Dr. Pepper Snapple Group
March 5th, 2013
Current Situation Analysis
The Dr. pepper Snapple Group fuses its vision and mission statements saying, “At Dr. Pepper Snapple Group, it is our vision to be the best beverage business in the Americas. Our brands have been synonymous with refreshment, fun and flavor for generations, and our sales are poised to keep growing in the future.” This stamen is straightforward and informatively average. It establishes the company’s goal and core values. Also, it highlights DPS’ interest in future sales growth. The company includes its business strategy stating that it focuses on building and enhancing leading ...view middle of the document...
The main product lines of the industry are carbonated soft drinks, fruit beverages, bottled water, so-called functional beverages (including energy drinks and ready-to-drink teas and coffees), and sport drinks. The soft drink industry is made up of two major manufacturing systems that fall into distinct categories: (1) flavoring syrup and concentrate manufacturing and (2) soft drink manufacturing. The supply chain is largely dependent on the syrup producer, as this is the driver for most downstream operations. The majority of the bottled soft drinks follow a similar product life cycle, moving from syrup producer, to bottler, to distributor, to merchant, to final consumer. The principal raw materials used in the beverage industry are cans and ends, glass bottles, PET bottles and caps, paper products, sweeteners, juice, fruit, water and other ingredients. Major retailers associated with the beverage industry include Wal-Mart, Target and Kroger. In addition to retailers, beverage manufacturers also depend on foodservice customers such as McDonald’s and Taco Bell, which buy syrups for fountain drinks. Major competitors in the manufacturing industry include Coca-Cola, PepsiCo, Nestle S.A. and Kraft Foods Inc. Refer to exhibit 1 for an analysis on key success factors and exhibits 2, 3 and 4 for industry markets share and 2011 sales.
The company’s management team includes President and CEO Larry Young, Chief Financial Officer Marty Ellen, and Chairman of the Board, Wayne Sanders. Larry Young has served as president and chief executive officer since October 2007. The management team has played a central role in creating an integrated beverage company that has resulted in a more reliable, sustainable, and secure route to market. DPS’s marketing strategy is to grow its brands through continuously providing new solutions to meet consumers’ changing preferences and needs(Hoovers). The company identifies these preferences and needs and develops innovative solutions to address the opportunities. Solutions include new and reformulated products, improved packaging design, pricing and enhanced availability. DSP is a strong advocate for advertising, media, sponsorships, merchandising, public relations and promotion to provide maximum impact for the company’s brands and messages. The company’s operating structure consists of three business segments: Beverage Concentrates, Packaged Beverages and Latin America Beverages (Pearson). It operates 24 production plants and more than 200 distribution centers in those areas. See exhibit 5 on DPS’ brands and exhibit 6 on the company’s detailed business model.
Internal Analysis Financials
Dr. Pepper Snapple Group is the third largest carbonated soft drink manufacturer in the U.S. The company is the industry’s leader in flavored carbonated soft drinks with a 40.4% market share in the U.S. for 2010 as measured by retail sales. Overall, DPS financial performance since the spinoff has exceeded...