Management Strategies for Energy Drinks
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ScribdTranslationsManagement Strategies for Energy Drinks
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ScribdTranslationsIntroduction to Management
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Last names and Pedro Alberto Ramirez Espinoza
names
Code U18214793
General guidelines.
Hello! It's time for your reading assessment. So you can do it properly
optimum follows the following instructions:
1. Get ready: Review the class material from weeks 9, 10, 11, and 12.
2. It is important that you review each question and based on what is requested, your response is asked for.
response.
The delivery date is between Saturday and Sunday of week 12 (30 and 31 of
October
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Questions:
1. The foreign company ABC engaged in production, marketing and
distribution of energy drinks is being evaluated to enter the Peruvian market with its
RBV product. In this scenario, it hires the services of its consultant to
conduct a study using Michael Porter's 5 competitive forces
provide information to make the decision to bet or not in the market
Peruvian. You are asked to conduct this study using the suggested tool.
for each of the forces.
2. Depending on the described scenario, what type of organizational structure
I should design and implement the company in case I decide to enter the market.
Peruvian. Support your answer and provide evidence of the organizational chart.
Development:
Introduction to Management
The 5 competitive forces of Michael Porter.
Rivalry of the Competitors:
Volt: Brand of the Aje group that emerged in 2015, has diversified its portfolio of
products and fueled competition in the energy drink segment. Continues
innovating and has managed to ensure that most of its versions contain ingredients
natural/functional, in such a way that this energy contribution comes from sources
natural. It has a larger consumer base due to its low price and
accessible to everyone S/.2.00, moreover it is available at various shopping points
which makes it much easier to buy and acquire them.
Red Bull: also with different organic and differentiated alternatives, has led in
international markets for years. entered the Peruvian market in 2002, with
non-traditional advertising and no ads, from the beginning it opted for an audience
Objective of socioeconomic levels A and B. Located in modern places;
bars, clubs, stores that border universities or in supermarkets, at a price of
S/. 7.00. approximately.
Threat of New Competitors
Monster Energy: With just three years directly managing the brand in the
Peruvian market and 15 since its international launch, Monster Energy
has become the strongest bullfighter for its competitors such as Red Bull and
Volt, where not only a beverage with high caffeine content is sold, but a
experience and even a lifestyle that the brand conveys. although it is still
in negotiations to market Monster Energy cans in nightclubs, chains
from pharmacies and distributors, according to the latest Nielsen data as of February of this year, their
Market share has doubled year-on-year from 18.2%
up to 36.4% in the modern channel, thus managing to surpass its competitor.
This momentum has been made possible, according to the executive, by the strong channels of
distribution that The Coca-Cola Company offers, which in mid-2014 acquired the
16.7% of Monster Energy, although an impact is just starting to be seen in Peru, as
Introduction to Management
The work with the bottlers has been progressive and, in the country, their alliance with Lindley.
Arca Continental started in July of last year.
Threat of Substitute Products:
Green tea: Contains a lower amount of caffeine than energy drinks, and that
the numerous health benefits of green tea (including a decrease in
risk of heart disease and cancer) makes it an excellent option for
energy drink. There is also evidence that it helps improve mental clarity and
the performance, which makes it a good alternative to morning coffee.
Protein shakes: Lack of protein is a common cause of fatigue. A shake
protein can help your body meet nutritional requirements, but
It is noted that mixing protein powder into a shake will not give you energy.
protein needs carbohydrates to convert them into energy. Add fruit and germ
I add to your milkshake 10 grams of yogurt protein, milk or soy milk to
obtain more energy.
Customer Negotiation Power:
Volt: It has managed to conquer 93% of the Peruvian market considering its volume in
sales. In Peru, it ranks first in the most consumed energy drinks. It has a
comfortable price of S/.2.00 and it is available in stores and streets which makes it more
massive.
Red Bull: It is present in more than 165 countries worldwide. In Peru, it occupies the
second place in most consumed energy drinks. It has an average price of
$8.00 and has its sales in supermarkets, convenience stores, bars, pharmacies and
nightclubs.
Bargaining Power of Suppliers:
buyers are also a factor of great importance for this industry. The
energy drink manufacturing companies wish to obtain customers with a certain level
of considerable orders and that present a stable financial situation. Most of
Red Bull's customers are wholesalers and retailers who subsequently sell it.
Introduction to Management
product in supermarkets, bars or convenience stores. The high purchasing power of
The negotiation of buyers poses a great threat to Red Bull. This high
The power of buyers derives from the low switching costs in the industry of
energy drinks. Beverage buyers can easily switch from Red
Bull to another beverage manufacturing company that offers a lower price.
Typically, wholesalers and retailers place orders in large quantities, and
this results in greater negotiating power for the buyer. With respect to the
suppliers, their bargaining power depends on their size. For the
to produce its energy drink, Red Bull needs to buy the ingredients from
different suppliers. Some of the suppliers are strong and their power of
The negotiation with Red Bull is very high because due to its large size it can change.
easily from the buyer. However, many parts of the product are purchased from
smaller suppliers whose bargaining power is very low, as Red Bull can
find another company that provides them with the same product at a lower cost. Furthermore,
Red Bull has numerous channels and suppliers of its raw materials, and this allows it to ...
provides a clear competitive advantage by being able to switch from one provider to another that
offer a lower cost in a more flexible way.
2. What type of organizational structure should be designed and implemented by the
company.
In my opinion, the foreign company ABC would provide you with a structure.
functional organizational, as it has different departments such as production,
sales, marketing, systems, administration, finance, etc. the grouping of areas is
take into account the skills and the tasks that the people and the members will carry out
from the area share technical skills, interests, and responsibilities. Which would allow
a good entry of your RBV energy drink product into the Peruvian market and
to be able to compete with the great variety of competition that exists in this.
Manager
General
Company ABC
Secretariat
D. Sales and D.
D. Operations D. Financial
Marketing Management
Resources Coord. of
Sales Production
Humans Purchases