Monster: A Global Leader in Energy Drinks - Essay Sample

Introduction

Monster is one of the best-performing companies in the world. Monster Company manufactures and sells energy drinks globally. Monster faces stiff competition from other companies producing other soft drinks both nationally and internationally. The sale of the Monster in various marketplaces depends on the distribution patterns and partnership with other companies. Coca Cola Company provides a current distribution pattern for Monster because of many consumers trust Coca-Cola Company (Symbol &Year, 2018). Coca-Cola Company is among the organization that produces non-alcoholic drinks with more than 500 brand names. This paper focuses on providing a guideline to managers in the selection of the type of soft drink to stock and the one to sell. The paper also evaluates fundamental components considered while buying stock and estimating the price of goods to be sold to consumers

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The Type of Soft-Drink to Stock

Monster is selected for stocking in the company valuation results. The analysis of the valuation results provides a clear indication that Monster is widely used in America. You should consider stocking Monster in the company because the daily sales of monster are more significant as compared to the transactions on Coca Cola sodas. The best strategy used in improving competitive nature of Monster Company is the addition of new products and flavors in the drinks to come up with new brands and attract as many consumers as possible in other countries especially in China (Noe et al. 2017). The added products include the sports drinks that provide a higher level of energy to the consumers.

The ingredients contained in the Monster drink are healthy; therefore, the beverage does not cause any nutritional disorder or disease to the users. The addition of different products other than standard energy drinks changes the sales margins because of the increase in the quality of the energizer. The new product increases the flavor of the beverage, therefore, satisfying the needs of a large number of people.

Partnership is one of the useful measures taken to improve the performance of Monster Company in terms of the number of sales in makes per day in the country and other parts of the world. Coca-Cola Company is trusted by many people; therefore, its partnership with Monster Company will open up international markets for Monster. Coca-Cola Company will also provide new brands for the Monster Company. The new Monster brands increase its market segments in global market structure. The distribution structure follows some of the guidelines established to protect the interests of each company (Morgenier et al. 2010).

Moreover, since Monster's distribution depends on its relationship with Coca-Cola and its bottlers, changes made on the distribution structure might affect the market segments of Monster brands, therefore, affecting further investment. As a result, we assign the firm a high uncertainty rating. From the evaluation of the firm experiences faster volume growth in international markets, as its products flow through the Coca-Cola distribution system, and is better able to institute modest pricing increases once it gains traction in a particular region.

Energy drinks are sold at higher prices than sodas because of their functional needs. First, the manufacture of Monster drink requires a lot of products and raw material as compared to Coca-Cola beverages. In some case, the company purchases the raw materials and ingredients from other companies and ingredient suppliers. The monster company adds these products to improve taste and functional needs of the drink to satisfy consumers' needs and compete favorably with other companies producing energy drinks. Potential customers include military groups, sporting clubs, nutritional organizations, and restaurants. The functional benefits and production requirements inclusively account for the higher prices of Monster Energy drink than Coca-Cola sodas. The Monster Valuation provides a clear justification of this selling prices by the producing company (Kumar et al. 2013). For instance, the price/fair value for Coca-Cola sodas is 0.98 while that of Monster drinks is 1.05. The operating margin for Coca-Cola drinks is also low as compared to that of Monster Company. The operating margin for 2018 was 27.3% for sodas and 33.7% for Monster. Coca-Cola Company has strategized on how to improve its sales in both domestic and international markets. You will expect to buy the Monster at higher prices due to their functional benefits as compared to Coca-Cola beverages.

Identifying the Type of Stock to Sell

Coca-Cola drinks are sold in all parts of the world. The low price of selling sodas to consumers makes them prefer them more than other non-alcoholic beverages. The reason for selling the Coca-Cola stock is due to the ability of the bottlers to exclusively manufacture Coca-Cola beverages, therefore, creating close and long-lasting relationships between the involved companies. Stable relationships shape the distribution system of drinks in all parts of the globe. The enhanced distribution strategy secures active markets for the company to sell its stock. Also, the large size of the Coca-Cola Company offers another advantage because people trust the beverages sold with Coca-Cola brands. The sale of Coca-Cola beverages has little or stiff completion from non-alcoholic manufacturing companies since Coca-Cola enjoys an Oligopolistic nature in both domestic and international markets (Morgenier et al. 2010). You should sell the stock at lower prices to retain and maintain a large number of consumers in the market.

References

Kumar, A., Sharma, A., Marwah, D., Shekhawat, J. S., & Singh, M. (2013). Credit Rating-Financial Aspects. Available at SSRN 2235567.

Morgenier, K., Bindslev, E., MacLellan, C., Warrington, S., Kumar, V., Truitt, J., & Owens, B. (2010). Crummer/Suntrust Portfolio: Analysis and Recommendations [2010].

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human Resource Management: Gaining a Competitive Advantage. New York, NY: McGraw-Hill Education.

Symbol, M. N. S. T., & Year, F. (2018). Monster Beverage Corp. Retrieved from: https://finance.yahoo.com/quote/MNST/profile/