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'Non-CSD drink: Non-CSD beverage Coke and Pepsi are attacking these categories themselves, each trying to become a â€Å"total beverage company. ” entrust this approach lead to grade dilution? Do CPs risk becoming a less profitable channel if they do not extend the commemorate? No good answers yet to these questions: Pepsi, so far, has had much success and has been more than aggressive with non-CSDs. 7/20/2011 32 academic term lead by Prof. J. K. Mitra, FMS, Delhi Non-CSD beverage: Non-CSD beverage The business model for non-CSDs is somewhat different from the holy CSD model (pp. 1-14) The supply chain and bottling requirements make up complexity to the nourish chain, compared with the relatively honest CSD model. 7/20/2011 33 posing light-emitting diode by Prof. J. K. Mitra, FMS, Delhi Non-CSD beverage: Non-CSD beverage The basic principles of the business remain the very(prenominal): Coke and Pepsi own the brand and match product development; Dedicated bot tlers supplement economies of scope in dispersal (selling to same outlet, same trucks). There are exceptionsâ€e. g. , Gatorade is address through food wholesalers. As nook products, non-CSDs carried prices and margins that are higher for everyone in the value chain. /20/2011 34 Session led by Prof. J. K. Mitra, FMS, Delhi The Implications of Bottled irrigate: The Implications of Bottled Water give Coke and Pepsi be able to adopt their success with CSD in the water segment, or will a new private-enterprise(a) dynamic emerge? (page 14) 7/20/2011 35 Session led by Prof. J. K. Mitra, FMS, Delhi Bottled Water: Bottled Water Repeat of CSD virgin (less attractive) Industry Structure Economies of scale in advertising Hard to create brand loyalty Barriers to entry in statistical distribution spiritedly fragmented, competitive structure a care political economy of deoxidise firm High price sensitivity Little specialisation (e. . , taste) 7/20/2011 36 Session led by Prof. J. K. Mitra, FMS, Delhi Bottled Water: Bottled Water Unless Coke and Pepsi can generate brand loyalty and establish their brands, water is more likely to become a commodity-like product, where scorn the scale and barriers in distribution, most of the wage will be extracted by the distribution channel (retailers) rather than by the concentrate companies or (especially) the bottlers. 7/20/2011 37 Session led by Prof. J. K. Mitra, FMS, Delhi epitome of the Case:Summary of the Case 1. integrity of the clearest examples on how firms can create and cipher market power. 2. To really understand the opportunities for strategy, we moderate to look at the underlying political economy of the firm and the industry, and its related (upstream and downstream) parts. Without understanding the economics of the CP and bottler, we cannot understand the motivations and the likely success of moves like vertical integration. 7/20/2011 38 Session led by Prof. J. K. Mitra, FMS, Delhi\r\n'