Britvic Industry Analysis: Macro, Micro, and Adaptations Report

This report provides a detailed industry analysis of Britvic, a major player in the UK's soft drinks sector. It begins with an introduction to the modern business environment and the importance of analyzing both internal and external factors. The report then delves into the macro environmental factors affecting Britvic, utilizing Porter's Five Forces model to assess the competitive landscape, potential for new entrants, supplier power, customer power, and the threat of substitutes within the UK market. Following this, a value chain analysis of Britvic is presented, examining inbound logistics, production, outbound logistics, marketing and sales, and services to evaluate the company's internal activities and identify areas for improvement. Finally, the report concludes with an explanation of appropriate adaptations Britvic can implement to enhance its market position and capitalize on opportunities, such as leveraging the UK's post-Brexit trade environment and strengthening its brand image. The analysis highlights the importance of understanding both the external environment and internal processes for strategic decision-making and achieving competitive advantage.

Industry Analysis

Table of Contents
INTRODUCTION...........................................................................................................................1
a. Analysis of the macro environmental factors using Porter's five forces model......................1
b. Value chain analysis of the firm..............................................................................................3
c. Explanation of appropriate adaptations of the selected firm...................................................5
d. Reflection on the usefulness of an academic model...............................................................6
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Modern business environment is being defined as both internal along with the external
factors which impacts upon businesses to a range of extent (Abidi, De Leeuw and Klumpp,
2015). Basically both of these factors consist with a range of elements which could be from
customer's expectations, market trends, social trends, employees, innovation in technology,
economical changes, including owners and so on. Along with this, business environment
basically needs proper analysis when it comes to enter a whole new market or to enhance the
sales of existing products and services.
Specifically, organisation which is being chosen i.e. Britvic which is coming under soft
drink sub sector of United Kingdom. Company has headquartered in Hemel Hampstead. Away
with this, essay is going to be enclosed with identification of external macro factors that affect
business, a detailed analysis of micro environmental factors considering the Porter's five forces
model and lastly, a detailed explanation has been given of appropriate adaptations of business
organisation which will aid in grabbing the benefits in much more effective and efficient manner
than the existing ones.
a. Analysis of the macro environmental factors using Porter's five forces model
Organisations within the soft drinks sub sector basically operates considering the
surroundings which mainly stays enclosed with a range of different factors. These elements
could be considered as macro factors (Bosch-Mauchand and et. al., 2013). Basically, there are
two tools which can be utilised in order to analyse the external business environment within the
Soft Drinks sub sector and these PESTLE Analysis and Porter's five forces model. In present
context, in order to measure the current environmental influences within the United Kingdom of
Soft Drinks sub sector, Porter's five forces model has been utilised.
Porter's five forces model :-
This being considered as one of a crucial model which basically aid in identifying the
exact situation of external environment. This consist with five basic forces which influence or
impacts upon different range of strategies or products and services of a business organisation.
Considering this approach, it can easily be said that a company might gain competitive
advantages. On the other side, this type of a model may also aid in analysing the whole sector or
a sub sector which might aid a business organisation in taking right decisions as per the
1

requirements. Since Porter's five forces model, is consist with five forces which are specifically
utilised to examine or to identify the competitive intensity within a business sector, attractiveness
and profitability within a sub sector and so on (Bunse and et. al., 2011). Specifically, these five
forces are : competition in the industry, potential of new entrants into the industry, power of
suppliers, power of customers and threat of substitutes and these are discussed in a detailed
manner regarding UK's Soft Drinks sub sector, underneath :-
Competition in the industry- Basically, this is being considered as one of a crucial force
within Porter's model, which consist with a range of competitors and helps in identifying the
competitiveness among different organisations that are coming under an industry. If it is talked
about power of companies within UK's Soft Drinks sub sector, is lesser when the number of
rivals are larger to an extent. Under this, both the buyers and suppliers look forward to identify
competitive level within a sub sector at the time of offering them with different range of services
among lower prices (Burns, 2012). It is being found that, within the United kingdom's Soft
Drinks sub sector competitive rivalry is very low, which means a company like Britvic may
consist with a power to charge individuals (customers) with higher prices of different range of
products.
Potential of new entrants into the industry- Another crucial force where power of a
business organisation basically gets affected due to new entrants within a market. It is being
found that an organisation cannot afford to adopt all the changes within a industry that are
coming as it requires heavy investments. Therefore, it is may be possible that an organisation's
reputation and its market share might get affected. If it is talked about United kingdom's Soft
Drinks sub sector, it is not really very easy for a company to enter this market as it consist with a
range of barrier to enter. Due to Brexit, UK has made itself as an upon trade centre, which now
basically could be considered as one kind of an opportunity, which many business organisations
has grabbed. Therefore, it can easily be said that for a company like Britvic which is performing
operations in United kingdom's Soft Drinks sub sector that, there is a high risk which is
presented in front of Britvic within United kingdom's Soft Drinks sub sector.
Power of suppliers- This type of force basically shows easily suppliers can drive up the
cost of inputs. This is affected by a number of suppliers of key inputs of new service or good,
uniqueness of these inputs, cost of the company in switching from one supplier to other (Charles
and Zegarra, 2014). When the number of suppliers within the United kingdom's Soft Drinks sub
2

sector is basically less, the Britvic depends more on supplier. Moreover, if the number of
suppliers is more then the company can keep input costs lower and increasing profits. Within the
United kingdom's Soft Drinks sub sector's business organisation like Britwic may sell a range of
products or the services at a reasonable price and the company creates and maintains conditions
for continuing business success.
Power of customers- Another crucial force out of Porter's five forces, where customers
can drive the prices or a particular product. It can be said that, United kingdom's Soft Drinks sub
sector has a larger client base considering different ages using the demographic segmentation.
Under this, it can be said that company's like Britwic that are performing business within United
kingdom's Soft Drinks sub sector consist of a small but powerful client base and reason behind
this is that there are many companies like Coca-Cola and more are performing well and already
has a good customer base. Therefore, it can be said that customers basically consist with power
for negotiating in order to get better deals.
Threat of substitutes- Since United kingdom's Soft Drinks sub sector, is filled with high
range of substitutes because of high competitiveness as companies like Coca-Cola, Pepsi Co. and
more consist with high range of products. Therefore, it can easily be said that substitutions are a
threat for organisation's like Britwic and more which means, to grab a good position within the
market it will be required for companies to focus on enhancing their own portfolio (Drnevich and
Croson, 2013). This may include caffeine drinks, hard drinks, alcohol drinks and many more. In
order to solidify brand image or market share, companies that are coming under United
kingdom's Soft Drinks sub sector would need to develop strategies to grab a good position within
the UK's business market.
b. Value chain analysis of the firm
It has been analysed that internal business environment of a company, there are a range of
tools and techniques present, which can be used. This may include a range of factors like
employees, strategies, investors, suppliers and many others as well. It is much needed for
business organisations to analyse the internal factors and this specifically might help in
enhancing market share through improvising quality of products and services (Fessehaie, 2012).
Some of tools or models to analyse the internal factors could be from SWOT Analysis, Value
Chain analysis and so on. In regards to the same, Britwic is also focusing upon enhancing its
3

market share and this could be done through proper internal analysis. For the same, Britwic's
value chain analysis has been done beneath :
Value chain analysis
Porter's value chain analysis model can be defined as an effective strategic tool that can
be used to analyse different range of internal activities which an organisation performs on a
regular basis. Considering this model, a company like Britwic could easily perform proper
analysis, which will aid in finding out the activities which are having more value to Britwic.
Through this, maximum benefits like competitive advantage can be gained by the organisation
(Kaiser, El Arbi and Ahlemann, 2015). Basically, support, maintenance, production, sales of
products are coming under primary activities. Internal activities may include a range of factors
and these are given beneath:
Inbound logistics- This type of factor within the value chain analysis consist with
distinct processes which are specifically includes things like receiving, storing along with the
internal distribution of a range of raw materials which are needed among services and products
of a company like Britwic. Under this, it will be required for Britwic to manage the relationship
with its suppliers in order to create brand's value much more effective within the competitive
business market. Since, Soft Drinks sub sector involves a different range of things like
manufacturing, packaging, storing and distribution of bottles which consist with flavoured
essence, energy and other types of drinks to individuals as per their own requirements.
Production- Production line along with production floor are the operational activities
that might comes under this. Basically, these are the activities of Britwic, which majorly
develops or changes raw material into the finished goods and this consist with a process named
as supply chain process. In order to create the value, it is being found that operational process
basically needs to be properly managed in order to grab a good position within the market. Since,
Britwic is a well known business organisation within the United Kingdom, its products are also
famous for the same. Company has a production plant at its headquarter and in the same way,
Britwic has also taken an initial as public offering. This improvised benefits for both company
and for its investors at the same time (Porter, Allen and Thompson, 2014).
Outbound logistics- These type of logistics are basically linked with selling products and
services to consumers in all over United Kingdom. Distribution, Storage along with transport are
some of elements of outbound logistics that aid in enhancing customer base. Britvik is the
4

business organisation which is specifically associated with United Kingdom's soft drinks
business sub sector, which stores different range of products (soft drinks) to its customers among
different nations. This export activity improvise the value through channelising its products
through a range of transport channels and these are rail, air, road and more.
Marketing and sales- It consist with products and services within the business market
where an advertisement is being built or developed in order to enhance sales of a business
organisation. Marketing and sales includes managing and generating customer relationships. The
guiding principles are setting apart from the competition (Porter and Williams, 2011). This
creates the advantages of the customers. The marketing and sales of Britvic's soft drinks is done
in an effective manner. This company sells it's products under it's own brand name and it offers
discounts and bonuses for the lucky customers. This company initiates various marketing
campaigns at colleges, universities, shopping malls, etc. for increasing the awareness about brand
and it's products.
Services- This incorporates all exercises that helps in keeping up the estimation of the
products or services that are linked with the clients. This guarantees great services are being
given to the clients and they are fulfilled by the products offered by the organization. The soda
pops (soft drinks) of a company named as Britvic are of good quality and these items are enjoyed
by the clients.
c. Explanation of appropriate adaptations of the selected firm
Since, Britvic is performing its operations in United Kingdom's Soft Drinks sub sector
and headquartered in Hemel Hampstead. Organisation is also listed in London Stock Exchange
and continuously gaining a good reputation within the UK (Ronda‐Pupo and Guerras‐Martin,
2012). It can be said that a business organisation like Britwic has started included initial public
offerings which helped them in enhancing the interest of shareholders in order to build up
investments that they were doing in all over the world. Basically, Porter's Five Forces Model
which has been conducted above for Britvic, this will aid in enhancing the profit margins along
with the sales because, it will directly aid in taking right decisions as per the requirements. Here,
decision taking plays a crucial role for a business company. In the same way, considering the
analysis like Porter five forces model and value chain model will directly aid in enhancing the
decision making power for Britwic in specified time frame. Along with this, both the models has
5

helped business organisation (Britwic) in reaching to new heights through gaining competitive
advantages. Here, some of strategies are given beneath:
Generated profitable growth in the core markets - Britvic is continuously performing
its operations within the countries like Brazil, Ireland & France considering the broad portfolio
strategy as one of a leading brand. Along with this, it is being found that Britvic is also being a
part of Pepsi Co. and this also basically helps the company in developing one of the most
balanced portfolio within the existing business market in which company is performing and i.e.
soft drinks business sub sector.
Realises global opportunities in kids, family and adult categories – Franchise, Joint
Venture and licensing agreements are some of the crucial tools that Britvic keeps its focus on.
Through this proper enhancement of the existing benefits considering selective acquisitions
regards to products and services that company is offering, Along with this, company has kept its
focus on building relationships with strong but local brands. Through this, routes to the existing
but unknown and new market can easily be pulled out which might help Britvic in reaching to
new heights.
Continue to step change the business capability – It is being found that, Britvic
basically need require to have right people with right capabilities who can achieve the vision of
this company. The priority of the company is to improve efficiency of the organisation and
producing quality soft drinks to customers.
Build trust and respect in the communities - Britvic is specifically involved in building
trust and respect in the communities. This company acknowledges the contribution to the local
economies and society and minimising the environmental impact. This company embedded
sustainable business strategy for ensuring that the firm is delivering a strong performance with
integrity.
d. Reflection on the usefulness of an academic model
Considering all the above mentioned information, it can be said that Porter's five forces
model plays an effective role in the companies as it helps in analysing a business environment so
that they can easily evaluate their growth and success at competitive market place. With the help
of this model company can grab various opportunities and overcome the barriers. In context to
Britvic, company their most important product is soft drink and for maintaining its long term
sustainability, they opt Porter's five forces model. This is because it aid them to analyse the
6

strategies of their competitors and profitability at market area. In porter's five forces model
consist five factors such as bargaining power of suppliers, bargaining power of buyers, threats
from substitute products, threat of new competition and rivalry of industry. Along with this, it
has also been observed that Porter's five forces model aid in identifying competitive stage of a
company and the growth or profitability stage of company. In relation to bargaining power of
suppliers and buyers says about the ability of a company by which they enhance or mange cost in
an effective manner. Also, low entry barriers aid in attracting competition whereas, high entry
barriers discourage the competition accordingly. On the other hand, rivalry of industry is high so
companies target same customers for generating competition in the market environment (Rusi,
and Lehti, 2017).
Also, it has been found or observed that Porter's five forces model would aid a business
company like Britvic for knowing about the factors by which they affects profitability at specific
sector. By the help of this analysis, it helps in taking best and effective decision which is related
to various concepts such as enter into a new market, implementing or developing competitive
strategies, enhancing capacity and many more. As per the analysis, it is being evaluated that in
Porter's Five Forces Model has include various actions which are described as below:-
Actions to do Actions to avoid
 It is required for Britvic to use Porter's
five forces model information when the
market in having three competitors
within a business market.
 The impact of government has to be
considered.
 The life cycle of the industry should be
considered and the early stages are
more turbulent.
 The dynamic and changing
characteristics of the industry are
considered.
 At the time when organisation like
Britvic is performing alone within a
market, it can be said that a company
may only require to avoid this type of
model.
Limitations of Porter's Model :
7

After analysis the Porter's five forces model, it can easily be said that the major limitation
of this model is that, it only focuses upon five forces only, and when it comes to grab a good
position within the market, it is much required for a company like Britvic to focus on every
single force which might impact upon working of Britvic (Bunse and et. al., 2011). Along with
this, it can be said that no industry is perfect and no company can make profit always. This
cannot be applied to all industries.
CONCLUSION
With the help of above mentioned report, it is being concluded that Porter's five forces
model may aid a business organisation in analysing the external business environment. Along
with this, value chain analysis model could directly help a business organisation in enhancing the
performance level in much effective and efficient manner. With the help of this, a business
organisation could easily lead to the success.
8

REFERENCES
Books and Journals
Abidi, H., De Leeuw, S. and Klumpp, M., 2015. The value of fourth-party logistics services in
the humanitarian supply chain. Journal of Humanitarian Logistics and Supply Chain
Management. 5(1). pp.35-60.
Bosch-Mauchand. and et. al., 2013. Knowledge-based assessment of manufacturing process
performance: integration of product lifecycle management and value-chain simulation
approaches. International Journal of Computer Integrated Manufacturing. 26(5).
pp.453-473.
Bunse, K. and et. al., 2011. Integrating energy efficiency performance in production
management–gap analysis between industrial needs and scientific literature. Journal of
Cleaner Production. 19(6-7). pp.667-679.
Burns, L. R. ed., 2012. The business of healthcare innovation. Cambridge University Press.
Charles, V. and Zegarra, L. F., 2014. Measuring regional competitiveness through data
envelopment analysis: A peruvian case. Expert Systems with Applications. 41(11),
pp.5371-5381.
Drnevich, P. L. and Croson, D. C., 2013. Information technology and business-level strategy:
toward an integrated theoretical perspective. Mis Quarterly, pp.483-509.
Fessehaie, J., 2012. What determines the breadth and depth of Zambia's backward linkages to
copper mining? The role of public policy and value chain dynamics. Resources Policy.
37(4). pp.443-451.
Kaiser, M. G., El Arbi, F. and Ahlemann, F., 2015. Successful project portfolio management
beyond project selection techniques: Understanding the role of structural
alignment. International Journal of Project Management. 33(1). pp.126-139.
Porter, D., Allen, B. and Thompson, G., 2014. Development in Practice (Routledge Revivals):
Paved with good intentions. Routledge.
Porter, J. and Williams, L. M., 2011. Intimate violence among underrepresented groups on a
college campus. Journal of Interpersonal Violence. 26(16). pp.3210-3224.
Ronda‐Pupo, G. A . and Guerras‐Martin, L. Á., 2012. Dynamics of the evolution of the strategy
concept 1962–2008: a co‐word analysis. Strategic Management Journal. 33(2). pp.162-
188.
Rusi, E. R. and Lehti, S., 2017. Hohto-pocket: new kind of reflective accessory.
9