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Running head: JAYS 1

JAYS 2

Jay's Non-Alcoholic Beverage Company

Kelly Moore

Strayer University

BUS 599 Strategic Management

Dr. Etta Steed

April 24, 2016

Jay's Non-Alcoholic Beverage Company

NAB Name and Significance

Jay's Beverage Company is a non-alcoholic beverage company that deals with a couple different types of organic soda. In coming up with a company name, it is imperative for the originators to craft a name that potential clients can easily identify themselves with and keeping a part of their family origin intact. The name Jay is easy to recognize and will be instrumental in selling the company's product portfolio to the public. In addition the name Jay is a family name of the owners. Being an English name extension, Jay's epitomizes beverages brewed from natural ingredients with sheer elegance, perfection, and skill.

Mission Statement

The mission of the company is to continuously operate in the competitive industry and stay in line with best corporate practices while using the best quality and taste for favorable customer satisfaction.

The mission statement represents Jay's Beverage Company's focus to organize the production and distribution of high quality drinks based on customer preferences and compliance with safety standards. The company, in line with its mission, will strive to facilitate an organic environment in manufacturing or products safe for human consumption.

Trends

The trends which are being in the non-alcoholic beverage industry which have a likely impact to affect the operations of the Jay's Beverage Company entails the rapid changes in the lifestyles of the residence. This entails the fluctuations in the disposable income as well as the rates of inflation being influenced on a daily basis. This implies that the demand for these beverages fluctuates most of the time making it difficult to predict the likely consumption of such beverages.

Consequently, the increase in health awareness has led to some reactions which are mostly negative to the operation of the Jay's Beverage Company in selling its beverages. Since this beverage has been mostly found to contain a lot of sugar, people have resorted to having drinks which are free of sugar. In this regards the beverages demand s expected to decrease drastically (The U.S. non-alcoholic beverage market: Impact Databank review and forecast 2012).

Strategic Position

In the development of the products as well as services, the best position for strategy in the Jay's beverage company is ensuring that the customer’s perceptions are put into consideration. This implies that the company should invest so much in providing the exact needs of the customers. Additionally, this strategy entails the customer evaluation of the products so that the products which in this case are the beverages are appealing to the customers and offers them self-satisfactions from drinking such beverages. In carrying out this, the qualities which the customer’s water should be added so that the customers will feel that they are being valued and thus be fond of the company’s beverages.

In terms of competition, this strategy will be advantageous to the Jays beverage company since the beverages have been cooked and produced according to the specifications and orders of the customers. This implies that the likely of the beverages getting disliked by the customers are low. In this regards the company will have added advantage over its competitors. Therefore, the prices as well will be set to be friendly which is affordable to the customers basing on their disposable income (Doole & Lowe 2011). In implementing this strategic position, the company should ensure that every decision they make as well as the processes the carry out in their premises, the customers are made aware of and their opinions were given consideration very carefully.

Distribution Channels

Jay's Beverage Company will start b selling their soda to distributors, wholesalers, and retailers. Distributors will be able to sell to retail markets and restaurants. Consumers will be able to purchase products from Jay's website directly. Ultimately this is how Jay's Beverage Company will want to sell their product. This will cut out the middle man and the expense that comes with that and will be in direct contact with their consumers.

Risks

There are various risks which are associated with the Jays Beverage Company as well as any other beverage company. This includes the risks which are related to the product development as well as its supply. This is a risk since the beverage industries have been mostly found to be vulnerable to changes in the preferences of the customers. This implies that the company should have to come up with different methods of convincing customers into buying from them. Additionally, the supplies of this product are being challenged by the costs associated with it since some areas in the nation are inaccessible due to poor road conditions and heavy rains experienced.

The risks related to the competition are highly prevalent since the beverage industry if highly competitive. In this regards, Jays beverage company have to put up strategies to diversify on their geographical operations so that they can win at least half of the market. This additionally implies that the company should reduce the prices so that the customers will be able to choose them over the others beverage industries in such a geographical area. Most importantly, for the Jays Company to emerge more competitive, a lot of promotional activities ought to be conducted so that the prospective customers can be attracted (Charter & Polonsky 2013).

Moreover, there are risks which are related to the products safety. This implies that the safeties of the beverages are so vital and should be given priority and ensured safe at all costs. This as well means that the Jays Company should comply with the applicable set rules governing the food industry to ensure safety is not compromised. Despite all this being looked on by the company, the risks as well result from the way these beverages are handled by the producers as well as the suppliers of these products. This to ensure that this is achieved; the company should scrutinize their suppliers and the producers so as to ensure safety reigns.

SWOT Analysis

The strength of the Jays Beverage company entails the ability to sell quality beverages to the customers who have made it be well known for this, Moreover, the service teams are very competitive and customer friendly which has led to retaining customers. Moreover, they outsourced which they think they are expensive to them at a cheaper cost while maintaining quality. Despite this, Jays Company has various weaknesses which include reliance on some few customers which implies that if they change their preferences, the company will not have customers at all. In addition, they are not well versed with the cultural practices of the natives (Paquin 2015).

Nevertheless, the company has some opportunities which include the ability to expand their market to reach more customers which will improve their reliance on the society. They as well have unrestricted operating hours which will enable them to earn extra income from such hours. The threats facing the Jays beverage company include the rise in the number of competitors which might see the company drawn out of the market.

Marketing Plan

Jay's Beverage Company deals with a couple different types of organic soda. It is imperative for the originators to craft a name that potential clients can easily identify themselves with and keeping a part of their family origin intact. The company is focused on continuously operate in the competitive industry and stay in line with best corporate practices while using the best quality and taste for favorable customer satisfaction. Jay's, in line with its mission, will strive to facilitate an organic environment in manufacturing or products safe for human consumption

Target Market

Jay's Beverage Company would like their soda to appeal to everyone. Specifically, though, Jay's will target those who are health conscious, but still enjoy something sweet and refreshing. Ideally Jay's will target families with young and children. Parents today are no so inclined to give their children soda anymore. Jay's would like to appeal that the beverages they offer are organic and natural and safer for consumption compared to those of major soda corporations.

According to Ni, et al. (2013 ) non-alcoholic beverage industry there are many consumers. Analysis will be necessary to determine who would be more likely to consume the product. The company will target all ages and races.

As far as demographic goes, Jay's will target those of middle to upper-class. Jay's products will be priced higher than Coke or Pepsi because of the natural and organic ingredients that will be used to make the soda. This of course does not mean that the beverages cannot or will not be consumed by those of the lower-class.

Market Competition

The non-alcoholic beverage industry is already widely competitive. Not only will Jay's be up against the already well established major soda brands such as Coca Cola and Pepsi, they will be competing against other natural and organic beverages. This makes the beverage market very competitive and new business find it difficult to craft strategies that can deal with these two companies. Sorek (2016) elucidates that market competition is stiffer when there are already strongly established businesses. Jay's will to push for shelf space in retail markets.

Coming up with an organic soda is among the most effective marketing strategies. With Coke and Pepsi leading the industry, it makes it difficult for new product to find space therefore Jay's will need use creative strategies. Compared to the alcoholic beverage industry, the non-alcoholic beverage industry has a larger consumer base. In regards to analysis of strategies by Keune, Mayhew, and Schmidt (2016), differentiating the product by introducing it as an organic and natural beverage will create an impression in the market that this is a completely new product that is also much healthier for consumption. Developing a satisfying product will enable the company to attract and retain customers which in turn will steadily increase the market share of the company in the new and competitive market.

Company's Message

Jay's message to let the consumers know they are new to the market and plans to use the strategies they have put in place. By analyzing the market, Jay's has recognized the needs and wants of the consumers. Jay's will ensure their consumers of the benefits of drinking their beverage's compared to those already in the market. Jay's focus is on their consumers wants and needs and delivering the best available product their able to produce.

Marketing Vehicles

One marketing vehicle that Jay's will use is social media. It is so easy to spread advertisements through social media. Knoll (2016) clarifies that consumers are able to share their thoughts with their friends and contacts through social media as well. The company is able to share their message, promotions, and encourage others to share it as well. Social media is an inexpensive and powerful marketing tool that helps build trust and authority that can ultimately grow the business.

Another marketing vehicle Jay's can use is advertising through radio and television. Television may be pricey, but can be the most effective way to spread the companies message. Almost everyone uses a television and it can be the fastest way to advertise their products. Radio can have consumer intrigued enough by the mention of their product on the radio to go check the product out.

Sources and use of funds

The sources of funds will include majorly the cash. The cash is sourced from the sales, short-term notes payable and the actualization of the long-term notes payables. The major sources of funds are the short-term and long term notes payable and the paid-in capital and the retained earnings. The uses of the funds will be made for the operating, investing and financing activities. Typically, the major sources of funds are the shares issued by the company and the debt and this is termed as the debt and equity capital. A company can have different proportion of these two elements depending on the availability of these sources and the company can maintain different ratios for example the company can have half debt and half equity as sources of funds or a company can completely rely on the retained earnings i.e. past profits to fund its business activities. The business activities will include operating, investing and financing activities and the company will need funds for these business activities. The operating activities include cost of sales, the investing activities include capital expenditures and business expansion activities and financing activities include the cost of debt i.e. the interest amount paid on the long-term and short-term loan and the dividends that it pays.

Plan assumptions

The plan assumptions include the following:

Basic assumptions

· The company successfully develops the competitive organic product

· The company has the necessary man power and technical knowledge and capacity to manufacture the product

· The company successfully accumulates the funds it requires to operate

· The company is able to carry out its marketing activities efficiently

· The company successfully gets the operating license and other business licenses to be listed on stock exchange

· The company successfully accumulates the funds from the issue of shares

· The company successfully accumulates the funds from the lenders

· The company operates on going-concern

Other assumptions

· Credit sale of 55% of the sales

· Benefit allocated per employee per year $5000, increase in wages by 3.5%

· Opening balance of $16,500 and tax rate of 25%

· Interest bearing account with 1% interest rate

Break-even analysis

Breakeven analysis is the synthesization of the number of units required to be sold in order to meet the costs including the variable and fixed costs. Breakeven in units can be defined as the fixed costs divided by the difference of the sales price per unit and variable cost per unit. The breakeven point in volume i.e. $ amount can be attained by multiplying the units required to breakeven with the sales price per unit.

The total expenses for the company for the year 2016 are $264,925 and these represents the fixed costs. The sales price per unit can be traced from the sales projection and these are $4 per unit for regular organic and orange soda. The total units to be sold for regular organic soda will be 268242 and orange soda will be 174357 and total of both of the two 442599 units. The variable costs per unit will include direct material, direct labor and direct expense and this will include all the costs that are subtracted to achieve the gross profits. Therefore, variable cost per units for each of two items will be attained from total cost of sales divided by number of units sold. The unit variable cost for the orange soda is $1.75 (30125/174357) and the unit variable cost for organic soda is also $1.75 (469423/268242).

The breakeven in units will therefore be:

= 264925/(4-1.75)

= 117,744 units. The will be the number of units be sold to meet the fixed and variable costs.

The breakeven in dollar amount will be:

117744 units *$4 per unit (sales price)

= $470976. This will be the amount that will be required to meet the fixed and variable costs.

References

Charter, M., & Polonsky, M. J. (2013). Greener marketing: A global perspective on greening marketing practice. Sheffield: Greenleaf Pub.

Clark, B. (n.d.). Social media marketing: How to grow your business using social media. Retrieved May 10, 2016, from http://www.copyblogger.com/social-media-marketing/

Doole, I., & Lowe, R. (2011). International marketing strategy: Analysis, development and implementation. London: Cengage Learning.

Keune, M., Mayhew, B., & Schmidt, J. (2016). Non-Big 4 Local Market Leadership and its Effect on Competition. Accounting Review, 907-931.

Knoll, J. (2016). Advertising in social media: a review of empirical evidence. International Journal of Advertising, 266-300.

Ni, M., Vandevijvere, S., Waterlander, W., Thornton, L., Kelly, B., Cameron, A., . . . Swinburn, B. (2013 ). Monitoring the availability of healthy and unhealthy foods and non-alcoholic beverages in community and consumer retail food environments globally. Obesity Reviews, 108-119.

Paquin, P. (2015). Functional and speciality beverage technology. Boca Raton, Fla: CRC.

Sorek, G. (2016). Competition and Product Choice in Option Demand Markets. Journal of Economic Analysis & Policy, 785-805.

The U.S. non-alcoholic beverage market: Impact Databank review and forecast. (2012). New York, N.Y: M. Shanken Communications.