Soft-Drink Industry profitability assessment
             As seen in the report "Internationalizing the Cola Wars" the soft-drink industry yields huge profits for those companies able to compete in this gigantic market. Also illustrated in the article, was the opportunity that booming economies, like China, could offer those companies in the soft-drink industry. Generally, in countries where disposable income is high, demand for soft-drinks is also high. For companies such as Coca-Cola and Pepsi, recognizing growing economies and strategically entering those markets can result in additional profits in the billions of dollars.
             Soft-drinks are basically made up of 3 products: flavor base, sweetener, and carbonated water. There are 3 parts to the production line: concentrate and syrup producers, bottlers, and distributors.
             For concentrate producers, the investment for machinery and overhead is very little. One typical manufacturing plant costs about $25 million and can serve a country the size of United States.
             The bottling process is more capital-intensive and it involves specialized, high-speed lines. An efficient large plant costs about $30 million to $50 million and roughly 80 to 85 plants are required for full national distributions within the United States. Also, in the United States most of the work is done here, therefore the company can exclusively decide on the pricing, new packaging, selling, advertising, and promotions in their territories.
             By 1994, the break-down of soft-drinks distribution in the US was: 40% food stores, 17% fountain, 8% vending, 14% convenience stores and gas marts and 21% other outlets.
             The key for success in the soft-drink industry is to develop "brand recognition." For example, everyone knows who Coca-Cola and Pepsi are. In fact Coca-Cola has become so familiar that many people use the word "coke" to refer to any soft-drink, for instance if someone where to say &quo...