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Dr Pepper Snapple Group Inc Swot Analysis

Essay by   •  May 12, 2011  •  Case Study  •  950 Words (4 Pages)  •  3,981 Views

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Dr Pepper Snapple Group Inc.

SWOT Analysis:

Strengths:

Dr Pepper Snapple Group Inc. has very strong relationships with its customers, including the largest bottle distributors and the most important U.S retailers including Wal-Mart, also strong relationships with good service companies. It has a strong brand portfolio which provides customers with a foundation for growth and profitability. Dr Pepper Snapple Group have a strong market position, it holds number three in the United States, Canada and Mexico beverage markets. It has a broad product line. There are no capital constraints meaning a large free cash flow. It is a popular brand of carbonated soft drinks and is easily recognisable to customers.

Weaknesses:

With the Health craze that is looming and that will no doubt penetrate the markets there will be a significant blow to the sales of soft drinks. Also, having the majority of revenues (70%) coming from North America, including US, Canada and Mexico is also a weakness. To combat this they should expand their market place.

Opportunities:

With health consciousness growing it will be an opportunity for the company as they are already the leader in non-carbonated drinks with brands such as Gatorade and Lipton, also with healthy food brands like Quakers Oats. There is also growth in emerging markets, and with the growth of the Hispanic culture in the US it is an opportunity for the company as their product line consists of Sabritas chips which many Hispanic people like. The growth of bottled water also identifies another opportunity in the market.

Threats:

Due to the rise in health consciousness there is a fall in the sales of carbonated drinks. With oil prices fluctuating there are effects on the production and distribution. Recessionary times also cause a threat to the Dr Pepper Snapple Group. However, the most notable threat is that of the competing companies in the market. This will require the company to invest much time and energy into this new line of products as they will have an uphill battle to make themselves appealing to customers.

Competition

The Dr Pepper Snapple Group has five main forms of competition already in the market place. Combined they account for 94% of the dollar sales in the U.S.

The most established of these competitors is Red Bull who is the most recognised energy drink in the market. Red Bull is composed of several different entities who work together to distribute the drink around America. However, compared to the rest of the market, they have extremely high advertising costs and over the last few years they have experienced a dramatic loss in market share at nearly 40%. This would suggest that they are vulnerable to emerging companies and this can be seen as a positive for the Dr Pepper.

Hansen

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