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Assignment 1: Company Description and SWOT Analysis
3. The global beverage industry has a growth trend, and it is also positive for UniDrink, because the company can develop new products and take over markets of several countries. Global beverage sales are growing rapidly (Development of Global Beverage Sales, 2016). For example, they were 1.71 trillion liters in 2010, 1.83 trillion liters in 2012, and are projected to reach 2.13 trillion liters in 2016. Its growth rate is high as well. In 2014 and 2015, the growth rate of sales was 3.8%, and it is predicted to reach 3.9% in 2016 (Projected Growth of Global Beverage Sales, 2016). The products I chose for my company are natural tea beverages. This product was chosen for several reasons:
1) The size of the global tea beverage market is large, and it is projected to grow. Currently, it is equal to $38.2 billion, and it is estimated to reach $43 billion in 2020 (Size of the Global Tea Beverage Market, 2016). Thus, UniDrink has a good chance to take this market.
2) In 2016, the trends in the beverage industry include the focus on tea beverages and using natural flavors, and they are becoming more and more popular among consumers (Berry, 2016). Therefore, as UniDrink specializes in natural teas, it has a good opportunity to grow in the market rapidly. It is more likely if the company stresses on natural flavors and ingredients when it promotes its teas. If customers see the benefits of natural flavors, they will be willing to try new teas.
3) Tea itself has many benefits to health, and they should remind to customers and stress this fact in the advertisements of UniDrink. Therefore, the company will be likely to succeed in the market. The benefits of tea for health are numerous. For instance, tea contains catechins that help to prevent various diseases, such as diabetes and even cancer (Jain, Siddiqi, & Weisburger, 2006). Thus, tea is much better for consumption than traditional fizzy drinks that are consumed worldwide. Fizzy drinks are not good for health; for instance, they can cause sugar cravings, which can lead to other health issues, fizzy drinks speed up aging and are linked to causing cancer by some researchers (Epstein, 2015). Thus, UniDrink can stress on benefits of its tea over fizzy waters in their advertisements and persuade customers to buy teas if they take care of their health.
4., The best strategic position for UniDrink should be based on customer perception factors (Abrams, 2014, p. 142). To implement this position, specific approach will be used. To distinguish our teas from competing products, some unique features will be provided to them. First, the choice of teas will be very wide. Consumers will be able to buy green, black, red and other types of teas. Some teas will be sweetened with sugar, and others will be issued with sugar substitutes to satisfy people with diabetes and other diseases, or people who do not consume sugar as they keep to special diets. The choice of flavors will be wide as well, including berry flavors, fruit flavors, and other flavors like honey. Moreover, the choice of packages will be wide as well. Teas will be sold in bottles and carton packages of different sizes to make consumption convenient both for individuals and for groups of people. Second, teas will be completely natural. The company will use for their production only natural ingredients, juices, colorants and flavors. Third, the price for teas will be reasonable. UniDrink will make prices moderate to find loyal customers for a new product in the market.
5. The distribution channels for UniDrink will have such model: producer wholesalers retailers. Such channel was selected because the company will sell its teas in various retail chains, including large and small supermarkets, small grocery stores, kiosks, and vending machines. Thus, selling to several wholesalers each of which sells to several types of retailers is convenient to reach customers everywhere.
6. 1) Product risks are possible if one of production stages is problematic. To avoid it, it is necessary to find approved vendors and organize stable production using high-quality facilities and experienced personnel.
2) Market risks are possible for any business, including a beverage company. It may turn that because of economic fluctuations, demand for teas and sales will decline. To avoid that, production should be made flexible. UniDrink should be able to produce other types of drinks, including cheaper ones, for the case of economic downturn not to lose the market share.
3) Regulatory risks are related to laws and other set of laws used to regulate beverage industry and production in a particular country or region. To avoid risks, UniDrink should follow all policies regarding teas production, such as regulations on ingredients that can be used or environmental regulations.
7. SWOT analysis for UniDrink will cover the companys strengths, weaknesses, opportunities, and threats (Abrams, 2014, p. 153).
The company will produce teas that will use natural juices and flavors. It is beneficial because not all competitors produce natural teas, and it will be attractive for customers, especially those who prefer natural products and take care of their health.
UniDrink will produce teas with sugar and with sugar substitutes, and a number of potential customers will grow, because teas will be available for both those who consume sugar and those who do not eat sugar due to diabetes or other health restrictions.
Despite offering products with natural ingredients and of high quality, UniDrink will charge reasonable prices for its teas.
The choice of teas will be very wide. Customers will be able to buy teas with sugar or substitutes; green, black, red and fruit teas; teas with various flavors, etc.
Since the company plans to produce only teas at the beginning of its operations, it is a weakness, because most large competitors produce different drinks, for instance, waters, carbonated drinks, energy drinks, and juices.
As teas are natural, their production may be difficult and expensive than for common drinks with artificial ingredients. At the same time, prices for teas will be democratic to attract customers to a new product. As a result, UniDrink may face problems with productivity.
UniDrink is a new player in the market, and its brand name is not known yet. Thus, customers may not buy its products in large amounts, preferring the products of older and better-known competitors.
Sales of teas can grow rapidly, because global tea market is predicted to develop in the nearest years.
Due to natural ingredients and a wide choice of flavors, UniDrink has a good opportunity to find loyal customers quickly, and it will allow increasing sales and taking over new markets, including the market of different regions and countries.
If the sales are high, the company can increase its assortment and offer its customers other natural drinks, such as juices or flavored waters. It is likely to happen, because the global beverage market shows a constant growth trend.
UniDrink can enter several niches and sell its teas to large supermarket chains, small local shops, cafes and restaurants, as well as vending machine distributors.
Because of high costs and medium prices, UniDrink may feel hard to grow, as its net profit will be too low for the companys growth.
As there are many competitors in the market, and they own famous brands and have loyal customers, UniDrink may fail in competition.