External Analysis
The General Environment of the Industry
Jamba Juice and its immediate competitors operate under the industry entitled “snack and nonalcoholic beverage bars” [ (U.S. Census Bureau) ]. According to the U.S. Census Bureau the official description of the snack and nonalcoholic beverage bars is as follows: “This U.S. industry comprises establishments primarily engaged in (1) preparing and/or serving a specialty snack, such as ice cream, frozen yogurt, cookies, or popcorn or (2) serving nonalcoholic beverages, such as coffee, juices, or sodas for consumption on or near the premises. These establishments may carry and sell a combination of snack, nonalcoholic beverage, and other related products (e.g., coffee beans,
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In analyzing the bargaining power of buyers, it is important to look at both categories under a separate scope.
End users are those individuals walking in the company stores, ordering a smoothie and a cookie, paying the cashier and then telling her friend how wonderful the ambiance is. This buyer segment does not purchase large amounts of product at one time and likely chooses Jamba because of the quality of the ingredients. With no switching costs and a growing industry offering many options, patrons of smoothie cafés can freely purchase their delightful cool beverage anywhere. According to the U.S. Census Bureau the number of stores within the “snack and nonalcoholic beverage bars” industry grew from 36,036 in 2002 to 49,463 in 2007 [ (U.S. Census Bureau) ]. This trend means that Jamba Juice will have to increase customer loyalty to battle the increased competition. The second type of buyer is the franchisee, which pays Jamba Juice for the right to use its trademarks and proprietary business information (recipes, processes, menus, and other resources). As noted in the case, Jamba engaged in a growth strategy in 2007 that involved acquisition of a majority of the franchised locations. This approach reduced the franchisee’s buying power and allowed Jamba to have the upper hand. With the downturn of the economy forthcoming, franchise demands would likely deteriorate. In spite of the growth opportunities offered by franchises, Jamba maintained
For specialty coffee beverage services, including coffee, espresso, tea, chai and granite the leading drinks in 2004 were espresso-based beverages with
Conduct an environmental scan for Jamba Juice as it considers a new juice bar to open near your university. Identify factors that you think have an impact on the juice bar market, and indicate whether these factors would tend to enhance opportunities or represent threats.
Most buyers do not share the same palate, purchase the same quantities, or respond in the same manner to marketing efforts. Therefore, a concentrated Niche Marketing approach will work best to target our selected segment. Instead of pursuing a smaller share of a large market, Exotic Fruit Bars will target a large share of one focused niche. Through niche marketing, Exotic Fruit Bars can achieve strong market positioning by gathering thorough and detailed knowledge of the consumer needs in the niches it serves, and by acquiring a distinct reputation to differentiate Exotic Fruit Bars from it’s competitors.
Since there are many stores, like McDonald’s and Starbucks that are also providing all kinds of healthy smoothies with a price that is similar to Jamba Juice’s, buyers actually will not face high switching costs. Therefore, low switching costs enhance the bargaining power of buyers.
In accordance with findings based on extensive research, Jamba Juice has encountered a steady decline in its sales and market share value due to a variety of internal and external factors. Although the largest smoothie chain in the United States is foreseeably on the road to non-existence, proper business development can potentially help the corporation turn things around and prosper like it once did.
First, the strengths are that the overall design, “the creation of the smoothie and juice names, and distribution, was done with multiple stores as the goal.” (Pg. 2) This business model differentiates them from the competition because instead of offering the same flavors, juice names, design, and distribution to all of the locations it is determined by a section of stores rather than the entire market. This tactic allows their business model to be targeted for a specific demographic depending on the external environment.
In the following analysis, we will first identify the key issues that Sunshine needs to tackle. We will then evaluate the current market conditions of the manufactured juice industry, Sunshine, and its competitors. To find a suitable market match for Sunshine, we will look into the behavior and characteristics of orange juice consumers. Afterwards, we
According to Exhibit 5, from 1985-1989, Orange crushes’ market share decreased from 22% (1985) to 8% (1989), this data shows that prior to the entrance of Coca Cola’s Slice and Pepsi’s Minute Maid, Orange Crush had more of the market share which at the time, they were positioned toward groups between the ages of 13-40. Since 1985, Crush repositioned itself to target individuals between the ages of 12-17.
With having only one of “The Four Ps,” (the place), Juice Guys had to come up with a marketing plan to develop the other three Ps; which were of product, promotion and price. Juice Guys knew they wanted to sell fresh juices and fruit smoothies; however, they needed to know if the consumers wanted more than just those products. Also, they needed to find a way to promote their new products and make their prices economically feasible for the consumers in this new place; which was Boston. In order to accomplish this, they needed consumers to let them know what they thought was the ultimate juice shop.
To accomplish this feat, the company must decide how to target and position the stores given the differential differences in demographic and environmental traits. Furthermore, Juice Guys needs to determine who are their customers, their inclinations for the product and their preferences to a smoothie store.
Nantucket Nectars' numerous strengths have led to their success. They produce all natural products that have a great taste, have a very strong management team as well as a strong branding, guerilla marketing skills, possess the ability to exploit small, rapidly changing market opportunities, last good access to single-serve distribution in the New Age beverage market, and is the best vehicle for juice companies to expand into the juice cocktail category without risking their own brand equity. In addition, Nantucket Nectars' management team has the required knowledge and experience with the single-serve business and thus has the ability to add value to large player who wants to roll out new single-serve products.
As Top Juice transitions from a small family business with a little infrastructure in terms of staff, rapid expansion presented challenges. Although major players such as Boost Juice and Sumo Salad holds larger market share, Top Juice strives to develop strong relationships with staff, establish direct relationships with local growers, expand through franchising and provide consumers unique, top quality and fresh produce.
Jamba Juice targets and segments to young middle and high class consumer. This customer has to have high disposable income, so
Foods Fantastic Company is a public company which mainly operating regional grocery store in Maryland. This Company relies on application programs, such as bar-code scanner, to entre sales to the system. The FFC majority depends on the computer system to run their business. Based on this situation, the Information General Controls review is necessary for this company as the reason that ITGC is the foundation of every categories of the internal control.
Innovation is important to both distribution channels, but more important to the finished goods model since the juice category has seen a decrease on both volume and market share. At the same time the carbonated soft drinks market has grown in both volume and market share. In order to increase the volume sold in the juice aisle a brand extension should be developed. By adding more SKU’s and promoting to the eight to twelve year old group, sales