Fit Juice

From a consultant perspective Fit Juice’s is strategically positioned to penetrate Texas market and further develop the brand globally. The energy drink industry is estimated to have a consistent growth rate of 7% by 2015. The implication of such findings is that the sector offers opportunities to both the existing firms and new entrants. Although Fit Juice will be competing with already established brands including Red Bull, Lucozade and Rockstar the additional and unique component of the brand that boosts the mental capacity of consumers gives it a competitive edge. Fit Juice targets the healthy conscious individuals and given that the government has launched programs to advocate for a nutritious lifestyle, the brand is poised for success if the management is able to balance the internal conditions with those influenced by external market factors. Notably however, as a new product, gaining visibility in the competitive industry is challenging. Consumers are already loyal to the developed brands given that the rivalry nature of the sector leads to collapse of new entrants that lack unique propositions. The leadership should therefore collaborate with the employees and the consumers through virtual communities in coming up with customized solutions. By directly connecting with the consumers, the firm is positioned to understand their tastes and preferences, and expectations for individualized offerings. Sustainability of positive outcomes is assured through the establishment of an organizational culture that supports open communication, creativity and innovativeness, teamwork and participation. Such a culture gives the management an opportunity to promote the vision and mission statements for successful and sustainable operations.

Strategic Issues and Recommendations

Fit Juice positions itself as the provider of value added energy drink. Apart from the refreshment component, the brand also boosts the mental energy of the consumers. The vision of Fit Juice, which is to become the global provider of nutritious drink solutions, is established in one statement ‘a revolutionary drink that exceeds the refreshment and energy boost purposes to add value on your mental health with natural ingredients and taste”. The statement captures the value proposition of the brand and highlights the attributes that are strategic in connecting with the consumers.

The revolutionary element implies that Fit Juice is an all-time product which is not impacted by changes in the food system. The drink is produced using natural ingredients which are minimally affected by the industrial process. It is unlikely in the future for consumers to prefer energy drinks with artificial additives relative to the nutritious products. As more people continue to appreciate the need for a healthy lifestyle by consuming nutritious and naturally-blend drinks, the demand for Fit Juice will increase. As such, the value of the product will continue to increase with the growth of the sector.

Fit Juice offers refreshment to the users such that it can be used for leisure, fun and entertainment. The brand is not addictive and as such, it is suitable for household consumption. In addition, the product improves mental capacity and for physical fitness. Unique product portfolios that fit specific consumer needs such as workout juice and fitness juice can be developed. Consumers can make use of the product to maintain a healthy lifestyle and avoid conditions attributed to nutritious issues such as obesity and diabetes.

Notably, implementation of the value proposition depends on the internal and external environmental conditions impacting the organization. It is upon the leadership of Fit Juice to come up with effective and efficient strategies to position the brand in the market so that profit, wealth, and growth maximization prospects of the shareholders are realized. An analysis of the environment using the SWOT model, PESTLE, Value Chain, Balanced Scorecard and Porters Five Forces depicts a couple of factors that affect operations and possible solutions.

According to Saguy and Sirotinskaya (2014), strategic issues comprise of challenges impacting the mandate, vision, mission, stakeholders and management of an organization. Establishment of the issues is the first critical step in determination of the viability of a business initiative. Study of industrial data about the specific industry, benchmarking the processes and initiatives of rivals and on-the-ground assessment are some of the methods used by strategists to evaluate the strategic implication of its initiatives. The identified strategic issues facing Fit Juice include creating and sustaining brand visibility, financial requirements, diversification, formation of production network and corporate social responsibility.

Developing and Sustaining Visibility

Fit Juice is a new product that is yet to attract and retain a considerable consumer market. The brand developers target the health conscious consumers who are made up of students and business professionals residing in Texas. There are established brands including Red Bull and Lucozade who command loyalty from most of the consumers with the former having the highest market share. Building loyalty takes time and resources since the process are gradual. However, the changes in preferences by consumers, shifts in economic conditions that affect the purchasing power of the buyers, regulations and competitiveness given that the industry has high entry barriers increases the challenge of creating and sustaining market share. Notably, the energy drink market is characterized loyalty from consumers since most of the products are expensive relative to other non-alcoholic beverages such as Coca Cola thus attracting middle-high income consumers and individuals. Ensuring that the brand is recognized by the intended group and turning the likes sales and subsequent brand loyalty is a task that requires strategic solutions.

Recommended Solution

Product Portfolio

The management of the brand should come up with a segmentation strategy to divide the market for easier management. Through the initiative, it is possible for the brand to create customized customer experiences which according to Cross et al. (2015) results to higher customer loyalty and focused marketing promotions. Notably, Fit Juice has already segmented its customer base using the demographic, psychographics and geographic strategies. The brand targets people from all age groups given that the ingredients are natural, students and business professionals in Texas region, and the health conscious people.

The segmentation and positioning strategy makes it possible for the firm to retain buyers since the needs of each segment are identified and addressed. For example, the students seek low-priced products that provide refreshing and mental energy boost solutions since their minds are mostly occupied in learning. As such, they prefer an energy drink that relaxes their minds and body while acting as an entertainment. The specific issue can be addressed by offering energy small packages to lower the price. On the other hand, the business people are positioned to produce energy drinks at home using different fruit flavors. As such, the segment has a high bargaining power since they are knowledgeable of the production process thereby able to dictate terms. However, the substitutes take long to process. Fit Juice can fill this gap by marketing the hydration, mental boosts and refreshment aspects of the product which are not automatically provided by the substitutes. Segmentation provides insights about each consumer group which makes it possible for the management to individualize marketing campaigns and product solutions for better market traction.

Structure

The structure of the company depicts the activities and decision-making processes used in the conversion of implementing the strategies of the company. The management is responsible for hiring employees with skills and expertise needed to implement the strategies. Given that context of the strategic issue, the strategic and human resources functions are the most critical in ensuring that the brand is visible to the target market. As such, the marketing function should be empowered through training and development programs so that the workers obtain customer service and communication skills needed to reach out to the specific groups. For instance, a part of the marketing team can focus on the students. The team should be made up of millennials since they can connect with the students. In addition, online marketing campaigns through the different social media sites can enhance visibility of the product. The sites can be used to directly engage with the consumers to understand their perception of the energy drinks and expectations so that the solutions are tailored to their needs.

Decentralization of the decision making is critical so that line managers can take responsibility of their actions and become more engaged in their respective roles to avoid recording low sales or outcomes when other departments have positive outcomes. When the managers responsible for reaching out to different segments are consistent in delivering positive returns, the overall results for the company are high and subsequently, the visibility of the brand is increased leading to sustainable results.

Organizational Culture or Behavior

With respect to creating and maintaining brand visibility, the management should strive to create a sense of responsibility to the employees so that they can emotionally connect with the brand and become active Fit Juice ambassadors. The objective can be accomplished by creating teams that give employees the opportunity to talk about their experiences with the brand and give opinions for improvement (Inabinett and Ballaro, 2014). The employees will own the brand and become determined to create its visibility so that Fit Juice becomes the product of choice. When a brand drives high sales traffic, sales revenue increases leading to higher profits. As a result, job security is assured and the firm is also positioned to provide better intrinsic and extrinsic benefits. A rewarding culture such that better performers particularly in the sales and marketing unit is also critical in ensuring that the workers are resilient in promoting the brand to prospective buyers. For instance, commissions above the weekly wages or monthly salaries for sales above the set limit motivate workers to penetrate the market for better returns. Subsequent brand visibility is realized.

Value Chain Analysis

Adequate technology should be in place to assist workers perform their roles efficiently. The firm should implement an application that allows information sharing across the units so that workers can get connected and collaborate in creation of innovative solutions that will captivate the consumers. The human resource management should therefore ensure each worker is empowered for his or her role such that there are no breaks during operations. Productivity is ensured with the result being value added products that are satisfactory to the consumers.

Performance Measures

In the realization of the firm’s strategies, the financial, human resources, organizational capacity should match with the needs of consumers. In this context, visibility is assured by focusing on the individual needs of the segment markets so that customer are satisfied enough to purchase from the firm after the first connection. The use of digital tools and other traditional marketing devices such as television can assist the firm to reach to consumers and understand their individual needs so that the product is produced and packaged to their expectations. When the desires of the target markets are satisfied, it is possible to attract and most importantly retain buyers for sustainable market penetration and development. As such, the firm should invest promotional tools that directly connect with the buyers for the determination of their needs and preferences.

Financial Requirements

Penetrating a new industry that is already dominated by powerful brands require heavy capital investment to gain momentum. Given the low-price model of Fit Juice and the low sales that are normally recorded by startups, implementation of the strategies is a strategic challenge that may hinder progress if adequate measures are not put into place. The machinery and processes used to produce the drinks are expensive to acquire and maintain and its one of the reasons that the sector has high entry barriers.

Recommended Solutions

Product Portfolio

The firm can take advantage of the low prices to build its finances in the first few months of establishment. A low cost model should therefore be utilized so that it is possible to offer low prices without incurring losses. As such, lean approaches of production can be used to avoid unnecessary costs. For instance, the firm can establish outdoor outlets close to the target market so that the buyers can consume the drinks using Fit Juice serving equipments. The cost of packaging and delivery is eliminated using such an approach and as the firm continues to penetrate other markets, packaging materials can be added.

Structure and Value Chain Activities

Decentralization of operations ensures that line managers individualize operations to the needs of the local market and segment groups. The managers create a budget that assures at least a 40% gross profit margin. In addition, the research and development team should be empowered so that leaner approaches of production are formulated to help the organization minimize expenses for better profits.

Performance Measures

Periodical performance measures should be instituted to allow consistent monitoring of performance so that gaps are addressed in time. The budget stipulates the costs to be incurred in conducting the various activities including marketing, human resource management and capital acquisitions. The accountants should monitor progress of finances by comparing the outcomes against the projections. The results help in assessing the ability of the solutions to offer solutions and address financial issues in a leaner manner.

Diversification

When targeting a wide market, diversification is essential. The energy drink sector offers limited opportunities for diversification and differentiation. In particular, focus on natural ingredients makes it more challenging given that the brand’s value proposition concerns with the healthy benefits for conscious consumers.

Recommended Solutions

Product Portfolio

It is not possible to rely on one innovative idea when the industry is already populated with developed brands that have high market shares. However, given that Fit Juice focuses on healthy conscious consumers, it can take advantage of the refreshment and the mental energy boost of the brand to invent a product that can be used for fitness and workout purposes. As such, in addition to the normal energy drink, the firm can produce an extra brand that specifically fulfills the need of work out. In an interview with the production manager, it was however established that the current content combination does not meet the required expectations to fully energize the consumers. Research and development is essential in the determination of extra natural ingredients that will offer work out solutions.

Organizational Structure and Culture

A team that is composed of employees with different skills and experience levels should be formulated to deal with the diversification issue. The management should provide adequate incentives in terms of finances and training so that the workers are motivated to produce positive outcomes (Betcher, 2005). The role of this team should be extensive research of the available evidence to recommend extra products that compliment the energy drink or provide more solutions. Benchmarking the rivals in the determination of their current portfolio offerings is essential to come up with solutions that are unique and specific to the brand’s value proposition.

Diversification should not be limited to product but even market. Texas is the main region of focus for the new product but it is important to consider other regions that offer similar or better market penetration benefits. Determination of such ensures that the management is strategically positioned to reach out to more consumers.

A culture of knowledge sharing, creativity and innovativeness is important in fostering the diversification strategy. Such an environment is boosts morale the workers and given their diversity, it is possible to come up with different ideas so that the manager can choose the most viable with respect to the vision and core resources of the organization.

Performance Measures

Diversification is considered when the current product offering gains enough market momentum to sustain other operations. When the brand gains visibility and achieves a net profit margin of 40% on cost, production of a new product and penetration of new regional markets should be initiated. The Fit juice is a revolutionary product and since the market is predicted to grow by 5 percent by 2025, attainment of a considerable market share implies that the brand will be able to sustain operations in the long term. A target 40% net profit margin by the end of the year and acquisition of at least 10 percent of the market share provides an adequate foundation for further market and product diversification.

Establishment and Sustaining Production Networks

A critical component of the business model is the development of relationships that facilitate provision of materials and services needed to implement the vision of the brand. Fit Juice requires a strong supply chain to allow purchase and delivery of the natural fruits that are used in the manufacturing process. In addition, the firm requires consultants to help in the marketing processes and regulatory procedures. Another important relationship is that of the business entities that will be point of sale for the products including supermarkets and other retail chains that deal with energy drinks. Such networks are strategic since they assist in connecting the brand with the market. For example, the farmers and other providers of the raw materials impact the quality of the produced good (Jungbae et al., 2008). If sub-standard goods are offered, the implication is that the firms will not continue with the manufacturing process thereby reducing convenience of the firm in reaching and satisfying consumer needs. If the low quality aspects of the goods are realized after production, additional expenses are incurred which negatively the firm’s reputation and earnings. As such, consideration for the development and maintenance of the production networks is important in ensuring that the operational model is sustained.

Recommended Solutions

Performance Measures

The firm requires a comprehensive code of conduct that stipulates its relationship with the network stakeholders and ethical expectations for performance. A study by Wilhelm et al. (2016) revealed firms that strategically impose standard requirements for their suppliers are less likely to be inconvenienced in operations than the ones that rely on the ability of the stakeholder to make rational decisions. The vision of the company is not the same with those of suppliers and other network players. As such, it is the responsibility of the management to develop a policy that dictates terms and conditions so that players are aware of performance expectations and repercussions incase of violations. An example of a firm that uses a code of conduct to transact operations with suppliers is Apple. Through the policy, the firm has been able to maintain relationships for sustainable operations. Fit Juice should also use such policy statements so that the suppliers, distributors, and other stakeholders are aware of the performance expectations for healthy and durable relationships that that facilitate growth of the vision statements.

Organizational Culture

Values such as integrity, honesty, and open communication should be enhanced between the firm and the network players. The firm depends on the services offered by such individuals to maintain its operations. As such, it is important to ensure that both parties are in agreement and pursuing similar objectives with respect to the activity that joins them. For example, the firm is obliged to report any changes in production before the farmer delivers products to the warehouse. If communication on such an important change is done after delivery, the farmer is likely to incur additional transport, storage and economic costs which adversely impact his or her earnings. When both parties maintain a culture of open communication and honesty, changes that result from the internal or external environment – such a decrease in demand due – means that a solution that favors the operation model of each stakeholder is designed and implemented on time to avoid further damages.

Corporate Social Responsibility

In the modern market, consumers are more knowledgeable about business initiatives and expectations by the government and other social institutions. One critical initiative that impacts the perception of buyers towards a brand is corporate social responsibility. Apart from offering solutions in the form of Fit Juice product portfolio, the organization is supposed to offer solutions to economic, political and social problems affecting the community. Fit Juice is set to operate in an aggressive market, Texas, and as such, it is challenging for the management to come up with a CSR strategy that directly impacts the lives of the community and maintain its core objectives without adversely impacting its profitability.

Recommended Solutions

First, after the attainment of the required financial and operational performance measures, the firm should set aside a portion of the net profits, 1 percent, for CSR strategies. Given that the firm deals with energy drinks for the healthy consumers, a suitable strategy is formation of online and on-the ground programs to empower the people on the need for a healthy lifestyle by focusing on a diet that is nutritious and rich in natural ingredients. The advantage of this strategy is that it offers knowledge to the community about consumption of nutritious foods and beverages and other strategies applicable for maintaining a healthy body such as physical exercises. In addition, the CSR strategy is relevant to the firm’s business model and the goal of creating visibility to the users. During the training programs, the teachers can propose the use of Fit Juice in upholding a healthy lifestyle. In addition, the management can offer free samples to the attendants who are likely to give feedback for improvement purposes or purchase which ultimately develops the brand in a sustainable manner.

How the Recommendations Help the Company Achieve its Strategy and Vision

The recommendations address multiple strategic issues that impact the performance of the organization. The issues have been established after conducting an internal environmental scan using the SWOT model as illustrated in appendix A and balanced scorecard as shown in Appendix B. The frameworks assist in understanding the core resources and weaknesses of the firm that can be used to counter threats in the external environment and take advantage of opportunities that are depicted using the market position analysis that is provided as appendix C. In addition, Porters Five Forces model illustrated in Appendix D and the organization assessment provided as appendix E provide information that help in understanding the company’s competitive edge and how they are strategic in positioning Fit Juice as the brand of choice to consumers in the energy market.

The recommendations therefore are provided using evidence obtained from the management of the firm and reports about the sector. As such, they are practical and viable in addressing the issues faced by the management. Successful implementation of the recommendations will ensure that the firm gains visibility in the industry, develops and sustains production networks, upholds strategic corporate social responsibility for a positive brand reputation, and is capable of using its finances in a productive manner for the realization of its profit, wealth, and growth maximization prospects. In addition, implementing the solutions will assist the management in maintaining its value proposition such that consumers are able to emotionally connect with Fit Juice for a more sustainable market share that subsequently provides the management with incentives required for national and global penetration.

Conclusion

The strategic audit presents the findings about the market prospects of Fit Juice brand which is targeting to penetrate the competitive energy market. The sector provides significant growth opportunities for aggressive start-ups that are able to balance the needs of the market with the operational resources. The sector is estimated to grow by 7 percent in the next ten years and as such, Fit Juice is strategic in its product and market penetration and development prospects. Creating brand visibility, obtaining a substantial market share and generating consistent profits however depends on the ability of the management to address the strategic issues facing the brand in a timely and strategic manner. Given that the energy sector is populated with competitors such as Red Bull and Lucozade which have global presence, unique strategies are required for attaining credible competitive edge. Notably, in addition to refreshment solution, Fit Juice offers a unique component - boosting the consumers mental capacity. In addition, the brand targets the mass market and affiliate consumers by offering a variety of blends and packages that are individualized to the income abilities of the target market. As such, different consumer groups can afford the product leading to more visibility. Fit Juice is nutritious given that it is produced with no sugars and other additives. The value proposition of the brand makes it compelling and viable in the long term. The management should focus on sustaining the brand by balancing the structure and culture so that all stakeholders, including the employees and consumers are positioned to make decisions that impact the production process so that solutions are customized to their needs (Zagotta and Robinson, 2002). More investment on research and development is recommended so that the organization remains updated about changes in the market that affect its internal operations and consumer expectations. Further, a review of past and current evidence that shows how new ventures in the energy industry position themselves for competition is advisable so that the management is able to make decisions that positively impact the operations of the organization. The vision and mission statements of the firm should be the foundation for development of strategies, formation of relationships between different stakeholders, and most importantly, planning and implementation of changes.

References

Becher, J. D. (2005). Operational alignment: Bridging the gap between strategy and execution. Business Performance Management, 3(1), 11-16.

Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How marketing managers use market segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual C