Strategic Management - Executive Summary

My Non-Alcohol Beverage (NAB) company name is EZ-Cleanz

The significance of this company is to provide a convenient method of detoxing at the fraction of the cost to detox drinks at home and the convenience being able to carry it along with you. Detoxing with various beverages is a great way to help give your body the nutrients it’s really craving, and can give your digestive system a break from having to break down and digest food. The liver is the most important detoxifying organ in the body, so it only makes sense to drink fruits and vegetables to help it function at its best.

MISSION STATEMENT

EZ- Edge is a socially conscious company providing a detox drink for our consumers to assist in creating a healthy lifestyle change or weight loss. Detoxing the body has been shown to be effective for starting a new diet program, a new exercise program, or just a good idea to do at strategic times throughout the year.

Range/Nature of Products or Services Offered: Non-Alcoholic Beverage

Quality: Purified water and organic fruits and vegetables

Price: $2.99 - 8.99

Service: Detox drink/smoothie

Overall Relationship to Customer:

EZ-Cleanz pride ourselves with a close relationship with our customers. This relationship allows use to be able to customer’s suggestions regarding our products in order to enhance them. We strive to let our customers know they are our number one priority.

Management Style/Relationship to Employees:

We plan to use the participative (Democratic) style of leadership. This leadership style has the primary objective of building commitment and consensus among employees. EZ –Cleanz Beverages will have a close relationship with its employees, which will allow them input in developing and making of the products. We value our employees and we aim to provide a great working environment.

Nature of Work Environment: Friendly, open-door environment

Relationship to Rest of Industry: EZ-Cleanz would have to compete with other competitors but we have to ensure we have a competitive advantage over other companies by offering a better product and easily accessible to our consumers.

Incorporation of New Technology/Other New Developments:

In order to have a competitive edge over our competitors, we have to constantly review our products to ensure we are providing a top product using the best techniques/equipment available.

Growth/Profitability Goals: Our goal is to be a successful company that will have year over year growth each year

Relationship to Community/Environment/Other Social Responsibility Goals:

EZ-Cleanz would like to have an appearance in the community to show what we are concerned about the health of our consumers.

Other Personal/Management Goals:

EZ- Cleanz will consistently provide training for our staff and employees to allow our company to provide the best products to our consumers. As the company grows we want our employees to grow.

Trends in the Non-Alcoholic Beverage Industry

Non-alcoholic beverages are drinks that contain less than 0.5% alcohol. They comprise juices, energy drinks, bottled water, wines, ready to drink tea/coffee and non-alcoholic beer, all of which can also referred to as soft drinks or virgin drinks. There is a global surge in the consumption of soft drinks, owing to the changing customer needs coupled with the introduction of many new flavors and product varieties, thereby causing a huge demand for this type of drinks. The rising levels of disposable income for customers in the emerging economies is another major factor driving the need for the non-alcoholic beverages, and we expect this to continue to have an enormous impact on the soft drinks consumption levels.

However, demand and by extension revenue growth for the non-alcoholic beverages in the United States may not grow as rapidly as other regions of the world, a phenomenon that is attributed to the increasing health awareness more so in the younger population. In fact, demand for the soft drinks is expected to decline in the US and most of North America owing to the aforementioned health concerns and obesity. This may not be the case in the Asia-Pacific and in the Rest of the World where the growing disposable incomes and rapid changes in consumer lifestyles are expected to drive demand for the non-alcoholic beverages. The European market is more similar to the United States, and it is expected that the demand for soft drinks may suffer a deep decline. However, the recent introduction of sugar-free and diet drinks may reverse this trend and thereby considerably lead to increased consumption (Publishing, Worldwide Music Series, Market, 2012).

In short, the demand for non-alcoholic beverages is greatly determined by the consumer perceptions and health awareness, accentuated by the levels of disposable incomes and the government regulations regarding the manufacture of these drinks. The growth in population and changes in consumer lifestyles are also huge factors that dictate how much of the soft drinks products is consumed in a given region. It is, therefore, hard to predict the overall global effect and trends on the soft drinks industry because different regions will have a different trend depending on the prevailing market conditions in that area (Steen, 2007).

Strategic Position

The best strategic position to be taken for this detox beverage company is to create a grand alliance with several packaging companies who are going to manufacture the final products, using the formula or concentrate given by the beverage company. This way, the parent beverage company can focus all its attention on developing a good concentrate, as well as leading all marketing and advertising initiatives for its products. The manufacturing and packaging company also gets to specialize in optimizing their manufacturing process to reduce overhead costs.

Distribution Channels

Supermarkets, general merchandisers, and food service establishments are the main outlets where soft drinks are sold. The three collectively sell over 70% of sales. It is, therefore, critical that we enter into contracts and deals that will ensure our products reach these outlets since this is where the majority of customers buy from. Other means by which we can get out products to enter the market involve the vending machine operators, where also a lot of sales can be made. The secret to having the best distribution is to use the primary distribution channels, but also explore new ways such as online distribution, which can achieve the same results in a more efficient, convenient and cheaper fashion.

Risks Associated with the Soft Drinks Industry

The non-alcoholic beverage industry faces numerous risks associated with this line of business some of which if not adequately mitigated, may cause detrimental loss and disruption of its normal operations. Some of the significant operational risks stem from the stiff regulations and laws imposed by the government within which the beverage company operates. The risk of litigation and hefty government penalties are some of the main risks that such a soft drinks company may suffer. This risk emanates from, among others, the regulations put in place by the food standards agencies mandated to control the food and additive components of any beverage to ensure that the drinks are indeed safe for human consumption both in the short-term and in the long-term. For instance, the US Food and Drug Administration recently gave a report indicating that several soft drinks contained benzene levels that were above the recommended 5ppb. Such a report may result in the imposition of substantial penalties on the affected companies, not to mention the legal suits from concerned consumers of the products involved (Pear, 2011).

Market risk is another major concern for the non-alcoholic beverage industry. The ever changing market dynamics in any given region creates new dimensions of the demand and supply of the soft drink products. Health concerns associated with the beverages pose a new headache for the manufacturers who are now subject to numerous laws that affect their businesses adversely in more ways than one. The emergence of many players in this industry also means that the growing number of competition will bring about a serious threat to both the existing and upcoming soft drinks beverage companies. Loss of a substantial market is a nightmare for any organization and could mean the beginning of its downfall, and therefore, most companies will fight hard to maintain their market share, if not grow it.

Currency risk is also a critical concern for those firms companies that have operations beyond the United States. The foreign exchange rates are always changing. Although the USD may be getting stronger, the same may not be said about the other currencies. Any volatility in the political and economic well-being of a country will have some effect on the exchange rate of its currency, and this could adversely affect the operations of the multinational soft drink company. Such risks may, however, be mitigated by the use of hedging when drawing any international contracts (Jorion, 1990).

SWOT Analysis

SWOT analysis refers to a planning tool used to identify the strengths, weaknesses, opportunities and threats that exist both in the internal and external organizational environment, in a bid to help in making decisions that will assist the firm to the attain its goals and objectives. SWOT analysis, therefore, helps a firm to make better decisions and improve it business operations (Westhues, Lafrance, & Schmidt, 2001). The strengths and weaknesses relate to internal factors while opportunities and threats relate to factors external to the firm. The following is a SWOT analysis of my hypothetical detox beverage company (Goodrich, 2015).

Strengths –The most outstanding strength in this company is the wealth of over 10years of experience that is possessed by two of our top managers, and if we harness this then we can go on to become a great beverage firm. We also have a excellent technical team who will help us use the best technology to run and distribute our product. We also offer superior products.

Weaknesses- We are facing very stiff competition in the industry against some of the largest soft drink companies in the world. Poor marketing and advertising also hamper our growth. Our low market share is also a major weakness, compounded by low brand awareness.

Opportunities- There are numerous opportunities for new international markets in emerging economies which can enhance organizational performance. The rising demand for healthy beverages is also a huge chance for us to gain more market share.

Threats- There is the possibility of our competition overwhelming us with competitive pricing by other beverage firms, which calls for us to institute prudent measures aimed at cost reduction. Water is getting scarcer by the day and costlier and being an essential ingredient, this may make our products more expensive.

In conclusion, for one to succeed in the non-beverage industry, an extension SWOT analysis is necessary, as is innovation and superior product offering. This will allow the company to leverage on its strengths while keeping in consideration the threats and opportunities posed by the environment.

Target Market Analysis

The product will mainly target the American adults with a particular emphasis on minority races like the African-Americans and those from the Hispanic community. The targeted consumer’s age will range from 35 – 75 years. The consumers will, at least, have high school level education with little to no income since the product will be availed at affordable prices. The target market will include both male and female who come from all the ethnic groups in America but mostly the African-Americans and white adults (Shaw, 2012).

The estimated population of Greensboro, NC is approximately 56.5 thousand with the adult male and female between the ages of 35-75 making up roughly 49% of the population. Around 58% of the population is African Americans while the white make up an estimated 33.5% of all the people in the area. Over 85% of the population have attained a high school diploma or higher (Factfinder.com).

Market Competition Assessment

EX-Cleanz will face direct competition from in-store products sold at the local CVS and Wal-Mart stores and Juice bars that claim to provide organic cleansers and indirect competition from companies selling juice cleanses online such as Blueprint Cleanse and Life Juice Shop as opposed to natural juices. Many of these natural juices are marketed under Coca-Cola and Pepsi ,they are businesses that are already established with their brand names familiar globally. They, therefore, possess stronger financial power and popularity among the consumers. Due to their massive capital base, they can advertise through practically every available channel, and can produce more and distribute better. For this reason, competing with them is bound to be an uphill task.

Also, the indirect competitors consistently pose the threat of converting consumers from purchase detox cleanses to making their own natural, organic cleanse at home for a fraction of the cost. Their main selling strategy for their products is their alleged health benefits that come with them and the convenience of them being pre-packaged.

Strategy for Competing With Market Leaders

EZ-Cleanze will first and foremost strive to establish its market niche. Competing with brands such Blueprint Cleanse and Life Juice Shop may prove impossible. Therefore, the company will resort to narrow down its target market to a size which the company can comfortably customize the detox drink for them. However, competition will most likely also be present in the new niche and for the reason EZ-Cleanze will now make efforts to set itself apart from the competition. This will be achieved by the company doing what the competition is not doing regarding product quality and keeping up with the trends in the industry. EZ-Cleanze will also work hard to satisfy the consumers. This will be done by ensuring high-quality products at all times. Customer satisfaction more often than not results in customers talking about the product and ultimately spreading the brand awareness in the process. Also, the company will grab market share by heavily investing in campaigns, which will help create brand awareness and reach the consumer.

Differentiating EZ-Cleanze products from those of the competition is important for the company, through differentiation, will be able to shake up the market share controlled by the industry leaders. Having a good strategy will, therefore, ensure that the company’s product will be able to move from “just another detox drink” to a recognized and affordable detox drink.

Company message

EZ-Cleanze detox drinks are guaranteed to be natural and organic that will provide consumers with healthy on-the-go alternatives contrasting products that other retailers offer. It provides a quench the consumers thirst and at the same time can refresh the mind, body and spirit. The drinks will be sold at pocket-friendly prices to ensure savings on the consumer’s part. The products will be available in all leading stores in the city in easy to carry and environmentally friendly containers. The detox drink represents the new generation of adults that want to live healthy lives who make up the culturally diverse world that we currently live. EZ-Cleanze will in the future continue to dedicate resources to conserving the environment and unifying the different cultures in the world (Lamb, 2013).

Marketing Vehicle

EZ-Cleanze will use the internet, social media to be particular, as its primary vehicle for its marketing. Social media will be selected as the primary marketing vehicle for its numerous benefits. Firstly, it is one of the most efficient methods of increasing the brand awareness and recognition. Secondly, through interacting via social media with the consumers, consumer loyalty towards the brand will significantly increase. Social media provides an excellent opportunity to convert visitors to customers. Marketing campaigns on social media platforms are notably cheaper compared to channels such as billboards or television commercial. Lastly, social media is one of the most effective platforms for getting consumer feedback (Lamb, 2013).

The success of social media as a campaign vehicle for non-alcoholic beverage can be demonstrated in the success that the Coca-Cola Company has recently enjoyed with its “share a coke campaign”. During this campaign, consumers could place an order for a coke bottle with a customized message through a dedicated Facebook app. This campaign led to an 870% increase in the traffic on the company’s Facebook page, and this ultimately translated to over 7% increase in the total sales of the soft drink (Grimes, 2013).

Ethics & Social Responsibility Plan

Good corporate citizen

Business organizations are basically set to serve the people through their products and services as well as the opportunities they offer to the people. Taking this into consideration, a business can be perceived as a citizen to a nation because it serves the nation and pays taxes. EZ-Cleanz is a business organization that is committed to be a good corporate citizen through the following efforts:

Creating jobs

One of the greatest aspects of any organization especially in the business sector is creation of job (Hill & Gareth, 2012). The organization needs to run and therefore needs manpower for the same. In this case, EZ-Cleanz is a manufacturing organization which implies that it needs a considerably large number of people to run. As a good corporate citizen, the business will create jobs for the locals to enable them afford a decent life. One of the best ways that companies can be good corporate citizens is by creating jobs especially for the individuals from the local society; it is a great way of boosting their economy through corporate social responsibility.

Adhering to rules and regulations

There are rules and regulations in different areas that govern how business should run. For instance, businesses are required to pay for licenses and permits as well as taxes. They are also supposed to meet various minimum requirements. As a good corporate citizen, EZ-Cleanz observes all rules and regulations required in order to run business. In this case, the business is being a good corporate citizen to the government. Following the law enables businesses to work easier because they are recognized by the government.

Fair treatment of employees

Employees are the greatest assets of any organization because without them no operations can go on. It is therefore necessary to make sure that they are treated fairly to get their best services. EZ-Cleanz treats all citizens in the same manner; it does not favor or oppress any. All employees get fair treatment from the management team. This move has enabled the organization to be a good corporate citizen.

Non-discrimination of employees

As stated earlier, the organization does not discriminate its employees because it perceives them as having equal value to the organization. To make this move more important, the company embraces diversity in the sense that it hires employees from different cultures and ethnicities.

Social venture

One of the goals of the organization as a social venture is to make sure the environment is kept clean so that people can live happily (Weiss, 2009). The environment is among the most valuable aspects in life therefore it must be kept clean for the benefit of all. EZ-Cleanz has made this as one of its priorities.

In order to reach this goal, the company uses environmental friendly manufacturing processes. The waste products are treated before being discharged to make sure that they are harmless to the environment. The company also makes use of reusable energy that is environmental friendly. In addition to this the company encourages the users of its products to dispose packages in a safe manner that is least harmful to the environment.

This company is a social venture because it is intended to impact the society in a positive way. It is a detox beverage company and this implies that it is interested in improving the social lives of the people. The business is chosen as a social venture because it is concerned about the people around it. Its efforts are geared towards making sure that the society lives a social life that is beneficial to them.

Effect of company activities on the environment

As a beverage company, there are several ways through which activities can affect the environment. One of the ways is disposal of waste products to the environment through water discharges and fumes. Industrial processes usually have possible effects on the environment through a variety of ways. It is the responsibility of the organization to make sure its activities are less harmful to the environment.

Another possible way through which the organization can affect the environment is through its choice of packaging. After the beverages have been used, most consumers would through the bottles or packages anywhere really minding the effect on the environment. Despite the fact that this is an act of irresponsibility from the consumers, the manufacturing company is equally responsible.

In order to mitigate these negative effects on the environment, the company has taken several steps (Weiss, 2009). As mentioned earlier, the company is engaging in renewable energy as well as treatment of its waste products to make sure they do not affect the environment. In addition to this, the company is packaging its products in recyclable or reusable containers in a move to eliminate negative effects on the environment.

Health issues

The beverages manufactured by EZ-Cleanz are beneficial in terms of health because of the nutritional value. The beverages are specifically designed for detoxing and this comes along with several health benefits. Consumers have a better appetite for food and their sugar levels in the body are normalized. As a detoxing beverage company, EZ-Cleanz products have additional health benefits to consumers. A routine use of the product is healthy to consumer as it boosts even their immune system.

In order to mitigate any negative claims about the beverages, the company will concentrate on making sure that it observes all standards required in manufacturing its products (Hill & Gareth, 2012). It will also focus on using the best quality raw materials to make sure that the finished product is of the highest quality possible. It should be noted that products might have negative effects on the health of the people and measures should be put in place to eliminate this. It is the responsibility of the manufacturer to take care of such an issue through the best way possible.

Marketing of the product

To make sure that the products attract the right consumers that will not be affected in a negative way there will be adequate information about the right consumers. For instance, the persons under the age of 18 do not qualify to use the product. Individuals on specific medications will also not be recommended to use the products. Distribution will be to specific areas to make sure that only the target market is reached.

References

Factfinder.com. http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF.