FOR REY WRITER

Running head: OPERATION MANAGEMENT 1

OPERATION MANAGEMENT 6

Operation Management

Vernette Nathan

Strayer University

Dr. Sandra R. Bryant

Bus 599

23 October 2015

Name and significance

Luxury Beverage Company is one of the many exclusive licensed distributors of energy drinks. The Upscale Beverage is one of its products, which has gained utmost significance and popularity among other non-alcoholic drinks (Bohm, 2010). The company’s head office is situated in Durban, South Africa. This is a privately held company founded in 2010 with a capacity of 100 employees in each of its branches. I have chosen an upscale beverage, putting into consideration three major reasons. First, being a new product, most consumers are eager to try it. Secondly, the organization is well known for its good public image and above all, its expertise in producing energy drinks over the years (Hartline, 2002). Finally, for the case of Upscale Beverage, the name itself suggests a completely elevated product, which attracts a majority of consumers.

Mission statement and future growth rate

Luxury Beverage Company has a profound mission statement, which stands by three major descriptions;

a) To refresh the entire world with the mind, body and spirit.

b) To be an inspiration especially in moments of optimism and more so, create happiness through the company’s brands and actions.

c) To create exquisite value and make a difference in the beverage industry.

Basing consideration on competitors in the beverage industry at large, Luxury Beverage Company has to come up with strategies that will in turn provide the organization a better position in the industry. There have been numerous market entrants into the beverage industry over the past two years. Competitive advantage is desired by al organizations. Therefore, the Upscale Beverage has to be considered one of the best in the industry, for Luxury Beverage Company to have a competitive advantage. With such a trend, it is evident that the organization may be successful only it sufficient strategies are formulated and more so, in the event that formulated policies are sufficiency implemented.

Strategic position

Strategic positioning entails the development of intended objectives and specific and applicable approaches to situations that are most likely to occur within the organization operations and other activities. The Luxury Beverage Company is specific in its goal alignment and formulation of policies within the consumer goods market. Considerable steps have been taken to ensure that communication to personnel is prioritized and more so, that the firm and personnel, in general are operating towards the firm's stated goals and objectives. To distinguish my non-alcoholic beverage from others in the industry, I will use the differentiation strategy. This will be applied in packaging, as well as advertising Upscale Beverage. This is in order to be more specific and ensure consumers specifically identify with an Upscale Beverage.

Distribution channels

The Upscale Beverage is made for use in most areas. The major target market is a wide range of people, considering the flexibility of the product, availability and more so, its use in different markets. Grocery stores will supply Upscale Beverage, which may be as well availed in sports venues, schools, churches, hospitals and other recreational facilities. Consumer convenience is highly considered by the luxury beverage company. The three-tier distribution channel is to be used in providing the Upscale Beverage to the end users. This scheme incorporates modernized warehouses, smaller brewers and other agents in the channel as well. From the manufacturer, the product will pass through wholesalers retailers and finally, to the end user.

Types of risks

Luxury Beverage Company is well aware of the different types of business risks likely to be encountered while in operation. With this knowledge, the organization has put up two distinct approached towards mitigating them. First, the insurance policy has been embraced. This way, employees are covered; third party as well as all organization property (Ray, 2010). Another step is the involvement in employee education and awareness on the different types of business risks which include;

a) Strategic risks. These are risks associated due to the engagement in operations in a particular industry. They are caused by; the general business environment, transactions, and investor relations.

b) Financial risks are associated with the financial structure of the organization and transactions involved in the particular industry.

c) Operational risks incorporate different administrative procedures of the particular industry.

d) Regulatory risks also called legal, or compliance risks are associated with the need to comply with government recommendations, rules, and regulations.

SWOT Analysis

Strengths

Luxury Beverage Company has major strengths that include; it has a major share of the global beverage market. More than 40% of customers are loyal to this brand. The company also has a strong marketing strategy of which most has been aided by advertising and other promotional aspects.

Weaknesses

Upscale’s weaknesses are that it has not yet fully diversified its entire product portfolio. This is what is highly essential for its entire future growth in the beverage industry. Diversification costs are rising each year, and the organization may remain at a loss (Silverstone, 2012). The company also has significant amounts of debt capital from acquiring other companies.

Opportunities

The Luxury Beverage Company has significant growth opportunities that are major in the emerging markets all over the globe. Consumption of carbonated and healthy drinks is on the increase. This gives Upscale Beverage a better chance to penetrate the beverage market and diversify its portfolio.

Threats

The major threat to upscale beverage is the inconsistent change in consumer’s tastes and preferences. This has reduced the amount of consumption of Upscale Beverage for the past one year.

References

Ray, D. (2010). Service Systems with Balking Based on Queuing Time. London: Routledge Publishers

Silverstone, L. (2012). Operations Research. London: Cengage Learning

Sandholm, H. (2007). Operations Research: A Model-Based Approach. New York: John Wiley and Sons

Bohm, A. (2010). SWOT Analysis. Norderstedt: GRIN Verlag publishers.

Hartline, M. (2002). Elements of SWOT. London: Cengage Learning.