Sodastream Case Writeup

SodaStream Case Write Up

SodaStream, a company that manufactures an at-home carbonated drink maker and different concentrate flavors, was introduced in the 1950’s. In the late 1990’s, the company decided to reposition itself in the market place due to the changing external environment. So, SodaStream modified their customer value techniques by replacing plastic bottles with “green products.” Also, they made an effort to reduce obesity by providing products that serve as a healthy alternative. Although SodaStream established a well-thought-out business model, I believe they should pursue a partnership with a more established company, like Coca-Cola.

Coca-Cola obtained 41.9% of the carbonated soft drink company market shares in 2011. They had the highest percentage of market share in the industry with their high-selling soft drinks, such as Diet Coke, Coke, Sprite, and Fanta. I believe that SodaStream would benefit from partnering with Coca-Cola’s beloved brand. Although SodaStream has a significant competitive advantage, their system will eventually lose its appeal to customers due to the lack of resources, company credibility, and concentrate flavors. Coca-Cola has the tools to keep this business model going. For example, when Coca-Cola partnered with McDonalds, the fast-food chain reported that they had about 75% retail margins on fountain drink sales. Meanwhile, McDonalds exclusively sold Coke products and accounted for half of all food sales in 2011, making this partnership mutually beneficial. I believe that a SodaStream and Coca-Cola partnership could have the same impact. With SodaStream needing to meet consumer demand for more popular/better flavor formulas and Coke needing to meet societal trends of being “green” and “healthy,” these two brands could collaborate to make a new and improved product/system that would benefit both companies.