Description, Significance, Mission Statement
Company X has been engaged in beverage production for more than five years. It has evolved as a consequence of the owner’s health condition. He has been experiencing a serious illness, which implied a strict diet. In the course of treatment, it turned out that it was forbidden to take any beverages offered in the market, and the owner decided to create an organic drink that would be delicious and would meet the health requirements of customers. Company X is planning to launch All Organics Drink next year; therefore, it is necessary to plan all the essential measures and evaluate the potential of the new commodity (Ansoff, 2016).
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The mission statement of Company X is to provide its clients with non-alcoholic drinks that meet all quality and health standards, satisfy the taste preferences of people but contain no artificial additives or other unhealthy substances that common carbohydrates or sweetened drinks have (David & David, 2015). In addition, the organic products and their production will be environmentally friendly and cruelty-free. Importantly, this mission statement envisions the values of the company, which are the well-being of customers, caring attitude toward people, and nature, and it evidences the need for change.
Company X has the potential to attain a share in the retail organic beverages market. The four reasons for it are the fact that the enterprise intends to encourage healthier nutrition, it stresses the importance of eating and drinking clean, raises awareness on people’s health and supports it, and the company is environmentally friendly and cruelty-free (Reece et al., 2013). These factors coincide with the latest trends in the market since consumers require natural and organic content and emphasize the importance of preserving the environment. Despite the fact, that this category of drinks is pricier than beverages with artificial elements and sweeteners, a significant shift in consumption patterns is evident (Reece et al., 2013). The number of people choosing organic drinks over other soft beverages is steadily increasing.
The projected future growth rate is as follows:
- Year one – 10% sales growth in comparison to the previous financial period;
- Year two – 10% sales growth over year one (the company will employ more people to engage them in productions);
- Year five – Company X will have ten full-time employees engaged in marketing and sales. Additional space for storing might be needed to reach wider geographic locations.
In terms of the strategic position, the company will aim at Market Segment (Abrams, 2014). This approach is beneficial for small-scale companies, and it will provide an opportunity to reach targeted consumers. Importantly, customer satisfaction is one of the main aspects of marketing a commodity. This approach implies that clients will have conductive perceptions of the product (Abrams, 2014). Notably, to implement this strategic position and distinguish the drinks from other non-alcoholic beverages, Company X will be active on social media. Through the use of the company website, YouTube, Instagram, and Facebook, the enterprise will be able to obtain rapid feedback from clients, determine the degree of their content with the commodity, and promote the new line and sales.
Regarding the distribution channel, it will be rather precise. The work setting will be organized so as to cooperate with farms. In addition, it will include the production site in which the beverages will be manufactured, placed in containers, and sent for distribution. Retail stores, as well as the central office, will be located on the same premises so that it is easy to reach end-users. This method will enable keeping control over the supply and the timeliness of distribution.
Types of Risks
The four possible risks are linked to financial, regulatory, and other aspects. First, the economy is rather volatile; therefore, the changes in it or in regulations can affect company performance to a significant degree. Second, the potential competition in the market is possible as well due to the emerging trends (Davis, Lockwood, Pantelidis, & Alcott, 2013). Third, it is possible that national-level rivals will produce cheaper healthy products. Thus, the clients who are unable to afford the company’s products will prefer alternatives. Fourth, online retailers have rather lucrative offers. In particular, it is possible to purchase drinks in bulk at a discounted price.
To mitigate these risks, Company X should employ promotional activities and provide education to its customers. It is reasonable to stress the importance of healthy eating and drinking and the harmful effects of drinking sweetened beverages (Davis et al., 2013). In addition, it is significant to emphasize that the company takes care of the environment. Moreover, it is essential to keep track of pricing and consider on-line shopping.
- the company offers rapid delivery and has solid relationships with suppliers (Sarsby, 2016);
- the experienced customer-oriented workforce is aimed at meeting client’s requirements;
- high-quality products satisfy the acute needs of consumers;
- pricing strategy coincides with the quality of products, which enables bringing the value to customers.
- the moderate budget does not allow intense advertising;
- Company X has no brand equity (Sarsby, 2016);
- the enterprise has a limited product range.
- the company has the potential to increase profits;
- the introduction of on-line functions will positively affect sales;
- active social media use will increase brand awareness;
- by expanding product range, the enterprise will be able to attract a greater amount of customers.
- rivalry from the side of national companies is possible (Sarsby, 2016);
- the slower economy will affect the buying power of customers;
- price differences can persuade consumers to choose less expensive beverages even if they concede Company X’s products in quality.
Abrams, R. (2014). The successful business plan (6th ed.). London, UK: The Planning Shop.
Ansoff, I. (2016). Strategic management. New York, NY: Springer.
David, F., & David, F. (2015). Strategic management (15th ed.). Upper Saddle River, NJ: Pearson.
Davis, B., Lockwood, A., Pantelidis, I., & Alcott, P. (2013). Food and beverage management (5th ed.). New York, NY: Routledge.
Reece, M., Tasner, M., Davila, T., Epstein, M., Shelton, R., Light, L., & Kiddon, J. (2013). How to innovate in marketing (2nd ed.). Upper Saddle River, NJ: FT Press.
Sarsby, A. (2016). SWOT analysis. Raleigh, NC: Lulu Press.