bus report.doccompetitive force of soft drink industry in bangladesh.”

7/27/2019 BUS Report.docCompetitive Force of Soft Drink Industry in Bangladesh.

1/36

PART 1INTRODUCTION

1


2/36

1. Introduction

1.1 Background:

Our world is now in modern globalized era. At this 21st

century our world has becomespeedy based on the developed technology. So the people living standard is being changed

tremendously and for this many things are used for people to make their life comfort. Soft-

drinks are the products to make people refreshing.

his report has been prepared on this product on the topic !Competitive Force o !ot Drink

Indu"tr# in Bang$ade"%."

his is a great opportunity to know about this industry through our report. his market is a

competitive market by nature as several soft drinks companies is working in the market.

heir different competitive tactics make us to learn how to survive in the competitive

business market. As a student of ##A under school of business this type of knowledge is

very much beneficial for us. his gives us practical knowledge about the commercial world.

And therefore$ it is mandatory for ##A students to prepare reports under ##A as a partial

re%uirement. &or this reason we have to prepare this report about competitive factors of

#angladesh soft drink industry.

Our faculty 'r. 'oniruzzaman$ (ecturer$ School of #usiness$ #angladesh )niversity of

#usiness * echnology$ has assigned to us this report writing as a part of our course study.

+e are sincerely thankful to him for assigning such type of a pro,ect work in a group of five

members. +e hope our work will meet his epectation.

1.& !igniicance:

Soft drink industry is very profitable and thus in our country different soft companies has

emerged. he competition level among these companies is very high. hey always try to give

their customers best product so that can earn loyalty. he output of this report may help to

understand the situation of the current soft drink market and position of different brand of this

industry.

1.'. !cope o t%e Report:

his report has been asked to prepare for analyzing competitive force of oca cola based on

the customer opinion and observation the market through visiting the market closely. his

report is covered by the soft drink market positioning of Coca Cola Company* the level of

2


3/36

its competition. /opefully this report can cover the competitive market situation of oca

ola and how they can maintain their position in the soft drink industries.

1.(. O)*ective":

1.(.1. +enera$ o)*ective:

he 0eneral ob,ective of this report is to identify * analyses the competitive force of

coca cola and find out the opportunity for this product.

1.(.&. !peciic o)*ective:

o analyze the soft drink market of #angladesh

o find out the local competitors of Coca Cola.

o analyze the customers perception about the products and these provided services.

o discuss the S+O Analysis of oca ola.

o identify the marketing mi ofCoca Cola.

1.,. -et%odo$og#:

1.,.1. T#pe o re"earc% de"ign: t isa descriptive research by nature.

1.,.&. !ource" o Data:

1.,.&.1. Primar# "ource": ata organized by the researcher for the specific purpose

of addressing the research problem.

1.,.&.&. !econdar# "ource": ata collected for some purpose other then the problem

at hand.

1.,.'. Data co$$ection procedure:

1.,.'.1. !econdar# data: ompany profile$ 'agazine$ 3ews paper add$ Annual

reports were used as secondary.

1.,.'.&. Primar# data: ustomer survey$ observation$ in-depth interview were

conducted to collect primary data.

1.,.(. Re"earc% In"trument":

1.,.(.1. ue"tionnaire

he set of all those %uestions is our %uestionnaire of this report. Our %uestionnaireincludes %uestions about the product like this4-

3


4/36

1. 'ain competitor

2. 5roduct %uality

6. #rand convenience

7. Any steps to develop product

8. 9eason for developing product

:. 5rice of the product

;. Any possibility to reduce price


5/36

1. 5imitation:

1. (ack of time for conducting a large scale survey.

2. (ack of customer co-operation.

6. (ack of 9ecords4Sufficient books$ publications$ facts and figures are not available.

hese constraints narrowed the scope of accurate analysis.

7. he research only covers the customers of oca ola in 'irpur$haka.

8. +e have faced difficulties on getting enough information about the company.

:. o not have enough information in their web page and annual report.

5


6/36

PART6&

O'5A3>59O&(?

6


7/36

&.1. Background o Coca Co$a Compan#:

he oca-ola ompany is the world@s leading manufacturer$ marketer$ and distributor of

nonalcoholic beverage concentrates and syrups$ with world head%uarters in Atlanta$ 0eorgia.

he ompany and its subsidiaries employ nearly 61$=== people around the world. Syrups$

concentrates and beverage bases for oca-ola$ the ompany@s flagship brand$ and over 26=

other ompany soft-drink brands are manufactured and sold by he oca-ola ompany and

its subsidiaries in nearly 2== countries around the world.

#y contract with he oca-ola ompany or its local subsidiaries$ local businesses are

authorized to bottle and sell ompany soft drinks within certain territorial boundaries and

under conditions that ensure the highest standards of %uality and uniformity.

he oca-ola ompany has a commitment$ more than a century old$ to social responsibility

through philanthropy and good citizenship. he ompany@s reputation for good corporate

citizenship results from charitable donations$ employee volunteerism$ technical assistance

and other demonstrations of support in thousands of communities worldwide.

&.&. 7i"ion:

oca ola ompany has to focus on customers satisfaction and value and ensures %uality of

product. t also 0row share of customer. &ulfill customer needs and wants and evelop

customer relationship.

-i""ion:

o refresh the worldB

o inspire moments of optimismB

o create value * make a difference.

+oa$:

he ultimate ob,ectives of the business strategy are to increase volume$ epand companys

share of worldwide nonalcoholic ready-to-drink beverage sales$ maimize companys long-

term cash flows and create economic-value-added by improving economic profit.

7


8/36

&.'. OR+ANO+RA- o t%e Coca Co$a Compan#.

8

89ecutive Director

C%airman

+enera$ -anager

Financia$ ;R Director

-arket Deve$opment

-anager

-arket Deve$opment

89ecutive

Unit "a$e" manager

Cu"tomer 89ecutive

-erc%andi"er"


9/36

&.( !


10/36

Feature6oca ola ompany has added various types of features into its products.

(ike- (ogo of the ompany$ 3et +eight of coca cola$ name of the flavor of coca

cola$ >ear of establishment.

Brand name6t has only one brand name that is oca ola$ remembered for the

customers.

Packaging6oca ola ompany has packaged its all brands in such way$ which

protects the cola pack from sun heat$ rainfall and natural damages. t also attracts the

customers buying perceptions.

Return6f there is problem with the productC the company takes back those defective

products without any condition.

Price

5i"t Price6oca ola ompany has mentioned the price of the product into the size

of bottle$ which helps the customer to know the accurate price of the product.

Di"count6oca ola ompany provides discount only towards its loyal istributor.

Credit term"6oca ola ompany provides many credit terms towards its dealers or

retailers.

-arket Price !ituation Coca Co$a Brand":

he following list is the price of various brands of cement as on @t%Fe)ruar# &3.

!$.

No.

Name o t%e Brand and "i0e

Per

Bott$e

Rate Tk.

Commi""ion

Per

Bott$e

=1. oca ola D28=ml E 12.== 3il

=2. oca ola D8==ml E 6=.== 3il

=6. oca ola D1===ml E 8=.== 3il

=7. oca ola D2===ml E


11/36

Factor#

Dea$er!a$e"

Departmen

t

8nd

U"er

Retai$er

Promotion

!a$e" promotion6 oca ola ompany provides short-term incentives towards its

customers.

Adverti"ing6 here has so many advertising for the customer.

Pu)$ic re$ation6 oca ola ompany offers different types of gifts to its istributor

and wholesaler. (ike- &ridge$ 'icro +ave$ ron$ #o &an and many other attractive

products to the istributor and wholesaler. oca ola ompany offers these gifts to

whole #angladesh. oca ola ompany has budgeted a big amount in this segment

to increase a friendly relationship with its customers$ dealers and retailers.

Direct marketing- oca ola ompany has maintained direct marketing by the

distributor and whole seller.

P$ace

C%anne$6oca ola ompany distributes its products by shop. ealers use several

types of cargo by which they bring the product to their selling area.

Coverage6 n +hole +orld oca ola ompany is highly demanded and the

company is successfully filling up the demand of target customers.

A""ortment6oca ola ompany has different category of product but it is easy to

carry in all over the world and %uite comfortable also.

Tran"portation6oca ola ompany has its own transportation.

11


12/36

12

he process starts from the sales department and the demand of the

customers

After producing the coil from the factory distributor purchases the

product from the company

hen distributors sale the products to the retailers and customers.

(astly end usersF consumers buy products from retailers


13/36

PART '

/?O9?A(AS5?S

13


14/36

'.1. Bu"ine"" 8nvironment:

he word Genvironment does not merely refer to the natural or ecological environment.

t is a generic concept which embraces the totality of environment forces which may

influence any aspect of organizational activity.


15/36

DARTBOARD 'odel-

he artboard configuration gives the organization pride of place in the center while

radiating from it are eight categories of environmental concerns.

According to Peace and Robinson-

hey separate a firms eternal environment into three categories4-

he Gremote environment$ such as global and domestic$ political$ social and

technological concerns this is akin to the contetual environment outlined above.

he Gindu"tr# environment or its competitive forces$ threats of intense segment

rivalry$ new entrance$ substitute products$ buyers growing bargaining power$

suppliers growing bargaining power.

he Goperating environment which comprises a rather mied group of actorsincluding suppliers and customers.

15

?conomyechnology

Sector

/uman

9esource

Sector

&inance

Sector

Socio

ultural

Sector

0ovt.

Organization

International Context International

ndustry 9aw

'aterials

'arket Sector

nternational

Sector


16/36

'.'. Competitive Force":6

'ichael 5orter has identified five forces that determine the intrinsic long-run

attractiveness of a market or market segment4 industry competitors$ potential entrants$

substitutes$ buyers$ and suppliers. /is model is shown below. he threats these forces

poses are as follows4-

1. Threats of intense segment rivalry: 6 A segment is unattractive if it already

contains numerous$ strong or aggressive competitors. ts even more unattractive

if its stable or declining.

2. Threat of ne entrants: 6 he most attractive segment is one in which entry

barriers are high and eit barriers are low. &ew new firms can enter the industry$

and poorly performing firms can easily eit. 3ew entrants bring new capacity$

new resource and desire for market share.

6. Threat of s!bstit!te "rod!cts: 6 A segment is unattractive when there are actual or

potential substitutes for the product. Substitutes place a limit on price and on

16

5otential entrants

DThreat of mobilityE

ndustry competitors

DSegment rivalryE

Substitutes

DThreat of

substitutionE

#uyers

DBuyer PowerE

Suppliers

DSupplier PowerE


17/36

profits. f technology advances or competition increases in these substitute

industries$ prices and profits are likely to fall.

7. Threat of b!yers# groing bargaining "oer: 6 A segment is unattractive if

buyers posses strong or growing bargaining power. #uyers bargaining power

grows when they become more concentrated or organized$ when the product is

undifferentiated$ buyers switching costs are low$ etc.

8. Threat of s!""liers# groing bargaining "oer: 6 A segment is unattractive if the

companys suppliers are able to raise prices or reduce %uantity supplied. Suppliers

tend to be powerful when they are concentrated or organized$ when there are few

substitutes$ supplied product is an important input$ costs of switching suppliers are

high$ etc.

17


18/36

PART (

A3A(>SS

A3 &330S

18


19/36

1. -arket "%are o ma*or )everage compan#:

0%

10%

20%

30%

40%

Tabani BeverageLimited

BangladeshBeverage Limited

Partex BeverageLimited

l!be "!#t $rinsLimited

Beverage Company

Beverage &!m'an(

&rom our analysis$ t is found that abani beverage company have 68H share$ #angladesh

#everage company have6=H share$ parte beverage ltd have 27H$0lobe Soft drink have

11H.

&.!trateg# to attract con"umer

Approac% Percentage

Adverti"ement &32

+ood /ua$it# (32

Price &,2

Free Oer 132

Ot%er ,2

Po"ition Beverage Compan# -arket

!%are

1st abani #everage (imited 68H

2nd #angladesh #everage

(imited

6=H

6rd 5arte #everage (imited 27H

7th 0lobe Soft rinks (imited 11H

19


20/36

&rom above figure$ these strategy to attract consumer on the advertisement 2=H$ good %uality7=H$ price 28H$ free offer 1=H and other 8H.

'.T%e eature t%at cu"tomer prioriti0e E%en purc%a"e a "ot drink :

Feature Percentage

Ta"te (32

Price '32;ea$t% con"ciou"ne"" &32

Ot%er 132

&rom above figure$ customer purchases soft drinks on the basis of its features. Such as taste

7=H$ price 6=H$ health consciousness 2=H and other 1=H.

(.Con"umption rate:

20


21/36

Brand Con"umption rate

Coca6co$a (32

Pep"i ',2

-o*o ,2

Rc6Co$a 132

Ot%er 132

40%

35%

5%

10% 10%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

&!)a*)!la Pe'si +!,! -) &!la .ther

Consumption rate

&!ns/m'ti!n rate

&rom above figure we see that$ consumption rate in the market oca cola 7=H$ 5epsi 68H$ 'o,o 8H$

9- cola 1=H$ and other 1=H.

,.Factor t%at po""e" %ig% )arrier to enter in t%e indu"tr#:

8ntr# Barrier percentage

Co"t o e"ta)$i"%ment ',2

89i"ting )rand popu$arit# (32

5ack o product innovativene"" &32

Ot%er ,2

21


22/36

&!st !#stablishment

xisting BrandsP!'/larit(

La) !# nn!vative'r!d/)t

.ther

ntr( Barriers 35% 40% 20% 5%

0%

10%

20%

30%

40%

50%

Entry Barriers

&rom above figure we can understand that$ factors that posses high barriers to enter this

industry. &actors are affected on cost of establishment 68H$ eisting brands popularity 7=H$

lack of innovative product 2=H and other 8H.

.Bu#er" )argaining PoEer in t%e indu"tr#:

Bu#er" )argaining PoEer Percentage

;ig% 32

5oE 1,2-oderate &,2

54%

23%

23%

Buyer Bargaining Power

igh +!derate L!

&rom above figure refers buyers bargaining power in this industry$ high bargaining power:=H$ low 18H and moderate 28H.

22


23/36

. !upp$ier )argaining poEer in t%e indu"tr#:

!upp$ier )argaining PoEer Percentage

;ig% '32

5oE (,2

-oderate &,2

30%

25%

45%

Supplier Bargaining Power

igh +!derate L!

&rom above figure we see that$ Supplier bargaining power in this industry is high 6=H$ low

78H and moderate 28H.

@.!tronge"t "u)"titute or "ot drink":

"u)"titute percentage

TeaG Coee &,2

Huice (32

-inera$


24/36

&rom above figure we see that$ strongest substitute for soft drinks industry such as tea or

coffee coverage 28H$ ,uice 7=H$ mineral water 2=H and alcoholic drinks 18H.

4.Preera)$e !trateg# to "urvive in t%e market:

!trateg# Percentage

5oE co"t ',2

Be"t ua$it# (32

-arketing &32

!egmentation ,2

Above figure we see that$ companys preferable strategy to survive in the market these

strategies are low cost strategy 68H$ best %uality 7=H$ marketing 2=H and segmentation 8H.

24


25/36

PART ,

'a,or &indings

25


26/36

'ost of the customer drinks cola flavors. hey feel prestigious as well as mobility

while they drink cola.

abani #everage (imited is first position in the market because they cover 68H share

of total market share in this industry.

0ood %uality is important because it attracts to 7=H consumer.

'ost of consumer when purchases the soft drinks then they consider tastes of soft

drinks. #ecause 7=H consumer considers about taste.

'a,ority consumer consume oca ola and say that oca ola keeps refreshing

capacity * they also know the other brands of cola flavor. #ecause 7=H consumer

consume oca ola drinks.

n soft drinks industry entry barriers are high. Specially eisting brand popularity is

very high.

n this industry$ buyer bargaining is also high.

n this industry$ Supplier bargaining is low.

n this industry have many substitute products like as teaFcoffee$ ,uice$ mineral water$

alcohol drinks etc. #ut ,uice is strongest substitutes for soft drinks.

o survive in this industry then the company must have maintain various strategy.

/ere best %uality strategy is important for soft drinks industry.

onsumers take other flavors occasionally when cola flavor is not available in that

place.

'ost of the consumer influences by the I commercial * their most preferable I

advertisement.

5rice and %uality both are important for any product. 'aimum number of customer

does use it for its reasonable price.

(arge portion of customer who are using oca ola$ cause of its %uality and price.

'ost of the consumer epects free item or discount from the oca ola. f the

company offers any free item or discount with their preferable cola product$ then$ they

will take it more.

onsumer considers various matters when they take oca ola. Such as color$ taste$

brand image * price. #ut they prefer more !#rand image as well as taste" regarding

cola product. Somebody consider color * price also.

26


27/36

PART

O3()SO3

27


28/36

he demand of soft drinks is increasing day by day in developing countries like #angladesh.

t removes our thirstiness * makes us fresh * comfort. +ith this soft drink oca ola is

working to provide the best %uality product with a reasonable price. t is very much important

for oca ola to ensure the customer satisfaction in surviving in this market as this is very

competitive market and customers are both %uality * price sensitive.

28


29/36

PART

9ecommendation

29


30/36

3ow we are able to give proposal or a fair advice to oca ola according to our comparison

between theory and what is going on currently in oca ola. n this step$ we have to shed alight over those areas which are valuable$ creative and useful for oca ola but they are not

considering to them.

n start of our recommendation$ we would like to add that nomination of ?OJ criteria more

benefits to sales employees$ so it should be highly recommended to have it for all so as to

make system fair. 9eward system is an effective techni%ue to support and change culture of

the organization optimisticallyC it would only be possible if the system is e%ual for all

employees of organization. +e recommended to oca ola management to utilize this

system to all employees so as to increase effectiveness and productivity. On more important

recommendation should be to design both financial and non financial rewards in a way to

give a fair importance of both for top and lower levels.

9eward management of oca ola should be highly functional to make employees

committed to organizational goals$ vales and standards$ also it should push employees in a

way to boost their competencies and work understanding. 9eward management of oca ola

should be addressed to group tasks$ as all rewards are mostly designed for individual levels

like ?OJ$ make the move and sales dangle$ definitely it reduces productivity. #ecause now a

days$ organizations have more curiosity towards group tasks which needs great interaction

and communication between departments and it only work if all department employees

rewarded e%ually.

&or us$ it should manageable in a way to remove ambiguity at all levels$ so as to increase

organizational efficiency. here should be criteria for employee to consider their opinions at

management level respectfully. t should need to reduce gap between management and

employees so as to increase overall results. &or us goals should be specific$ measurable$

achievable$ and realistic and time bound DS'A9E$ it would definitely increase overall

effectiveness.

30


31/36

+e have to recommend oke to design their system in specific way to define employees

career path$ recognition and future goalsC it would definitely positively boost organizations

performance. raining and development should be more used to oke to groom career of

their employees at all level$ they are doing on the ,ob but we recommended that a fair amount

of budget should be declared for this purpose$ then off the ,ob training sessions of fifteen

days or a monthly package may use to boost performance.

According to our research$ they have declared 6H for rewards with respect to whole revenue$

but it is less because system is not working for all departments e%ually. +e are on the view to

increase this budget to minimum 8H so as to treat all employees e%ually. ?mployees should

be involved in decision making to increase %uality and productivity.

+e are keen to make system significant for the sake to reduce the dissatisfaction of the

employees on promotion criterion$ reduce the dissatisfaction of the employees on appraisal

system$ reduce the dissatisfaction of the employees on salary$ bonus and other fringe benefits$

and improve the work performance$ improve the productivity$ reduce the level of

occupational stress that arises from feeling of ine%uality on reward$ and reduce the

perceptional gap on reward management system and develop a culture of high performance.

hese all points beautifully eplain the reward management system conse%uences and its

more value.

here should be proper check and balance system between goals and performance have to be

introduced$ currently yearly bases performance evaluation has been going on$ for high

motivational level$ high %uality it demands %uarterly bases. here should be a system of

consultation between employees and management about employees career path$ it is easier

for management to understand and analyze what employees actually want and allocate them

reward properly. +e would like to recommend oke to introduce alternative of reward

management like wise profit sharing$ pay for knowledge program and goal sharing so as to

increase their productivity.

31


32/36

PART @

#ibliography

32


33/36

Te9t Book:

5hilip Kotler * 0ary Armstrong- !5rinciples of 'arketing" 11 th?d. )pper Saddle 9iver$

3ew Lersey$ ).S.AB5rentice- /all.

Ot%er Pu)$ication:

9eport on abani #everage (imited.


34/36

PART @

Anneure

34


35/36

ue"tionnaire:

+elcome on this survey which is an eercise have to do in ?nglish. >ou ,ust have to follow

the %uestions and it will be easy to do.

t@s very fast to answerM

1. o you like soft drinks

A. >es #. 3o

&. ;oE oten do #ou drink "ot drink"

A. 3ever #. 9arely . Often . Always

'.


36/36

hank you for having answered this surveyM

bus report.doccompetitive force of soft drink industry in bangladesh.”

Documents