 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:

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.
Interest rate:

Debts and investment portfolios are centrally managed considering investment opportunities and risks ,tax
consequences and overall financing stratagies ,certain interest rate derivative instruments including intersst rate
swaps ,cross currency rate swaps ,cross currency interest rate swaps. Treasury locks and swap locks are entered to
protect against unfavorable interst rate changes relating tp forcasted debt transactions.

Alternative strategies:

 Pepsi and coca - 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. 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.

 The most important aspect is the strong competition of the brands. 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.

 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, so to satisfy their need to know one has to come up with a product which has least controversial
elements.

 Strategies:

Lower Cost Strategy: should e followed by designing ,producing, and marketing a comparable product more
efficiently than its competitors.

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.

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.