Case Study On Snapple

1. Advantages and disadvantages of a company being part of a multinational conglomerate like Cadbury as opposed to being an independent company
Various benefits accrue to companies from being part of a multinational company. Among them is that they are more competitive while attached to a more major company as opposed to being independent. The larger multinational company has a large market and is popular that it has a competitive advantage than the independent companies. There is also the benefit of increased bargaining power, while using the name of a multinational company, any small company within it can negotiate better terms for any business deals. There are also distributional benefits, sales, and availability of finances from the multinational company that can lend the small company.
Some disadvantages accrue to the company being part of a huge multinational company. For instance, such a connected company is not able to develop and grow as compared to an independent company. This is because it mainly follows the plans and guidelines set by the larger company rather than its strategies. For an attached company decision-making is slow, as there needs to be consultations made with a more dominant company. A company part of a multinational is limited in its production and business expansion by the multinational; it cannot produce a competing brand as opposed to an independent one.
2. Advantages of being number 3 firm in an industry
There are advantages accrued from being number three in the industry such as a business can develop productive relationships with other companies. For example, DPS Company was able to establish productive relations with their bottlers and distributors because of their position in the industry. Due to its position, it can attain a relatively large market share in the North America just behind Coca-Cola and Pepsi.
3. Dr. Pepper Snapple’s business strategy and how it is working
DPS have since their demerging developed and implemented various strategies to grow the company. The company plans to build and enhance their core products that have the potential of more sales. It also intends to turn its attention to the emerging profitable opportunities available such as the ready-to-drink tea. It business strategy also aims to increase the company’s profile of the company being part of a multinational conglomerate like Cadbury than an independent company’s goods in high margin channels. Other business strategies are increasing the operating efficiency, developing the route-to-market via acquisitions, and leveraging the integrated business structure. So far, the strategies adopted are working well, with the company registering reduced operating cost and higher profits.
4. Resources that give DPS a competitive advantage and how they should be developed
The company draws its competitive advantage from the skilled labor at its disposal especially in its management. Professionals, who are well informed and have a vast experience, head the company. The company also has a competitive advantage resulting from its strong history of quality brand development. Another of the aspects that give DPS a competitive advantage is their developed different teas. Preference of the tea brands by the consumers, hence more competitive. The company should focus on building on its excellent reputation and developing more and better qualities of beverages than there are in the market.
5. Are the DPS brands different enough to require a different approach to the market for each one? What synergies does the company enjoy across its brands?
Since all the DPS product fall under the same industry, it would be cheaper to adopt the same market approach for all of them than a different approach for each. The company enjoys the same bottling and distributional channels for the majority of it bottled drinks. The same channel or distributor bottles and distributes several brands the company produces.
6. Suitability of Larry young as the CEO and advantages and disadvantages of having a CEO who has spent his/her whole career in the industry
Larry Young is the right person for the job. He is responsible for the breakaway from Cadbury, and hence has goals and interest of the company at heart. He is also well skilled and has a vast information of the company to help in its management. One advantage of having a CEO, who has spent his/her entire career in the industry is that he/she brings much experience and knowledge in the running of the business. Another benefit is that he/she can solve the challenges that may face the company with ease. He is in a position to use his/her influence and relationships with other companies to grow the company. The disadvantage of such a case is that he/she may be too comfortable with the management-leading incompetency. In addition, rival companies may be able to predict his/her strategies.
7. Major trends influencing the beverage industry currently and the position of DPS to take advantage of these trends
One of the crucial trends in the industry is the heightened awareness of the consumers on their health. Many people are shifting from the carbonated soft drinks to alternatives like noncarbonated drinks, ready-to-drink teas, and regular or flavored water. DPS is in a good position to capitalize on the opportunity since its beverage products are widely known, and the company has already improved on the tea flavors.
8. Do you believe DPS will perform better in the future by forming more cooperative alliances with the top two competitors or by taking them head on?
The DPS company will perform better by coming up with policies that allow for forming of cooperative alliances with the leading competitors than on taking their head on. With the alliances, the firm will have an exceptional opportunity to improve on its geographical coverage and develop its distributional channels across a number of locations. The company should not try any efforts to compete head on with the leaders in the industry, and any attempt of such would ruin the company.
9. Should any of the DPS brands be divested? Should DPS diversify into other products? IF so, which ones an why?
The DPS brand should not be divested. This is because all its brands that are now producing real revenues to the company. On the other side, even though the carbonated soft drinks market may shrink in the coming days, DPS is still in a position to make profits in the remaining market. Currently and as the company is planning, it should diversify its production to cover for the difference in production by which its leading competitors exceed it with. It should develop its production for the regular and flavored water, for which its market is growing.