The US Soft Drink Industry

Paper Summary:

The American soft drink industry has had an exceptional history; few industries can match its consistent record of profitable growth. The industry is also one of continual change and evolution. The paper shows that its competitive climate requires bottlers and franchise companies to respond with speed and boldness to competitive challenges, technological developments and changing consumer tastes. The pace of the industry has quickened over the last decade, making the challenge of managing and planning for future profitable growth even more demanding.

From the Paper:

"The increasing volume on different components of production costs can be quantified. Direct labor costs, for instance, are determined by the line speed, the number of lines per plant, and the types of lines. A canning line requires the least direct labor; a returnable bottling line the most. The mix of lines within a plant determines the total direct labor cost per case. To increase volume in a plant, management would first run the lines more hours per day, either by adding another shift or by adding overtime. The usual path to increasing production capacity itself is to upgrade a line to increase its output by acquiring faster components or perhaps replacing the old line with an entirely new, faster line."

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