1. Sources and competencies require anoperator to set and apply strategies. The aim of the implementation ofvalue-creating strategies is to gain strategic achievements and gain profitsover the averages while increasing the productivity and efficiency of thecompany. For a strategy that creates value in its economy, two sources areimportant: knowledge and relationships, or competencies of an organization andits customers.
Innocent Drinks has demonstrated competence with many factorssuch as product designs, fun surveys and out-of-the-box procurement tools, andhas been able to connect with its customers. Every business mustdevelop its own competence. These core competencies will provide the companywith competitive power. Businesses and activities directly related to this corecompetence must be carried out in the enterprise and all other jobs should besubject to outsourcing. In this way, both of organizational structure will besimplified, the organizational stages will be reduced, and the senior managementwill have more time to think about strategic issues.Depending on the case,the Innocent Drinks company has three core competencies:Having visible value for customers, at a festival people have experienced anevent they have never experienced before. Three university graduates havetested their fruit drinks with a participant who attended a music festival inLondon. Later on, they asked people to throw empty cardboard cups in boxeslabeled YES and NO according to whether they liked the drink or not.
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At the endof the festival, the written boxes were filled. After they found theinvestment, they launched their products. The rest is known from the case.
Unique compared according to its competitors, many companies are willing to sellthe company and do something new in order to make more money after earning highprofits. However, when Innocent Drinks partners saw profit they had achieved ina short period of time, they aimed to open up new markets instead of sellingthe company. In fact, Innocent Drinks were like their children. As theycontribute to the development of a child, they have contributed so much to thedevelopment of Innocent Drinks products and have conducted research to betterlocate the Innocent Drinks company in the market.Difficult to imitate, most fruit juices on the market contain concentrate and sugar. InnocentDrinks, on the other hand, drove smoothie beverages into the market, consistingof small, but 100% natural fruit particles, unlike the others.
In doing so,they thought about nature as they thought of the taste of the customers andpacked their products in that way. While other product types on the market areavailable every day of the year, Innocent Drinks products vary in season.2. There are many reasons why InnocentDrinks products are successful.
Three of these reasons are as follows:Most fruit juices on thefirst market contain high sugar and this is one step ahead of Innocent Drinks.When the Innocent Drinks products are known to contain no sugar, the press hasmade a great deal of place for these products. This is a good advertisement forthe company because customers can be influenced by it and switch to anotherbrand.
Innocent Drinks has become a healthy product brand. This situation hasincreased the likelihood of the child’s parents purchasing the product. On theother hand, families with children have become one of the company’s targetmarkets.
Before the news came out, the companies on the market could perhapsfocus on re-labeling their products in a healthy way, encouraging sugar contentto be natural sugar found in fruit. However, after Innocent Drinks entered themarket it was hardly possible.The price of productstargeted and the target market scale is another critical success factor. Thisis mostly due to the product pricing strategy, because for many consumers, thisproduct is a luxury item and it is not necessary for them. When we look at thedata in the case, the company generates an average turnover of about 200million pounds each year. However, if companies want to expand their customermarket, you can reduce the product price and can make them available to alarger target market. This can be achieved in a short time by lowering pricestrategies. This will nevertheless give them a good annual profit.
However, if companieswant to expand their customer market, you can reduce the product price and canmake them available to a wider target market. This price is a strategy forreducing state can be achieved in a short time. This would still give them agood annual profit.
Smoothie drinkers are in doubt that InnocentDrinks products will lose their natural future. Besides, they thought that thecompany would make a deal with the fast food companies in the market afterhaving a big share in the market. However, Innocent Drinks could convincesmoothie drinkers that the company would work on the same ethics and not besold to big fast food giants. The reason for the stagnation in sales might bethat consumers spend less and find cheaper products in similar qualities.
High-quality Innocent smoothies require a high cost, but if consumers couldfind a similar product for a better price during the recession, the companycould have had to cut prices. Despite, there was a recession in 2007 in theU.K. the company’s sales were good. Today, consumers want to eat healthy whilemanaging busy lifestyles they have to deal with work, home and children.Parents are always looking for the healthiest options for their children.Innocent Drinks products do not contain preservatives or stabilizers and theyare 100% natural.
They also have smoothies that have attractive packs for kids.Nowadays the internet is the best communication and marketing place andInnocent Drinks is using it very well. It is very easy to do surf in theirwebsite and has lots of information about the company.3. In this question, future growth ofInnocent Drinks will be separated three different regions and those are UnitedState, UK and Europe.
For the region of United State, as a product of growthfor the future, I recommended yoghurt that it will be good and acceptable pointfor the entering the market. This product is chosen because of there is no highlevel of competition in this product branch. Smoothies and the juice aresupernal risky for the Innocent Drinks, reasons of this, smoothies were foundedby Odwalla and also this brand was increased their market value in last tenyears. Also, Odwalla are well-known brand and preferred by the customers insmoothies. Therefore, there is no any reason to take a high level of risk in adifferent market and, also one big failure or mistake in new market could bereduced the brand’s prestige.
Besides, according to Reed’s bachelor party, ourfounders had been taken really good respond to joining the U.S. market andalso, the founders are believed in their self in the U.S. market build newsupply chain. Every people want to protect their health issue and also it issame for people who live in United State, because of this reason, yoghurt willbe the most important product in U.S.
market because it does not affects humanhealth negatively. In Europe market Innocent Drinks company cannot deal withthe ice cream products because again there is a big competitor which is Italy.When we look at the case table we can see that smoothie drinks in Europe has nogood sales, so the Innocent Drinks company can enter this market with theyogurt. They can manage this market with yogurt with the help of being as a well-knowncompany in UK. UK is close to the Europe and they can supply their productseasily. Again for Europe there is seasonality for the ice cream and the companyhas to think their profit.
People who live in the Europe region attach greatimportance to their health as well as people who live in the U.S. region.Therefore, the main product of Europe region is yogurt. When we look at the UKmarket it’s like our home. We know very well in UK, so in UK market we can sellour product easily because UK people trust our naturally. Smoothie yogurt mustbe our target product because in Europe Italy has highly confidence about icecream market.
They have huge supply to Europe. However, we can think aboutfamilies that they can want to serve health life food to their children.Especially, in UK the company has to trust its being well known. On the otherhand, ice cream has a huge seasonality. It is really big problem.
However,yogurt has no seasonality. It is benefit for the Innocent Drinks company. Onthe other hand, founders of the Innocent brand think to close out this brandand also this is a one option to Innocent brand in the future. According to ourcase, the founders are tried to thinking professionally but employees arestrongly against this idea. Actually founders are also against this idea oroption because they also want to keep alive their brand. This brand ismetaphorically like their child and also they do not want to lose this brand.As I mention before, employees do not want any collaborators in their brandbecause they are afraid of losing their freedom and originality. Therefore,founders cannot think any co-operation with different companies.