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Innocent Drinks - Case Study Example

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Name 12 April 2011 Innocent Drinks Answers Innocent Drinks as a company succeeded due to a few entrepreneurial steps taken by its founder directors. The founders had managed to exceed the projections in their initial business plan, to about 235,000 lira pounds…
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Download file to see previous pages They had a never give up attitude which helped them to not feel low as soon as they hit an unwanted hindrance during the course of the setting up of their company, right from getting manufacturers to thinking of innovation in the field of providing fresh juices to their customers. Thus, these aspects helped the company to grow, develop and reach success. Expansion and diversification is always the key aspects of helping any enterprise to grow and develop and reach new heights in terms of revenue and sales. Thus, expansion of Innocent Drinks into Europe and U.S seems to be an excellent idea for the company. However, according to the facts presented, except for France, Netherlands and Belgium, the rest of Europe was not helping the company meet a wider range of success. In other countries like Italy, Germany, Sweden and Denmark, the company was not really doing well because of a number of reasons with respect to the beverage. The main reason was that these juices had a longer shelf life in these countries; however, these countries already had an established smoothie base, which meant that Innocent Drinks had to beat out a lot of competition in order to set itself or stabilise itself in the region. This was proving to be very difficult for the company, and was leading to marginal or no profit at all, and thus, it is a step that could have been avoided. Instead of France, Netherlands and Belgium, the company should stop selling to the rest of Europe because of negligible returns. The U.S on the other hand, was a much safer and stronger option to expand into, for the company. This was because smoothies as a product were already quite well known and received in the market by the people; thus there was no problem in the demand. For the supply as well, the founders went ahead and established contacts with some leading manufacturers and suppliers in order to set up shop. However, the only problem was beating the tough competition that already persisted in the smoothie market. In keeping with the introduction of new combinations of products under the Innocent brand, into different countries and continents, a very bold move was made by the company. Despite the bottlenecks in the business, in my opinion, the company should go ahead with producing and selling ice creams and other such dairy related products in the US and Europe, because both these areas have a high acceptance of such products, and the company can begin by banking on its already established brand name for help. At the time of the case, the company could be valued for a sum of 3 million lira pounds according to a personal opinion, in keeping with the figures that have been presented in the facts. However, despite this, the company should not consider a purchase offer at such a crucial time because this is the main span of its phase of growth and development. This is the time when the company can acquire more and more of the market share and set up a better consumer base. This is also the time of proper growth and expansion, not to forget penetration into the market. Thus, if the company lost that value of having to grow and develop on their own, and considered a purchase offer at such an early stage, then it would lose its momentum eventually and finally, its value as well. One of the main complications faced by the founders was of whether or not to alter the management structure within the business. According to a pers ...Download file to see next pagesRead More
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