FOR REY WRITER

Operation Management

Vernette Nathan

Strayer University

Dr. Sandra R. Bryant

Bus 599

30 November 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. These reasons make the company highly significant amongst the entire population it serves and more so, to stay ahead of its competitors 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. The major aim is to offer quality products for its customers and more so, ensure that market gaps are well filled for the sake of customer satisfaction.

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 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. The below diagram is an illustration of the three-tier system, on how the product will reach the final consumer from the manufacturer.

Manufacturer Wholesaler Consumer

This channel of distribution is highly preferred especially by most commodity producers since it is much cheaper as compared to embracing the other channels of distribution first, it is easier for the goods to reach the final consumer, process remain favorable due to the reduction of middlemen, product reaches consumer within a short period and lower distribution costs are incurred by the manufacturer of the commodity, in this case, Upscale.

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

Up scale’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.

SWOT Analysis Worksheet

Strengths a) What do you do well? b) What unique resources can you draw on? c) What do other organizations or businesses see as your strengths?	Weaknesses a) What could you improve? b) Where do you have fewer resources than others? c) What are others likely to see as your weaknesses?
Opportunities i) What opportunities are open to you? ii) What trends could you take advantage of? iii) How can you turn your strengths into opportunities?	Threats i) What threats in the industry could be of harm to your organization? ii) What is the impact of your competition to your success and profitability? iii) What threats do your weaknesses expose you to?

The above worksheet can be correctly used by the organization to help in the evaluation of the business strengths, weaknesses, opportunities and threats in the industry in which it operates. In other words, it is important to perform consistent evaluations of an organization for the sake of its continued profitability some of the strengths, weaknesses, opportunities and threats evident to the organization are well described above.

Marketing Plan

Target market

I am targeting business as well as individual with my beverage product which I have rolled out in the market. Research shows that most of the consumers taking non-alcoholic drinks fall within the brackets of 16 to 25 years of age. My primary target will be young people both female and males because of their high consumption rates that enhances the viability of my sales forecasts. In the light of competition in my area, I have evaluated the suitability of my business venture and discovered there is an existing gap to introduce new beverage. Most of the drinks available in major stores are convectional drinks such as coca cola and Pepsi which creates for newer products. Young people are inquisitive and in most often than not they change their loyalty from brand in case it seizes being fashionable or an appealing product is produced in the market. I plan to introduce a variety of flavors that will give the young people both the dynamism and flexibility they need while purchase my beverage drink.

Consumer Demographics

The types of consumers that will be targeted by products will include young people between the age of 11 and 25. Arguably, this is because of their immense need for energy giving drinks. The education level of these consumers will range between high school and college students. On the other hand, the income level of these consumers will be between $100 and $10, 000. However, it is important to note that the gender will be mixed as the drinks will target both males and females. My business is located in the heart of Chesapeake, Virginia which according 2010 census it had a population of 222,209 and today it is estimated to 232,977 according to US Census department.

Company’s Demographics/Market Competition

Beverage market is characterized by huge companies such as Coca Cola and Pepsi which have numerous numbers of differentiated products with considerable market share. Furthermore, these companies have a national and international coverage (p. 107). The secret of my survival lies exclusively in differentiation of my products to arm against cut throat competition in the beverage market. Most of the forms of advertising adopted by large beverage companies have been based on large promotional campaigns as well as advertisement in television and other forms of mass media due to huge resource muscles.

Marketing Message

My aim is to create a relational beverage which young people can identify. I aim at portraying my beverage as part of the lifestyle of the consumers. The brand and the value will be conveniently interlinked so as to grow royalty upon which the business can win new clients as well as maintaining existing ones. My marketing aims at attempting to satisfy the individual rather than simply his thirst (p. 160). My business is anchored on providing value to the consumers that is being a battle of beverage. It is often agreed that if a man’s heart is won over, it means that other areas of his life can be conquered. For this reason my aim is to rally the young people behind my beverage the same way other brands have been transmitted to the culture of the young people such as the pop industry that has captured millions of young people through portraying itself as a culture rather than products.

Marketing Strategies

I have evaluated a mix options which together result to incredible business success. One of my strategies is referred as infomercial which is a type of television commercial that allocates more time to discuss in detail and sample products over a period of time. One of the obvious advantages is that it mops out any possible prejudice in the market regarding my products. It also informs the customers in depth knowledge about my beverage price, composition, selling points and appearance.

On the other hand, the commissioned research aimed at assessing the needs and expectation of my target group in addition to their unique attributes. As I present my products to them, I will attempt to match their needs with the solutions offered by my beverage in the most suitable way.

On the other hand in order to capture the young people as a segment I have initialized mechanisms of issuing free test drinks to groups of young people as opposed to individual so as to draw the segment rather than scattered people. Coco Cola has been known to sponsor large sporting activities which bring a lot of people together such as in key football tournaments such as the world cup. Due to the nature of my target market, I will use both the social media and other forms of online marketing so as to capture more the technologically savvy young people.

In doing this I will package my message through clips that can be shared freely on social media alongside appealing images that create value to my target market. In addition I will sponsor small music fests and other events in local university and colleges to raise awareness for my brand. By regularly engaging my target audience I will be ensuring that I keep pace with their current new trends in the target group in order to remain vibrant and persuasive. In addition I will seek to foster partnership with food cafes frequented by young people whereby my beverage can been packed with meals at a relatively cheaper cost thereby increasing my brand’s reputation.

On the other hand, the different factors that influence the choice products will consistently be addressed by my business which will entail keener focus on the available opportunities for diversification as well as forging further partnership with other beverage companies for mutual benefits. My company will engage stakeholders of different sectors that concerns the youth as part of my strategy of involving them in the day to day running of business which will encourage making further purchases from my business.

The business provides us with an opportunity to establish a huge internet marketing arm which has potential for growth and diversification. The fast growth of the online businesses and stiff competition by established businesses. Online business is versatile and we may experience whooping number of new clients which might be challenging to handle and potentially leading to crashing of our site. We intend to create a site that can handle large number of users and also conduct close monitoring of the platform, upgrading it when necessary without delays. We will hire sale agents to approach potential clients to counter stiff competition by our competitors.

Planned promotion /advertising type	Expected business improvement	Cost ($)	Target date
Social media campaign	Social media will be give us a greater visibility and connect us to potential businesses on social media.	[$] 15,000 every month	[Month/Year] Oct-Dec/2015
On site advertisement	We will use our site as the primary way of marketing our business to potential clients. With the growth of the business we will be advertising our serves on other websites.	[$] Cost covered by our site.	[Month/Year] Oct-Dec/2015
Giveaway media	The free beverages will be distributed to the public part of whom shall be our potential clients which will serve as an advertising mechanism for our business. It will give us a chance to get new clients for the beverage business.	[$] Cost covered by production unit	[Month/Year] Oct-Dec/2015
Promotion	The free beverages will be sent to our potential clients to encourage them to adopt what other businesses are involved in as part of the ways of pursuing them to form partnership with us	[$] 5,000 every month	[Month/Year] Oct-Dec/2015

Operation plan

The operation plan of the plan covers the major aspects of how the company will be running its operation as well as the factors that will be employed during the process. To begin with, the company will run under a facility that is spacious enough to give the production process sufficient space. The location of the manufacturing plant also puts the company in a better position to reach out to its targeted market thus greatly reducing the costs incurred during the distributions process. The company will also ensure that those facilities that require very high initial capital to purchase are rented rather than buying, (Burrow & Kleindl, 2012). The location of the company will play a major role in reducing the costs of operation as well as making the production process more effective. For instance, the proximity of the plant to the market will greatly reduce the transportation costs. Also, readily available raw material such as water and synthetic sugar will reduce the production time thus increasing the productivity of the company.

The competitive advantage of the company will be its minimum operation costs. The company will put up systems that will see it through that operations cost such as the cost of production and transportation costs. The result is that the company will be in better position to compete with its competitors who are having less cost effective systems. This eliminates the need for the company to engage in price wars with the competitors. The company is also focused on addressing some of the challenges that its bound to face and these challenges may be from the surrounding population following the activities of the company. The company will engage with the local so as to ensure that their concerns are addressed the best way possible. The research and activities of the company will be able to bring out the concerns of the customers regarding the product as well as that of the public regarding the activities of the company. It is this information that will be used to develop the quality of the product as well as enhance the relationship between the company and the locals by addressing their concerns.

Technology plan

One of the very important aspects of technology that will be used by the company is cloud computing as well as a graphics software. With this in place, the company will able to put all its information regarding the customers details as well as the inventory in the cloud system, and this can be accessed at any time thus reducing the amount of paperwork as well as paper wastes generated by the company, (Clark, 2007). For the hardware needs, the company will use three Macintosh computers from the start. These will be used to run the inventory, record customer information as well as track the production process. The computers will also be used to record employee information, and the information will also be stored in the cloud.

The company will invest in a telephone connection within the plant. With this in place, there will be an effective flow of information from the top management to the bottom or the other way round. This will ensure that information is passed to the relevant individuals are fast as possible so that they can take the necessary action in good time, (Reuvid, 2011). With time, the company will invest in more computers, and this will facilitate the used of email as well as social networks for communication between employees. With regards to personnel needs, the company will have to outsource the services to ensure that the employees are well trained on the use of the technology in the company. Even though this might cost the company more than using in an in-house program, the employees will be able to get quality training from experts, and this increases their knowledge and skill on how best to use the technology for maximum efficiency. This will increase the productivity of the employee and that of the organization as a whole.

Management and organization

The key management position in the company will include, The President, who will be in charge of the whole organization. There will be vice presidents how will head the various departments such as marketing production and accounting among the others mentioned below. At each department, there will be a supervisor who will manage the activities of the employees and will be reporting to the VP.

The board members will also be the advisors of the company, and these will include the individuals who have contributed the initial capital for the start up. The President of the company will be the one chairing the board. The company will employ a horizontal management style. The style will involve self-managing teams who set their goals as well as make their decision. The style will benefit the organization because it substantially reduced the number of individuals needed to run the organization, (Hoang, 2007). This will be in line the objective of the organization to used effective systems that will reduce the operation costs of the company.

Ethics and social responsibility plan

The company will be committed to being a good corporate citizen by considering the concerns of the both the internal as well as the external environment that are affected by the activities of the organization. To begin with, the operations of the company will create jobs to the local individuals are well as those from a distance and have qualified for the different job position that will need to be filled. This means that the livelihood of the individuals will be improved because they will now have a source of income and they can use the money to fulfill their financial needs, (Rendtorff, 2009). This will greatly result in the economic development of the area because these individual will have more disposable income to spend.

Also, the company will see it through that the recruitment process for employees is fair and honest and that the most suitable individuals are selected without any form of discrimination. This will also involve the fair and honest treatment of employees after they have been accepted by the organization. Employees will be rewarded based on their performance and hard work. This will see it through that every employee gets the sense of being valued by the organization, and they will, therefore, do their best to achieve the goals and objectives of the organization.

With regards to the laws are regulations of the land, the management of the company will work to ensure that the company adheres to both state and federal laws. Some of the laws that will affect the activities of the company will be the Equal Employment Opportunity Act, 1961. The company will see it thought that every individual is given equal employment opportunity in the organization regardless of their race, gender, sexual orientation or national origin. This enables to company to have a productive workforce that is diversified with individuals from different cultures. The employees will also be trained on the importance of respecting the difference cultures within the organization and this will curb discrimination in the workforce. Also important to mention is that the company is a social venture and will be looking forward to enhancing to relationships of the locals are well as make improvements on potential environmental hazards, (Sims, 2003).

There are environmental concerns related to the activities of the company. The kind of production undertaken by the company will necessitate the use of water. As a result, the company is likely to generate a lot of wastes in the form of water, and this water may pose a potential health hazard to the locals. There is also the threat posed by the vessels that will be used to package the energy drink. The bottles are made of non-biodegradable materials and might pollute the environment if not disposed of in the correct the manner. To mitigate these effects, the company is going to install a water recycling system within the plant, and this will be used to make the waste water usable for the company as well as render it harmless when released into the nearby stream. This will see it through that the company is not only able to disinfect the wastes waters but also save on the huge sum of money that could have otherwise been used to pay for fresh water.

The bottles will also be reusable as the company will be reusing the bottles until they are damaged. When that happens, the company will work with the suppliers of the bottles who will then take them for recycling and reducing the price of new orders. This move too will also see it through that the company save as substantial amount of money that could have otherwise been used to buy new bottles for packaging.

Unlike soft drinks, Upscale energy drink will not have any negative health concerns. There have been growing concerns by the public and regulators on the amount of sugar added to the soft drinks, and they are advocating for a reduction of sugar in the drink. The luxury energy drink will have sugar in quantities that have been proven to be safe for human consumption even if they consume several bottles in a single day. The company is focusing on healthy living, and one of the objectives of the company is to provide customers will healthy drinks that will make them live a happy life my improving their health. If there are any negative implications reported with regards to the product, the product development team will ensure that the issue is addressed as first as possible, and the information is passed out to the relevant authorities as well as the public, (Rendtorff, 2009).

Reaching the targeted market is one of the major factors that will determine the success of the product in the market. The company will be using marketing vehicles that will ensure that it is only the targeted market that gets to know as well as buy the product. To begin with, the company will be sponsoring some of the major sports events, and this will ensure that the targeted market is reached out directly because they will be the individuals taking part in the games as well as attending to watch. The company will also ensure that TV commercials are aired at a time when the targeted market is likely watching the TV. This will greatly help the company to avoid running marketing campaigns that do not give the expected results.

References

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

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

Burrow, J., & Kleindl, B. (2012). Business Management. Mason, US: Cengage Learning

Clark, G. (2007). Business start up and future planning. London: Emerald.

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

Hoang, P. (2007). Business & management. [Melton, Vic.]: IBID Press.

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

Rendtorff, J. (2009). Responsibility, ethics, and legitimacy of corporations. [Frederiksberg, Denmark]: Copenhagen Business School Press.

Reuvid, J. (2011). Start up and run your own business. Philadelphia: Kogan Page Ltd.

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

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

Sims, R. (2003). Ethics and corporate social responsibility. Westport, Conn.: Praeger.