Competitive Advantages and Challenges of Motivated Energy Drinks

Motivated Energy Drinks Incorporated, is a non alcoholic beverage (NAB) production startup based in San Francisco, United States. Given that the company targets to increase its revenue base within the next few years, this report is prepared to detail its operation, technology and management plans thereby dividing the paper into three main sections.

Operations plan

            The operations plan covers four major sections: aspects of operation; costs and time efficiencies; competitive advantages; and challenges anticipated in the organization. To begin with, it is important to note that the aspects of operation are classified further into equipment and inventory, facilities, and personnel required to manage the manufacturing process. Table 1 below summarizes the different equipment leased and owned by the company for production as well as its current inventory.

Owned Equipment

Value

Two (2) NAB Mixer Beverage Filling Machines

$28,500 each

Two (2) Accutek AccuSnap Capper Bottling machines (for capping bottles)

$9,600 each

Four (4) Vehicles (used panel vans)

$10,000 each

Three (3) Computers (Apple Macintosh)

$1,200 each

Graphic Software

$750

Leased Equipment

Value

Labeling machinery

$450/month

Printers

$550/month

Current Inventory

Value

Glass Bottles (16 oz.), 24,000

$33,000

Labels, 24,000

$840

Metal caps, 24,000

$300

Cardboard Cartons (holds 48 bottles), 500

$500

Table 1: Equipment owned and leased by the company and current inventory

(Source: author’s own)

Similarly, also included are the facilities required to enable the actual production process. Table 2 below summarizes the different facilities required.

Facility

Value

Building Maintenance costs

$5550/month

Water / Sewer facilities

$3500/month

Gas

$2550/month

Electricity

$1550/month

Trash removal

$350/month

Table 2: Facilities required for the actual production (Source: author’s own)

Finally, are the different personnel required to manage the different processes in the company. Table 3 below summarizes personnel information.

Personnel

Salary

CEO

No salary first 6 months

Computer Expert

$200/week

NAB Creator & Master Mixer

$40,000 inheritance

Volunteer

No salary

Paid Consultant

$650/month

Production Line Foreman

$1500/month

Projection Line Workforce

$450/month

Maintenance Workforce

$550/month

Table 3: Personnel required for the actual production (Source: author’s own)

In addition to the equipment detailed in table 1, the company will also require refrigerators, burners and ovens in order to manage production effectively. The company targets an initial revenue of $750,000 in the first month in the sales of energy drinks and sugar free beverages to its target market comprised of teens and young adults aged 30 to 35 years. Consequently, most of its initial production will be outsourced from other manufacturing companies as it transitions from a small prototype to large scale production company (Bellgran & Säfsten, 2014).

Quality control for the beverage products will also be emphasized as recalling defective items is quite expensive for the company (Davis, Lockwood, Pantelidis & Alcott, 2012). In order to attain appropriate beverage quality levels, an online analysis system will be implemented in the company in order to alert managers of any inconsistencies with the production process.

Additionally, inventory control measures will be put in place in order to ensure efficiency in costs and turnaround time for given orders. Raw materials such as chemicals and preservatives used in the beverages will be sourced locally in order to reduce costs and as well, save time incurred in procuring them. Further, a turnaround time of 24 hours is allocated for any orders received in order to ensure timely delivery. Further, given that the company targets to meet the demand of its immediate environment, distribution channels adopted will include retail outlets and supermarkets in the region. Similarly, sales are anticipated through the online portal available with the company’s website.

Consequently, the competitive advantage areas for the company include its ready market, easily accessible distribution channels, and a competent team that guarantee quality beverages. The company in addition allocates sufficient budget for its research department in order to keep abreast of new developments in production. Notable areas where innovations are rapidly taking place include packaging and the development of diverse flavors for the different energy drinks (Ashurst, 2011).

Areas where challenges are expected include rival competition from existing companies as well as transitioning from the small prototype status to a large scale company. However, measures put in place include hiring consultants to transition the phase and adopting competitive strategies.

Technology plan

            According to Rogers (2011), technology is indispensable in the food and beverage industry as it enables companies to reduce their operation costs while improving their efficiency of their processes. Consequently, the technology plan focuses on meeting diverse needs ranging from software and hardware requirements to telecommunication and personnel needs. To begin with, software is required both on premises and in the cloud platform in order to efficiently manage the different processes. Table 4 below categorizes the different software required in the organization.

Software

Cost

Enterprise Resource Planning (ERP) software

$4,000

Quality control software

$3,000

Accounting software

$2,500

Graphic design software

$1,500

Table 4: Software required in the organization (Source: author’s own)

            Table 4 illustrates three main types of software required in the company. First, is the enterprise resource planning (ERP) solution that is tasked with managing personnel, tracking and managing orders, manage inventory, and easing communication with customers. A reason for its selection is that the software solution employs a single database that enables interaction between all departments in the organization ranging from marketing and sales to production and inventory management (Monk & Wagner, 2009).

Additionally, the solution automates organizational processes thereby standardizing them and providing a consistent application interface for all departments. Without such integration, different departments would find it difficult to interact with one another. The solution is to be implemented in the cloud in order to allow security and enable access from any independent location. Quality control software will be implemented in the robots used in production in order to guarantee quality even as production levels increase. Accounting software on the other hand will be implemented to manage the company accounts for all procurements made ranging from raw materials to advertisement and business operation costs. Finally, the graphic software will be implemented in the premises to enable computer experts design different labels for the products.

There is also a requirement for different hardware in the company. Table 5 summarizes the different hardware requirements. 

Hardware

Cost

Desktop computers (10)

$800 each

Servers (1)

$1500 each

Networking Equipment

$500

Security Equipment

$500

Table 5: Hardware required in the organization (Source: author’s own)

From table 5, hardware required is classified into four categories. Desktop computers will be required for all personnel in different departments in order to provide them with appropriate workstations for their work while the server will be installed in the organization as a backup solution for applications requiring high security. Networking and security equipment on the other hand will be implemented to provide internet connection and protect the organizational resources from existent threats respectively (Liska, 2003).

            Telecommunication equipment will also be required in the organization comprising Private Branch Exchange (PBX), telephones, answering machines, and Voice over Internet Protocol (VOIP). Such equipment will enable communication with suppliers and customers thereby easing the order placement and delivery processes. Additionally, personnel technology will be required where computer experts will be outsourced to undertake the branding work for the different products. Similarly, print work will be outsourced to ease its delivery.

Management plan

            Good management is critical for an organization as managers guide the accomplishment of set out objectives (Clegg, Pitsis & Kornberger, 2016). The beverage production company is headed by the Chief Executive Officer (CEO) who focuses on providing leadership and direction of the company. The CEO works hand in hand with the board of management and different advisors who make critical decisions that impact the operations of the company.

Melinda Cates, creator of the NAB, Ian Glass, a volunteering consultant and Mary Cates, a paid consultant, serve directly under the CEO each tasked with unique responsibility. Steven Jobs, a computer expert and Mark Thomas, the production supervisor, also report to the CEO while various projection line and maintenance employees report to the production supervisor. The flowchart below demonstrates the given hierarchy.

Figure 1: Flowchart of the management at the company (Source: author’s own)

From the flowchart, a hierarchical management structure is adopted where the CEO is the final decision maker. Given the nature of the manufacturing industry, autocratic management style is adopted in order to ensure employees at the production line achieve the required targets within the required time. However, among the higher ranking employees such as consultants and the board of advisors, the CEO adopts a democratic management style where there is consensus on the decisions made by all team members.

Conclusion

The paper has elaborated on the operation, technology and management plans adopted by Motivated Energy Drinks Incorporated. As such, aspects related to the three key areas have been identified and described in detail.

References

Ashurst, P. (2011). Production and packaging of non-carbonated fruit juices and fruit beverages. New York: Springer.

Bellgran, M., & Säfsten, E. (2014). Production Development: Design and Operation of Production Systems. New York: Springer.

Clegg, S., Pitsis, T., & Kornberger, M. (2016). Managing and Organizations. Los Angeles: Sage.

Davis, B., Lockwood, A., Pantelidis, I., & Alcott, P. (2012). Food and beverage management. London: Routledge.

Liska, A. (2003). The practice of network security. Upper Saddle River, N.J.: Prentice Hall PTR.

Monk, E., & Wagner, B. (2009). Enterprise Resource Planning. Australia: Cengage.

Rogers, L. (2011). Food and beverage industry embraces technology. Mmh.com. Retrieved 18 February 2018, from http://www.mmh.com/article/food_and_beverage_industry_embraces_technology