Change in Business Strategy since 2006 - Innocent Drinks - Case Study Example

Innocent Drinks Case Study (Report) Introduction: In 1999, three college friends marked the beginning of a journey towards establishing a brand that people would willingly pay for its products and services. These three entrepreneurs are Adam Balon, Richard Reed and Jonathan Wright who began the company Innocent drinks limited on a nightmare, as they had no experience or knowledge of what the market of smoothies entailed or had in store for them (innocent drinks case study, p 2, 2004). Nonetheless, after a struggling six months through procedural testing of various recipes they fully engaged successful market analysis to launch the final product of healthy tasty fruit drinks. In the process of beginning the growth journey, the three entrepreneurs launched with three flavours, orange, banana and pineapple smoothies, which they marketed a music festival called “jazz on the green." In this event, they requested the customers to put the empty bottles in the YES bin if they liked the smoothie products and put the bottle in NO bins if they did not like the flavors. The eventual outcome was that they sold all their products, and the YES bin filled faster while the NO bin had no bottles (innocent drinks case study, p 3, 2004). This marked the eventual growth and spinning of the Innocent drinks limited to the successful entity, it later became. The investment, with an investment of 250,000 pounds, they launched the official premises for the business. Since this initial input, the company continued to grow accordingly and by the year 2005, the company was already enjoying turnovers of over 100 million pounds with about 250 employees and established offices across the entire Europe (Business Wisdom, 2005, 1). Moreover, they marked the sales level of over two million smoothies sold per week, making it the leading smoothie brand and fastest growing food and drinks business in the entire UK. The company success in growth is measurably evident as Innocent Drinks Limited continues to appear in The Sunday Times 100 companies Fast Track for four years consecutively. They founders of Innocent drinks continue to pursue their dream and objective of becoming the favorite little juice company of the entire Europe in the near future. The Innocent drinks company continues to maintain its steady growth from the structural organisation, which gives it a steady and horizontal expansion into the vast regional markets targeting the entire Europe. Innocent Drinks has an organisational structure constituting of various essential stakeholder pillars, including the people, information technology, strong financial back up and environment, as well as the United Kingdom team in the commercial, business marketing and delivery operations (Cooper, Wehring & Woodard, p 1, 2009). Further, the structure also carries the extended strength in the production and technical support, as well as suppliers and logistics, are also key structural components of the organisational development of the company. Thus, through the structure components, as well as, the established management structures from the top management to supervisors and employees, which is a top-down management structure is key in factoring the growth and stability of Innocent drinks limited. Richard Reed, Adam Balon and Jonathan Wright as the founding directors of Innocent Drinks recognise every element entailed in the company as an organ, which facilitates the minor and major operational elements as well as management for the successful establishment of the company. Reasons facilitating the growth up to 2005 The performance of Innocent drinks company has been on the rise since the inception of Innocent drinks smoothies. The company product is a key factor contributing the notable vertical and horizontal growth for the company. The strategy entailed in differentiating the company products is key, as the smoothies are 100% natural (innocent drinks case study, p 5, 2004). The manufacturing of the smoothies entails the use of natural fruit products as well as additional components. The success in the operations of the company is a factor of the scope of the company offers of products and services to the customers. This composition of offers makes the sales for the company notably successful, hence the growth observed since the inception of the company (Cooper, Wehring & Woodard, p 1, 2009). Further, the massive popularity gained from the initial records launched a growing platform for the new product giving it potential for making a successful business endeavour; hence, the expansive scope of the business. Further, the company also gained key grounding in its initial launch from the market share and publicity it established. Having such a vast market share gives the company the platform to engage an active advantage in the sales. An additional component is the financial strength that Innocent Drinks has, since the inception platform, which also continued to contribute remarkably to the positive growth of the company. Thus, up to 2005, Innocent Drinks achieved an upward trend in growth both vertically, financially and horizontally, covering a vast market of the Europe market share; hence, the successful growth. Change in business strategy since 2006 The performance of Innocent Drinks since the year 2006 took another significant leap in the sales, after the shift of production to pure fruit juices. As a popular brand of juices in United Kingdom, the company focuses on capturing the wishes and attention of the customers in the various designs of drinks as they facilitate in the market. The company since 2006 invested accordingly on the availability of the young concepts and ideas which give the company the innovative touch needed in the remarkably competitive UK market to gain successfully on the market capacity. Further, the financial perspective and popularity in the massive market is another component that facilitated the innovative progress since 2006, helping the company establish great levels of quality in production. The shit of Innocent Drinks ideas to focus on healthy food and fruit trends in this period also marked a milestone in the increasing awareness of the sales for the Innocent Drinks. Thus, the more promising assurances of the company allowed it financial growth and marketability since 2006 (Datamonitor: Innocent Drinks Case Study, p 3, 2014). An additional development is the recent incorporation of the Coca-Cola Company in the operations of the Innocent drinks company this marked a significant boost to the operations and market coverage of the company since 2009, making the company achieve the progress it has to date. Thus, all these components of the company are facilitating the continuous growth of Innocent Drinks accordingly. Coca-Cola taking control of innocent drinks Innocent Drinks announced its deal with Coca-Cola to further the increasing investments of the company in 2009. This deal entailed the action that Coca-Cola buy majority shares f the founders of the company. However, the agreement also entailed that Innocent Drinks would maintain its homegrown management team as well as, the business objectives as established from the onset of the business. The company hoped to continue pushing the operations for better standards in social and environmental standings of business operations as well as the supporting activities of the Innocent Drinks Company (Cooper, Wehring & Woodard, p 1, 2009). The engagement of Coca-Cola also entailed that the minority shareholders maintain their equity on the Executive Committee, which in turn would continue facilitating the support for the business in this exciting phase of innovation and international expansion. The consequence would notably influence the decision-making support system for the companies. Notably, since the investment by coca cola in these four years, Innocent Drinks growth has increased significantly from strength to strength, leading to a consequential doubling in the size of the company and becoming the market leader in the smoothie market across Europe. The result is an increasing rise in the millions of pounds as profit to the Innocent drinks foundation. This is illustrative through the very comments of Richard Reed, a co-founder of the Innocent Company that since the deal with Coca-Cola, the company has gained significantly from the support facilitated from Coca-Cola. The commitment from coca cola gives Innocent Drink protection of the brand and its values accordingly, as this relationship contributes significantly to the investment capacity, innovation and international expansion for the company. This support in business is remarkably significant to the horizontal growth that the company continues achieving as it expands in its coverage of the European beverage and drinks market (Soft Drinks Industry Profile: Europe, p 14, 2014). Similarly, the coca cola group president in Europe acknowledged that the relationship with Innocent Drinks is a commitment for the long-term and that the company is confident of the potential of further growth for Innocent Drink through its teamwork as well as the brand value. The valuable input from each of these participants in the business relationship is key to the success of each of these companies in engaging the vast Europe market. The Coca-Cola systems support the decision-making entities of Innocent Drinks accordingly, as they work in coordination and cooperation towards achieving the set objectives of the businesses. Thus, this integrative relationship is notable in contributing to the success of Innocent Drinks Company to the status. PESTLE on Innocent Drinks In a macro analysis of the Innocent Drinks Company, the operations of the company are interactive to the economy and supporting resources entailed in the vast composition of the population and market coverage. The political environment is a significant component for observation in the challenges that face Innocent Drinks. The political incorporation in the business entails debates on the level of calories and sugar entailed in the products of Innocent Drinks. The government has varied targets and audit standards, which require the company to maintain control over the sugar levels in their ingredients. Innocent Drinks, alongside other 480 brands operating in the UK market signed an agreement to curb calorie and sugar content in their products (Innocent Drinks, p 1, 2011). Further, the Public Health minister in UK pledged to ensure leading brands including Innocent Drinks cut their calorie and sugar content by a further 10% in 2013, which would influence the company success accordingly (Soft Drinks Industry Profile: Europe, p 17, 2014). The Economic analysis reflects that since 2008, the climate in the economic platform is not in favour of any of the companies (Datamonitor: Innocent Drinks Case Study, p 8, 2014). However, it is notable that this economic climate does not affect the sales of Innocent Drinks either in comparison to the competitors. A key development is the establishment that the global price of fruits is soaring higher, leading to increasing costs of supplies and thus production costs. This emergent trend in the economic platform impacts the costs of production and sales for the Innocent drinks company accordingly. The social composition reflects that Innocent Drinks enjoys a strong and sustainable competitive advantage compared to the competitors. This is since the company has a strong social engagement, which delivers the message about the company products across the society through the marketing and media campaigns accordingly. The healthy and natural products gain environmental favour from the use of recyclable packaging among other elements. These components support the company growth and success accordingly. Technologically, the company employs far-fetched strategies such as social media to create publicity as well as, other technological platforms that add to the techno equipment of the company marketing strategies. However, a threat to its eventual gain is the incorporation of Coca-Cola, which seems to impair the image of the product threatening the sustainability of the company strategies. Nonetheless, the technological support and marketing tools and software facilitate a competitive advantage for the operations of Innocent Drinks. In the environmental perspective, it is notable that Innocent Drinks accepted the GCTTF policy, which entails maintaining an environmentally friendly supply chain and compliance to international labour organisation standards. The company has continued to customise the products to improve and sustain its image with respect to environmental awareness. In 2011, the company achieved a 35% recyclable capacity in its components, which is a key success for its image (Datamonitor: Innocent Drinks Case Study, p 6, 2014). Thus, Innocent Drinks is focusing on the challenge to open premium prices for fully organise products, which in effect will affect the customer capacity in purchasing the products. The legal component incorporates the various minor law cases against and for Innocent Drinks as the course of operation within the international participation and influence of the legal component. The legal threats are not any significant with respect to the standards of operation and observance of law since Innocent Drinks maintains the slogan to do things the right way. The company also observed ethical structures and confinements, producing all ethical supporting elements for the product as well as, the business standards. Future analysis and conclusion Innocent Drinks has key strengths in the increasing trend of gains in revenue. Additionally, its expansion to incorporate the participation in charity works, as well as the use of eco-friendly packaging, gives the company a valid standpoint for a future success in this remarkably competitive market. The company also has the capacity to expand its operations in the food chain market as well as, accommodating other meals options, which are future prospective opportunities for expansion. The sustainable environment capacity is another facilitator to the future growth of the Innocent Drinks. The approval of varied given strategies of operation also factors a strategic possibility of developing and implementing a distinctive plan of promotion for its products. The consequential standing from the PESTLE analysis also reflects a positive trend for Innocent Drinks Company, and its merger with the Coca-Cola Company will continue boosting the competitive stance of the company. Thus, in view of these milestones made by Innocent Drinks, the future is indeed full of opportunities for expansion and growth. References Business Wisdom - Innocent Drinks 2005, , London (UK). Cooper, B., Wehring, O. & Woodard, R. 2009, just-drinks review of 2009: Management briefing: Soft drinks, Aroq Limited, Bromsgrove. DATAMONITOR: Innocent Drinks Case Study 2014, Innocent Drinks Case Study: Capitalizing On The Health Trend In The Smoothie Category, pp. 1-15, Business Source Complete, EBSCOhost, viewed 4 April 2015. innocent drinks case study 2004, Innocent Drinks Case Study: Making Use Of Alternative Marketing Strategies, pp. 1-15, Business Source Complete, EBSCOhost, viewed 4 April 2015. Innocent Drinks 2011, , Haymarket Business Publications Ltd, London. Soft Drinks Industry Profile: Europe 2014, Soft Drinks Industry Profile: Europe, pp. 1-39, Business Source Complete, EBSCOhost, viewed 4 April 2015. Read More