Thursday, September 26, 2019
Competition in Energy Drinks Essay Example | Topics and Well Written Essays - 1000 words
Competition in Energy Drinks - Essay Example In essence, the PorterÃ¢â¬â¢s five theory comprise of five forces namely: existing competitive rivalry between suppliers, threat of new entrants, bargaining power of buyers, power of suppliers and the threat of substitute products with the inclusion of technological change (Orcullo 48). Competition in Energy Drinks, Sports Drinks and Vitamin Enhanced Beverages United States is one of the countries that serves the market for drink such as energy, sports drinks and vitamin enhanced beverages. Apparently, energy drinks are consumed by young people who want to increase their healthy levels. On the other hand, the sport drinks are mostly consumed by people who constantly watch their fitness and those who engage in sporting activities. In the same way, vitamin enhanced beverages are mostly consumed by adults especially those that have varying health issues (Bangs and Henricks 226). Some of the companies that are involved in the production of these alternative beverages include Coca cola Company, Pepsi Company and the Red Bull GmbH among others. ...It is worth mentioning that most people have opted to consume alterative drinks as opposed to carbonated drinks. This in turn has translated to an increase in the demand for the alternative drinks as compared to other drinks in the market. In response to this, the Coca cola Company and the Pepsi Company have gradually increased their production of alternative beverages. For instance, there has been extension of product line and the development of new products which moves in to capture the demand from buyers (Gamble 77). The Threat of Substitute Product It is often argued that any competition is endangered if there is presence of substitute products in the market (Orcullo 50). Although, Coca cola Company and the Pepsi Company are ancient in the world in regard to production of soft drinks and the gradual production of alternative beverages, other companies such as Red Bull GmbH have come up with substitute drinks with vary ing prices. As a result, buyers have options while purchasing such drinks making the market extremely competitive. The Threat of Supplier Bargaining Power In the same way, the bargaining power of Suppliers is very crucial in any market. In essence, the power depends on issues such as degree of differentiation of inputs, cost of inputs in relation to selling prices of the product, and the presence of substitute products (Bangs and Henricks 226).