ANALYSIS OF TELEVISION AND SOFT DRINKS INDUSTRY

Submitted To: Submitted By:

Ms. Japneet Kaur Shikha

Shivang

Shobitash

MBA-HR

What is an industry?

An industry is a group of manufacturers or businesses that produce a particular kind 

of goods or services. For example-television industry, tourism industry, soft drinks industry, fish industry,

food processing industry etc.

Classification of industries

Industries can be classified in a variety of ways. At the top level, industry is often

classified into sectors: Primary or extractive, secondary or manufacturing,

and tertiary or services. Some authors add quaternary (knowledge) or even quinary (culture and research) sectors. Over time, the fraction of a society's industry within

each sector changes.

Classification of industries

Industries can be classified in a variety of ways. At the top level, industry is often

classified into sectors: Primary or extractive, secondary or manufacturing,

and tertiary or services. Some authors add quaternary (knowledge) or even quinary (culture and research) sectors. Over time, the fraction of a society's industry within

each sector changes.

Sectors

Definitions

Primary

This involves the extraction of resources directly from the Earth, this includes farming, mining and logging. They do not process the products

at all. They send it off to factories to make a profit.

SecondaryThis group is involved in the processing products from primary

industries. This includes all factories—those that refine metals, produce furniture, or pack farm products such as meat.

Tertiary

This group is involved in the provision of services. They include teachers, managers and other service providers.

QuaternaryThis group is involved in the research of science and technology. They include scientists.

Quinary SectorSome consider there to be a branch of the quaternary sector called the quinary sector,

which includes the highest levels of decision making in a society or economy. This sector would include the top executives or officials in such fields as government, science,

universities, nonprofit, healthcare, culture, and the media.

Television industry

• In the last five years color television industry (CTV) has witnessed drastic changes in the intensity of competition.

• Exchange schemes, free gifts, price offs, prizes, deferred payment schemes and other incentives as promotional tools have been deployed by the players, which certainly have made the market, vibrant witnessing a new scenario with a new market profile. The entrenched position of the Indian market leaders in CTVs’ like

Television industry (continued….)

Videocon, BPL and Onida have been challenged by MNCs such as LG, Samsung, Sony, Philips, AIWA, Akai, Panasonic, Sansui and Sharp; some in a perceptible way, others threatening to do so.

• The industry is going through turbulent transformation. Companies are relooking at their strategies and are desperate for growth.

• A major factor contributing to the growth has been availability of consumer financing schemes.

• The industry has seen environmental factors operating in the Industry to provide a basis for devising Strategy. 

Future prospects of television industry

• 4K and 8K technology

4K UHD is a resolution of 3840 pixels × 2160 lines (8.3 megapixels, aspect ratio 16:9) and is one of the two resolutions of ultra high definition targeted towards consumer television, the other being 8K UHD which is 7680 pixels × 4320 lines (33.2 megapixels). 4K UHD has twice the horizontal and vertical resolution of the 1080p HDTV format, with four times as many pixels overall.

Future prospects of television industry

Smart television

A smart TV, sometimes referred to as connected TV or hybrid TV, describes a trend of integration of the Internet features into television sets and set-top boxes, as well as the technological convergence boxes. The devices have a higher focus on online interactive media , Internet TV, over-the-top content, as well as on-demand streaming media, and home networking access, with much less focus on traditional broadcast media than traditional television sets and set-top boxes. Similar to how the Internet, Web widgets, and software applications are integrated in modern smart phones.

Soft drinks industry

Soft drinks are a kind of beverage that do not contain alcohol as the active agent and hence are referred to as 'soft' drinks, in opposition to 'hard' which means alcoholic beverages. There are mainly two kinds of soft drinks, one that is carbonated and one that is non-carbonated. They are believed to taste best when consumed chilled. The different types of soft drinks include colas, flavored water, carbonated water, sweet iced tea, fruit drinks, carbonated soft drinks, diet soft drinks, and fruit punch.

Soft drinks Raw materials used in soft drinks:-

• Water(90-95%)

• Artificial flavors

• Acids(citric acid, phosphoric acid etc.)

• Natural flavors

• Caffeine

• Carbon dioxide

• Color

• Sugar

Future prospects of soft drinks industry

The Indian soft drinks market generated total revenues of $3.8 billion in 2010, representing a growth rate of 11% for the period spanning 2006-2010.

• Carbonates sales proved the most lucrative for the Indian soft drinks market in 2010, generating total revenues of $1.9 billion, equivalent to 50.5% of the market's overall value.

• The performance of the market is forecast to decelerate, with an anticipated CAGR of 9.1% for the five-year period 2010-2015, which is expected to lead the market to a value of $5.9 billion by the end of 2015.

Future prospects of soft drinks energy(continued…..)

• Soft drinks consumption has reached saturation point. Therefore ,a decline is expected to follow in the growth rate of soft drinks industry.

• People are becoming more health conscious now-a-days. They are shifting towards natural fruit and vegetable juices.

Major players of soft drink Industry

Pepsi Pepsi was first introduced as "Brad's Drink"[2] in New Bern, North Carolina, United States, in 1893 by Caleb Bradham

PepsiCo is one of the largest food and beverage companies in the world.

Its products include a variety of salty, sweet, and grain-based snacks as well as Csds and non-Csds. the company is responsible for the manufacturing, marketing, and sales of these goods. it has 18 brands in its portfolio.

It headquartered in new york

Dr Pepper Snapple (DPS)

The drink was created in the 1880s by Charles Alderton of Waco, Texas and first served around 1885.

The Dr Pepper snapple Group is a leading integrated brand owner, bottler, and distributor of soft drinks in the united states, Canada, and Mexico.

the company has 15 brands

headquartered in Plano, texas

Major players of tv Industry

Samsung

Samsung was founded by Lee Byung-chul in 1938 as a trading company

Samsung Group is a South Korean multinational conglomerate company

Headquartered in Samsung Town, Seoul

Videocon

Videocon is an Indian multinational industrial conglomerate headquartered in Gurgaon,

The group has 17 manufacturing sites in India and plants in Mainland China, Poland, Italy and Mexico

It is also the third largest picture tube manufacturer in the world.

The group is a US$5 billion global conglomerate.

Onida

Onida was started by G.L. Mirchandani and Vijay Mansukhani in 1981 in Mumbai

Onida is an electronics brand of Mirc Electronics, based in India

Onida is well known in India for its colour CRT televisions

Panasonic

The company was founded in 1918

Panasonic is the world's fourth-largest televisionmanufacturer by 2012 market share

It is a Japanese multinational electronics corporation headquartered in Kadoma, Osaka, Japan.

LG

Lucky Goldstar is a South Korean multinational conglomerate corporation

LG Corp. founder Koo In-Hwoi established Lak-Hui Chemical Industrial Corp. in 1947

Its headquarters are situated in the LG Twin Towers building in Yeouido-dong.

Sony

Sony, is a Japanese multinational conglomerate corporation headquartered in Kōnan Minato, Tokyo, Japan

Sony found its beginning in the wake of World War II. In 1946.

The company is one of the leading manufacturers of electronic products for the consumer and professional markets

Sony is ranked 87th on the 2012 list of Fortune Global 500.

Other players

Onida

Mitashi

Haier

JVC

Philips

Sharp

Sansui

Akai

Daenyx

Competition

Competition among players

SWOT Analysis

trengths

What advantages does our company have?

What do we do better than anyone else?

What unique or lowest-cost resources do we have access to?

What do people in our market see as our strengths?

What factors mean that we "get the sale"?

S

eaknesses

• What could we improve?

• What should we avoid?

• What are people in our market likely to see as weaknesses?

• What factors make us lose sales?

W

pportunities

• Where are the good opportunities facing us?

• What are the interesting trends we are aware of?

Useful opportunities can come from such things as:

• Changes in government policy related to our field.

• Changes in social patterns, population profiles, lifestyle changes.

• Local events.

O

hreats

• What obstacles do we face?

• Are the required specifications for our job, products or services changing?

• Is changing technology threatening our position?

• Do we have bad debt or cash-flow problems?

• Could any of our weaknesses seriously threaten our business?

T

Example:Coca-Cola Swot Analysis

StrengthsThe best global brand in the world in terms of value ($77,839 billion)World’s largest market share in beverageStrong marketing and advertisingMost extensive beverage distribution channelCustomer loyaltyBargaining power over suppliersCorporate social responsibility

WeaknessSignificant focus on carbonated drinksUndiversified product portfolioHigh debt level due to acquisitionsNegative publicityBrand failures or many brands with insignificant amount of revenues

Coca Cola Swot Analysis

OpportunitiesBottled water consumption growthIncreasing demand for healthy food and beverageGrowing beverages consumption in emerging markets (especially BRIC)Growth through acquisitions

ThreatsChanges in consumer preferencesWater scarcityStrong dollarLegal requirements to disclose negative information on product labelsDecreasing gross profit and net profit marginsCompetition from PepsiCoSaturated carbonated drinks market

PEST AnalysisPEST Analysis

• This analysis is essential for an organization before beginning its marketing process

• Consists of internal environment and external environment

Pest Break Up:

• Political

• Economic

• Socio Cultural

• Technological

Political FactorsPolitical Factors

• This is the most important influence on the regulation of any business.

– How stable is the political environment?

– Influence the Government Policy / Law on your business

– Government’s position on Marketing Ethics

– Government’s view on culture under religion

Economic FactorsEconomic Factors

• Government outlook towards

– Bank Financing

– Interest Rates

– Exchange Rate Mechanism

– Incentives for Exports

– Restrictions for Imports

– Inflation

– Labor Policies

Socio-Cultural FactorsSocio-Cultural Factors

• Demographics

• Distribution of Income

• Social Mobility

• Life Style Changes

• Consumerism

• Educational Levels

• Advantage of Technology

– In terms of Economies of Scale

• New Discoveries & Innovations

• Speed & Cost of Technology Transfer

• Rate of Obsolescence

Technological FactorsTechnological Factors

Role of PESTRole of PEST

• Helps Assess the market including Competitors from the stand point of a Particular Business.

• PEST is relevant for any type of Business large, small & medium.

Case Study On McDonalds Follows this Slide

POLITICAL CHALLENGES

Health and Safety Guidelines

Fast food consumption has been shown to increase calorie intake, promote weight gain and elevate risk for diabetes criticised for caloric content, trans fats and portion sizes

Ecological/environmental issue

One of the largest consumers of paper products in the US leading to millions of pounds of food packaging waste littering roadways, clogging landfills and spoiling quality of life.

ECONOMIC CHALLENGES

Low set up costs leading to rapid expansion keeping the prices low for the customers.

Franchising facilitates set up McDonald's corporation provides financing assistance and training for new franchise owners to manage cash flow and keep businesses profitable

SOCIAL CHALLENGES

Health fears

Customers now opting for more healthier options like SUBWAY which offers more variety for health conscious customers.

Emphasis on food safety

TECHNOLOGICAL CHALLENGES

Streamlining of processes to improve efficiency through technology enhancements such as FPI's Help Desk Service, network and application consolidation and other technology implementations, operations of the company are greatly improved

Marketing done by means of television advertisements.

Implemented technology to improve supply chain management

Porter's Five Force Model

Porter’s Five Forces Chart

Importance of The 5 Forces

Strategize :* Competitive advantage* Cost advantage* Market dominance* New product development* Contraction / Diversification* Price leadership* Global* Re-engineering* Downsizing* De-layering* Restructuring

Measure and monitorstrategy effectiveness

What strategy to use?

Basic knowledgeof business strategy& forces that influencethe decision making

Industry analysis :1) Industry relevance2) Industry players3) Industry structure4) Future changes

How to deal with competition?

Threats of New Entrants

The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are:

1. How loyal are the end users in this industry? 2. How troublesome or hard is it for the end users to switch and use

another product? 3. Does it require a large seed capital to enter this industry? 4. Do entries to this industry regulated by government? 5. How hard is it to gain access to the distribution channels? 6. How long does it take for new staff to acquire the necessary skills to

do the work?

Threat of Substitutes

Threats of Substitute in the Porter’s theory actually means goods and services that does similar functions

How many close substitutes are available?

How pricey are the substitutes?

What is the perceived quality of the substitutes?

Intensity of rivalry among established firms

1. How many close competitors exist in the industry?

2. What are the sizes of your close competitors?

3. What is the industry structure? Is it a fragmented, consolidated, oligopoly or monopoly industry?

4. What is the current industry growth rate?

Bargaining power of Customers

How many companies are there for the buyer to choose from?

Are the buyers buying a huge volume?

Do we depend only on a few buyers to sustain our sales?

How hard is it for the buyers to switch and use a competing product?

Do the buyers have the capacity to enter your business and produce the goods themselves?

Bargaining power of Suppliers

Are there substitutes for our suppliers’ products?

Do our suppliers serve multiple industries?

Does the total industry revenue accounting for only portion of the supplier’s total revenue?

Do we have high switching cost to use another supplier?

Do suppliers have the capacity to enter in our business?

Does our company capable to enter the supplier’s business?

Porter's 5 Force For Sony TV

Threats of new Entry (Low): Electronic industry needs huge amount of capitals. High scale economy and constant innovation is another barrier to a new entrant. Moreover, the government policy acts as entry barrier for a new company.

Bargaining Power of Buyer (High): For Sony Corp. product the bargaining power of buyer is very high as there is almost no switching cost from one brand to another. And the information technology provides the customers with wide range of alternatives.

Bargaining Power of Supplier (Low): Sony has a global band of suppliers giving the suppliers no upper hand (bargaining power) over Sony. Moreover suppliers are comparatively small entity than Sony so suppliers have weak bargaining power. Sony usually negotiates directly with its supplier to obtain high quality product in low price.

Porter's 5 Force For Sony TV

Threat of Substitute Products (Low): Sony’s varied range of products has no substitute or a very few that seems to be obsolete or have on foot out of the door. Thus the possibility threat of substitutes is moderately low. Considering that Sony has built a good reputation and strong customer loyalty, it effectively positions the company’s products against product substitute to some extent; this is a surplus for the company.

Intensity of Rivalry (High):Industry rivalry is high due to relatively intense competition and high exit cost. It is also largely due to the numerous and equally balanced competitors in the markets, generally short product life cycle as well as high R&D, fixed and storage costs. The growth is slow and thus the intensity of competition.

Thank You

Any Queries?