SWOT Analysis – Delmont Non-Alcoholic Beverage Company
Discuss the major strengths of Delmont Non-Alcoholic Beverage Company
Abstract
The major strengths of Delmont Non-Alcoholic Beverage Company are its customers who are
very loyal, its strategic management plans and marketing abilities are well organized and
efficiently managed. These paper looks at the major weaknesses and also the strengths together
with all the threats and opportunities that may affect Delmont Non-Alcoholic Beverage
Company, in the non-alcoholic beverage industry.
Introduction
SWOT analysis refers to the Strengths, Weaknesses, Opportunities and Threats facing a
particular company. Strengths and weaknesses normally relates to a company’s internal
organization and management while the threats and opportunities are mostly related to external
factors which are beyond the control of the company. (Ross, Westerfield, Bradford, 2010). Given
the size and nature of the competition the best strategy that Delmont Non-Alcoholic Beverage
can utilize to penetrate the market is by differentiating its products and positioning them as
unique in the market largely by defining and segmenting its market to a niche that is related to
SWOT Analysis – Delmont Non-Alcoholic Beverage Company 2
particular sector in the market. For example, Delmont Non-Alcoholic Beverage can relate its
products to active sports that are largely dominated by young teenagers who are ardent sport
lovers or athletics. The other strategy is also to exploit all its opportunities in the market give the
large monetary reserves that the company together with the goodwill that it’s currently enjoying
in the market. To provide adequate distribution services, Delmont Non-Alcoholic Beverage can
use efficient supply chain management systems to coordinate its distribution network nationally
and also internationally. Non-alcoholic beverages are mostly purchased by sports lovers or
during sporting events. Targeting sports centers and large supermarkets to distribute the non-
alcoholic drinks together with other large or complex shopping malls or individual retail shops
and shopping centers (Drucker, 1999).
The following is the SWOT analysis for Delmont Non-Alcoholic Beverage Company;
The SWOT Matrix For Delmont non-Alcoholic Beverage Company
Strengths Weaknesses
1 Core competence in Beverage production 1. Lack of clear strategic direction
2 Strong financial position and resources 2. Competence not well developed
3 Strong brand name 3. Weak balance sheet with high debt ratio
4 Economies of scale 4. High unit costs compared to competitors
5 Superior technology 5. Inferior product features
6 Competitive supply chain capabilities 6. Weak reputation
7 Efficient production process 7. Financial resources tied on stocks
8 Strong global distribution network
9 Good quality products than competitors
Opportunity Threats
1 Expansion into new territories globally 1. Increased competition among the rivals
2 Expansion of the company’s range of products 2. may reduce profits
3 Falling trade barriers and staff reduction in 3. Slow down in global economy
4 lucrative foreign markets 4. Increased bargaining power of suppliers & customers
5 Acquisition of rival firms 5. Shift in consumer tastes and needs from the market
6 Advanced technological innovations 6. Adverse demographic changes
7. Restrictive trade polices
8. Expensive regulatory control systems
SWOT Analysis – Delmont Non-Alcoholic Beverage Company
3
To counter the heavy presence of other products from large multinational companies requires
aggressive promotional activities and also effective advertisement. Personalize promotional
activities is generally more effective than the large and expensive digital television advertising
modes that is largely used by the large companies (Camp, 1989).
Delmont Non-Alcoholic Beverage Company is a fast growing firm whose competence stems
from its effective marketing campaigns and competent management strategies that aim at
expanding its hold in the non-alcoholic beverage market that’s currently dominated by Coca
Cola and Pepsi whose market capitalization amount to $178.63 Billion and $141.08 Billion
respectively. The reason why I chose this company is that its rate of growth is outstanding
among its competitors in the market. Its market capitalization is not comparable to the market
leaders but its growth trend and financial performance is outstanding. The following is the
performance of the companies in the non-alcoholic beverage industry.
Direct Competitor and Trend
analysis Cott Coca-
Cola DPS Pepsi Industry
Market Capitalization 826M 178.63B 15.20B 141.08B 339.11M
Number of Employees 9,193 129,200 19,000 271,000 1.01K
Qtrly Rev Growth 0.13 0.01 0.03 -0.01 0.14
Revenue 2.10B 46.13B 6.12B 66.68B 249.51M
Gross Margin 0.13 0.61 0.59 0.54 0.44
EBITDA 173.50M 12.76B 1.40B 12.42B 38.56M
Operating Margin 0.03 0.23 0.19 0.15 0.06
Net Income 10.00M 7.04B 703.00M 6.50B N/A
EPS 0.11 1.59 3.56 4.26 0.09
P/E 82.8 25.72 22.15 22.31 26.06
PEG (5 yr expected) 12.06 4.23 2.62 3.32 2.23
SWOT Analysis – Delmont Non-Alcoholic Beverage Company 4
P/S 0.4 3.87 2.49 2.13 1.97
DPS = Dr Pepper Snapple GR Inc
Whereas Pepsi has the largest number of employees, Coca Cola has the largest market
capitalization while its total revenues are much lower than those of Pepsi. In the financial year
that ended in 2014, the revenues for Pepsi amounted to $66.68 Billion while for Coca cola the
revenues were $46.13 Billion while the net income for Coca cola was 7.04 billion while that of
Pepsi amounted to $6.5 Billion (Garrison, Noreen & Brewer, 2009).
The major risks associated with the non-alcoholic beverage are the regulation of the industry by
the US Food and Drug Administration whose major objective is to protect and also promote
good health. Under the FAA Act, all food and drinks manufacturing companies are required to
operate under strict policies that aim at providing safe measures towards the production of
hygienic drinks.
The manufacturing or the production of non alcoholic drinks is subject to regulation by the
federal and state licences and permits. The withdrawal of such production permits can lead to the
end of such companies as the law requires the compliance of certain regulation that are
supervised by county governments.
The other risks are associated with the change in taste or behavior of the consumers. A sudden
change in the taste of the consumers can lead to the end of the sales prospects of the products
hence can lead to the collapse of the company.
SWOT Analysis – Delmont Non-Alcoholic Beverage Company
5
To conclude, the major strengths of Delmont Non-Alcoholic Beverage Company are its vast
resources and its ability to raise adequate funds from the stock market whereas its major
weaknesses and threats are the increasing competition, restrictive trade policies in foreign
markets, reduced profits due to intense competition and inferior product features compared to the
leading products in the market. The strong brand name that Delmont Non-Alcoholic Beverage
Company has struggled to build over the years, its competitive supply chains that it has built
together with the efficient production process that has been boosted by the superior technology
that it has adopted can also create some positive impact if the company would utilize all the
opportunities available at its disposal. The company can also take advantage of the lucrative
external market and expand into new territories in foreign market. The limited range of its
product line can also affect its sales.
SWOT Analysis – Delmont Non-Alcoholic Beverage Company 6
Reference
Camp, R. (1989). The search for industry best practices that lead to superior performance.
Productivity Press
Drucker, P. F. (1999) Management Challenges of the 21st Century. New York: Harper
Business,
Garrison, R., Noreen, W. & Brewer, P. (2009) Managerial Accounting , New York, NY:
McGraw-Hill Irwin. 65 -70
Ross, S., Westerfield, R, Bradford, D. (2010). Fundamentals of Corporate Finance (9 Ed.). New
York: McGraw-Hill.
