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Published by: sanaakramtufail on Oct 30, 2010
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Q#9&10 Issues : The issues faced by the beverage industry is to cope up with the changing eating habits of its consumers and to transform their products accordingly. As we know that with the passage of time more researches are taking place which are ultimately awaring the consumers about the food they eat and the beverage they drink. Fizzy and carbonated drinks due to their fattening nature are almost out of all health conscious consumer s diet plan and other hear say s such as drinking Pepsi along with Mentos can cause intestine eruptions as they are switching towards mineral water and juices . Recycling and environmental friendly campaigns are the need but are costly. Current scenario: immunity from the impact of environmental factors over any business cannot be acquired, so these factors do have their impact either good or bad. So is the case with the beverage industry, after the 9/11 attacks in new york muslims have become the most targeted entity across the globe no matter what happens in any part of the world the first accused would namely be a muslim ,so in this series several issues has been raised such as:


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a : Controvercy about the coca cola monogram b : The issue of Halal and Haram in the food sector, beverages and finger foods launched by the top beverages came under the confusion of being it Halal and Haram, for example , LAY s chips was conspired to have such ingredients which are not Halal then this issue was highly ignited and pulledby the extremists which was then cleared by the pepsi co through an add casting a religious figure Junaid Jamshaid to give the assurity of the chips being Halal ,and now the packs are tagged as Halal. So these are the issues that result in impacting the regular sale of the prouct. Other issues at present faced by the beverage industry: Market risk: Commodity prices : enables to reduce the impact of volatility in the raw materials and energy costs through hedging strategies and ongoing sourcing intiatives. This commodity price is directly effected by inflation and change in prices. Foreign exchange rate: Financial statements of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and weighted-average exchange rates for revenues and expenses. Adjustments resulting from translating net assets are reported as a separate component of accumulated other comprehensive loss within shareholders¶ equity under the caption currency translation adjustment.

In order to attain and retain the market share against the competitor strict home work is required as food industry has become really dynamic by the time and it has elongated its arms in many ways towards its consumers in order to attract them towards their product such as pepsi and coca cola with different products simultaneously catering different lifestyles and age groups.certain interest rate derivative instruments including intersst rate swaps .producing. so to satisfy their need to know one has to come up with a product which has least controversial elements. Product Variety&Innovation: By including the variety the product line can be extended further such as pepsi is in food sector more than to be in beverages comparitively with the innovative products in its product line.tax consequences and overall financing stratagies . Treasury locks and swap locks are entered to protect against unfavorable interst rate changes relating tp forcasted debt transactions. .cross currency rate swaps . Consumers have become really smart and aware they inquire religiously about the product they use no matter they invest a penny or thousands but they need to know each and everything about that particular product. Alternative strategies: y Pepsi and coca . and marketing a comparable product more efficiently than its competitors. The most important aspect is the strong competition of the brands. Strategies: y y y Lower Cost Strategy: should e followed by designing . In order to be in the consumer s hand the players should work hard to improvise the features of their product which should get adjusted with beverage industry has to keep its R&D strong so that they are aware of the consumer s requirement.Interest rate: Debts and investment portfolios are centrally managed considering investment opportunities and risks .cross currency interest rate swaps. Cost benefit: If the beverage industry keep a strong conviction towards its R&D then it cane get the hold of its day to day challenges in an effective and logical manner.cola is in the food s business catering the finger foods which do expand its product line but hence increasing the demand to improve the product so it should not get any drawback due to being un healthy and fattening.

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