Soft Drink Industry

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Sumol & Compal

A Detailed Analysis of Strategic Management Opportunities

Company Overview

Value Creation Model

Research and Development

Production

Marketing and Sales

Service

Resource-Based View of the Firm

Firm Specific Advantage

Company Overview

The begginnings of the Grupo Sumol date back to 1945 when the company was founded to produce soft drinks (sumol + compal, N.d.). The sumol + compal company later merged and have crafted a unique niche geographically as well as with their product mix. The company owns many domestic brands of soft drinks, fruit and vegetable juices, and alcoholic beverages as well as act as a distributor for strategic partnerships in the Portuguese market. The company is managed by an experienced management team that has expanded customer loyalty in the domestic market (sumol + compal, N.d.). Despite having an innovative product mix, the industry is competitive and there can be many distribution challenges. Furthermore, the target market is limited to the European domestic market as well as the African market.

From a strategic management perspective, the company faces many challenges from different risks that could manifest in the short-term. For example, the Portuguese economic environment has been turbulent at best and the economic conditions required a EURO bailout that introduced many austerity measures (Bugge & Goncalves, 2015). Because of the economic conditions in Europe, Sumol + Compal could see new regulatory requirements and increases in their tax liabilities relative. Therefore, it is necessary for the organization to continually look at both internal and external factors when trying to maintain their strategic objectives.

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This analysis will use three different strategic management models to attempt to identify opportunities for future growth.

Value Creation Model

The four primary activities for value creation are research and development (R&D), production, marketing and sales, and service.

Research and Development

Sumol + Compal can attempt to create value by investing in R&D and bringing innovative new drinks to the market. One trend that is affecting the global beverage industry is that consumers are becoming more health conscious. The organic and natural food segment has been increasing over the years at an average rate of 8% to 10% with the growing demand from customers to have healthy beverages while also consuming less sugary products. Sumol + Compal have already invested heavily in R&D in this regard.

"SUMOL+COMPAL is developing with iBET a R&D project, NATUREXT with the aim to produce ingredients with biological activity, aiming to launch a new product in the market of functional foods (iBet, 2012)."

The development of new and advanced products such as NATUREXT could be one source of value creation for the company.

Production

There are also production opportunities that would allow Sumol + Compal to create value. The organization could look to form more strategic partnerships for distribution with foreign brands. This would allow Sumol + Compal to leverage their existing infrastructure to bring beverages that have consumer demand in the markets they operate without having to invest heavily in research and development.

Marketing and Sales

Marketing and sales can….....

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