A survey of the nature of competition in the soft drink industry in Kenya
Abstract
This study was conducted between July and October, 2003 the population of
interest was made up of soft drink marketing organizations in Kenya. The focus
was more on the formal soft drink industry which was described as consisting of
carbonated soft drink bottlers, juices, cordials and bottled water.
The study had two main objectives
1. To determine the nature of competition in the industry.
2. To determine the relative importance of Porter's competitive forces m the
industry and therefore the key drivers of industry competitiveness.
A semi-structured questionnaire was used to collect data (Appendix 1) and the
key findings were as follows:- The nature of competition is such that players in the various sectors do consider
themselves to be in competition with each other either directly or as close
substitutes of each other. There is intense rivalry among the various industry
players with the only way for growing being through market share in a stagnated
economic environment. Many of the firms in the industry have over the past three
years introduced new products outside the stable of their core product range. This
has in effect increased the amount of competition and driven down margins.
An interesting finding was that government has a greater impact on the firms'
success than suppliers. Rivalry among competitors (Impact of existing
competitors) was found to be the most influential of Porter's forces on the
industry with the least influential factor being the bargaining power of suppliers.
Success in the industry can be achieved by a firm through protecting itself from
the adverse effects of intense rivalry by differentiating itself in the hope that its
products can demand price premiums in the market. It would also need to ensure
that the buyers of the products (retailers) support its products by extending
supenor margins.
Citation
MBAPublisher
University of Nairobi School of Business, University of Nairobi
Description
Master of Business Administration