1. Sources and competencies require an
operator to set and apply strategies. The aim of the implementation of
value-creating strategies is to gain strategic achievements and gain profits
over the averages while increasing the productivity and efficiency of the
company. For a strategy that creates value in its economy, two sources are
important: knowledge and relationships, or competencies of an organization and
its customers. Innocent Drinks has demonstrated competence with many factors
such as product designs, fun surveys and out-of-the-box procurement tools, and
has been able to connect with its customers.
Every business must
develop its own competence. These core competencies will provide the company
with competitive power. Businesses and activities directly related to this core
competence must be carried out in the enterprise and all other jobs should be
subject to outsourcing. In this way, both of organizational structure will be
simplified, the organizational stages will be reduced, and the senior management
will 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 an
event they have never experienced before. Three university graduates have
tested their fruit drinks with a participant who attended a music festival in
London. Later on, they asked people to throw empty cardboard cups in boxes
labeled YES and NO according to whether they liked the drink or not. At the end
of the festival, the written boxes were filled. After they found the
investment, they launched their products. The rest is known from the case.
Unique compared according to its competitors, many companies are willing to sell
the company and do something new in order to make more money after earning high
profits. However, when Innocent Drinks partners saw profit they had achieved in
a short period of time, they aimed to open up new markets instead of selling
the company. In fact, Innocent Drinks were like their children. As they
contribute to the development of a child, they have contributed so much to the
development of Innocent Drinks products and have conducted research to better
locate the Innocent Drinks company in the market.
Difficult to imitate, most fruit juices on the market contain concentrate and sugar. Innocent
Drinks, on the other hand, drove smoothie beverages into the market, consisting
of 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 and
packed their products in that way. While other product types on the market are
available every day of the year, Innocent Drinks products vary in season.
2. There are many reasons why Innocent
Drinks products are successful. Three of these reasons are as follows:
Most fruit juices on the
first 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 has
made a great deal of place for these products. This is a good advertisement for
the company because customers can be influenced by it and switch to another
brand. Innocent Drinks has become a healthy product brand. This situation has
increased the likelihood of the child’s parents purchasing the product. On the
other hand, families with children have become one of the company’s target
markets. Before the news came out, the companies on the market could perhaps
focus on re-labeling their products in a healthy way, encouraging sugar content
to be natural sugar found in fruit. However, after Innocent Drinks entered the
market it was hardly possible.
The price of products
targeted and the target market scale is another critical success factor. This
is mostly due to the product pricing strategy, because for many consumers, this
product is a luxury item and it is not necessary for them. When we look at the
data in the case, the company generates an average turnover of about 200
million pounds each year. However, if companies want to expand their customer
market, you can reduce the product price and can make them available to a
larger target market. This can be achieved in a short time by lowering price
strategies. This will nevertheless give them a good annual profit. However, if companies
want to expand their customer market, you can reduce the product price and can
make them available to a wider target market. This price is a strategy for
reducing state can be achieved in a short time. This would still give them a
good annual profit.
Smoothie drinkers are in doubt that Innocent
Drinks products will lose their natural future. Besides, they thought that the
company would make a deal with the fast food companies in the market after
having a big share in the market. However, Innocent Drinks could convince
smoothie drinkers that the company would work on the same ethics and not be
sold to big fast food giants. The reason for the stagnation in sales might be
that consumers spend less and find cheaper products in similar qualities.
High-quality Innocent smoothies require a high cost, but if consumers could
find a similar product for a better price during the recession, the company
could have had to cut prices. Despite, there was a recession in 2007 in the
U.K. the company’s sales were good. Today, consumers want to eat healthy while
managing 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 they
are 100% natural. They also have smoothies that have attractive packs for kids.
Nowadays the internet is the best communication and marketing place and
Innocent Drinks is using it very well. It is very easy to do surf in their
website and has lots of information about the company.
3. In this question, future growth of
Innocent Drinks will be separated three different regions and those are United
State, UK and Europe. For the region of United State, as a product of growth
for the future, I recommended yoghurt that it will be good and acceptable point
for the entering the market. This product is chosen because of there is no high
level of competition in this product branch. Smoothies and the juice are
supernal risky for the Innocent Drinks, reasons of this, smoothies were founded
by Odwalla and also this brand was increased their market value in last ten
years. Also, Odwalla are well-known brand and preferred by the customers in
smoothies. Therefore, there is no any reason to take a high level of risk in a
different market and, also one big failure or mistake in new market could be
reduced the brand’s prestige. Besides, according to Reed’s bachelor party, our
founders had been taken really good respond to joining the U.S. market and
also, the founders are believed in their self in the U.S. market build new
supply chain. Every people want to protect their health issue and also it is
same for people who live in United State, because of this reason, yoghurt will
be the most important product in U.S. market because it does not affects human
health negatively. In Europe market Innocent Drinks company cannot deal with
the 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 no
good sales, so the Innocent Drinks company can enter this market with the
yogurt. They can manage this market with yogurt with the help of being as a well-known
company in UK. UK is close to the Europe and they can supply their products
easily. Again for Europe there is seasonality for the ice cream and the company
has to think their profit. People who live in the Europe region attach great
importance 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 UK
market it’s like our home. We know very well in UK, so in UK market we can sell
our product easily because UK people trust our naturally. Smoothie yogurt must
be our target product because in Europe Italy has highly confidence about ice
cream market. They have huge supply to Europe. However, we can think about
families 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 other
hand, ice cream has a huge seasonality. It is really big problem. However,
yogurt has no seasonality. It is benefit for the Innocent Drinks company. On
the other hand, founders of the Innocent brand think to close out this brand
and also this is a one option to Innocent brand in the future. According to our
case, the founders are tried to thinking professionally but employees are
strongly against this idea. Actually founders are also against this idea or
option because they also want to keep alive their brand. This brand is
metaphorically 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 brand
because they are afraid of losing their freedom and originality. Therefore,
founders cannot think any co-operation with different companies.