Coca-Cola Enterprises Strategic Alliances Industry Overview the Essay

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Coca-Cola Enterprises Strategic Alliances

Industry Overview

The carbonated beverage industry is one of the oldest and more complicated industries in existence. This industry is heavily dependent on its customer loyalty that it has developed historically and its reliance on marketing and innovation to grow new revenue streams. There are a growing number of potential threats that are present in the carbonated beverage industry. One trend that is emerging in many of the markets in the developed countries is that the consumers are becoming more health conscious. As a result the demand for drinks containing high fructose corn syrup is diminishing relatively rapidly in some segments. Coca-Cola has had to innovate to diversify their product mix to offer products that appeal to these demographics.

Another threat is that younger generations are seeking new types of drinks and new product brands. For example, the energy drink industry has grown rapidly. "Globally, the energy drink industry has gone from a $3.8-billion business in 1999, to a $27.5-billion business last year, according to data from market research firm Euromonitor. That's a more than 620% jump (Foeger, 2014)." Demand in new market niches has led Coca-Cola to find innovative ways and partnerships to meet the emerging demand.

Monster Energy Drinks

Coca-Cola has recently entered into a long-term strategic partnership with Monster Energy Drinks.

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The Coca-Cola Company announced that they have entered into definitive agreements for a long-term strategic partnership that is expected to accelerate growth for both companies in the fast-growing, global energy drink category (Coca-Cola Company, 2014). The new, innovative partnership leverages the respective strengths of The Coca-Cola Company and Monster to create compelling value for both companies and their shareowners.

Value Creation

This partnership adds value to Coca-Cola's product mix through the addition of a strong brand in the energy drink niche. As consumers shift preferences from carbonated soft drinks s to alternatives such as sports and energy drinks, bottled water and ready-to-drink (RTD) teas, Coca-Cola needed to strengthen its portfolio in these fast growing segments in order to maintain its share in the overall beverage market. Although Coca-Cola has established itself in the global bottled water and sports drinks markets with popular brands Dasani and Powerade respectively, the company has negligible presence in energy drinks, which is the fastest growing beverage category (Trefis, 2014). The addition of Monster to Coca-Cola helps fill this void for the company and its investors by positioning itself in the growing market niche.

Improving Market Access

Monster will improve their market access through Coca-Cola's global supply chain and distribution system. Rodney C. Sacks, Chairman and Chief Executive Officer of Monster.....

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