Question

QUESTION 1:

For our discussion/participation assignment this week, we will continue the company/industry research. This week, you should determine the following:

1. Industry Description and features
2. Top 4 Industry Leaders
3. Industry Type and Why: Monopoly, Oligopoly, Monopolistic Competition and Perfect Competition
4. Industry Sales and Revenue Figures
5. Number of Competitors
6. Competition Analysis
   1. Compare your firm to top 4 in sales, revenues, profits, stock price
   2. Behavior of your firm due to its market structure
7. Future of the Industry – profits, new competitors, ways to improve or continue

For this research, you are free to use online sources, company websites, print sources, etc.  

Answer 1

A. India is the largest consumer market for malt-based drinks in the world. These are referred as health drinks in India and their target group is children. Common among them are Pediasure, Horlicks, complan, Boost, Bournvita and many more.

Pediasure began its journey in 2000s.It faces stiff competition from Horlicks, complan, Boost, Bournvita etc. That time these companies were at peak. Most of the ads were for children who were going to school or were involved in sports activities. Pediasure took advantage of that. They tried to bring specialised nutrition focusing on growth and immunity. They gain the confidence of paediatricians in India Ultimately pediasure was started suggested by the doctors to the mothers It was also recommended for small children which was not done by any other brands in india.In October 2013,it beat Horlicks junior in the toddler category for the first time in market share

B. The top 4 industry leaders are:Horlicks, complan, Bournvita, Boost apart from pediasure which is strengthening its position in India. Because of strong position of pediasure, Horlicks has launched Horlicks junior, complan Nutrigro for small kids. They try to target kids of 2 to 6 years.

C. The industry is facing oligopoly because the main players are pediasure and horlicks. They have a major share in the market As far as oligopoly is concerned, it is a market situation where market is dominated by small numbers of large sellers.

D. Health drinks in India has USD 860 million marker in 2017. It grew at a rate of 10% year after after. The market was dominated by Horlicks and Boost having more than 60% market share. By 2016, horlicks lost its market share by 800 basis points to51% and it went to pediasure in urban toddler market.

E. Pediasure is facing stiff competition from horlicks, Boost complan, Bournvita Milo launched by Nestle. Still pediasure has a market share of 9% on less than a decade of launch in urban areas.

F. If we analyse the competitive structure then it has been found that horlicks has established itself in rural areas also which is not in the case of pediasure. Complan contributed 40 to 45% of Rs. 1700-1800 crore sale of financial year 2017.while horlicks has Rs. 4208.57 crore in 2017.

Horlicks has 49% market share followed by Bournvita having 11% share. Complan have 7% share. Pediasure has 1% share but commands premium price compared to other competitors.

G. Presently the situation has changed. Consumers are demanding scientific evidence to back the claims fir promoting the products.

Horlicks complaign of taller, stronger, sharper or complan compaign of being a complete food for family and growing children is not backed by scientific proofs. All these drinks contain sugar and starch which contain obesity for children. Present competitors like nestle or Abbott product of pediasure are more suitable as they get support from doctors. It has been said that highest energy giving health drink is seen as pediasure But it take some time to establish itself as a major leading brand in India.