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