Launching anew product in the soft drink industry is possible but it is difficult. Floridawas receptive but who’s to say other places will be receptive.

It is a bigcompetition with all the other types of drinks that are already out. Within thereport, a microeconomic analysis of the current state of the soft drink marketin the U.S. was explored and what is currently going on that is affectingdemand. The macroeconomic analysis of the state of the U.S. economy and theimpact this may have on the demand for this new product was presented. Finally,a list of key management accounting practices was listed with explanations foreach.

Though it is a great idea to expand, at the moment the way the economy isgoing, it may not be the right choice. Consumers are now in demand of healthierproducts compared to before when people drank any and everything. The figure belowshows the decline of soda consumption in the U.S.Conclusion 4.     Trust: Decisions should be moreobjective because of accountability and scrutiny.

There should be a balancebetween the short-term and long-term interests to value for stakeholders. Theaccountants are to be professional, ethical, mindful of the values theorganization holds, etc. Trust and credibility is enhanced through feedback fromthe organizations performance (Bramwell, 2014). 3.     Value: A thorough understanding ofthe macroeconomic environment on a wider scale must be understood.

Informationalong with value-generation path, evaluating opportunities, and focusing on therisks, costs, and value-generation potential of opportunities must be explored.Other scenarios should be looked at to determine the end result to helpdetermine whether or not engaging in the expansion is worth the risks that maycome along (Bramwell, 2014).2.     Relevance: Information that ispassed must be relevant to the what the company is working on. The best andavailable resources are scanned to help those who make the big decisions. Oncethe information is understood, it is identified, collected, and will beanalyzed. There must be a balance between past, present, and future-relatedinformation, internal and external information financial and nonfinancialinformation, including environmental and social issues (Bramwell, 2014).

 1.     Influence: Communication is key toeverything. It can either make the transition smooth if everything is going theright way or it can make things difficult if the wrong information is passedaround. Accounting begins and ends with conversations.

No communication meansno decision making taking place. The lines of communication must be openbetween all departments, so everyone is aware of what will/will not happen. Transparencyand teamwork are the key to making sure projects are going as planned, newideas forming, and bringing everything together before it goes to topmanagement (Bramwell, 2014).

            Whileplanning on expanding, there are procedures that must be followed and practicesthat must be put in place to support the expansion plan. The key managementaccounting practices are:Management and Accounting Practices            Due to the rise and fall of theeconomy, the value of the U.S. dollar is increasing, which is a positive thingfor the economy.

As the economy does well, jobs become available, theunemployment rate down and brings increased spending putting money back intothe economy (Pokharna, 2011).Then when the economy is in a bad state, unemployment rates increase, while thedollar value begins to decrease. When there is an increase, spending increasesas well so the flow of cash in and out of consumer pockets go into the economy.The decline can lead to recession depending on how bad the economy takes a hit(Pokharna,2011). Federal Funds rate were increasedby the FOMC (Federal Open Market Committee), which deals with financial loans increasingthe federal funds rate currently at 1.5% (Amadeo, 2017). Federal fund rates are the mostinfluential n the U.

S. economy. Targets are set for the funds rate, and bankscan’t be forced to use these rates.

Inflation is controlled through the fedsand how it deals with rates. The impact it may have on the new product is thatas the U.S. improves, the soft drink industry will be positively affectedthrough sales and revenue, and consumer purchases increasing (Amadeo, 2017).Macroeconomic Analysis of The State ofThe U.

S. Economy (Kell, 2016)Nevertheless, sales are decreasingbecause consumer interests are shifting towards water, coffee, and juices (Fry,Spector, Williams, & Mujeeb, 2012). For the tenth year in a row thecarbonated soft drink market decline. 1.

4 billion cases were lost in thebeverage industry since 2004. Diet soda brands are also losing, reporting adecline of over 5% with Diet Coke, 4.8% with Diet Mountain Dew (Kell, 2016). Thesoda industry is struggling as consumers are turning to juices, flavored water,and other options that are healthy due to an increase in health consciousness,so the soda industry is struggling (Fry, Spector, Williams, & Mujeeb,2012). The health alternatives don’t have as much calories, do not containingredients like sweetener aspartame, a sugar substitute that has a mixedreputation among consumer that those purchasing would worry about (Kell, 2015).

In the figure below, it shows the demand drop for soft drinks in 2015.o  “Positioning:the customer’s perceptions of the place a product or brand occupies in a marketsegment. In some markets, a position is achieved by associating the benefits ofa brand with the needs or lifestyle of the segments (Carbonated Soft Drinks…2020, 2017).”o  “Targeting:process of focusing on a particular segment of a total population, whereby themarketer utilizes its expertise to satisfy that submarket and accomplish itsprofit objectives (Carbonated Soft Drinks…2020, 2017).

“o  “MarketSegmentation: process of subdividing a market into distinct subsets ofcustomers that behave in the same way or have similar needs. each subset mayconceivably be chosen as a market target to be reached with a distinctmarketing strategy (Carbonated Soft Drinks…2020, 2017).” ·       The soft drink market used marketingstrategies with a model called STP: a three-stage process examiningsegmentation, targeting, and positioning which can be used by specificcompanies or the industry.

·       U.S. when it comes to carbonatedsoft drink still holds as the largest market both in growth and value (Report Explores… Industry, 2017).·       Compound annual growth rate (CAGR)of 0.1% was the market consumption increase between 2011 to 2015 and reached183,791.5 million liters in 2015 (Report Explores… Industry, 2017).

·       The soft drink market in the U.S.had a total revenue of $286,295.7m during the year 2015 with a compound annualgrowth (CAGR) of 6.0% between 2011 and 2015 (ReportExplores… Industry, 2017). Based on types of drinks whether it be Coke, flavored water,or more the data listed below analyzes the market. (Fry,Spector, Williams, & Mujeeb, 2012). Soft Drinks have been around for a long period of time andin the beverage market it represents almost half of the revenue in the U.

S. (Fry,Spector, Williams, & Mujeeb, 2012). The industry accounts for about 25% ofthe beverage market. Stats show that soft drinks are the largest sugar sourceconsumed in America. About 40% of children and 33% of adults drink thesebeverages (Fry, Spector, Williams, & Mujeeb, 2012). Back in 2014, therevenues of the soft drink market in the U.S. exceeded $158 billion.

Thesenumbers represent a growth rate in the soft drink industry regardless of adecline in sale at one point. The soft drink market is evolving with differentchoices of drinks, but the three major companies are Coca-Cola Company (28·6%),PepsiCo, Inc. (26·8%), and the Dr Pepper Snapple Group (8·6%) while the other36% belongs to small soft drink manufacturers (Figure 1) (Fry, Spector, Williams,& Mujeeb, 2012).Microeconomic Analysis of TheCurrent State of The Soft Drink Market              Industries no matter what type mustdeal with the ebbs and flows of the economy in the nation they are located andsometimes the world. The soft drink industry as a multi-billion-dollar globalindustry with product lines in carbonated soft drinks, bottled water, juices,teas, coffee, and fruit beverages (Fry, Spector, Williams, & Mujeeb, 2012).For this paper, I will be assuming the role of a financial consultant for astart up company that plans to introduce a new beverage categorized as a softdrink, which will be a healthier alternative to soda. The product was firstintroduced in Florida, where there was a growth in sales and the company wantsto explore the option of expanding to other markets in the U.S.

Being that thecompany has no financial experience and has become highly profitable I willprovide a general analysis of this project. I will start of by providing anddiscussing a microeconomic analysis of the current state of the soft drinkmarket in the U.S. and how any recent developing trends may affect the demandfor this product. Then, a macroeconomic analysis of the state of the U.S.economy and the impact this may have on the demand for this new product will bepresented.

Finally, a list of key management accounting practices that thecompany must put in place to support their planned expansion will be provided.Each practice will have a full explanation describing how and why the practiceis necessary to manage the growth that will come with expansion of the productto different states. With each explanation, I must consider the fact that thecompany will need outside financing and may even consider the possibility ofgoing public in order to sell its stock on an exchange.


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