BUS599 assignment 3

Company Description and SWOT Analysis

Teresa Bailey

BUS599 - Strategic Management

Dr. Derrick Ross

07/15/2018

Introduction

Creating a business starts with an idea or what is termed in the business world as a Business Concept. Once you have an idea you begin to think of ways to grow that idea, and make it turn into a profit. To convert an idea into profit, your business concept must meet a need for the consumer you are marketing too. Having a clear interpretation of the market that you are entering should be the priority once the decision is made to move forward with your business concept. Determinates of your success would be based upon the size of the market you are trying to penetrate. Before progressing forward, you must assess if the market demand is large enough to substantiate the company and whether consumers will be responsive to the business you are starting. Realizing the strategic position and being able to sustain that position will be essential for a business to prosper.

Other key factors to the success of your Business Concept would be financial control, which is ensuring that money is handled effectively. Anticipating changes to the market and culture and being able to adapt well to those changes as well is critical. Also defining the business’s values and integrity standards and having the ability to respond to Global opportunities and trends well is essential. These are all factors that will turn ones’ idea into a thriving, profitable business. In this paper, I will reveal my Non-Alcoholic Beverage (NAB) company name and explain its significance, develop my organizations Mission Statement, describe the trends in the NAB industry for the beverage type I have chosen. Identify my best strategic position and provide an overview of my company’s distribution channels.

1. Create your revised NAB company name and explain its significance.

The name of My NAB Company is Grapefruit Honey Refresher. The primary business idea of Grapefruit Honey Refresher is to provide customers with a fresh and healthy refreshment product with a smile. Where most customers may be apprehensive about consuming grapefruit juice due to the bitterness of the drink, introducing the fact that honey is included in the ingredients will attract more people and make them curious about trying the refreshing drink. The name gives you it all; this is an easy way to draw in individuals that would not typically go for a bitter tasting beverage. I was not that interested in drinking grapefruit juice at one time, but in researching drinks that would help to burn fat and are healthy, I happened upon the excellent benefits of drinking grapefruit juice.

2. Develop your revised company’s Mission Statement and provide a rational for its components.

Developing a good Mission Statement is vital when creating a practical business. The Mission Statement gives you a guide on the direction you want your business to go in. It also provides a roadmap for investors, employees, and consumers, by reading it they should be able to precisely determine if the organization lines up with where they are going. A company’s mission should reflect every facet of the organization from the range and nature of the product(s) being offered to the pricing, quality, service, and marketplace position. It should also encompass the potential growth the business will have as well as the use of technology and what your relationships with customers, employees, suppliers, and competition and the community. The Mission Statement for my NAB Company is: To provide a refreshing and healthy, thirst quenching drink that will help individuals reduce the amount of fat stored after a meal while aiding in improving health. For my Mission Statement, I wanted to ensure that employees, consumers, and potential investors understand that my goal is for them to know that consuming this drink would do more than quench thirst.

3. Describe the trends in the non-alcoholic beverage industry, especially the specific type of beverage category you have chosen. Justify at least three (3) reasons why you have chosen this type of non-alcoholic beverage.

Grapefruit Honey Refresher is a product of high quality, that will be produced at an affordable cost with the option of customizing the product to meet the customer’s health as well as nutritional needs. The products include:

· Real grapefruit honey juice

· Skinny smoothies

· Health and fitness supplements

The United States juice and smoothie industry produce a wide range of blended fruit plus vegetable juices for consumers looking for nutritious as well as delicious beverage options. Consumers, especially the health-conscious ones, have drifted away from the traditional products to the juice and smoothie products. Also, fruit and vegetables are not only well established, but also stable items in many households. Nonetheless, the influx of new drinks like the sports and energy drinks, which are heavily marketed to the younger generation is gaining sustaining growth, and this is creating external competition to juice producers. Given that some juices have high sugar content, the IBIS World projected revenue decline between 2013 and 2018. Industry statistics indicate that there are 455 businesses in the juice production industry employing a total of 14,783 people in the United States. The industry revenue in 2018 stands at 12 billion dollars, and the annual growth between 2013 and 2018 is -2.9 percent (IBIS World, 2018).

Orange juice, as well as lemonade citrus juices, the share of the juice and smoothie industry have been steadily falling over the past decade. Orange juice is hit by an incurable disease referred to as citrus greening which attacks orange trees. This disease, also known as the Huanglongbing, has adversely affected citrus production in different countries including the United States. Citrus greening results in the premature falling of fruits. The United States Department of Agriculture indicates that production of oranges in the country has fallen in the past five years because of the high decline of oranges in Florida. This has led to a sharp increase in citrus juices leading to a decrease in revenues (IBIS World, 2018).

Even so, Grapefruit Honey Refresher has decided to enter this industry because of three key reasons. First, the IBIS World indicates that the industry will experience modest growth over the next five years because of innovation. Also, the industry revenue is expected to grow because of the increase in per capita disposable income. However, the primary threat is that the younger consumers need more than just the traditional juice. Most importantly, the IBIS World identifies more than 250 success factors for businesses and the most important ones for the juice and smoothie industry are: research and development, economies of scale and distribution management (IBIS World, 2018).

Second, there is a rise in demand for refreshment because consumers are more concerned with their health and understand the impact of their dietary choices on their overall health. Gagliardi (2015), in his support, posts that many people are willing to pay more for weight loss as well as health-boosting products. The Nielsen’s Global Health and Wellness Survey of 2015 found that 88 percent of the 30,000 participants stated that they would pay more for health-boosting product and 50 percent of the respondents indicated that they take a lot of natural fresh foods with the aim of expanding their diets (Nielsen, 2015). Beck and Schatz (2014) assert that the demand for healthy eating trends can be supported by the 6.4 trillion decreases in the number of products sold by 16 largest food as well as beverage companies in the United States between 2011 and 2015.

4. Choose one (1) strategic position from the course text that you believe is the best strategic position for your company. Explain the approach you will use to implement this strategic position to distinguish your beverage from other non-alcoholic beverages.

Grapefruit Honey Refresher is a high-quality product, fresh fruit juice and protein smoothies produced at an affordable cost. To achieve this, the company will source its raw materials direct from the farm and use one vendor or the supplier, who is also the manufacturer of the core products. This will lead to a massive reduction in distribution costs which are typically transferred to customers in the price of the product. As a result, the business will offer high quality and health focused products at an affordable price.

5. Provide an overview of your company’s distribution channels. Explain the manner in which your product will reach end users. Provide a rationale for your chosen method.

Grapefruit Honey Refresher will be a Mobile juice outlet which will traverse various cities and states across the country selling its products along the way. This mobile shop will also make sales at various pop-up shop events at Festivals, carnivals and attractions sites like well know amusement parks. The business will utilize a distribution service to have their product sold at retailers such as Walmart and Target. They will be very heavily involved in the obtaining insight from their customers which is vital in understanding the prevailing market trends. Also, the business will utilize social media sites like Facebook, Instagram as well as YouTube to attract new customers. For value proposition, the company will include entertaining videos of lovely places that the mobile shop has been too, showcasing the overall stories of the Grapefruit Honey Refresher mobile business and customers’ stories. Also, the compny will rent a facility for production and warehouse purposes. Most importantly, they will buy two large refrigerators for storage of finished goods and raw materials for quality preservation.

6. Outline at least three (3) types of risks (including any regulatory risks) that your business faces. Describe your company’s plan to mitigate such risk.

Beverage products, both alcoholic and non-alcoholic, must be produced under sanitary guidelines put in place by governmental regulations (Ristovska, Dimistrovska & Najdenkoska, 2012). Grapefruit will continuously clean and disinfect production and storage equipment with cleaning agents. Also, the company will use laboratory techniques to detect and quantify chemicals in juice and smoothie products to identify the potential health risks. Application of critical control point systems combined with the controls conducted by the health and food control authorities will be useful in ensuring product safety. Apart from government regulations, the business is likely to face two other risks: economic risk and technological risk. Even though Grapefruit Honey Refresher will not operate on a large scale, the business is vulnerable to unpredictable economic changes. As a result, the business will identify the economic trends, both national and international, that may affect its operation and profitability. With regards to technology, there are innovations each time, and a business must be ready to be innovative to attain competitive advantage. Grapefruit has the scope to invest in quality technology, and the business does not worry about adopting a new technological innovation if it can offer a competitive advantage.

7. Develop a SWOT analysis for your NAB Company using the SWOT matrix worksheet in the course text.

SWOT Analysis

References

Abrams, R. (2014). Successful Business Plan: Secrets & Strategies (6th ed.). Palo Alto, CA: Planning Shop.

Beck, M., & Schatz, M. (2014, January 16). Americans' eating habits take a healthier turn, study finds. The Wall Street Journal. Retrieved from.

https://www.wsj.com/articles/no-headline-available-1389825503

Gagliardi, N. (2015, February 15). Consumers want healthy foods. Forbes. Retrieved from.