuliep, 2018). Abram is expected to handle conflict with the best solution applicable to his friends who are strongly influenced by their American culture.
Economies of scale: Large companies can produce products at a much lower cost than small ones because the cost per unit drops as the volume of output rises
-The costs which can be borne, and the investment required to compete in the industry.
“Economies of scale are unit cost reductions associated with a large scale of output” as it is able to spread over the fixed costs over a large volume of quantity (Wickramasekera, Cronk & Hill 2013 p90). “First-mover advantages are the economic and strategic advantages that accrue to early entrants into an industry and the ability to capture scale economies ahead of later
Low product differentiation and economies of scale: There isn’t much product differentiation at play in the retail industry as there are well known manufacturers whose products are offered for sale, which leaves price to compete on. Current well established retailers with thousands of stores enjoy the economies of scale to control their cost that a new entrant might not be able to replicate after immediately entering the industry.
Coca-Cola’s customer segments meet the needs of every age and every lifestyle. They provide a variety of products from different flavored sodas to soy based drinks. They have a drink that targets every age group. For kids and adults, they have
Answer: In our judgement, PepsiCo did not have a moral obligation to divest itself of all its Burmese assets. The reason being: