The Final Project

I would start a soft drink business with the slogan “Live It Up.” The business will be known as Live It Up Corporation and use the same name. Due to the liability protection it provides, I would establish a corporation that is held by shareholders. I would choose this course of action because claims could arise at any time during the course of the business that would result in a civil lawsuit and other legal actions related to the product. Shareholders cannot lose personal assets as a result of the company’s indebtedness because companies are thought of as separate legal entities from the owners. The ease with which it is to raise funds with corporations would further cement my decision because the cost of starting up the company would not be cheap and an unlimited flow of cash might be needed and in future for expansion purposes should the business pick up well. Corporations can simply raise money by selling stock to cover debts or for business expenses. The tax benefits that corporations enjoy is a no-brainer as it is mandatory to file taxes differently from the shareholders. Corporation owners pay taxes on any bonuses, salaries, and dividends earned by the business. The beneficial part of it though is that corporations do not remit tax on earnings paid deemed as compensation to shareholders or employees and it can still deduct the same payments as the business expense. The tax rate for corporates is also usually much lower than the tax rate for personal income (Kunz).

I would take up an organizational product structure since the business will seek to produce several soft drinks products ranging from the flavors and type of drink. The soft drinks would be cola, pineapple, orange, peach, and blackcurrant flavored together with a zero sugar cola drink.

The other focus of this structure would be because I’d like to organize the business into divisions with each focusing on a particular product based on the type and flavor. I would also like to structure each unit with its marketing and sales team given the dynamics by which each product attracts customers. Target customers for each product would also be a driving motivation to pick this organizational structure because each flavored drink attracts different customers. In the business of soft drinks, customers have a particular attachment to a specific flavored drink which they carry with them from childhood into adulthood. For instance, I, for some reason picked on Coca-Cola for my choice of soft drinks and had been taking strictly that to date. The ever-growing concern and need to have healthy, tasty and sugarless soft drinks is a factor that should not be ignored as this is the product for the future as cases of diabetes keep on increasing. The sugarless Cola drink would attract the diabetic and health-conscious consumers who form a large number of the population in today’s world. I also know for a fact that the person with diabetes are dying to have a soft drink they can enjoy so this would serve mainly to attract those numbers that have been ignored all this while. (Vitez)

Product organizational structure would help me shorten the cycles for product development and give me a clear focus on the market segments thereby helping me meet customer needs more efficiently. Business would also boom as I will encourage positive interdepartmental competition by offering bonuses and incentives to the teams that produce the most profitable and viable products.

Live It Up Corporation will be located in Naivasha, Kenya and have its products manufactured by Keroche Breweries situated in the same area. The address will be P.O. Box 236, Naivasha, Kenya and the phone number will be +254 725 456 789 and +254 773 977 978. The products will be named Live It Up Cola, Live It Up Pineapple, Live It Up Orange, Live It Up Peach, Live It Up Blackcurrant and Live It Up Zero Sugar. The website will be entitled liveitupcorporation.com and will have social media accounts on Instagram, Twitter, and Facebook all under the account name Live It Up. The minimum order quantity will be 800,000 liters with 1,000,000 bottles of 500ml and 1,000,000 bottles of 300ml. Live It Up Corporation will in future invest in a large tract of land for planting pineapples, oranges, and peach in the same country.

The 500ml bottle will have a recommended retail price of 40cts which is Ksh40, and the 300ml bottle will have an RRP of 30cts which is Ksh30. We will take up the pricing for market penetration as the prices we set are much lower than the cost of Coca-Cola products which are our main competitor in the region. We will be willing to forego profits at the start just to draw attention to our products especially the peach flavor which is entirely new in this part. We are optimistic that this strategy will have a positive impact on increasing awareness that will subsequently drive profits and enable us to stand out from the crowd. After penetrating the market sufficiently, we will raise the prices of our products in the long run to reflect the state of our position within the market. (Maguire)

The products will mostly be marketed in South Sudan and Kenya to taking up the oil-rich new nation of South Sudan. From our research, Coca Cola hasn’t taken up the young nation seriously and by it having oil reserves the country will have a robust economic GDP which will subsequently result in purchasing power by the residents of the nation. The state is also known to be very hot which will result in a good number of thirsty customers for our product. We will plan to raise the price even higher in South Sudan after it has caught attention because the competition is quite aggressive in Kenya. Kenya is one of the three countries that are the heartbeat of Africa after Nigeria and South Africa. The state is an economic hub for East and Central Africa and should we gather just 30 percent of the soft drinks market then it will be effortless for the company to expand into the neighboring countries of Tanzania, Uganda, and Rwanda. With investors steadily streaming in South Sudan due to the restored stability and oil reserves, the young nation is a sure bet for Live It Up Corporation products.

We will sell in wholesale because we do not have the infrastructure set up for retail and besides the wholesalers have better knowledge of the local market and will help us penetrate our product since we are a new company and would like to get attention as quickly as possible. By selling through the wholesalers, we will bring our inventory closer to where our products are needed and at the same time giving retailers more flexibility in ordering.

Budget

Category

Pricing

Manufacture order

500ml@33cts=$330,000

300ml@25cts=$250,000

Salaries for 12 months

$100,000

Licenses, set up cost and taxes

$20,000

Total

$700,000

Works Cited

Kunz, Marnie. ”The Advantages of a Corporation Over a Partnership and Sole Proprietership.” 2017. Chron. Document. 13 November 2017.

Maguire, April. ”6 Different Pricing Strategies: Which Is Right for Your Business?” 2017. quickbooks. Document. 13 November 2017.

Vitez, Osmond. ”Product Based Organizational Structure.” 26 September 2017. bizfluent. Document. 13 November 2017.