Strategic Management 1

Assignment 1

Company Description and SWOT Analysis

Name

BUS 599 – Strategic Management

University

Professor

Date

Company Description

           The Frank Beverage Group is named because of the significant meaning. The reasoning is the fact that the products being produced by the company will firstly be as advertised. The majority of companies today state that specific compounds are found in their products. This can be demonstrated by the recent class-action lawsuit that was filed against the giant beverage companies in the U.S. Namely, Coca-Cola Co.; the company failed to appreciate the science in their products hence why they were sued (Shemwell, 2016). With Frank Beverage Group, the objective of the naming is to ensure the client that the products being sold are “frankly” as advertised. Additionally, the name was selected because numerous beverage companies today barely listen to the wants and needs of the people with most of their products.

           After appreciating the reasoning for the company’s name, it is important to address the products that will be sold. Today, more people are switching to healthy behaviors; this is demonstrated by reduced tendencies to consume carbonated drinks. With an increased preference for juices, the company will focus the majority of its production with no sugar added juices of all flavors available.

Mission Statement

           The mission statement guidelines to the company to focus and define the business concept for at least the next few years (Abrams, 2014). The expectations of the company will be enforced by its mission statement, which will be “the Non-Alcoholic beverage distributor of choice by surpassing the expectations of the consumers, suppliers, and workforce.” When the mission statement is analyzed, it is noteworthy that the company has already established its production goals and expectations. Firstly, the company will be producing no added sugar fruit juice. Secondly, the company will concern the standard about the quality of production because the company realizes that customer care is important in a competitive market to become successful. Finally, the employees are assured appropriate working conditions. By properly adhering to their needs the company will be able to sustain continuous production with reduced expenses.

Trends

           In addressing the non-alcoholic beverage industry at the current rate of growth, economists assume that by 2024, the industry will be worth 1252.54 billion (Prnewswire, 2019). This figure will be registered by a CAGR (Compound Annual Growth) of approximately 5%. These figures were attained during the focus period of 2019-2024 (Prnewswire, 2019). When this information is redressed, it identifies the increased demand for beverages that supplement their health. This is ensuring the no sugar added juice would be flexible enough within the market trends.

Strategic Position

           The best strategic position that the company will apply during its initial stages in the market is the customer perception factor. The company will continuously review the customer's satisfaction and modify the new product line to meet the customer’s preferences. The price basis would be reasonable, and there is a customer service to take care and review the customer group throughout their consumption. Also, the company keeps concentrating on the product’s quality as advertising, and assure stating the direct ingredient’s label on the products. Additionally, the company appreciates having a local market because it would have more opportunities to develop and more focused market. The cost for the newer business is limited which the distribution of the product would be cheaper for serving customers in a local market.

Distribution Channels

           It is considering that selling the product directly to the consumer may seem like the most advisable action. Therefore, it will rely on distribution channels such as supermarkets/hypermarkets, food and drinking places, convenient stores, and vending machines. Selling in the distribution mentioned before is an effective way to reach the customer, and it’s not necessary for requiring advanced technology. Additionally, online is another channel that directly connects to the customers without intermediaries (Abrams, 2014), which in the past, if a person has to buy the beverages, they have to visit the stores. The online channel gives more choice to the customers and assists them in convenient consumption. Also, it opens up more opportunities to increase the company’s sales.

Risks

           It should be appreciated that the company may be successful by always considering the opinion of the consumers, so it will experience some risks because of the varieties of multicultural preferences and different dietary styles. Another risk would be a financial risk, which including when starting the business and as the company is growing. Those issues may be faced with challenges in debt capital for the business. Moreover, there is a competitive risk that is a significant situation because of the market changing. The accessibility of new competitors may create their products and services more effectively (Abrams, 2014). Including the competitors which already exist in the market, the company has to be aware and thoroughly prepare the strategies to back up the risk that might happen from other competitor’s action.

SWOT Analysis

Strengths: The company’s main strength is the consumer demand for no sugar added fruit juice with health supplements included. This will allow for the development of more company unique products. Additionally, the market is highly segmented, allowing for healthy development and competition (Kim & Zheng, 2017). Finally, there is a demand for no sugar added drinks in other continental markets such as that of Asia offering the company supply demand.

Weaknesses: The main weakness that the company may face is the business risks as the products are highly specialized to appease consumers to purchase them. There are a variety of choices of drink in the non-alcoholic beverage industry. Additionally, the ability to maintain such specialized production can cause the company to spend high costs on the product and employees.

Opportunities: The opportunities present in this market are ever-increasing as more markets make the change to have health supplements such as vitamins and other chemicals (Kim & Zheng, 2017). The company still maintains the concept that no sugar added product in the different kinds of health supplements. The lifestyle of customers has changed in a convenient way, and they tend to use more technology to shop. Putting the advertisement into the social media make more change to get to the customers in this century.

Threats: The main threat the company may face is competition because there are numerous companies that present the same kind of products to the non-alcoholic beverage industry. Consumer preferences can cause the company to lose sales affecting revenue overall affecting the company. As a result, the company will continuously maintain the qualities of their products and take care of the customers to defend the competitors. Plus, brand loyalty is also essential in this industry. Keeping consumer loyalty will be one of the best ways to maintain sales and income.

References

Abrams, R. (2014). Successful business plan: Secrets & Strategies (6th ed.). Palo Alto, CA:

Planning Shop.

Kim, G., & Zheng, Y. (2017). US non-alcoholic beverage demand: Evidence from AIDS model with dynamic effect. Journal of Agribusiness. 35 (1).

Prnewswire (2019). Retrieved from https://www.prnewswire.com/news-releases/global-1252-54-billion-non-alcoholic-beverage-market-to-2024--300893221.html

Shemwell, D. (2016). False advertising and labeling suits two years after the landmark supreme court decision in pom wonderful versus coca cola: Implications for the marketing professoriate. Retrieved from http://digitalcommons.kennesaw.edu/cgi/viewcontent.cgi?article=1104&context=ama_proceedings

W

Weaknesses

- Risks to appease the customer’s purchase

- high cost

S

Strengths

- No sugar added juice

- Healthy product

T

Threats

- Facing newer competitors and others already in the market

O

Opportunities

- increasing another healthy supplements by maintaining no sugar added