Assignment 4: Business Plan--Final

Company Description and SWOT analysis

Gregory Finney

Strayer University

BUS 599

Dr. Andrea Banto and Dr. Cynthia Parmenter

October 17, 2019

Company Description and SWOT analysis

Fizzy Bottles

Fizzy Bottles is a manufacturer and seller of carbonated soft drinks and sparkling water. The company derives the name "Fizzy" from the physical and functional elements of the company. The nature of the drinks enables them to fizz out when they produce effervescence after opening the Bottle. The practical aspect of the name comes to the way the company's brand aims to be a symbol of interest and fun as perceived by the target consumers.

Mission Statement

"Fizzy Bottles' mission is to optimize customers'; entertainment, refreshment, and experiences through non-alcoholic beverages. Promote customers' satisfaction and gratification of our brand. Develop a comprehensive continuum understanding of consumer wants and needs to develop innovative products and designs to meet customer satisfaction. Attract and retain customer groups, boosting brand loyalty."

A mission statement aims to give a business a sense of direction. The statement reminds the company of its goal so that its strategies are focused on achieving that goal (Kepczynski et al., 2018). The purpose of Fizzy Bottles is to maximize customers' experience while also protecting their health and wellbeing.

Trends in the industry

Fizzy Bottle is a part of the carbonated beverages industry. This is a relatively large industry will an estimated value of $392.6 billion (Menke, 2019). This industry is in its maturity stage. Therefore, it does not have a rapid growth rate now. Between 2018 and 2023, the industry will have grown at an average rate of 6%, estimated to be approximately $316 billion (Menke, 2019). The industry has a positive future, given the expected growth in size.

Additionally, new innovative strategies are allowing the business to develop new types of products and flavors that help to sustain the growth of the industry. The issue with this industry is its domination by two companies. Coca-Cola Company and PepsiCo, Inc. are the two leading producers of carbonated drinks with a combined global market share of over 40% (Menke, 2019). The dominance of the two companies in the industries creates an oligopoly, sort of market where a few companies have excess control over the market and consumer behavior (Fudenberg & Tirole, 2013). Thus, this might pose a challenge for a new business hoping to be successful in the industry.

Strategic position

Competitive strategic positioning is essential for a business's success. The strategic position refers to the qualities of the company that differentiate it from the competitors. Proper positioning is what makes consumers choose a product over that over the competitor (Iyer et al., 2019). Fizzy Bottles' positioning focuses on customer perception. This strategy highlights the best features of the products, which makes them stand out among the competitors. Fizzy Bottles positioning will concentrate on the value that customers will derive from the healthy aspect of the drinks. The benefit of Fizzy Bottles comes from the ingredients and flavors used in the development of the productions. First, the products will be developed with healthier ingredients such as non-sugar sweeteners, Creatine, carbonated water, some Amino Acids (BCAAs)- branched-chain amino acids, Turmeric, Electrolytes, and B Vitamins but no caffeine. Additionally, the products will have unique flavors that are not currently available in the U.S. market to make the company stand out. The two unique flavors that the company has developed so far are Berry Berry Blast and Sparkling Watermelon, which include elements from Caribbean flavors.

Distribution

Fizzy Bottles Company will sell the drinks through several distribution channels to maximize the sale of the products. One of the distribution channels will be through direct selling. Fizzy Bottles will provide restaurants and retail stores with the products to sell directly to the consumers. Additionally, it will use wholesalers and retailers to distribute drinks to the final consumers. The company will have warehouses where wholesalers get the drinks for their depots. The retailers can then link the wholesalers with the final consumers of the products.

Risks

Effective business planning involves planning for the potential risks that can affect the business. Risk management is a process of identifying all the hazards that can affect the business and developing strategies to mitigate or manage them properly (Kepczynski et al., 2018). The following are the potential risks that can affect Fizzy Bottles.

Regulatory risks: The Food and Drug Administration (FDA) controls the production and sale of any edible products. Any inclusion of unacceptable components in the company's drinks might attract legal issues with this organization. However, the company will manage this risk by performing adequate research to ensure that only safe ingredients are used.

Competitive risk: The market dominance of the business's competitors is a significant risk for the success of the business. It may be hard for the business to be successful in the soft drinks industry, with two companies having most of the control. However, the company will mitigate this risk through product differentiation. Fizzy Bottles will offer healthier drink options to stand out in the market.

Market risk: A potential change in the economic system might affect the ability of Fizzy Bottles to be successful in the market. Issues such as inflation, which affect the prices of goods in the market, could cause a significant increase in the costs of Fizzy Bottles. The company may lose customers in such a case because the drinks can be relatively expensive. Such market risks are hard to prevent. The company can mitigate the effects of the risk ensuring its pricing strategy is in line with that of the competitors. This strategy will prevent consumers from choosing other products based on price only.

SWOT Analysis

Strengths · Offers new and unique flavors · Products are made with healthy ingredients	Weaknesses · Limitation of resources · Inexperienced team
Opportunities · Chance to diversify tastes · Opportunities in new geographical markets.	Threats · Competition is too high · Market dominated by large multinational companies

Strengths

Fizzy drinks have a product that offers what many companies in the U.S. have been unable to deliver. This business will be creating refreshing and fun soft drink flavors while including healthy ingredients that will help to promote the wellbeing of the consumers. Carbonated drinks are mainly associated with unhealthy ingredients. Health-conscious people do not buy the products in the market because of this factor. Fizzy Bottles will give them a chance to enjoy refreshing beverages without having to compromise on their health.

Weaknesses

This business is still relatively small. The company does not have the resources to develop an advanced business strategy as the competitors in the market. Additionally, the business has an inexperienced team in the industry. These factors will likely set the company back in its competition. There's a chance for the business to develop and grow to a level it can effectively compete with the already existing companies in the market.

Opportunities

This business has an opening for market diversification and expansion. There are so many unique flavor options that the business can develop to improve the product diversity of Fizzy Bottles. The benefit of diversification is that it will offer the company a chance to reduce competition risk and increase the sources of revenue. Additionally, there is a chance for the company to explore new geographical markets. This business will start its operations within the U.S. but with prospects of expanding to international markets in places such as Africa, Asia, and South America.

Threats

The competition in the soft drinks market is so high that it threatens the potential for success for this business. Coca-Cola and Pepsi are currently too dominant in the market. These two companies endanger the ability of Fizzy Drinks to grow effectively. It will be hard for this business to gain control over the customers when two dominating companies already control their purchasing patterns. However, this company still has the potential to be successful in the market. With a good differentiation strategy that will enable it to stand out in a market filled with Coca Cola and Pepsi products.

References

Fudenberg, D., & Tirole, J. (2013). Dynamic models of oligopoly. Routledge.

Iyer, P., Davari, A., Zolfagharian, M., & Paswan, A. (2019). Market orientation, positioning strategy, and brand performance. Industrial Marketing Management, 81, 16-29.

Menke, A. (2019, September 4). Soft drinks show popularity around the world. https://globaledge.msu.edu/blog/post/55763/soft-drinks-show-popularity-around-the-w

Kepczynski, R., Jandhyala, R., Sankaran, G., & Dimofte, A. (2018). Integrated Business Planning. Management for Professionals.