Swot Pestel Porters free essay sample

They purchased Colombo Ice Company in 1894 which was producing ice and mineral water those days. It is now mainly recognized as Elephant House . In 1936; CCS introduced latest machinery in their production line to introduce carbonated soft drinks. The principal activities of the Company currently are manufacturing and marketing of beverages and frozen confectionary. The Company operates in two business segments: manufacture and retail trade. Ceylon Cold Stores Limited is now owned by John Keells Holdings. As for the assignment we would be focusing on the beverage sector of CCS. Elephant House Soft Drinks manufactures various soft drinks and few of their key products are mentioned below. Key Products Elephant Cream Soda Elephant Ginger Beer Elephant Necto Elephant Apple soda Elephant Soda Elephant Orange Crush And the two main soft drinks we are concentrating are Elephant house ginger beer which has been recently named as EGB, and Elephant house Cream Soda. 2. SWOT Analysis Strengths Strong Brand Name With a history dating back further than the 1860s Elephant Brand has a rich heritage that is rivaled by few brands in the world. Elephant Ginger Beer is an extremely popular brand in Sri Lanka and since most of the Sri Lankan customers are ethnocentric buyers, they are happy to buy products which are produces locally. This is a big strength CCS holds when it comes to soft drinks in Sri Lanka. ‘Elephant brand soft drinks have been re-positioned as proudly Sri Lankan, playing on the emotionality of Sri Lankan public. â€Å"Be Sri Lankan, buy Sri Lankan† (Tuesday, 25 May 2004 Online edition of Daily News) Taste Elephant soft drinks have a wide product choice, with each having their own unique tastes and quality. When considering Elephant Ginger Beer and Cream Soda it has its own special trademark tastes which over the years other companies over have tried to duplicate. Work Force Committed and extraordinary group of employees help Ceylon Cold Stores to reach their target. The employees play a big role as a source of motivation to the organisation. Various employee training programmes are conducted in the organisation to improve the skill of the employees and to educate them. This helps the company to have a strong bond with its work force. Market Share Ceylon Cold Stores holds a strong grip on Sri Lankan carbonated beverage market. Elephant house soft drinks are the market leaders in the industry with 47% market share. Elephant Ginger Beer and Cream Soda are the top most consumed soft drinks in the island. Price Closely examine the key cost-bases, especially in procurement and overheads have helped Ceylon Cold Stores to cut cost. As a result has reduced the burden of the customer when it comes to pricing. This has helped on the growth in products. Accreditations and Certifications Ceylon Cold Stores is a highly reputed company in the island. This has been proven by various awards and certification. Due to the continuous efforts at improving efficiencies and commitment to quality, Ceylon Cold Stores has achieved the ISO 22000 certification. In recognition of the organisations effort to penetrate the global markets was awarded by the National chamber of Exporters of Sri Lanka. Processes, systems and IT With a strong employee stand and new technological work has helped improve CCS in their product productivity. The process in which Elephant Ginger Beer, Cream Soda and other soft drinks are manufactured the organisation has been able to have steady rate in producing the items. Brand Presence across the Globe Elephant soft drinks especially EGB and Cream Soda have continued to be hugely popular among the migrant Sri Lankans who patronise ethnic stores across Australia, Europe and the Middle East. Elephant carbonated are now exported t0 25 countries. Opportunities Hybrid products and new products Elephant House soft drinks have a wide opportunity in bringing up new products. They recently put out a new beverage Apple Soda which popular among the people and was a huge success, like wise Elephant house can come up with new products which will boost their ever growing popularity. Such a new product can be a hybrid beverage. Product Distribution in North and East The end of 3 decade civil war brings new opportunities to company to expand its distribution of beverage products locally. The carbonated beverage market has been relatively low in the North and the East. Therefore the Elephant House soft drinks can expand it in a massive scale. New Automated Technology The modern era of producing uses automated technology. This is efficient and more productive. Elephant House soft drinks can move into this path grows and expands its production. For an example a new bottling will the organization in quicker production level and will help to cut expenses on work force. International to Global Elephant House soft drinks are currently distributed in 25 countries. Elephant Ginger Beer and Elephant Cream Soda are two major sellers. CCS can now look into the expansion of its beverage market globally. Elephant house retail outlets and restaurants Elephant house soft drinks can look into new retail stores and target restaurants since EGB and Cream Soda are soft drinks consumed by most customers during their meals. It would be a major breakthrough in the beverage industry. Expansion of John Keells Johan Keells super outlets are the key main distributers and retailers of Elephant House beverages. The expansion of these outlets attractive locations will help EGB, Cream Soda and other products to improve their stock holding and production capital 250 ml bottle The 200 ml bottle was major success in the beverage ‘buddy’ market. This can lead to a new 250 ml bottle which people are happy to purchase than the 400 ml bottle. Recycling Process The second major product incomes of the EGB and Cream Soda are the 750 ml and Mega plastic bottles. A recycling system will enable the customers to sell the empty bottles back. Weaknesses Market Capitalization Market capitalization of the organization has dropped by 47% considering last year. This is mainly due to the lack awareness of its products. The company has to remind of its core customer base about its products so that the customers are loyal. This can be achieved by proper promotion strategy. Focus The focus of the company was mainly on the demographically more profitable western province. The company needs to now concentrate more on outer city limits. 400 ml bottle People are losing interest in the 400 ml bottle. This because the organization is showing more interest on the new ‘buddy’ 200 ml bottles. Poor Brand Placement Lack of attracting new customers and drop of core customers, this is mainly due to poor promotion mix. The use of advertisement and brand ambassadors are not used accordingly. Threats The Inflation Due the global collapse of the economy, high interest rates and high product prices people are reluctant spend their money on products which are considered as ‘wants’. The change of consumption pattern is impacting the beverage sector. Consumers are now more selective. Economy Crisis Rising oil prices, Government import taxes and levies will disturb the product prices and operational efficiencies. The organization has to take key measures to tackle this adverse operating environment. Expensive Raw material As a result of the inflationary environment the price of raw material is going high day by day. This will impact the company with its products cost. Health Conscious Society In the present period people are more concentrated on their health issues. Therefore they consume natural products like fruit juices, tea, water and etc. This has resulted in consumers making carbonated products least favorable item. Nature Though the does not play a huge part in the beverage industry recent studies has shown that the uncharacterized weather patterns are making consumers change their buying behaviors when it comes to food and beverages. . PESTEL Analysis Political and Legal The CCS should have a good relationship with the political and legal factor to have a smooth production process, for this the company should make the tax payment properly on time. To reduce the emission of Carbon Dioxide the government has implemented some rules and regulation like high tax for polluting the environment as result of the production process. So the CCS has company’s production cost has increased bec ause of the high tax Technological From past till now CCS has invested a lot on improving the technology of the company, the two new and the main technological improvement has been the bottling process and the recycling process. From the starting of the production till the end new technological machines have been used for the mixtures of the raw materials used for the beverages. Recycling process is very important factor for the company because it decides the image of the company. If bottles are not recycled in a proper manner and defects are found the reputation of the company would fall. Economic Factors In recent years because of the economic crisis the prices of the product has gone up, so the prices of the other imported soft drinks has gone up but the prices of the EGB and the Elephant House Cream Soda did not change. During the economic crisis the Sri Lankan economy didn’t affected so much, so the prices of the local product didn’t increase. CCS uses only the local products to produce soft drinks so the unit cost didn’t change due to the economic crisis because of this the price of EGB and Cream soda didn’t change. The demand for the CCS soft drinks particularly soft drinks are less because high competition in the market. As a result of this high competition the prices of the soft drinks tend to increase. Export of CCS has reduced during the period of economic crisis, because the CCS product are not essential items so during the recession period people who live in abroad didn’t won’t waste their money for CCS soft drinks. Social Environmental Factors Elephant house soft drinks have gain the trust of its core customers but itself does not keep them happy. Even the external society has to be happy with organisation. With this intention the Elephant House Sustainability Committee initiates various programmes events and activities; one such programme is the ‘Sustainable Agricultural Sourcing Initiative’ that strategically helps sustains economic growth. They undertake generous activities which uplift weak sections of the communities Elephant house works with and help conserve the environment around them. By these initiatives the Elephant House soft drinks has been able built trust among the sharp customers, employees, suppliers and all the other takeholders. Recycling process, Heath team and safety team has helped Elephant house gain the upper hand in the society. These policies minimises the harmful impact on the environment caused by the business operations and to promote health and safety in the work place. 4. Porters Five Force Model Analysis Porters’ force helps the marketer to compare the competitive advantage o f the company. The five forces include: The bargaining power of buyers The bargaining power of suppliers Competitive rivalry The threat of substitutes The threat new entrants. The bargaining Power of Buyers The power of a buyer means how much control on pricing does the buyers have over the company supplying the product. There are 2 types of buying power: Customer Price Sensitivity. Negotiating Power. Customer price sensitivity means if there are many products in the market which are similar which make them a competitive product, then the customers will make decision of choosing the product by comparing the prices. In this scenario EGB (Elephant House Ginger Beer) and Cream Soda have similar products in the market but of their competitors which can make their customers to shift to their competitors. Negotiating power means where large buyers have power to negotiate low prices. The buyers of EGB and Cream Soda are both large and small buyers. There are certain factors to be considered to be affecting buying power. How big are the buyers of EGB and Cream Soda – If the buyer is a large firm such as supermarkets they would have high bargaining power. The number of buyers of EGB and Cream Soda – The more the buyers the higher they can bargain for prices. How much the buyer’s of EGB and Cream Soda purchase – If a certain retail outlet or many small buyers purchase large quantity they would have more power over the supplier. Therefore the buyers bargaining power is relatively higher when considering the factors and the decisions of the buyers. The bargaining power of Suppliers This looks at the bargaining power of the suppliers of a company. If there are many suppliers manufacturing the same raw materials needed for EGB and Cream Soda then the CCS would go according to the prices of their suppliers. This gives CCS the option to lower its cost by having a good bargaining power over its suppliers. However if there is only one supplier manufacturing the raw materials required by CCS for EGB and Cream Soda then the suppliers would have an advantage of bargaining the price. Ingredients contained by EGB and Cream Soda is carbonated water, sugar etc Which are available in abundance in Sri Lanka therefore suppliers barging power is very low, however not only because raw materials are available in abundance that CCS has an advantage of bargaining its prices with suppliers, but also because CCS buys raw materials in large quantities and is a large firm. These factors declare that the bargaining power of suppliers is very low. Competitive Rivalry Competitors are firms that compete with each other in order to gain strong market share than the other in an industry. High competition results in change in prices which would lead to change in profit margins. Many companies aim is to have a strong position in the market, especially for fast moving products like beverages. CCS has many competitors such as Pure Soft drinks who manufacture Coca Cola, Sprite and Fanta. PEPSI Co which manufactures PEPSI, These are global products with a good brand positioned worldwide. However CCS has managed to maintain a strong market position with the presence of global products such as coca cola and PEPSI since they provide a different product. However when considering the local competition for CCS it is the Ole products, it is the most competitive company for CCS because both are local companies, Ole manufacture’s similar products as CCS manufacture. For example: CCS manufactures Cream soda and EGB etc†¦ , where as Ole manufactures Ole cream soda and Ole ginger beer etc This gives the customers a variety to choose from, this is why as mentioned above the customer’s have a higher bargaining power. However elephant house soft drinks ( EGB and Cream soda) has been able to compete successfully because CCS, which has a long history, has understood local consumer needs better than its competitors. The Threat of Substitutes Substitutes are alternative products which satisfy the same needs and wants of consumers. Many people switch to their competitive products because it may be cheaper, and also people have been aware of the affects caused by carbonated drinks, and therefore are shifting towards substitute product such as Fresh Juice, Dairy products Energy Drinks. However substitute products of EGB and Cream soda are not cheaper but higher priced other than dairy product , therefore the main reason of the shift in consumers for substitute products could be the awareness of affects caused by carbonated drinks. There are many competitors of dairy product manufacturing companies who produce is mass and sell at a relatively lower price than EGB and cream soda which in fact makes dairy product more a competitive product. However since it is not a carbonated product it is known as a substitute product. Many people these days are health conscious and go to the gym to maintain their body which encourages them to purchase energy drinks to keep them fit and fresh juices which for refreshment. The Threat of New Entrants CCS soft drinks (EGB and Cream soda) have not faced threat of new entrants recent past. Since CCS is a company operating for many years it would have the advantage over the new company entering the market because a new company has to study its consumers and know how exactly the company should target its customers. For example: Five years back Ole entered the market and at that time Ole was a new entrant for CCS, However Ole made it look easier by producing products such as Ole Ginger beer Ole Cream soda which are similar products with similar taste to EGB and Elephant House cream soda. CCS had the experience to handle the situation and they managed to make many changes to their prices strategies, distributions etc†¦ and made sure their products stay in the market. 5. Recommendation Promotion The promotion strategy of Elephant house soft drinks has to be changed since the current marketing promotion is not that appealing. Elephant house has established a good customer base which now needs to keep reminding about the products. This can be achieved by a strong promotion strategy. Strong Advertisements Elephant house soft drinks can use new advertisements targeting their core customers. Elephant Ginger beer is mainly consumed by 25-60 adult age groups, therefore the advertisement should be done accordingly, and on the other hand Cream Soda is consumed by more teenage and young adults, by conveying the message to the proper consumers the company can keep the current customers on board and will also help attract new customers. Popular Brand Ambassador New popular brand ambassadors should be introduced. This will help products like Elephant Ginger Beer and Cream Soda move forward in strong command. Selecting internationally recognized figures will boost its popularity both locally and globally. New labeling Most of the current soft drinks in the market use attractive and eye-catching labels. Elephant House soft drinks use small labels on their products. Global market Elephant House soft drinks are currently distributed in 25 countries. Elephant Ginger Beer and Elephant Cream Soda are two major sellers. CCS can now look into the expansion of its beverage market globally. Elephant House soft drinks are only popular among Sri Lankans who are living abroad. Elephant Ginger Beer and Cream Soda can be distributed on a global scale which will help the products expand among the foreign population. Hybrid products Elephant House soft drinks have a wide opportunity in bringing up new products. They recently put out a new beverage Apple Soda which popular among the people and was a huge success, like wise Elephant house can come up with new products which will boost their ever growing popularity.