"Dr Pepper Snapple Group 2011: Fighting to Prosper in a Highly Competitive
Market" Please respond to the following: (Need simple answer, nothing elaborated)
The case study outlines six specific strategies that the firm has chosen to support its strategic direction. Determine which strategy is most likely to benefit the firm. Explain your rationale.
Briefly outline at least one other strategy the firm could take to support its strategic direction. Illustrate why this new strategy would be successful.
Dr Pepper Snapple Group 2011: Fighting to Prosper in a Highly Competitive Market
Larry Young, President and CEO of Dr Pepper Snapple Group, Inc. (DPS) seemed to be on a
roll. Named 2010 Beverage Executive of the Year by Beverage Industry Magazine, he led the
company through three very difficult economic years since it separated from the London-based
food and beverage giant Cadbury Schweppes. Reflecting on that time, he chuckled, “There
couldn’t have been a worse year to go public.”1 Triggered by the collapse of mortgage-backed
securities, the recession froze the credit markets and led to unprecedented commodities prices. In
spite of adverse economic conditions and fierce competition, the company managed to obtain
modest growth in sales in 2010.
Perhaps most satisfying of all was the recent turnaround of the Snapple Brand, which had been
struggling for many years.2 Sales volume for the brand grew 10 percent in 2010, fueled by new
products, packages and distribution. In addition, Dr Pepper, Canada Dry, Crush, Mott’s and
Hawaiian Punch all experienced increases in demand. A healthy cash flow allowed the company
to pay down its debt, increase dividends and repurchase shares.
A question remained as to whether the company was simply taking advantage of some fairly
obvious opportunities that it could not pursue when it was under Cadbury Schweppes ownership,
or whether this number three firm could actually begin to prosper in an industry dominated by
two of the strongest brands in the world. After all, although DPS sales were up almost 2 percent
in 2010, profits were lower than in 2009. In comparison, Coca Cola Company experienced
growth in revenues of 13.3 percent in 2010, with operating income increasing by 2.7 percent.
During the same time period, PepsiCo had revenue growth of 33.8 percent and growth in
operating profit of 3.6 percent.