SWOT Analysis of Gatorade

adam July 29, 2017 Soft Drink & Beverage No Comments

Following is the SWOT analysis of the Gatorade:

Strengths

• Brand Value: Gatorade is worth $4.8 billion as a brand. Forbes 500 most powerful brand puts it in the 86th position. Currently, PepsiCo manufactures Gatorade and the drink is distributed to over eighty countries. Gatorade holds 46% of the market share in the sports drink industry. Its annual sales exceed $3.3 billion.

• Market Dominance: Due to a significantly large market share, Gatorade has been able to raise the entry barriers to a significantly high level.

• Extensive R&D: Gatorade continuously works on improving its product and its through research has proved to be helpful in boosting the athletes’ performance. Thus, it is preferred by athletes.

• Customer Loyalty: Gatorade has a strong loyal customer base that follows its advertisements and remains loyal to the brand as they do not switch to other drinks. Its new products are also welcomed by this customer base (Novak, 2009).

Weaknesses

• Lack of Focus on Health Benefits: The brand does a minimum effort to highlight the health benefits of the drink. They need to focus more of their marketing efforts on this issue.

• Low Advertising: Gatorade mainly focuses on sports related promotions. It does not generally advertise on the television or the social media. It keeps a low profile.

• Too Many Varieties: Gatorade comes in a large variety of flavors and in a number of variants. This hinders the brand name as it causes confusion for the customers.

• Competition from Energy Drinks: Energy drinks are directly competing with Gatorade in the market to grab its market share.

Opportunities

• Blended Products: Since energy drinks are directly competing with Gatorade, it can develop a new product that gives the same level of energy as an Energy drink but still is considered healthy and does not dehydrate or tire out the consumer.

• Increased Advertisement: Gatorade can make use of the PepsiCo.name and increase advertisement on media resources such as television and social media to engage more people with the brand.

• Venture into New Sports: Other than the traditionally famous sports, Gatorade can target other booming sports such as mixed martial arts to promote itself. It will have an increased sports affiliation (Mass, 2014).

Threats

• Increasing Trend of Energy Drinks: Energy drinks are capturing market share from the sports drinks industry. They are more appealing to the customer base and attracting the youth.

• Market Decline: Gatorade showed a strong growth up till 2014, after which its sales volume started declining. The sports drink industry, overall, has been struggling. This reduces growth and chances for expansion. Ultimately it will affect the profits of Gatorade (Bhasin, 2017).

• Other Indirect Competitors: Besides the energy drink industry, fruit juices industry with its high-energy variants may also start grabbing market share. Thus, they are a potential threat for Gatorade and the sports drink industry. The direct competitors of Gatorade are Vitamin Water and Lucozade.

References

Bhasin, H., 2017. SWOT Analysis of Gatorade. [Online] Available at: http://www.marketing91.com/swot-analysis-gatorade/ [Accessed 26 July 2017].
Mass, N., 2014. GATORADE. [Online] Available at: https://prezi.com/bdiprndkxlyv/gatorade/ [Accessed 26 July 2017].
Novak, S., 2009. Gatorade Situation Analysis. [Online] Available at: https://issuu.com/halfadhalfpr/docs/gatorade_situation_analysis [Accessed 26 July 2017].

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