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MGT492H5 (1)

MGT492 Presentation notes

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Alberto Galasso

Substitutes There exists the option of switching to plastic or glass which has there advantages RESEARCH SUBSTITUTES FIGURES The threat of substitute products This threat is very strong for this industry which results mainly from the existence of plastic and glass containersThe growth of plastic containers is the industrys major worry mainly because it is more lightweight and convenient than metal cans or glass by consumers Glass accounted for only 14 of domestic soft drink sales trailing metal cans at 75 The area where glass outperformed metal was in the beer category where consumers grew accustomed to the long neck bottle designComplementsThroughout the 1980s the soft drink industry emerged as the largest user of packaging and in 1989 the soft drink industry accounted for 42 of metal cans shipped in 1989 By the end of the 190s aluminum soft drink cans had a 12 average annual growth rate in a decade that experienced only a 36 increase in total gallons of soft drinks consumed This illustrates that the demand of soft drink cans positively affects the demand for aluminumSupplier power is medium to high because they both had several advantages to each other There are tradeoffs to using either aluminum or steelThe advantage of steel over aluminum was price and it represented a savings of 500 million for can manufacturersAnd although the switch from aluminum to steel is inexpensive aluminum was much lighter of higher quality was more economical to recycle and preferred by customersThose who produced aluminum had more supplier power since the three largest producers supplied the
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