Monday, November 3, 2008

Hansen Natural Equity Analysis

Hansen Natural Business Analysis
Branding and Distribution are key competitive advantages; difficult for new entrants to gain market share
  • Hansen has created a strong brand (Monster)
  • Distribution contracts with major Coke and Bud distributors in US as well as six European countries
Consumers are price inelastic between different brands
  • Firms don’t compete on price
Consumers are addicted to a certain extent to particular energy drinks since they provide a quick boost in energy levels
  • Psychological barriers to switching brands
  • Coffee gives bad breadth and brown teeth; energy drinks avoid such problems and have no taste memory
Business model has high operational leverage
  • Incumbents can leverage economies of scale