Abstract
Purpose - The objective of this assignment is to conduct an extensive analysis of the external environment and evaluate the key drivers influencing the corporate strategic management of GlaxoSmithKline's company, Lucozade. It will concentrate on identifying, categorising and prioritising the key issues facing this organisation both in the macro-environment and the micro-environment.
Methodology - The tools used in this report to provide an external analysis of the key environmental forces and competitive drivers include; analytical frameworks such as the PESTEL framework, and Porter's 5-forces analysis. In addition an analysis of strategic groups, market segments and critical success factors are included.
Findings - To be completed
Value - The report utilises appropriate theory, conceptual frameworks and academic literature on future strategies and scenarios for Lucozade from an analytical perspective.
Introduction
The products and services Lucozade offer, will be defined in the sports and fitness nutrition industry, a distinct category of the nutraceutical sector. Dr Stephen DeFelice (1989) defined nutraceutical products as 'a food (or part of food) that provide medical or health benefits, including the prevention and/or treatment of a disease'. Emerging over the last decade within the nutraceutical sector, the sports and fitness nutrition industry has experienced growth due to increased awareness of the links between diet and health benefits. Advances in food technology have also played a part in this industries development.
Lucozade has a research arm known as The Lucozade Sports Science Academy, which has been carrying out nutritional research for over 30 years. It works in partnership with leading universities, coaches, nutritionists and sports professionals.
PESTEL
Political
HOME OFFICE website
Econimic
Sales of bottled sports drinks are down 4.5%
Powdered mixes are up 12%
Social
Consumer awareness of links of diet and disease
The demand for nutraceuticals has been growing worldwide due to consumer awareness of the links of diet and disease, aging population, rising health care cost and innovations in food technology and nutrition. Three main products contributed to the industrys dramatic growth in 2004
• low carbohydrate products - which grew by as much as 154%
• sports energy beverages - which grew by 18%;
• sports supplements - which grew by 6%.
Research-substantiated claims.
Consumers' ability to make intelligent choices should never be underestimated. People place more faith endorsements by university professors and doctors and claims backed by independent research than by endorsements by celebrities.
Consumers are also looking for products that taste good and are easy to take. Taste is a major feature that can either make or break a product. The hunt is on for manufacturers to come up with better and new flavors.
One litre of Lucozade Energy contains 700 kCal and is 0.01% ethanol, which kept observant Muslims from being allowed to drink it until, in 2004, the Muslim Council of Britain decreed that no one would be committing a religious crime if they drank it. http://news.bbc.co.uk/1/hi/uk/3527724.stm
500ml (one bottle) of Lucozade Energy typically contains 21 teaspoons of sugar (85g), which has led to media criticism regarding public health. Lucozade also contains 12.5 teaspoons of sugar for every 380ml bottle.#
n Muslims in the UK have been given permission to consume soft drinks which contain minute traces of alcohol and pork products.
Under strict interpretation of Muslim law, Lucozade and Ribena were both previously considered to be "unclean".
Lucozade contains 0.01% ethyl alcohol to aid flavouring, which the Muslim Law Council now says is too small to matter
Ribena previously used gelatin - a pork by-product - in its production but has now changed its manufacturing methods.
Long-running dilemma
The Muslim Law Council - the UK's highest authority on halal (clean) food - consulted earlier rulings by imams on halal food before reaching its decision.
In the ruling, the Council's chair, Zaki Badawi, said precedents had been set allowing the use of non-halal ingredients in certain cases.
"I see no harm in consuming Ribena and Lucozade which contain traces of ethyl alcohol and animal ingredients that do not bear their original qualities and do not change the taste, colour or smell of the product," Mr Badawi said.
In its submission to the Muslim Law Council, the drinks' maker, GlaxoSmithKline, pointed out fruit juices and bread could also contain the same or higher trace amounts of alcohol due to natural fermentation.
The decision ends a long-running dilemma for some devout Muslims who have avoided buying the brands for fear of breaching religious rules.
In the wake of the ruling, the British Soft Drinks Association said it would not propose a new labelling policy but some companies might decide to mark their products "halal" to prevent any future confusion.
A spokesman said: "Soft drinks are non-alcoholic, we welcome this confirmation and hope that it can reassure those consumers who were concerned."
Technological
Innovations in food technology
A good strategy now is to focus development of core products or integrating with large food and pharmaceutical concerns (e.g., Powerbar, BalanceBar).
E-commerce
For small companies that cannot or will not rely on strong distribution relationships, e-commerce is an increasingly attractive option.
Retailers and consumers clamor for "new," whether it means new forms of delivery (gels, effervescent tablets, functional beverages), new applications of or combinations with existing products, or all-natural sports nutrition products that are free of artificial ingredients and solvents.
Make your own sports drink
Sports drinks are really easy to make - not to mention a lot cheaper than buying expensive bottles in sho
http://news.bbc.co.uk/sport1/hi/health_and_fitness/4289704.stm
Sports drinks 'dissolving teeth'
Rehydrating sports drinks are up to 30 times more erosive to teeth than water, according to researchers at the University of Birmingham.
Environmental
Aging population
Legal
Regulatory agencies exist to protect the consumers. It is the responsibility of product manufacturers to undertake sound research and prove the efficacy and safety of their nutraceutical products. Products that are based on false or misleading marketing should be and are banned and condemned
http://news.bbc.co.uk/1/hi/uk/1121243.stm
AEROPLANES STOPPING LIQUIDS
The Organisation's Environment
Political Economic Social Technological Environmental Legal
Sources of Competition
Opportunities and Threats
Macroenvironment
PESTEL
Sources of competition
5-forces
Understanding competition
Strategic group analysis
Market segments
Critical success factors
Strategic gaps
Opportunities
Threats
Understanding the Environment
Diversity
Many different influences
Complexity
Interconnected influences
Speed of change
Particularly ICT
Not just a list of influences
Need to understand key drivers of change
Drivers of change have differential impact on industries, markets, and organisations
Focus is on future impact of environmental factors
Combined effect of some of the factors likely to be most important
Opportunities and Threats
Developed from external environment analysis (far and near)
Only the analysis (i.e. description or listing) is not enough - the critical aspects are the implications drawn from the analysis
These implications help guide strategic decisions and choices
Goals:
Reduce identified threats
Take advantage of identified opportunities
Strategic Gaps
= opportunities in the environment, which competitors do not (yet) exploit fully
5 Forces: gap is where rivalry is low
Strategic group map: gap is where no company is located on the map
Examples of such opportunities:
O in substitute industries
O in strategic spaces
O in targeting buyers
O in complementary products/services
O in new market segments
O over time
Sales of bottled sports drinks, the
category's mainstay, are down about
4.5 percent through the measured retail
channels for the year ending May 17,
2009. Powdered mixes, on the other
hand, are up 12 percent for the same
period.
Gatorade holds the lion's share of
the category, with eight of the top 10
bottled sports drink brands. Its newest
offerings, G2 and Gatorade Tiger, are
leading growth for the trademark. G2,
Gatorade's low-calorie offering, hit the
market in 2007, and saw an increase of
187 percent in dollar sales during the
past year. Gatorade Tiger was renamed
Gatorade Tiger Focus this year and
reformulated to contain 25 percent more
electrolytes than regular Gatorade and Ltheanine
for concentration, the company
says. The Tiger brand grew 172 percent
during the year ending May 17, and took
the No. 7 spot in the top sellers.
In addition to the Tiger repositioning,
Gatorade redesigned packaging
and renamed the sub-brands in its
entire line - Gatorade Fierce is now
Bring It; Gatorade X-Factor changed
to Be Tough; Gatorade AM, developed
for morning exercisers, is called Shine
On; and Gatorade Rain is No
Excuses.
Coca-Cola's Powerade Zero
saw the biggest increases in the
bottled sports drink category,
taking advantage of consumer
interest in lower-calorie drinks.
The brand rolled out last spring
and builds on Coca-Cola's
Zero platform. Coca-Cola Co.
also introduced Powerade
with ION4. The product contains four
electrolytes in the same ratio that is lost
in sweat, the company says.
Low-calorie options also helped the
sports drink mix category. Gatorade's
Propel is the top seller in that segment,
with a 12 percent increase, and G2
powdered stick packs took the fourth
spot on the list in their fi rst year on the
market.
In addition to low-calorie, natural
products are making a showing in
sports drinks. Dr Pepper Snapple
Group and Big Red/All Sport took
advantage of the recent Food and Drug
Administration approval of steviabased
Reb-A, and developed a lowcalorie
version of All Sport, All Sport
Naturally Zero.
Clif Bar & Co. is known more for
power bars, but it ventured into sports
beverages this spring, with Clif Quench,
made with all-natural and organic
ingredients.
And coconut waters, such as Zico
Coconut Water and O.N.E. Coconut
Water also are making inroads as sports
hydration beverages, thanks to their
naturally occurring electrolytes and low
calorie count. BI
Sports drinks
lighten up
SPORTS DRINKS, A BEVERAGE SEGMENT BUILT ON FITNESS, ARE SEEING LESS than-
robust sales these days, with a category decline of 4.4 percent through
U.S. supermarkets, drug stores and mass merchandise outlets, excluding
Wal-Mart, according to Information Resources Inc. But some brands and certain
sub-segments are out-performing the category as a whole. Low-calorie options
and powdered mixes, in particular, are enjoying success in 2009.
Sales of bottled sports drinks, the
category's mainstay, are down about
4.5 percent through the measured retail
channels for the year ending May 17,
2009. Powdered mixes, on the other
hand, are up 12 percent for the same
period.
Gatorade holds the lion's share of
the category, with eight of the top 10
bottled sports drink brands. Its newest
offerings, G2 and Gatorade Tiger, are
leading growth for the trademark. G2,
Gatorade's low-calorie offering, hit the
market in 2007, and saw an increase of
187 percent in dollar sales during the
past year. Gatorade Tiger was renamed
Gatorade Tiger Focus this year and
reformulated to contain 25 percent more
electrolytes than regular Gatorade and Ltheanine
for concentration, the company
says. The Tiger brand grew 172 percent
during the year ending May 17, and took
the No. 7 spot in the top sellers.
In addition to the Tiger repositioning,
Gatorade redesigned packaging
and renamed the sub-brands in its
entire line - Gatorade Fierce is now
Bring It; Gatorade X-Factor changed
to Be Tough; Gatorade AM, developed
for morning exercisers, is called Shine
On; and Gatorade Rain is No
Excuses.
Coca-Cola's Powerade Zero
saw the biggest increases in the
bottled sports drink category,
taking advantage of consumer
interest in lower-calorie drinks.
The brand rolled out last spring
and builds on Coca-Cola's
Zero platform. Coca-Cola Co.
also introduced Powerade
with ION4. The product contains four
electrolytes in the same ratio that is lost
in sweat, the company says.
Low-calorie options also helped the
sports drink mix category. Gatorade's
Propel is the top seller in that segment,
with a 12 percent increase, and G2
powdered stick packs took the fourth
spot on the list in their fi rst year on the
market.
In addition to low-calorie, natural
products are making a showing in
sports drinks. Dr Pepper Snapple
Group and Big Red/All Sport took
advantage of the recent Food and Drug
Administration approval of steviabased
Reb-A, and developed a lowcalorie
version of All Sport, All Sport
Naturally Zero.
Clif Bar & Co. is known more for
power bars, but it ventured into sports
beverages this spring, with Clif Quench,
made with all-natural and organic
ingredients.
And coconut waters, such as Zico
Coconut Water and O.N.E. Coconut
Water also are making inroads as sports
hydration beverages, thanks to their
naturally occurring electrolytes and low
calorie count.
