SodaStream is revolutionizing a product that, for decades, did not seem to need

Question

SodaStream is revolutionizing a product that, for decades, did not seem to need or have room for a new and innovative idea. By offering a counter-top home appliance, and over 100 flavored syrups, it has turned “make-your-own” soda into a thriving company. In five years it has grown from being sold in 300 U.S. stores to 15,000 stores, and over 60,000 worldwide. It partners with Kraft, Campbell, and Ocean Spray on flavors; it even worked with Samsung on a new Samsung sparkling refrigerator. SodaStream does not compete head-on with the Coca-Cola and Pepsi-Cola companies of the world. It has created its own niche and is expanding exponentially, as U.S. sales increased 75 percent last year. Here, competitive advantage is the name of the game.

The goal of any market niche is to find an unoccupied spot in the market and fill it. SodaStream is operating in the shadows of the beverage giants and dominating in its fast-growing home-carbonation niche. With 10 to 25 percent penetration in some countries, the potential is significant in less mature markets.

Are you familiar with SodaStream or the concept of home-carbonation beverages? Go online and visit the SodaStream website. (Links to an external site.)Links to an external site. Explore the company’s website to better understand the management philosophy of the company. (Some links you may not typically use on a company’s website, but might be useful, include investor relations, and some of the reports and presentations found there.)

What is the SodaStream “product leadership” strategy?

How can SodaStream grow so quickly, not just in the number of stores in which the product is available, but number and variety of products?

How does the SodaStream story relate to the competitive strategy concepts presented in the course text?

Explanation / Answer

Answer:- The SodaStream website is well designed and intuitive, and serves to educate potential customers on the products offered. SodaStream is a home carbonation system that allows the user to create their own sodas at home, with the intention of lessening the number of sodas purchased from companies such as Coke and Pepsi, with the added bonus of reducing the number of plastic bottles that are introduced into the trash system that will either be thrown away or recycled. Customers of SodaStream are typically environmentally conscious and are seeking health and environmental benefits. The website is designed in such a way as to answer questions the customer might have about the effectiveness of SodaStream’s effort to reduce the trash impact of plastic bottles in landfills, as well as the health benefits one might have of producing home sodas that are not loaded with sugars and preservatives.

The company’s leadership strategy is to take advantage of the trend of the current generation towards health-conscious products and healthy living. They use the slogan “water made exciting” in an effort to attract a wider range of customers by educating customers on health implications associated with carbonated beverages, such as the long-term effects of aspartame and sucralose and calorie intake, as well as environmental concerns. Given the nature of the SodaStream product, the company is also counting on repeat business, as customers who purchase a system must also purchase carbonation refills. (Fairholm, 2009) There are competitor companies offering similar products, but SodaStream prides itself in offering a higher quality product, and one that allows customers to make their own adjustments, such as the level of carbonation and flavour adjustments. (Sabol et al., 2013)

Answer- The company could grow quickly by diversifying its offerings over a wider range of flavours, which can increase its customer base. Products could also benefit from better packaging and are branching out further into related drinks, some that might not require carbonation. Allowing refills to be sold in more brick and mortar stores would help as well. Any innovations that lead to better products, less cost and more profit margins would allow the organization to grow. (Fairholm, 2009)

Answer:- SodaStream’s story relates to concepts presented by the course texts by highlighting the various strategies the company has used to promote its product, namely through sustainability. SodaStream's cans and bottles are reusable, and the beverage it produces is healthier than traditional sodas. By eliminating the single-use can or bottle, the company is able to make an impact by reducing the pollutants in the environment, making it environmentally friendly, but also in promoting more water intake free of carcinogens. (Sodastream.com, 2017)

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