By using the same supplier means that DPS have to follow what the competitors such as Coca Cola and Pepsi have done for the worldwide market in particular in US. This may cause costs to grow in the future but the supplier could have the advantages in producing their product by using own distribution and packaging in long term. DPS has the opportunity to expand into international markets and to growth in the Hispanic population. Bargaining Power of Supplier Threats
Economic stability is a threat that will affect DPS. At this moment of recession, consumers don’t spend money and at the same time prices for natural gas, corn, pulp and other commodities that are necessary for the company increase. Also, health concerns, preferences may affect the industry. -Substitute Products Opportunities
The company may see the best opportunity in high growth and high margin categories, as well as energy drinks, ready to drink teas, juice drinks and other functional beverages. Positive external trends or changes that may help an organization improve its’ performance. Substitute Products Threats Dr. Pepper Snapple group should be aware on the substitutes product offered by the competitors. The company should maintain an excellent relationship with wholesalers and retailers such as supermarket, convenience store because they are the company promoting and selling the product to the buyer. This is in case if competitors use similar characteristics and taste as DPS, the competitors may possibly dominate the market and eliminate DPS from the industrial market. -Political-Legal Opportunities The company will follow all requirements with all laws regarding political contributions.
There are surely some states that allow DPS to make political contributions surrounded by specific limits and reporting supplies by using a state beverage association. The company can not use their own facility, funds or any assets to support any political candidate unless it has an approval from Government Affairs and the General Counsel’s office. The nominal legal contributions of DPS products are allowed. -Political-Legal Threats -Technological Opportunities The company recognized that they needed to increase its efforts in advertising and distribution.
Therefore, the company launched a television commercial by using famous celebrities to endorse DPS by referring to the taste and flavor and stating “Trust me, I’m a doctor. ” This commercial was use in the late 1980 and early 1990s, which the strategy that worked for the company. If they come out with new commercials or old commercials with new generation it may help DPS to get more sells. -Technological Threats The larger advertising budgets of competitors can be a threat to maintaining market. Some of the technological threats may be billboards, super bowl and television.