The challenges that the carbonated soft drink manufactures in the beverages industry has to deal with included the recession brought on by the ending of the dot.com era, the financial crisis of the 1990 and the increasing health consciousness of the consumers who were shifting their preferences for beverage from carbonated soft drinks to healthier fruit drinks. Coca Cola and Pepsi responded to these challenges by internationalizing their brands, and targeting the markets in the developing countries with aggressive force to attain economies of scale in their operations. Similarly they used seasonal deals, low pricing strategies to beat out the retailer brands as well as aggressive marketing campaigns to survive the 1990s.
In the face of the changing consumer perception towards carbonated beverages, the increasing interest towards a healthier lifestyle, the future profitability of the soft drink companies is not sustainable. Instead the companies would be facing gradual loss of their profit margins as the expenditure employed to run the company would increase with limited stales revenues leading to constricting profit margins. Therefore in order to avoid this, the soft drink companies should seek to diversify into the fruit based beverages market and other healthier beverages market.
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