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where Aje Group with their flagship brand Big Cola began their growth journey In Latin America,

a, wealth is not well distributed at all. Our country, Colombia, is the eight most unequal country in the world and is the most unequal country in South America (according to the GINI Index). In Colombia there is a social stratification that has 7 levels, from 0 to 6. Categories from 4 to 6 have higher purchase power and are loyal to the traditional sodas like Coke and Pepsi and some local brands, but the categories 1 to 3 are a market segment in which these drinks were not an option because of the high prices. Thats where Aje focused their business model on. To be competitive they needed to reduce the costs as much as possible and be sure that they are going to be able to reach places no other distributor could reach. In order to reduce the costs they are building on the following strenghts:

The flavor of their soda is proprietary so they do not have to pay royalties or import the syrup. They heavily invest in technology reducing the production costs. The distribution is outsourced, reducing distribution costs. They give the product in consignation so if the distributors do not sell the products, they do not earn money.

The key strength is their distribution model. This distribution strategy has paid off in Colombia: under their impulse the soda market has grown by 5%, and Aje now controls 10% of this market in just 5 years; a unique growth by a new company in a new market. The company is growing at an amazing rate in the developing countries, opening operations in markets as far as Vietnam. Because they give the product in consignation, the distributors have a huge incentive to sell more and enter in new zones, because the more they the more they earn. So the interests of the company and of the distributors are completely aligned. Aje shows us how a clever change in a critical part of an industry business model may have big rewards, and how exportable a business model can be.

Like for every company the strategy and business model of the Aje Group has its strong and weak points. We have covered the strong points already, now lets have a look at the challenges and threats associated with a company that has less direct contact with their consumers than most of the companies in the same industry. Their main challenges and threats are:

Less insights in consumer behavior: because the Aje Group gives the product in consignation, they do not have the same knowledge of consumer behavior compared to their competitors integrated with distribution. There can be quick changes in the consumer pattern that will be unnoticed for the Aje Group but not for its competitors. This includes unsatisfied demand because the distributors do not share the information. Being labeled as a cheap brand: Latin America is growing faster and most of the projections say that this is going to take millions of people out of poverty. Because of its market position as a cheap alternative, customers may decide to switch to another brand as soon as they have a better economic position. Loss of product: because they give their product in consignation they can start to lose it because the distributor does not show up anymore. This is not the case because it is a model quite close to the micro lending system where the repayment rates are really high, but it is a threat.

Lack of reliability on the distribution network: again because the Aje Group does not control the distribution network, they cannot easily assure that the distribution network is reliable. This situation may drive the retailers to stop their business with the Aje Group.

The Aje Group is a highly successful global company with both innovation and cost reduction in their DNA. They have to face huge challenges in the future, but showed us all that they can solve them in an incredibly efficient way. Well keep an eye on the next innovations of Aje! DRINK TECHNOLOGY INDIA FINDS FERTILE SOIL IN a country of tea and coffee drinkers, packaged cold beverages are viewed by the organizers of drink technology India as having tremendous potential. Rising consumption places demands on corresponding investment on the part of the beverages and food industry. Existing plant and machinery has to be modernised, and new installations set up. It is against this fertile background that drink technology India 2010 is taking place from 18th to 20th November 2010 at the Bombay Exhibition Centre. One of the fastest growing economies in the world, India has a prosperous middle class, numbering around 300 million, who are oriented towards western consumer habits. The beverages market is profiting from this, and for many years it has been experiencing a unique boom. Already beverages consumption is the third highest in the world, after the US and China and there seems to be no end in sight to this rise. Across all categories of beverages, further increases some in double- digit figures are predicted for the coming years. Today India is the tenth largest economy and the third largest food processor worldwide. Due to the extraordinary developments in all important industrial sectors, the demand for machinery and equipment has grown rapidly within the last 10 years, a demand that cannot be met exclusively out of Indias production. Despite a considerable increase in the supply provided by local food processing and packaging machinery manufacturers, there is a high demand for foreign machinery featuring state-of-the-ar t technology. For the manufacturers of food processing and packaging machinery, India has become a very impor tant market in Asia with strong growth potential. Within the last five years the Indian imports of food processing and packaging machinery increased by 200% and amounted to US$550million in 2008. With a market share of 23% Germany is the most important supplier to the Indian food and beverage industry. The carbonated soft drinks industry in India comprises over 100 plants across all states. It provides direct and indirect employment for over 125,000 employees. Soft drinks constitute the third largest packaged food segment after packaged tea and packaged biscuits. But the penetration level of carbonated soft drinks in India is still low compared with other developing markets, an indication of further potential for rapid growth. The market size for bottled water in India has been estimated at US$570 million in 2008. With an annual growth rate of 14.5% volume sales of bottled water will increase rapidly within the next five years

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