CASE STUDY ANALYSIS - Essay Example

This resulted in lower demand of the beverages. Companies’ performances in the beverage industry have also been affected by the change in consumer preference. In the recent times, there has been a growing preference for sports drinks, energy drinks and vitamin-enhanced drinks. This has resulted in a decrease in the demand for the normal carbonated soft drinks. It is expected the decline will continue to take place as the preference for the alternative beverages continue to grow. This growing preference has created opportunities for new companies to join the beverages industry because it gives them a competitive advantage over the already established firms that major produce the carbonated soft drinks.

As a result, the industry has expanded and with its expansion, the performance of already existing firms has declined. The declined could first be associated with the decreasing demand of the carbonated soft drinks. Secondly, the fall in performance is due to the increasing number of firms in the market competing for the same customers. The previously already established companies are also forced to start producing the alternative drinks in order to maintain their market share. The emergence and growth of new products that were not there before in the beverage industry have also contributed to the performances of the companies.

There has been an increased growth of new products in the beverages industry. These new products threaten to displace the already existing products in the market. An example of a new product that was not in the market before is the Living Essentials’ 5-hour energy drink. This is a two- once energy shot drink. Since its introduction, it has been able to displace all the other energy drinks that were in the market. Its market share by 2009 was 85% of the market share of all the drinks falling in its category.

Pricing is one of the strategies employed by Coca