A RESEARCH PROPOSAL FOR MANAGEMENT RESEARCH PROJECT-I ON SOFT-DRINK INDUSTRY IN INDIA Submitted By: Patel Darshana Patel Jaimini

Patel Neha Patel Nirupa Patel Niyati (102) (108) (114) (116) (117)

M.B.A. Semester-III Under the Guidance of: Prof. (Dr) Mahendra Sharma, Prof. & Head, Prof. Shital Badshah, Asst. Professor V. M. Patel Institute of Management Submitted To: V.M.Patel Institute of Management, Ganpat University, Kherva.

2010-2012

CERTIFICATE BY THE GUIDE

This is to certify that the contents of this report entitled soft drink industry by Patel Darshana (102), Patel Jaimini (108),Patel Neha (114),Patel Nirupa(116), Patel Niyati (117) submitted to V.M.Patel Institute Of management for the Award of Master of Business Administration (MBA Sem-III) is original research work carried out by their under my supervision. This report has not been submitted either partly or fully to any other University or Institute for award of any degree or diploma.

Ms.Shital Badasha Assistant Professor V.M.Patel Institute of Management, Ganpat University. Kherva.

Date: Place: Kherva

CANDIDATES STATEMENT

We hereby declare that the work incorporated in this report entitled Soft drink industry in partial fulfillment of the requirement for the award of Master of Business Administration (semIII) is the outcome of original study undertaken by us and it has not been submitted earlier to any other University or Institution for the award of any Degree or Diploma. Patel Darshana Patel Jaimini Patel Neha Patel Nirupa Patel Niyati (102) (108) (114) (116) (117)

Date: Place: Kherva

PREFACE

As the part of the syllabus of MBA program. We are assigned some practical & theoretical work in partial fulfilment of the segments for the semester Third. We have to prepare a comprehensive report on any one industry for subject Management Research Project that is also know as MRP-I The basic purpose of this project is to enhance the knowledge of students about the industry in its totality and appreciate the use of an integrated approach in understanding the environmental issues and problems. This makes students more aware about Industry and its position and makes student capable in analyzing the Industrys position in all shares. This may also enhance students analytical ability. So our aim is to analyze the industry and know its force which runs the industry. We also have analyzed Political, Economical, Social and Technological Factor of Industry and then found out Strength, Weakness, Opportunity and Threat of the industry. This research really enhances industry and its various undertaking. We gained lot of knowledge from this project. We hope this will also help in future.

ACKNOWLEDGEMENT

We would like to express our deep feeling of gratitude to the mentioned officials for the assistance, guidance and inspiration before and thought the work of MRP-I. We give our special thanks to respected Dr.Mahendra.S.Sharma professor & head of V.M. Patel Institute of Management, Ganpat University for providing us an opportunity to carry out industry analysis of soft drink. We would like to thank Mr.Shital Badasha, Assistant Professor of V.M.Patel Institute of Management for her continuous guidance and support throughout the study period. We would like to give vote of thanks to all the faculty members and library and computer lab support provided by V.M Patel Institute of Management. We are very thankful to them for their help and advice thought our project. Their gentleness, availability and readiness to provide all the type of guidance for understanding the technical things made this project successfully completed well within the time frame.

EXECUTIVE SUMMARY

Certificate by the Guide Candidates Statement Preface

CONTENT

I II III

Acknowledgment Executive Summary Chapter No 1 1.1 1.2 1.3 2 2.1 2.2 2.3 2.3.1 2.3.2 2.3.3 2.3.4 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4 4.1 4.1.1 4.1.2 4.1.3 4.2 4.2.1 4.2.1. 1 4.2.1. 2 4.2.2 4.2.2. 1 4.2.2. 2 Profitability Ratio Gross Profit Ratio Net Profit Ratio Introduction of the industry Introduction to soft drink industry Birth of soft drink industry History of soft drink industry Major Players of the industry Major Players of the industry Filtrations of the Major Player In depth information of Major Player Coca Cola India Pvt Ltd Pepsico India Holdings Pvt Ltd Dabur India Ltd Parle Agro Pvt Ltd Strategic Analysis Driving Force of Industry SWOT Analysis PESTLE Analysis Porters Five Force Analysis Key Success Factor Strategic Group Mapping External Factor Evaluation Matrix Competitive Profile Matrix Phase Of Lifecycle Financial Analysis Trend Analysis of the Industry Trend Analysis of the Industry on the basis of Net Sales Trend Analysis of the Industry on the basis of EPS Trend Analysis of the Industry on the basis of Total Expenditure Ratio Analysis Liquidity Ratio Current Ratio Quick ratio Particular

IV V Page No.

4.2.2. 3 4.2.2. 4 5 5.1 5.2 5.3 6 7

Operating Ratio Debt Equity Ratio Conclusion Challenges of soft drink Industry Conclusion of the report Limitation Of the report Bibliography Annexure

CHAPTER-1 INTRODUCTION OF THE INDUSTRY

1.1 INTRODUCTION TO SOFT DRINK INDUSTRY

SOFT DRINK INDUSTRY, the production, marketing, and distribution of nonalcoholic, and generally carbonated, flavored, and sweetened, water-based beverages. The history of soft drinks in the United States illustrates important business innovations, such as product development, franchising, and mass marketing, as well as the evolution of consumer tastes and cultural trends. Many Europeans long believed natural mineral waters held medicinal qualities and favored them as alternatives to often-polluted common drinking water. By 1772, British chemist Joseph Priestley invented a means to synthetically carbonate water, and the commercial manufacturing of artificial mineral waters began with Jacob Schweppess businesses in Geneva in the 1780s and London in the 1790s. The first known U.S. manufacturer of soda water, as it was then known, was Yale University chemist Benjamin Silliman in 1807, though Joseph Hawkins of Baltimore secured the first U.S. patent for the equipment to produce the drink two years later. By the 1820s, pharmacies nationwide provided the beverage as a remedy for various ailments, especially digestive. Though the drinks would continue to be sold in part for their therapeutic value, customers increasingly consumed them for refreshment, especially after the 1830s, when sugar and

flavorings were first added. Soda fountains emerged as regular features of drugstores by the 1860s and served beverages flavored with ginger, vanilla, fruits, roots, and herbs. In 1874 a Philadelphia store combined two popular products to make the first known ice-cream soda. The first cola drink appeared in 1881. In the late 1800s, several brands emerged that were still popular a century later. Pharmacists experimenting at local soda fountains invented Hires Root Beer in Philadelphia in 1876, Dr. Pepper in Waco, Texas, in 1885, Coca-Cola in Atlanta, Georgia, in 1886, and Pepsi-Cola in New Bern, North Carolina, in 1893, among others. Reflecting two of the middle-class mores of the periodtemperance and feeling overwhelmed by the pace and burdens of modern lifeearly marketing touted these drinks as alternatives to alcohol and/or as stimulants. Coca-Cola inventor John S. Pemberton's first print advertisement for his creation read "Delicious! Refreshing! Exhilarating! Invigorating!," while Asa Candler, the eventual founder of the Coca-Cola Company, promoted his product in the years leading up to Prohibition as "The Great National Temperance Beverage." The history of Coca-Cola reveals how national markets in soft-drink brands developed. To limit the cost of transportation, manufacturers of syrup concentrates licensed bottlers to mix the product, package, and distribute it within a specific territory. Candler underestimated the importance of the bottling side of the business and in 1899 sold the national rights to bottle Coke for a fairly small sum to Benjamin F. Thomas and Joseph B. Whitehead, who then started a national network of bottlers, creating the basic franchising format by which the industry is still run. Candler and his successor after 1923, Robert Woodruff, were aggressive and innovative in marketing Coke as a leading consumer product and cultural icon. Coupons for free samples and giveaways of items bearing the drink's name and logo publicized the beverage, and pioneering efforts in market research helped define how best to take advantage of advertising and promotions. During World War II, Woodruff opened bottling operations overseas to supply U.S. military personnel, and after the war, Coke was poised to enter these international markets, not only as a consumer product, but also as a symbol of "the American Century." After World War II, the soft-drink industry became a leader in television advertising, the use of celebrity endorsements, catchy slogans, tie-ins with Hollywood movies, and other forms of mass marketing, particularly focusing on young consumers and emphasizing youth-oriented themes.

As health and fitness consciousness and environmental awareness became popular, the industry responded with sugar-free and low-calorie diet sodas, beginning in the 1960s, and later, caffeinefree colas and recyclable containers. The most famous rivalry within the industry has been between Coke and Pepsi, which waged two rounds of "cola wars" in the twentieth century. In the 1930s and 1940s, Pepsi challenged the industry leader by offering a twelve-ounce bottle for the same five-cent price as Coke's standard six ounces. In the 1970s and 1980s, "Pepsi challenge" taste-tests led Coke to change its formula in 1985, a campaign that failed because it underestimated the attachment Coke drinkers had to the tradition and symbolism of the brand. In 2001, the soft-drink industry included approximately five hundred U.S. bottlers with more than 183,000 employees, and it achieved retail sales of more than $61 billion. Americans that year consumed an average of 55 gallons of soft drinks per person, up from 48 in 1990 and 34 in 1980. The nine leading companies accounted for 96.5 percent of industry sales, led by Coca-Cola with more than 43 percent of the soft drink market and Pepsi with 31 percent. Seven individual brands accounted for almost two-thirds of all sales: Coca-Cola Classic (itself with nearly 20 percent of the market), Pepsi-Cola, Diet Coke, Mountain Dew (a Pepsi product), Sprite (a CocaCola product), Dr. Pepper, and Diet Pepsi. Domestic sales growth slowed in the late 1990s because of increased competition from coffee drinks, iced teas, juices, sports drinks, and bottled waters. The industry continues, however, to tap lucrative international markets; Coke and Pepsi each have bottling operations in more than 120 countries

1.2 HISTORY OF THE SOFT DRINK INDUSTRY

Soft drinks by definition are carbonated drinks that are non-alcoholic. Carbonated soft drinks are also refereed to as soda, soda pop, pop, or tonic. 1798: The term "soda water" first coined. 1810: First U.S. patent issued for the manufacture of imitation mineral waters. 1819: The "soda fountain" patented by Samuel Fahnestock. 1835: The first bottled soda water in the U.S. 1850: A manual hand & foot operated filling & corking device, first used for bottling soda Water. 1851: Ginger ale created in Ireland. 1861: The term "pop" first coined. 1874: The first ice-cream soda sold. 1876: Root beer mass produced for public sale. 1881: The first cola-flavored beverage introduced. 1885: Charles Aderton invented "Dr Pepper" in Waco, Texas. 1886: Dr. John S. Pemberton invented "Coca-Cola" in Atlanta, Georgia. 1892: William Painter invented the crown bottle cap. 1898: "Pepsi-Cola" is invented by Caleb Bradham. 1899: The first patent issued for a glass blowing machine, used to produce glass bottles. 1913: Gas motored trucks replaced horse drawn carriages as delivery vehicles.

1919: The American Bottlers of Carbonated Beverages formed. 1920: The U.S. Census reported that more than 5,000 bottlers now exist. Early 1920's The first automatic vending machines dispensed sodas into cups. 1923: Six-pack soft drink cartons called "Hom-Paks" created. 1929: The Howdy Company debuted its new drink "Bib-Label Lithiated Lemon-Lime Sodas" later called 7 Up. Invented by Charles Leiper Grigg. 1934: Applied color labels first used on soft drink bottles, the coloring was baked on the face of the Bottle. 1952: The first diet soft drink sold called the "No-Cal Beverage" a gingerale sold by Kirsch. 1957: The first aluminum cans used. 1959: The first diet cola sold. 1962: The pull-ring tab first marketed by the Pittsburgh Brewing Company of Pittsburgh, PA. The pull-ring tab was invented by Alcoa. 1963: The Schlitz Brewing Company introduced the "Pop Top" beer can to the nation in March, invented by Ermal Fraze of Kettering, Ohio. 1965: Soft drinks in cans dispensed from vending machines. 1965: The resealable top invented. 1966: The American Bottlers of Carbonated Beverages renamed The National Soft Drink Association. 1970: Plastic bottles are used for soft drinks. 1973: The PET (Polyethylene Terephthalate) bottle created. 1974: The stay-on tab invented. Introduced by the Falls City Brewing Company of Louisville, KY. 1979: Mello Yello soft drink is introduced by the Coca Cola Company as competition against Mountain Dew. 1981: The "talking" vending machine invented.

2.3 STRUCTURE OF INDIAN SOFT DRINK INDUSTRY

SOFT DRINK INDUSTRY

Carbonated or Aerated Drink

Non-Carbonated or Non-Aerated Drink

Mixture

Branded Product

Commodity Product

Ready to serve

Diluted before serve

Soda

Mineral water

Cola Drink

Non-Cola Drink

Having Preservation

Having no Preservation

Squashes Artificial Flavors

Pure Mineral Water

Flavored Mineral Water

Fun Drink

Health Drink

Fruit Juice

CARBONATED OR AERATED
Gelatin based Drink

New Flavors Product Lemon Flavor e.g. Non-Cola Drinks Cola Drinks Mango Flavor Orange Flavor Branded Commodity e.g. Limca, Teem, Miranda,e.g. Spot, e.g.Product e.g. Gold Maaza, MirindaPepsi, Coke, Fanta Canada Slice Thumps Up

Carbonated Soft Drink Industry

There are three major participants in the production-carbonated soft drinks. They are concentrate producers for example roughly one half if Pepsi colas sale are through company owned

bottles ; the remaining volume is sold through franchises bottles line of soft drink in a defined territory , and not allowed to market to market a directly competitive major brand.

The principal retail channel for channels for carbonate soft drink are supermarkets, convenience store, vending machines fountain service, and thousands of small outlet. Soft drinks are typically sold in glass bottle and in plastic and cans except for fountain services. In fountain service syrup is sold to a retail outlet. Which mixes the syrup with carbonated water for immediate sales.

2.4 SOFT DRINK MARKET INDIA SCENARIO

India soft drink industry is witnessing a boom time. Its growth rate is around 20% with which such growth rate, volume could reach billion crates within 10 years. Three major multinational companies are fighting to grab a major chunk of business from Indian markets. These three coca-

cola, Pepsi, Cadbury. All of these companies have seen an enormous potential in this country. Consequently, by world standard, Indian per capita consumption of soft drinks is still very low.

Therefore these soft drinks grants feel that fire capita consumption can only grow up. Soft drink industries has already seen and estimated sale of around 240 million crates higher than last years sale of 204 million in 1998. The Main reason for such a high growth rate heightened competition between coca-cola and Pepsi, Cadbury, bring a new entrant is for behind.

India is actually more vivid in taste and preference then any other country market. Delhi jar instance, account for about 20% of total soft consumption in term of sales.

There are about 4, 80,000 soft drinks retailers in India and their numbers are increasing day to day. This actually means that there is just one soft drink retailer on a population of 37,600, which is far below the international standard. Whereas Philippines has one soft drink retail counter over a population of 150 people i.e. 4, 00,000 outlet on a population of 60 million.

CHAPTER-2 MAJOR PLAYERS OF THE INDUSTRY

2.1MAJOR PLAYER OF THE INDUSTRY

1. Coca Cola India ltd

2. PepsiCo India Holding Pvt Ltd

3. Dabur India Ltd

4.Parle Agro Pvt Ltd

5.Mount Everest Mineral Waters Ltd

2.2 FILTRATIONS OF THE MAJOR PLAYERS Company Name

Coca Cola India Ltd PepsiCo India Holdings Pvt Ltd Dabur India Ltd Parle Agro Pvt Ltd Mount Everest Mineral Waters Ltd

Profit After Tax

167.35 135.02 471.41 12.27 -11.85

Net Sales
1163.69 754.82 3264.37 563.41 21.22

Net Profit Ratio

14.38% 17.89% 14.44% 2.18% -55.84%

Rank
3 1 2 4 5

Currently there are about 2300 soft drink companies in india but four major players in the premium organized segment dominate the industry. That is the reason for selecting four companies out of five companies. We selected these four companies on the basis of profitability ratio by using net profit ratio of all the five companies from all companies. We select four company which gives higher net profit as compare to other. In a pie chart it shows the net profit of selected four companies and one companies which profit is negative shows of graph.

From four selected companies the first company is PepsiCo India Holdings Pvt Ltd which highest in net profit ratio that is 17.89% The last company is Mount Everest Mineral Waters Ltd with net profit ratio of -55.84%. So we can choose Parle Agro Pvt Ltd.

2.2 IN DEPTH INFORMATION OF MAJOR PLAYER 2.2(1) COCA COLA INDIA PVT LTD
Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. 1894 In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson. Biedenharn sent a case to As a Griggs Candler, who owned the Company. Candler thanked him but took no action. One of his nephews already had urged that Coca-Cola be bottled, but Candler focused on fountain sales. 1899 -Two young attorneys from Chattanooga, Tennessee believed they could build a business around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture. 1900-1909 -The three pioneer bottlers divided the country into territories and sold bottling rights to local entrepreneurs. Their efforts were boosted by major progress in bottling technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling plants were operating, most of them family-owned businesses. Some were open only during hotweather months when demand was high. 1916 -Bottlers worried that the straight-sided bottle for Coca- Cola was easily confused with imitators. A group representing the Company and bottlers asked glass manufacturers to offer ideas for a distinctive bottle. A design from the Root Glass Company of Terre Haute, Indiana won enthusiastic approval in 1915 and was introduced in 1916. The contour bottle became one of the few packages ever granted trademark status by the U.S. Patent Office. Today, it's one of the most recognized icons in the world - even in the dark!

1920-As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S. Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their 1923 introduction. A few years later, open-top metal coolers became the forerunners of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain sales.

1920 and 30-Led by longtime Company leader Robert W. Woodruff, chief executive officer and chairman of the Board, the Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Cola was being bottled in 44 countries. 1940-During the war, 64 bottling plants were set up around the world to supply the troops. This followed an urgent request for bottling equipment and materials from General Eisenhower's base in North Africa. Many of these war-time plants were later converted to civilian use, permanently enlarging the bottling system and accelerating the growth of the Company's worldwide business. 1950-For the first time, consumers had choices of Coca-Cola package size and type -- the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and 26-ounce versions. Cans were also introduced, becoming generally available in 1960. 1960-Following Fanta in the 1950s, Sprite, Minute Maid, Fresca and TaB joined brand CocaCola in the 1960s. Mr. Pibb and Mello Yello were added in the 1970s. The 1980s brought diet Coke and Cherry Coke, followed by POWERADE and DASANI in the 1990s. Today hundreds of other brands are offered to meet consumer preferences in local markets around the world. 1970 and 80-As technology led to a global economy, the retailers who sold Coca-Cola merged and evolved into international mega-chains. Such customers required a new approach. In response, many small and medium-size bottlers consolidated to better serve giant international customers. The Company encouraged and invested in a number of bottler consolidations to

assure that its largest bottling partners would have capacity to lead the system in working with global retailers. 1990-Political and economic changes opened vast markets that were closed or underdeveloped for decades. After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. And as the century closed, more than $1.5 billion was committed to new bottling facilities in Africa. 21st Century-The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as people seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows.

2.2(2) PEPSICO INDIA HOLDINGS PVT LTD

PepsiCo, the world leader in convenient foods and beverages, welcomes you to a community of over 157,000 employees spread over more than 200 countries and territories across the globe with annual revenues in excess of $33 billion. As part of its sustainable development initiatives, PepsiCo India has been a committed leader in the promotion of rain water harvesting, water conservation recycling and the reduction of effluent discharge. Thus, we seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.

1893-Caleb Bradham,a young pharmacist from New Born. North Carolina, beings experimenting with many different soft drink concoctions; patrons and friends sample them at his drugstore soda fountain. 1898-One of Calebs formulations knows as Brads Drink, a combination of carbonated water, sugar, vanilla, rare and cola nuts are renamed Pepsi Cola on August 28, 1898. Pepsi-Cola receives its frist logo. 1902- Bradham applies for a trademark with the U.S Patent Office, Washington D.C and forms the Pepsi-Cola Company. 1905- Pepsi-Colas first bottling franchises are established in Charlotte and Durham, North Carolina. Pepsi receives its new logo, its first change since 1898. 1934-A landmark year for Pepsi-Cola. The drink is a hit and to attract even more sales, the company beings selling its 12 ounce drink for five percents (the same cost as six ounces of competitive colas. Caleb Bradham, the founder of Pepsi-Cola and Brads Drink dies at 66(May 27th 1867-Febuary 19th, 1934) 1941- The New York Stock Exchange trades Pepsis stock for first time. In support of the war effort, Pepsis bottle crown colors change to red, white and blue. 1960- Young adults become the target consumers and Pepsis advertising keeps pace with Now its Pepsi, for those who think young. 1963-Pepsi Cola continues to lead the soft drink industry in packaging innovations when the 12 ounce bottle gives way to the 16 ounce size. Twelve ounce Pepsi cans are first introduced to the military to transport soft drinks all over the world. 1965-Expansion outside the soft drink industry begins. Frito-Lay of Dallas, Texas and PepsiCola merge forming PepsiCo Inc. Military 12 ounce cans are such a that full scale commercial distribution begins. 1970-Pepsi introduces the industrys first two liter bottles. Pepsi is also the first company to respond to consumer preference with light weight, recyclable, Plastic bottles. 1984-Pepsi advertising takes a dramatic turn as Pepsi becomes the choice of a New Generation. 1985-After responding to years of decline, Cock loses to Pepsi in preference tests by reformulating. However, the new formula is met with widespread consumer rejection foreign the

re-introduction of the original formulation as Coca Cola Classic. The cola war takes one giant sip for mankind, when a Pepsi space can is successfully tested aboard the space shuttle. 1991- Pepsi introduces the first beverage bottles containing recycled polyethylene terephthalate into the marketplace. The development marks the first time recycled plastic is used in direct contact with food in packaging. 1992-Pepsi-Cola and Liptop Tea Partnership is formed. Pepsi will distribute single serve Lipton Original and Lipton Brisk Products. 1994-Pepsi Food International and Pepsi Cola international merge, creating the PepsiCo Foods and Beverages Company. 1997-PepsiCo announces that it will spin off its restaurant division to from Tricon Global Restaurants Inc. Including Pizza hut, Taco Bell & KFC; it will be the largest restaurant company in the world in units and second largest in sales. 1998-Pepsi celebrates its 100th anniversary.

2.3(3) DABUR INDIA LIMITED

Dabur India Limited is a leading Indian consumer goods company with interests in Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods. From its humble beginnings in the by lanes of Calcutta way back in 1884 as an Ayurvedic medicines company, Dabur India Ltd has come a long way today to become a leading consumer products manufacturer in India. For the past 125 years, we have been dedicated to providing nature-based solutions for a healthy and holisticlifestyle.Through our comprehensive range of products, we touch the lives of all consumers, in all age groups, across all social boundaries. And this legacy has helped us develop a bond of trust with our consumers. That guarantees you the best in all products carrying the Dabur name. 1884 - Established by Dr. S K Burman at Kolkata 1896 - First production unit established at Garhia 1919 - First R&D unit established Early 1900s - Production of Ayurvedic medicines Dabur identifies nature-based Ayurvedic medicines as its area overspecialization. It is the first Company to provide health care through scientifically tested and automated production of formulations based on our traditional science. 1930 - Automation and up gradation of Ayurvedic products manufacturing initiated 1936 - Dabur (Dr. S K Burman) Pvt. Ltd. Incorporated 1940 - Personal care through Ayurveda Dabur introduces Indian consumers to personal care through Ayurveda, with the launch of DaburAmla Hair Oil. So popular is the product that it becomes the largest selling hair oil brand in India. 1949 - Launched Dabur Chyawanprash in tin pack Widening the popularity and usage of traditional Ayurvedic products continues. The ancient restorative Chyawanprash is launched in packaged form, and becomes the first branded Chyawanprash in India.

1957 - Computerization of operations initiated 1970 - Entered Oral Care & Digestives segment Addressing rural markets where homemade oral care is more popular than multinational brands, Dabur introduces Lal Dant Manjan. With this a conveniently packaged herbal toothpowder is made available ataffordable costs to the masses. 1972 - Shifts base to Delhi from Calcutta 1975 - The Company was incorporated on 16th September for manufacture of high grade edible & industrial guar gum powder and its sophisticated derivatives. It was incorporated in the name of Vishal Chemical (India) Ltd. 1978 - Launches Hajmola tablet Dabur continues to make innovative products based on traditional formulations that can provide holistic care in our daily life. An Ayurvedic medicine used as a digestive aid is branded and launched as the popular Hajmola tablet. 1979 - Dabur Research Foundation set up 1979 - Commercial production starts at Sahibabad, the most modern herbal medicines plant at that time 1981- On 19th September, the name was changed to Vidogum and Chemicals Ltd.The capacity of the plant was 2700 tpa of modified and refined guargum powder and derivatives such as oxidised guargum, carboxymethylated guargum, sydoxalkylated, guargum and similar carbo hydrate modification. It was promoted by Dabur (S. K. Burman) Pvt. Ltd.and founded in 1884 in Calcutta. The company manufacture herbal and Ayurvedic medicines and cosmetics in India. The other products are Dabur Amla Hair Oil, Badur Chavanprash, Pudin Hara Etc.The Company undertook to set up a unit at Matsya Industrial Estate, Alwar, Rajasthan for manufacture of edible and industrial grade guargum powder and its derivatives. 1984 - Dabur completes 100 years

1988 - Launches pharmaceutical medicines 1989 - The Ayurvedic digestive formulation is converted into a children's fun product with the launch of Hajmola Candy. In an innovative move, a curative product is converted to a confectionary item for wider usage. 1992 - A new range of coconut oil under the brand name `Anmol' was launched.The company developed Dab 10, an intermediate for anti-cancer drug namely Taxol. The Company undertook to implement a phytopharma project at Ghaziabad U.P. This unit would manufacture a specialised anti cancer drug Taxot apart from manufacture of chemical intermediary for cancer drug and Terfenadine a non sedative anti allergic drug. The installed capacity of Taxot, the intermediate drug and anti allergic drug would be `6 Kg, 40 Kgs. and 18 tonnes respectively. The company entered into a joint venture agreement with M/s.Guldenhorst BV Netherland to form a company for manufacture and marketing of all types of bubble gum, chewing gum, toffees,chocolateand cocoa related products, sugar based spreading creams etc. The company co-promoted Dabur Finance Ltd. to carry on the business of leasing, financing etc.45, 50,520 shares allotted. Pursuant to a scheme of amalgamation of Dabur with Vidogum. 1994- New products launched were `Dentacare,' Vatika and Lactonic which were well received in the market.An integrated facility was designed at Alwar for manufacture of Ayurvedic Veterinary range at Alwar, a joint venture in technical collaboration with Shikobo Ltd., Japan to extend the range o natural gum products into speciality products.The company also undertook to set up a project in Himachal Pradesh for manufacture of Hajmola, honey, Gulabari, Pudin Hara, Lavan Bhaskar Churna and soft gel capsules, part of the existing range of products.At its Sahibabad plant, the company undertook to install various balancing equipments, mechanise operations, hitherto performed manually, instal reverse Osmosis plant, a concentration plant for extraction of herbs, barks, roots, seed etc.The company also undertook to upgrade amla pulping section, expand storage space for ayurvedic raw materials and to meet the cost of the installation of two additional DG sets. The Company floated two companies a manufacturing unit in Egypt in the name of Dabur Egypt Ltd. and Dadur International Ltd. in BVI. The company entered into a joint venture with Seprache Internationa Ltd.in the name of `Innova' Inc. For manufacture of

anti cancer drug namely`Paclitaxel'.The company signed a MOU with Osein Internatinal Ltd. For manufacture of biscuits, snack, foods & other products in India. 1995- In addition to the existing products, the company exported products like an improved version of Chyawanprash (with more honey and less pungency) liquid form of Chyawanprash an aqueous based, hair vitalizer Melatonine etc.182,02,080 bonus equity shares issued in prop. 4:1.During November 1993, the company issued 57,00,000 equity shares of Rs 10 lakh at a prem. of Rs 85 per share of which the following were reserved forallotment on a preferential basis: (1) 2,64,000 shares to employees of the company's shareholders of group cos. (all were taken up); (2) 5,27,000 shares to NRIs (all were taken); (3) 11,40,000 shares to Indian Fin. Insts. (only 8,38,400) shares taken up; (4) 5,40,000 shares to FIIs (all were taken up); (5) 6,00,000 shares to Indian Mutual Funds (all were taken up). Balance 26,29,000 shares along with 3,01,600 shares not taken up by FIIs, issued to public. Additional 56,530 equity shares allotted. 1996- The company launched Madhuvanni an anticough preparation.A unit was being set up at Baddi for manufacture of Chywanprash Janma Ghunti, Lal Tail, Dashmularishta and Ashokarishta. Semi synthetic pacitaxel and Docetaxel and various front line anti cancer drugs were being produced both for domestic as well as export market. The company proposed to double the volume of the Katni plant and introducemodern technology in processing Amla with high productivity and improved quality.The company undertook to set up a joint venture in Bangrain of France in the names of Dabon International Pvt. Ltd. Another joint venture viz. General de Confiteria Pvt. Ltd. commenced commerical production in April 1995. 1997- The Company set up a new manufacturing unit with a high degree of automation at Baddi (H.P.), to produce company's well known brands viz Chyawanprash, Janma Ghunti, Ayurvedic oils and Asva-Arishtas. A modern air conditioned packing line was commissioned at Sahibabad for homemade brands of ethnic pastes and line juices.The Dabur India Ltd has formed a joint venture with Osem of Israel for the production of food product in India. The joint venture named as Excelcia Food Pvt Ltd will have the Rs.15 paid up capital in which Dabur will have 60 per cent stake while Osem will have the rest 40 percent holding in the company.The company extended its range of real fruit juice by offering mixed fruit juice and tomato juice. Its veterinary division launched `mastilep' for curing mastitis in cattle.Dabur India launched a range of

extruded snack foods, ready-to-use cooking pastes and sauces here on Thursday.Dabur India is negotiating with Antonio Puig of Spain, the maker of the Paco Rabanne perfume range, and Kesling of France to set up joint ventures in the country as a part of its strategy to establish a strong presence in the personal care sector.Dabur India Ltd, Great Eastern Shipping Company Ltd and Ranbaxy Laboratories Ltd. have signed agreements with NSDL to get theirsecurities admitted for dematerialisation at NSDL.Dabur Industries Ltd has signed a tripartite agreement with the National Securities Depository Ltd and MCS ltd for dematerializing Dabur shares, becoming the first MCG company to avail of the facility.Dabur India Ltd is launching a new communication campaign this month to reposition its oldest brand - `Pudinhara'. 1998 - Dabur India Ltd on 19th January 1998 launched low sodium cooking salt called Nutrasalt in Chandigrah. Dabur signed a joint venture with Bongrain International SA of France to form a new company called Dabon International Ltd Dabur India Ltd has launched a range of ayurvedic health care products for dogs under the umbrella brand name Ayupet. Dabur India Ltd (DIL) has commissioned consultancy firm Noble and Hewitt to script a employee stock option plan.Dabur India has tied up with Godrej Foods for the manufacture and packaging of its `Real' range of fruit juices and fruit drinks in tetrapacks. 1999 - Dabur India Ltd has entered into an agreement with its Spanish partner Agrolimen to offload its 49 per cent stake in the joint venture company General De Confiteria India Ltd in favour of an Agrolimen group company.Dabur Pharmaceuticals Limited (DPL) has set up its first overseas arm in Britain with a million investment commitment and is considering similar ventures in Russia as well as South African countries. 2000 - The Company has taken Nestle SA to the Company Law Board (CLB) charging the latter with arm-twisting it as a majority shareholder in their biscuit manufacturing joint venture Excelcia Foods Ltd (EFL).FMCG major Dabur, along with US insurance company Allstate and Prudential-ICICI joint venture have applied for life insurance licens as the Insurance Regulatory and Development Authority .The Company has divested its entire 40 per cent stake in the controversial joint venture Excelcia Foods with Swiss major Nestle SA for a token amount of Rs 10.The Company sub-divide the fully paid-up equity shares of Rs. 10 each into 10 fully paid-up equity shares of Re. 1 each.Three domestic pharma companies - Cadila Pharmaceuticals, Shanth

Biotech and Dabur India have signed an agreement with the department of biotechnology (DBT) for developing and marketing basic molecules in leprosy, hepatitis and tumor disease segments.Crisil reaffirmed the highest safety rating of `P1+' to the company's Rs 100-crore commercial paper programme. Crisil has reaffirmed it's AA rating, indicating high safety, assigned to the Rs 20 crore non-convertible debenture issue of the company. Dabur India Ltd., has launched Efarelle Comfort, a natural menstrual pain reliever.Dabur India's ayurvedic specialities division has launched plain isabgol husk under the brand name Nature Care. 2001- Dabur India Ltd. proposes to increase the number of directors on its board, by adding three new directors. January 22, 2002. 2002 - Dabur India Ltd has informed that Mr.Ninu Khanna has resigned as Chief Executive Officer and Director of the Company and the resignation has been accepted.Dabur India Ltd has informed that the Compensation Committee has allotted 16660 fully paid equity shares of Re 1 each for cash at par to the employees of the Company.Dabur India Ltd has informed that the Board of Directors has approved the restructuring of the Board. Mr A CBurman, Mr Sidharth Burman ,Air Chief Marshal N C Suri (Retd), Mr S M Datta, Mr Raja Vijay Karan.MrAshok Goenka have resigned from the Directorship of the Company and the Board has accepted the same w e f April 1, 2002.Further, Mr V C Burman and Mr Pradip Burman have also resigned from the Whole-tim Directorship of the Company. Mr V C Burman and Mr Pradip Burma will however continue as Non-executive Directors of the Company Pradip Burman appointed as Whole time Director of Dabur India.The Board of Directors of Dabur India Ltd has appointed Mr Sunil Duggal as Chief Executive Officer of the company wef July 01, 2002. 2003 -The fourth Largest FMCG, Dabur India Ltd has tied with Free Markets Inc. for using leading edge technologies to execute online markets for its procurement needs.CRISIL assigned CRISIL GVC LEVEL 2 rating for governance and value creation practices of the company.Dabur has sued Pharmaseutical major Ranbaxy for telecasting the comparative commercial of Pepfiz.Dabur India has inducted Mr.Siddharth Burman as the chairman and Mr Sunil Duggal, Mr.P D Narang and Mr Charanjit Mohan as the directors of the 4-member board 2002. Dabur India Ltd has informed that Mr. Ninu Khanna would now becontinuing as CEO & Director till the Date of the next Board Meeting scheduled to be held on

of Dabur India's global arm based in Dubai.The company acquired 10,00,000 ordinary fully paid shares of 1 Pound Sterling each of Redrock Limited with this acquisition Redrock Limited has become a wholly owned subsidiary of the company. Redrock Limite is engaged in the business of manufacture and sale of various cosmetics, toiletries and health care products and operates from the Jebel Ali Free Trade Zone in Dubai.Acquires equity in Shri Dhanwantry Educational Society.Dabur forges alliance with Dhanwantry Dabur launch new Herbal pill for diabetics 2004-Dabur set to acquire Egyptian hair oil brand Touch.Dabur India gets Tetra Pak award Dabur India inks pact with Accenture for outsourcing Implements `Spend visibility solution' software provided by FreeMarkets Inc to control costs and strengthen the company's procurement process Dabur ties up Uttarnachal for cancer drug Dabur India has acquired a Nigerian company African Consumer Care Ltd, a step precursor to its plans to go on-shore for manufacturingin the country.Dabur join hands with DLF for healthcare hub 2005-Delists equity shares from The Calcutta Stock Exchange Association Ltd (CSE) with effect from January 27, 2005,Completes the acquisition process of Balsara Hygiene Products Ltd Besta Cosmetics Ltd on April 16, 2005.Dabur signs Sonu Nigam to endorse cough dropsDabur acquires Balsara's businesses for Rs.1.43 bn 2006-Dabur's Director P D Narang appoints as Chairman of PTL.Dabur India secures prestigious National Award from ICSI Dabur promoters acquires stake in Vishal Mega Mart Dabur crosses bln market cap, adopts US GAAP.Approves FCCB/GDR/ADR up to 0 million 2007 -The Company has issued Bonus Shares in the Ratio of 1:2.Dabur India decides to merge its wholly-owned subsidiary Dabur Foods Limited with itself to extract synergies and unlock operational efficiencies. The integration will also help Dabur sharpen focus on the high growth business of foods and beverages, and enter newer product categories in this space Dabur India announced its foray into the organised retail business through a wholly-owned subsidiary, H&B Stores Ltd. Dabur will invest Rs 140 crores by 2010 to establish its presence in the retail market in India with a chain of stores on the Health & Beauty format.

2008 - Acquires Fem Care Pharma Dabur India acquires Fem Care Pharma, a leading player in the women's skin care market. Besides an entry into the high-growth skin care market with an established brand name FEM, this transaction also offers Dabur a strong platform to enter newer product categories and markets.Dabur India - Launch of First Retail Store by Subsidiary Company 2009- Dabur India Ltd has appointed Dr. Ajay Dua as an Additional Director of the Company under the category of Independent, Non Executive Director w.e.f. September 03, 2009.Dabur launched Odomos Naturals, a range of personal application mosquito repellents packed with Aloe Vera and Citronella with two options, cream and lotion.Dabur Red Toothpaste becomes the Dabur's ninth Billion Rupee brand.Dabur Red Toothpaste crosses the billion rupee turnover mark within five years of its launch.

2.2(4) PARLE AGRO PVT LTD

Parle Products fame and familiarity is undeniable. Considering its extensive reach, the brand Parle is known and recognized by everyone. Over the years, Parles sweets and biscuits have become a household name. From kids to adults, everyone loves and cherishes these treats. It gives us great pleasure to see our consumers enjoy and embrace Parle products on daily basis. Our confectioners and chefs have the utmost authority at Parle. Had it not been so, the beginning of Parle would have been quite different. 1929- A small company by the name of Parle products emerged in British dominated India. The goal was to spread joy and cheer to children and adults alike, all over the country with its sweets and candies. Although, the company knew that it wouldnt be an easy task, they decided to take the brave step. A small factory was set up in the suburbs of Mumbai to manufacture confectionery products. A decade later this factory was upgraded to manufacture biscuits as well. Since then, the Parle name has spread in all directions and has won international fame. Parle has

been sweetening the lives of people all over India and abroad. Apart from the factories in Mumbai and Bangalore, Parle also has factories in Bahadurgarh, Haryana and Neemrana, Rajasthan. These are the largest biscuit and confectionery plants in the country. Additionally, Parle Products also has 10 manufacturing units and 75 manufacturing units on contract. Parle Agro is an Indian company in the beverages industry and has brands like Frooti, consistent winner of India's fruit beverage brand, Appy, Appy Fizz and packaged drinking water, Bailley.A pioneer in the Indian industry, Parle Agro is associated with many firsts. They were the first to introduce fruit drinks in tetra packaging, first to introduce apple nectar and the first to introduce fruit drinks in PET bottles. 1950 -The undivided Chauhan family manufactured beverages, water, confectionery, biscuits, etc under its registered brand name Parle. Over the years - The group split into three different companies Parle Agro, Parle Bisleri and Parle Products. Currently, all three are separate companies with separate ownership and management. They also have different products manufactured under them. All three companies continue to use the family trademark name Parle under which the current companies are named. 1984- Parle Agro commenced operations. 1985- Frooti was the first product that was rolled out of Parle Agro. It went on to become Indias favourite mango drink. It still has a leading market share. 1993- Starting with only beverages and diversifying to include bottled water. 2007- Parle Agro was confectionery. 2008- Parle Agro forayed into foods with the launch of two confectionery brands, Mintrox mints and Buttercup candies. This was soon followed by two more brands - Buttercup Softease and Softease Mithai. 2009- Parle Agro forayed into snacks with the launch of Hippo, in line with the companys vision of becoming a major player in the foods and beverages industry.

CHAPTER-3 STRETAGIC ANALYSIS

3.1DRIVING FORCES OF INDUSTRY

An industrys present conditions dont necessarily reveal much about the strategically relevant ways in which the industry environment is changing. All industries are characterized by trend and new developments that gradually or speedily or produce changes important enough to require a strategic response from participating firms. The popular hypothesis that industries go through a life cycle of takeoff, rapid growth, early maturity, market saturation and stagnation or decline helps explain industry change but it is far from complete. An industrys normal progression through the life cycle is by no means the only cause of industry change. The Concept of Driving Forces

Although it is important to judge what growth stage an industry is in, theres more analytical value in identifying the specific factors causing fundamental industry and competitive adjustment. Industry and competitive condition change because certain forces are enticing or pressuring industry participants to alter their actions. Driving Force are those that have the biggest influence on what kinds of changes will take place in the industrys structure and competitive environment. Some driving forces originate in the companys macro environment; some originate from within the companys more immediate industry and competitive environment. Driving force analysis has two steps: (1)Identifying what the driving force (2)Assessing the impact they will have on the industry IDENTIFYING WHAT THE DRIVING FORCE Many events can affect an industry powerfully enough to qualify as driving forces. Some are unique and specific to a particular industry situation, but most drivers of change fall into one of the following categories: Growing use of internet and internet application The Internet continues to change the world in ways that were completely unforeseen a generation agofrom the way people communicate to how they receive their news to where they purchase their books, clothes, and music. It is even changing the way employees report business misconduct. The internet applications are making the competition intense to some extent in soft drink industry. The one of example is internet advertising. But growing trend of e-commerce is also increasing the competition for soft drink industry. Internet application can lead to industry higher or lower profitability, because as explained earlier that internet applications are helping out soft drink industry in supply chain activities; so if a company is not adopting the internet application its supply may be not got the efficiency rate as compare to those that adopt the internet applications. And supply on the time, at right place is the main emphasis of this industry. Product Innovation Product innovation is the major driver for soft drink industry because for long term sustainability and to fulfill the consumer demand according to their choices product innovation is the tool that helps the companies in this regard. This driver has great impact on the demand of industry products because with availability of various flavors of consumers choice and variety of brands and flavors in each category of beverage industry increased the demand of industry products. This driver has vital role in increasing the competition among rivals of soft drink industry.

Because of new flavors and new brand war the competition is so intense even PepsiCo introduced its snacks as well with the brand name of Lays. The driver of product innovation can lead to lower or higher profitability of industry firms, because as I have explained earlier that with product innovation the consumers choices increased to the great extents now you dont have only soft drink you have hundred of other products and flavors to quench your thrust. I.e. if you want to quench your thrust you have; juices, water, tea, coffee, soft drinks, sports drinks, energy drinks. So if a company is not following an industry trends it wouldnt be able to capture as much market share as it want to. Now the competition is very intense and consumer choices are also increasing day by day. So product innovation is a strength that can insure the sustainability of any soft drink company. Technological Changes There various technical changes that boost up the demand and production of soft drink industry. The first change is internet and television technology which use special effects for advertising through media. They make some products look attractive. This help in selling the products. This technology helps to attract the customers in selling the products. As the technology is getting advanced there is an introduction of new machineries for production all the time. With the introduction of these machines the production of soft drink industry increased tremendously then it was few years ago.CCE is a company in England that produces cans for coca cola drinks; they have state of the technology for soft drink industry they produces a cans faster than bullets from the gun machine. Change in long term industry growth rate The changes in market & economic condition have impact on the business of soft drink industry; because the whole business effectiveness of this industry depends on economies of scales. Companies are able to achieve economies of scale when economic conditions are favorable. But In the wake of the current economic crisis, with inflation at a peak, huge price rises, redundancies, political instability in terms of terrorist activities and the weakening of the rupee against the US dollar and other currencies, over the forecast period the industry is not likely to enjoy tremendous support from consumers. Yet, manufacturers must see the positive side of the picture and be ready to tap into any potential opportunities even in todays difficult climate. Despite these hard times, the soft drinks market is set to witness increasing consumption across all age and income groups, and will post a total volume CAGR of 3% over the forecast period.

Change in who buys the products and how they use it? This driver is related to the change in customers usage and buying habits. The change in buying habits about soft drink is issues of health using soft drink not probably in Pakistan but mostly in European countries people are health conscious and some of our health critics are also emphasizing that people should not regularly take soft drink it would create this and this health problems and with an increase in awareness level people are shifted towards fresh juices and other carbohydrate drinks. Increasing globalization of industry The soft drinks industry was one of the earliest to be globalized. Globalization describes an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and exchange. When market is globalised there is more opportunity to access to local, national and international markets. Therefore this is important when competing in a global market with various competitors. Soft drink industry requires more labours. If a country producing more skilled, semiskilled labours with low cost there will be more opportunity to grow with the industry. Therefore this also a key driving force in soft drink industry. However it is fortunate to say that we can see Low labour cost, material and Better administration system. At present there are large numbers of countries producing soft drink and they are presenting more differentiated products to the world market with low prices. Therefore we should have competitive advantage in production and other region.The outsourcing, franchising & licensing culture aid the globalization of soft drink industry. Marketing innovation Marketing innovation changed the whole scenario of soft drink industry because if it is said that marketing innovation contributed 90% for the success of soft drink industry it couldnt be false. Its one of the example is value of coca cola brand. The value of only its brand mane is 120 billion us $ and the value of coca cola company except brand is only 50 billion us $. This shows that how important the marketing innovations are and how these are contributing towards the success of soft drink industry? The new ways of marketing a products has dramatically bring a change not only in soft drink industry but also all type of industry because in this era; products and customer choices are more but customers are few: it depends on the company that how they are differentiating their products and how they are positioning & convincing their customers that why should they purchase their products? Marketing let them all the tools; that how they should

add value in their products and services? Marketing is all about adding value in your products & services! Entry or exit of major firms As the risk rate goes down in soft drink industry and Govt. regulations also supporting businesses after WTO agreement. The ease of entry and exit does not cause competitive pressure on the major soft drink companies. It would be very difficult for a new company to enter this industry because they would not be able to compete with the established brand names, distribution channels, and high capital investment. Likewise, leaving this industry would be difficult with the significant loss of money from the fixed costs, binding contracts with distribution channels, and advertisements used to create the strong brand images. This industry is well established already, and it would be difficult for any company to enter or exit successfully. Changes in cost & efficiency The cost of production is changed & efficiency of out put produce also has been increased in a recent era; the major players are E-commerce, internet, advanced production machineries. Due to low cost of production companies become able to achieve economies of scale and got effectiveness in their business operations. This insures their higher profits. Growing preferences for differentiated products: The consumers preferences for products are increased at a large scale, the one of the reason behind growing preference is advancement in media & internet and other one is marketing practices that led the base for different flavors of a single product and also create a desire for these products. This driver has a great impact on soft drink industry.Companies started providing different flavors according to the need & desire of their customers. What benefit they got from this driver? They customized themselves and showed that how concerned we are about our customers requirements. They also capture the maximum market share from offering different flavors, and products. Reduction in uncertainty and business risk Soft drink industry was established a century ago now it has covered all most every corner of world with totally customized strategy. Soft drink industry was the first one that started the foundation of global business. The business risk and uncertainty totally reduced in this industry products because these products are highly acceptable by the customer thats why. Regulatory influences & Govt. policy changes

Regulatory influences & Govt. policy changes have great impact on soft drink industry. In the United States and elsewhere, legislators, health experts and consumer advocates are considering levying higher taxes on the sale of soft drinks and other sweetened beverages to help curb the epidemic of obesity among consumers, and its harmful impact on overall health. Higher taxes could help reduce soda consumption. Taxes could also fund education to increase consumer awareness of the unhealthy effects of excessive soft drink consumption, and also help cover costs of caring for conditions resulting from overconsumption. Changing societal concerns, attitudes and life style Societal concerns, attitudes and life style mostly bring these changes fashion industries, cosmetics and new ways of architecture of housing societies also tremendously changed the way of living and buying habits of people. People become more health conscious and hygienic concerned. This factor soft drink companies should recognize that in incoming years they should more secure themselves from any hygienic issue; that in current era most of the soft drink companies are facing in Europe. Like tooth decay and stomach problems issues that these drinks have. Diffusion of technical knows how Countries bring a fruitful changes for the under develop countries. We discussed about the soft drink industry, one of reason of their success is technical knowhow diffusion to the foreign countries. In soft drink industry the major players are coca cola and Pepsi both are not multinational but are global companies. These are transferring technical knowhow to other countries through patents and licensing. This driver enables the soft drink companies to expand their businesses all over the world through franchising, licensing and patent rights. The technical knowhow also boost up the economic development of a host company; because mostly multinational companies deploy such technologies that enhance the personal growth of workers and also increase the production level of companies through which other industries also try to deploy the same technologies if that relate to their business.

3.2SWOT ANALYSIS
The swot analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations. Swot is an acronym for Strengths, Weaknesses, Opportunities and Threats. Information about the origins and inventors of swot analysis is below. The swot analysis headings provide a good framework for reviewing strategy, position and direction of a company or business proposition, or any other idea. Completing a swot analysis is very simple, and is a good subject for workshop sessions. Swot analysis also works well in brainstorming meetings. Swot analysis for business planning, strategic planning, competitor evaluation, marketing, business and product development and research reports. You can also use swot analysis exercises for team building games.

Strengths

 Distribution network The industry has a strong and reliable distribution network. The network formed on the basis of the time of consumption and the amount of sales yielded by a particular customer in one transaction. It has a distribute network consisting of a number of efficient salesmen 7, 00,000 retail outlets and 8000 distributors. The distribution fleet includes different modes of distribution from 10 tonne trucks to open bay three wheelers that can navigate through narrow alleyways of India cities and trademarked tricycles and pushcarts. Low cost of operation The production, marketing and distribution system are very efficient due to forward planning and maintenance of consistency of operations which minimizes wastage of both time and resources leads to lowering of costs.

Weaknesses
Low Export Level The industry are produced worldwide thereby making the export levels very low. In India, there exists a major controversy concerning pesticides and other harmful chemicals in bottled products.
Small scale sector reservations limit ability to invest and achieve economies of scale

The industry operation are carried out on small scale and due to government restrictions of the industry finds it very difficult to invest in technological advancements and achieve economies of scale.
Expenditure

Right from the very beginning industry has hired the biggest and the most expansive stars in the country as its brand ambassador and has spend heavily on advertising which has affected its balance sheet. Traditional Preservation At presently this is one the biggest problems faced by soft drink industry. Soft drink industry is not able to get refrigerators in India so they have to import it other namely Sri

lanka, Mauritius etc.Because of this retailers are facing lot of problems in traditional preservations. They are not able to get new refrigerators replacements for old ones even the repair work takes lot of time because at times even the spares are not available on time.

Opportunities
Large Domestic Market The domestic market for the products of the industry is very high as compared to any other industry manufacturer. Example: Coca cola India claim a 58 percent share of the soft drinks market: this includes a 42 percent share of the cola market. Other product for 16 per cent market share, chiefly led by limca. In Bangalore, Coca Cola amounts for 74% of the beverage market.The industry appointed 50,000 new outlets in the first two months of this year as part of its plans to cover one lakh outlets for the coming summer season and this also covered 3500 new villages. Export Potential The industry can come up with new products which are not manufactured abroad and export them to foreign nations. It can come up with strategies to eliminate apprehension from the minds of the people toward the product produced in India so that there will be a considerable amount of exports and it is yet another opportunity to broaden future prospects and cater to the global market rather than just domestic market. Higher Income among People Development of India as a whole has lead to an increase in the per capital income thereby causing an increase in disposable income. Unlike olden times, people now have the power of buying goods of their choice without having to worry much about the flow of their income. The soft drink industry can take advantage of such a situation and enhance their sales.

Threats:
Import As India is developing at a fast pace, the per capital income has increased over the years and majority of the people is educated, the export levels have gone high. People understand trade to a large extent and the demand for foreign goods has increased over

the years. If consumers shift into imported soft drink rather than have soft drink manufactured within the country, it could pose a threat to the Indian soft drink industry as a whole in turn affecting the sales of the company.
Tax and Regulatory Sectors

The tax system in India is accompanied by a variety of regulations at each stage on the consequence from production to consumption. When a license is issued, the production capacity is mentioned on the license and every time the production capacity needs to be increased, the license poses a problem. Renewing or updating license every now and then is difficult. Therefore, this can limit the growth of the company and pose problems. Slowdown in Rural Demand The rural market may be alluring but it is not without its problem: a Low per capita disposable income that is half the urban disposable income; Large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal occasions; poor roads; power problems; and inaccessibility to conventional advertising media. All these problems might lead to a slowdown in the demand for the industry product. Environment Environmental concerns are often raise because of the massive amount of water extracted by the bottling plants resulting in the drop in ground water level which affects the local population adversely.

Health Growing health awareness among people and some of ill effects of carbonated beverages have pursued many people to switch over to non- carbonated beverages that can seriously hamper the long term prospects of the entire industry.

3.3PESTLE ANALYSIS

PESTLE analysis stands for Political, Economic, Socio-culture, Technological, Legal and Ecological analysis and describes a framework of macro-environmental factors used in the scanning component of strategic management. It is a useful strategic tool for understanding market growth or decline, business position potential and direction for operations.

Political Factor Various political factors affect the soft drink industry. With the change of government the policies regulating the industry might change. As the taxation policy keeps changing, it has a significant effect on soft drink industry. The government plants of encouraging foreign direct investment would affect our industry highly as organized soft drink industry has only 3% share as of now in the market but with FDIs it could increase significantly by coming of bigger players.

Economic Factor

Our company would rely on trucks to move our raw materials to the processing plant and distribute our finished product so; fuel is also important subject, so the company is subject to the fuel price fluctuation and to possible fuel crisis. Since ours is an agro based industry so we would be exposed to the risks of high prices due to crop failure, non availability of raw materials because of pest attack etc. Other economic factors affecting soft drink industry are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. Factors like money supply, energy availability and cost, business cycle etc. Social Factor We are more than a billion strong nations and the youngest country as well. We are also home to the great Indian middle class. The major growth drivers in soft drink market are increase consciousness among consumer, increase in disposable incomes and more sophisticated cocktail culture. There is more money circulating in the economy. With life becoming more hectic and tiring, consumer preferences are witnessing a visible shift towards healthy foods. Even the younger generation has started shifting from fizz to fresh and healthy. As people are becoming more and more educated, they are taking the healthy route. Technological Factor Soft drinks have become big business throughout much of the developed and developing world with the increasing health conscious proportion of population. In this growing industry technology plays a major role in maintaining the quality and cost efficiency to generate higher profits. Better technology can increase the shelf life of our product. Technology refers to both production process as well as machinery. Legislative Factor Processed soft drinks are regulated under the Food and Drugs Act and regulation as a food product and Consumer Packaging and Labeling Act. The Food and Drugs Act creates identify standards, provides a basis for labeling requirement and establishes the safety parameters for soft drinks. As food safety requirements become more advanced across the soft drink industry, tracking and traceability are a prerequisite. Environmental Factor

One environmental issue that food processing companies face waste remaining from packaging. However, the problem often lies in feasibility of collection, separation and purification of the consumers disposed bottles or drinks packets. Environmental issues have gained importance because of regulatory requirements. It is not possible to sell a new packaging material without covering all the environmental issues. With the increasing use of plastic bottles for non alcoholic drink, recycling and return concepts become an absolute necessity. The reduction of materials in packing cartons can potentially provide both financial and environmental benefits. Since 1977 even the soft drink industry has reduced the amount of plastic used in its PET bottles by almost 30%. Packaging materials used by the industry, including cardboard, plastics and aluminum is either recyclable or re-used. Bottle deposit laws and other regulations to ensure recycling and reuse of packaging are a significant regulatory concern to the soft drink industry. We propose to provide our product in tetra packs so that lesser damage is done to the environment in comparison to PET bottles.

3.4PORTERS FIVE FORCE ANALYSIS

3.5KEY SUCCESS FACTOR

Key factors for competitive success within the soft drink industry branch from the trends of the macro environment. Primarily, constant product innovation is imperative. A company must be able to recognize consumer wants and needs, while maintaining the ability to adjust with the changing market. They must keep up with the changing trends. Another key factor is the size of the organization, especially in terms of market share. Large distributors have the ability to negotiate with stadiums, universities and school systems, making them the exclusive supplier for a specified period of time. Additionally, they have the ability to commit to mass purchases that significantly lower their costs. They must implement effective distribution channels to remain competitive. Taste of the product is also a key factor for success. Furthermore, established brand loyalty is a large aspect of the soft drink industry. Many

consumers of carbonated beverages are extremely dedicated to a particular product, and rarely purchase other varieties. This stresses the importance of developing and maintaining a superior brand image.

Price, however, is also a key factor because consumers without a strong brand preference will select the product with the most competitive price. Finally, global expansion is a vital factor in the success of a company within the soft drink industry. The United States has reached relative market saturation, requiring movement into the global industry to maintain growth.

3.6 STRATEGIC GROUP MAPPING

Since competing companies commonly sell in different price/quality ranges, emphasize different distribution channels, incorporate product features that appeal to different types of buyers, have different geographic coverage, and so on, it stands to reason that some companies enjoy stronger or more attractive market positions than other companies. Understanding which companies are strongly positioned and which are weakly positioned is an integral part of analyzing an industrys competitive structure. The best technique for revealing the market positions of industry competitors is strategic group mapping. This analytical tool is useful for comparing the market positions of each firm separately or for grouping them into like positions when an industry has so many competitors that it is not practical to examine each one in depth.

Data of Strategic group mapping of major player in Companies

No

Company

Operating Profit (Rs in Crs)

Product Offering(Variety)

1 2 3 4

Coca-cola India Pvt Ltd PepsiCo India Holding Pvt ltd Dabur India Ltd Parle agro Pvt Ltd

284.75 209.12 572.43 47..58

16 15 6 5

We are now in a position to return to a discussion of the strategic group map as an analytical tool. The map is a very useful way to graphically display competition in an industry and to see how industry changes or how trends might affect it. It is a map of strategy space, instead of operating profit and product line and variety.

POSITIONING DIAGRAM AND STRATEGIC GROUP IDENTIFACATION

Dabur India Ltd

Coca Cola India Pvt Ltd

PepsiCo India Holding Pvt Ltd

Parle Agro Pvt Ltd

Low

Medium Operating Profit

High

Interpretation:Products in adversely affected strategic groups may try to shift to a more favorably situated group. Here in soft drink industry entry barrier is low thats why too much product are available. Currently Dabur India ltd, Coca-Cola India ltd, PepsiCo India ltd, Parle agro India ltd, stands in same strategic group. Here Dabur India ltd is leading operating profit but Coca-cola is leading product variety of soft drink market industry in both operating profit and product variety generation. Coca-cola has 2nd largest product variety but its operating profit generation is less than Dabur India. Dabur India has law product variety comparing Coca-cola India but operating profit generation is high. In soft drink industry upper PepsiCo India and Parle agro is the worst operating profit generating product. Parle agro has demand but thats product variety and operating profit is also low comparing to Dabur India and coca-cola India. In figure use strategic gap. No company wants of reached their product in that position because it is not possible low product variety with high volume of operating profit. On the other hand no company wants for a product with high product variety but low operating profit generation.

3.7EXTERNAL FACTOR EVALUATION MATRIX (EFE)

The EFE matrix is the strategic tool used to evaluate firm existing strategies, EFE matrix can be defined as the strategic tool to evaluate external environment or macro environment of the firm include economic, social, technological, government, political, legal and competitive information. There are five steps in developing an EFE matrix: 1. We identified key external factors. We include total of 15 factors which consist both opportunities and threats affecting the firm and its industry. We list the opportunities first and then the threats. 2. Assign to each factor a weight that ranges from 0.0(not important) to 1.0 (very important). The weight indicates the relative importance of that factor to being successful in the firms industry. Opportunities often receive higher weights then threats.

3. Assign a 1to 4 rating to each critical success factor to indicate how effectively the firms currents strategies respond to the factor. (a) 4 = the response is superior (b) 3 = the response is above average (c) 2 = the response is average (d) 1 = the response is poor The ratings are based on effectiveness of the firm strategy. The ratings are thus company based whereas the weights are the industry based 1. Then we multiply each factors weight by its rating to determine a weighted score. 2. Sum the weighted scores for each variable to determine the total weighted score for the organization The external fact analysis consists of two methods, External Factor Evaluation Matrix (EFEM) and Competitive Profile Matrix (CPM)

Key Factors Opportunities Energy drink sales are expected to increase 7 to 8 percent in 2007.

W 0.0

Rating WS

6 Consumers are striving to drink and eat their way to better health than 0.0 previous generations. 6 Less developed countries are in desperate need to improve community 0.0 water supplies. 2 According to the S&P Industry Survey, consumers are drawn to new 0.0 smaller beverage brands that are not sold on a mass scale. Demand for bottled water is increasing Sales of competitor, Pepsi Co, is declining in the US Threats Customers have become more health conscious Hurting products containing sugar & sugar-substitute based drinks 0.1 5 0.1 5 0.0 6 0.0 5

3 3 2 2 3 3

0.18 0.18 0.4 0.1 0.18 0.15

3 3

0.45 0.30

Key Factors (trend towards more healthy eating & drinking) Cost of Corn and Orange juice is raised by 50% in a year Increase in raw material costs Pepsi Cos energy drink Gatorades sales doubles in last 5 years

W 0 0.0 5 0.0 5 0.1

Rating WS

2 2 2 3 2 3 3

0.10 0.10 0.20 0.15 0.20 0.15 0.15 2.99

0 Government may prohibit Coca Cola and Pepsi to bid for Parle agro& 0.0 dabur India ltd 5 Pepsi may capture the market of bottled tea after Beverage Partner 0.1 Worldwide is ended. Water shortage for soft-drink industry in various parts of the world Availability of purified water (being main component) in different parts of the world Total 0 0.0 5 0.0 5 1

Interpretation:In this matrix is pursuing strategies that effectively capitalize on these opportunities, as indicated by the rating of 3. The total weighted score of 2.99 indicates that this industry is just above average in its efforts to pursue strategies that capitalize on external opportunities & avoid threats. It is important to note. Here that a thorough understanding of the factors being used in the external factor evaluation matrix is more important than the actual weights and ratings assigned.

3.8COMPETITIVE PROFILE MATRIX (CPM)

Competitive profile matrix is an essential strategic management tool to compare the firm with the major players of the industry. Competitive profile matrix show the clear picture to the firm about their strong points and weak points relative to their competitors. The CPM score is measured on basis of critical success factors, each factor is measured in same scale mean the weight remain same for every firm only rating varies. The best thing about CPM that it include your firm and also facilitate to add other competitors make easier the comparative analysis. IFE matrix only internal factors are evaluated and in EFE matrix external factors are evaluated but CPM include both internal and external factors to evaluate overall position of the firm with respective to their major competitors. Coca Cola Key Factors Market Share Price Comparison Cost of Production Product Quality Product Lines W 0.15 0.1 0.12 0.15 0.15 Rating 3 3 3 4 3 WS 0.45 0.3 0.36 0.6 0.45 Pepsi Co Rating 4 3 3 4 4 WS 0.6 0.3 0.36 0.6 0.6 Parle Agro Rating 2 2 3 2 1 WS 0.3 0.2 0.36 0.3 0.15 Dabur Rating 2 2 3 3 2 WS 0.3 0.2 0.36 0.45 0.3

Customer Loyalty Marketing Employee Morale Total

0.15 0.1 0.08 1

3 3 3

0.45 0.3 0.24 3.15

3 4 3

0.45 0.4 0.36 3.67

2 2 3

0.3 0.2 0.24 2.05

2 2 2

0.3 0.2 0.16 2.27

Interpretation:The above table is for competitive matrix, the players which are to be included Coca-cola, PepsiCo, Parle Agro & Dabur. In this Matrix we included some competitive factors & according to it we have given the rating and weight to the each company. For market share we have given 4 rank to PepsiCo because it covers large market share in soft drink industry in India. For product line we have given law rating to Parle Agro because it has few rang of products in the market. For marketing we have given higher score to PepsiCo because it engages more in marketing of its products.

3.9PHASE LIFE CYCLE

It is important for companies to understand the use of the industry lifecycle because it is a survival tool for businesses to compete in the industry effectively and successfully. The main aspects in terms of strategic issues of the industry lifecycle are described below: The Concept of Industry Lifecycle: A method for analyzing industries based on the idea that they go through a series of identifiable life cycle phases (e.g., introduction, growth, maturity). The information gained from defining where an industry is in its life cycle is used to determine the risk/reward ratio of a potential investment. For example, investing during the introduction phase is high-risk since future growth is uncertain. However, an early investment also has the potential for the greatest return. Like other living creatures, industry also has its circle of life. The industry lifecycle imitates the human lifecycle. The stages of industry lifecycle include fragmentation, shake-out, maturity and decline. These stages will be described in the followings section.

1) Introduction Stage: Introduction is the first stage of the new industry. This is the stage when the new industry develops the business. At this stage, the new industry normally arises when an entrepreneur overcomes the twin problems of innovation and invention, and works out how to bring the new products or services into the market. 2) Growth: Growth is the second stage of the industry lifecycle. It is the stage at which a new industry emerges. During the shake-out stage, competitors start to realise business opportunities in the emerging industry. The value of the industry also quickly rises. During this period, another company realised the opportunity in this market and decided to enter it by launching new product ranges. 3) Maturity: Maturity is the third stage in the industry lifecycle. Maturity is a stage at which the efficiencies of the dominant business model give these organizations competitive advantage over competition. The competition in the industry is rather aggressive because there are many competitors and product substitutes. Price, competition, and cooperation take on a complex form. Some companies may shift some of the production overseas in order to gain competitive advantage. 4) Decline: Decline is the final stage of the industry lifecycle. Decline is a stage during which a war of slow destruction between businesses may develop and those with heavy bureaucracies may fail. In addition, the demand in the market may be fully satisfied or suppliers may be running out. In the stage of decline, some companies may leave the industry if there is no demand for the products or services they provide, or they may develop new products or services that meet the demand in the market. In such cases, this will create a new industry.

Conclusion: The 50-bn-rupee soft drink industry is growing now at 6 to 7% annually. The Indian soft drinks market generated total revenues of $3.8 billion in 2010, representing a compound annual growth rate of 11% for the period spanning 2006-2010. In 2010, generating total revenues of $1.9 billion, equivalent to 50.5% of the markets 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. So we can say that the soft drink industry in India is at growing stage in industry life cycle.

CHAPTER-4 FINANCIAL ANALYSIS

CHAPTER-5 CONCLUSION

2.3LIMITATION OF THE REPORT

In this report we are assuming that selected four companies are representing the whole industry but it may not be.

We select four companies on the basis of available financial data but it may be possible that major companies remain unconsidered because of lack of financial data.

Here we selected four major companies on the basis of only net profit ratio so it may be possible that other parameters of the other companies are good compare to selected companies.

In the strategic analysis of soft drink industry we used strategic analysis tool call external evaluation matrix and competitive profile matrix in which we give weights and ratings to opportunities, threats and critical success factor as per our understanding.

In the PESTLE and five force analysis we include all possible variables as per our understanding but there may be changes of missing some variable.

In case of financial analysis we had done five year financial analysis up to 2010 because the financial data of the year 2011 was not available for all selected companies.

We try our best effort to apply all possible strategic tools and financial data to study the performance of soft drink industry but it may possible that some portion of the industry remain unanalysed.

CHAPTER-6 BIBLIOGRAPHY

CHAPTER-7

ANNEXURE