SodaStream Takes on Coke and Pepsi
(8 pages of text)
SodaStream International Limited is an Israel-based company that pioneered the home carbonation market. It sells soda makers that enable the consumer to prepare at home sparkling water or a variety of flavoured carbonated beverages. After its initial public offering in 2010, its chief executive officer sought to aggressively grow the company and set a $1 billion revenue target (from 2012 revenues of $436.32 million) by principally focusing on the U.S. market, the largest in the world for non-carbonated beverages. In addition to going up against global beverage behemoths, Coca-Cola Company and PepsiCo — whose advertising budgets alone are five to eight times SodaStream’s revenues — SodaStream faces new competitors in Green Mountain Coffee Roasters and Primo Water Corporation, who pose a direct challenge to its ambitious goal.
The case can be used in an MBA strategy course to discuss the topics of business models and strategic positioning. The following are its specific teaching objectives:
- To consider the implications of a company’s business model in light of shifting industry boundaries.
- To examine the role of a disruptor and identify the challenges it faces in a mature industry.
- To strike a balance between consolidating a company’s core market (i.e., Western Europe) and investing in overseas growth opportunities in a large but challenging market (i.e., the United States).
- To examine the role of environmentalism as a differentiator.
Accommodation & Food Services
Isreal; United States, Large, 2013
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