Depth Analysis of Outsourcing and Relationship between the Buyer and Supplier
The three big giants are GlaxoSmithKline occupying almost 10%, PepsiCo Inc. Occupying 13% and Coca-Cola occupying the bulk of it at 25%. Then comes the other small soft drink producers sharing the remaining 42% (Zijm, Henk & Matthias 70). There is very stiff competition between the 3 top companies for their products, and with the health awareness issue taking root into the minds of the consumers, there is new for innovative products that meet the health needs of the end consumers. Competiton among the existing firms creates a highway for outsourcing (Stemmler 185). Sometimes in the process of the buyer and seller interacting, there is a lot of competition for profit. This can be manifested in a company producing an aluminum can like Ardagh and crown BevCan UK and soft drink companies storing drinks in cans like the coca cola and PepsiCo Inc.
These companies depend on the soft drink consumers for their profit margins and the overall market network. This is a win-lose, zero-sum view between the buyer and supplier of soft drinks (Kalinzi 15). It’s recommended that Soft drink companies can have other options like plastic bottles of packaging for their products to minimizing overprizing of the aluminum cans which increases the cost of the soft drinks in general. eg for the case of low sugar soft drinks and bottled water, when demand for bottled water increases, suppliers will increase their prices. This will make consumers shift to the more affordable low sugar soft drinks as an alternative. With low demand for the bottled water, their suppliers will lower their prices (Wang 67).
The soft drink companies have co-operated social responsibilities towards the big UK market. The above social responsibilities included; meeting the safety and health requirements to the client. It's a strategy to stimulate growth and smooth production. It has become very popular for its numerous benefits. The reports bring in how it has significantly reduced the cost of transportation by up to 60% as was seen in the case of Coca-Cola Company (Benjamin 14). Initially, the big companies were experiencing a lot of expenses like the safety stock legally required when globally sourcing. This increased their turnover by 30% which is a very significant improvement for any company and eliminate the uncertainties we cannot predict and plan for like during shipping; there are risks of pirates, thefts, sea storms and risk of the drinks going bad (Zaremba, Adam & Jacob 110).
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