1. why is soft drink industry so profitable? 2. compare the economics of concentrate business with bottling business and tell why profitability so different? 3. how the competition between coke and pepsi affected industry profit? 4. how can coke and pepsi sustain this profit in wake of flattening demand and growing interest in non- csd.
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Soft drink plays an important role in the people’s daily life. There is no doubt that this industry is profitable. The soft drink can be found in everywhere in the world, and the reasons of its high profit have several aspects.
The first aspect is a little capital investment and material cost. They include that machinery, overhead, labor, and materials. The machinery, overhead, and labor are the basic requirements and for soft drink industry, the levels of these conditions are not very high. So the cost of those is low and reasonable. On the other hand, the manufacturers add the concentrate flavors to the drink and improve people’s desire for the soft drink. Of course, the concentrate flavors are not expensive, just like caramel coloring, phosphoric or citric acid, natural flavors and caffeine.
Soft drink plays an important role in the people’s daily life. There is no doubt that this industry is profitable. The soft drink can be found in everywhere in the world, and the reasons of its high profit have several aspects.
The first aspect is a little capital investment and material cost. They include that machinery, overhead, labor, and materials. The machinery, overhead, and labor are the basic requirements and for soft drink industry, the levels of these conditions are not very high. So the cost of those is low and reasonable. On the other hand, the manufacturers add the concentrate flavors to the drink and improve people’s desire for the soft drink. Of course, the concentrate flavors are not expensive, just like caramel coloring, phosphoric or citric acid, natural flavors and caffeine.
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