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BBPS4103
MATRICULATION NO : 791016145081001
E-MAIL : arman_saad@yahoo.com
Internal Audit 6
SWOT Strategies 9
SPACE Matrix 10
Recommendation 16
Case Abstract
Dr Pepper Snapple group (DPS) is the leading producer of flavoured beverages in North
America and the Caribbean, offering more than 50 brands. DPS is the leading producer of
flavoured beverages in North America and the Caribbean. Headquartered in Plano, Texas, Dr
Pepper Snapple (DPS) produces, bottles, and distributes Dr Pepper, Snapple, and other
beverages in North America, including Canada, Mexico, and the US. DPS owns 6 of the top
10 non-cola soft drinks. Nine of DPS’s 12 leading brands are No. 1 in their flavour
categories. Other DPS beverages include Sunkist soda, 7UP, A&W, Canada Dry, Crush.
Mott’s, Squirt, Hawaiian Punch, Penafiel, Clamato, Schweppes, Venom Energy, Rose’s, and
Mr. & Mrs T mixers. Soft drink companies face an ever changing world market. The
question DPS seeks to answer to guarantee their future includes: how can DPS continue to
grow at levels that will satisfy shareholders? To what extent should acquisition, joint
ventures, licensing agreements, and or internal growth tactics be pursued? Should DPS
diversify into other product markets such as snacks which Pepsi Co is using to create
competitive advantage? What geographic growth options are best for DPS to pursue? Should
any product or brands be divested?
Strengths
Weaknesses
Return on Equity 17 21
CEO Larry Young was named 2010 beverage executive of the 0.02 3 0.06
year by Beverage Industry Magazine
Snapple distributes their juices with labels indicating their 0.05 4 0.20
health benefits
$715 million agreement with Coke to distribute Dr Pepper and 0.15 4 0.60
Canada Dry in the United States
STRENGTHS WEAKNESSES
SWOT
OPPORTUNITIES THREATS
Generally energy beverage sales are growing Strong competitors like Pepsi and Coca
in USA
Cola
Opportunity for innovation Traditional position of energy beverages
Opportunity for making acquisitions Dependency on small number of large
retailers
Dependency on third party bottling
companies
Distribution agreements could be
terminated
People allergic on milk cannot use the
product since proteins are milk based.
Forward Integration
- The company should be more independent and not really so much on their
competitors to sell their products
Market Penetration
- Advertise with celebrities to help sell product like Snapple and show that there
products are healthy and good for you
- Advertise their other brands more like Snapple, Hawaiian Punch, and Mott’s
- Concentrate marketing efforts on Snapple rather than soft drinks since Snapple brand
is growing and soft drinks are decreasing.
Market Development
- Enter new market such as India, China or other Asian countries that has large GDP
growth
Product Development
Related Diversification
DPS should initiate a strategy to tackle its distribution problems and make available it products
in the international market by developing system for third party bottlers and distribution to help
DPS maintain in priority for their brands in other companies systems. DPS should also focus on
opportunities in high growth and high margin categories.
DPS should enter in the new market of energy beverages. The target group of population should
be males, between the age of 12 and 34, and adults from 34 to 55 because this target group is the
heaviest users of energy drinks now days.
DPS should include possibility to include head to head position against competitors. The best
way to compete is through good quality of beverage and attractive packing.
For distribution channel should be focused on convenience store, supermarkets and mass
merchandise.
Increase advertising by $200M marketing the health benefits of Snapple teas.
Increase R&D by $200M to develop an energy drink.
Increase advertising by $300M for Canada Dry, A&W and other non-cola flavoured soft drinks
Build a new bottling plant in Croatia for $100M.
Increase advertising by $100M for Snapple juice and tea products.
Develop a line of flavoured waters without sugar in plastic bottles only for $100M.
Develop a line of Christmas themed hot coco and ciders for $100M.