Soda Stream Case

Soda Stream International Case Analysis

By: Indah Puspita

Nim : 2401140074

  1. Executive Summary

SodaStream International Ltd. (SodaStream) engages in the manufacturing, distribution and marketing of home carbonation systems that enable consumers to transform ordinary tap water instantly into flavored carbonated beverages such as carbonated soft drinks and sparkling water. As health and environmental concerns over pre-packaged soft drinks have grown, so too has the company. As a result, the company has recently been reported as a potential acquisition target for heavyweights The Coca-Cola Company (Coca-Cola) and PepsiCo, Inc. (Pepsi) .Altough the acqusition news proven not to be true , SodaStream has an exceptional financial results, but the investor still worried that the Soda Stream system would lose it’s appeal to consumers as it had in previous decades. This case study analyzes SodaStream’s route to recent success and loss or potential success and loss, and assesses  if it’s worth to invest more in this company who bring a revolution idea for CSD(Carbonated Soft  Drink)  insdustry to replace plastic soda bottles and what is the next strategy that should be taken by SodaStream to win the CSD market.

  2. Case Facts and Problem Identification

Soda stream manufactures home soda drinks maker machines, flavor concentrates, and gas cylinders. Founded in 1903 as a subsidiary  of W & A Gibley gin distillers, the original SodaStream machines were marketed to British upper-class customers. The machine, dubbed “apparatus for aerating liquids” by inventor Guy Gibley, allowed us to convert ordinary tap water into carbonated water by injecting compressed carbon dioxide gas (CO2) into a container water. Marketed to the upper class, the first SodaStream machine was installed at Buckingham Palace. The company introduced flavored syrups in the 1920s along with commercial machines, followed by the introduction of a home carbonation machine along with a specially designed, durable plastic bottle, flavor concentrate, and a CO2 gas cylinder .

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According to Beverage Digest, the top 10 carbonated soft drink (CSD) brands held just over 66% of the estimated &74 billion market in 2011. All of the top 10 brands belonged to Coca- Cola, PepsiCo, andDr. Pepper Snapple Group. Table 1 shows the distribution of market shares by company in the United States in 2011 as well as a listing of their brands and place on the top 10 CSD brand list.

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Table 2 below show the effectiveness between CSD Advertising in boosting the salesin US. It’s showed that the bigger the spending point in advertising the higher is the boost or change in sales.