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Innocent Case Study

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					Innocent Case Study
Strategic Management, 14.-18. September 2009
Anita Stähli, Claudio Becker, Jessica Fernando, Quentin Crausaz




      Innocent: Short Introduction
Innocent




Product Line – Smoothies, Kids Smoothies, Orange Juice, Thickies, Veg Pot,
Superfruit Smoothies, Pure Fruit Squeezies




                                        
      Vision
Innocent Vision
„To be the Earth’s favourite little food company.“

This vision was left unchanged by the team because it is a good vision for 2030. The
only question is, if the company wants to stay „little“ or if it wants to grow. We then
concluded that this is concerning rather the image and not the actual size.




      Mission & Matra
Innocent Mantra
„To make good food.“

Innocent Purpose Statement
„Our purpose has and always will be to make food good. We promise that everything
innocent ever make will always be natural, delicious, healthy and sustainable.“

Mission Statement (proposed by the team)
„Our purpose has and allways will be to supplying health-conscious adults and
children world-wide with 100% natural, delicious, healthy and sustainable food. We
make use of our competence in alternative marketing methods and foster a good
relationship with our stakeholders in order to guarantee a philosophy of socio-
cultural, economic and environmental well-being. We are maintaining an internal
culture that is responsible, entrepreneurial, generous, commercial and natural.“


      External Audit
Economic Forces
  - Rising fruit prices
  - Raw material prices rising (Shipping/Import/Export)
  - Big multinational companies like Coca Cola -> Threat
  - Financial Crisis; Money is saved, cheap products wanted
  - Level of disposable income
Social, Cultural, Demographic, Environmental
  - Trends toward healthier life (Lifestyle)
  - Trends toward sustainability and care for environment
  - Trend: Fair trade products; supporting suppliers
  - Willingness to pay more for sustainable food
  - Community Thinking / Behaviour of people, Identification with brand
  - Less time for cooking/eating; Everything „ready to go“, convenient food
  - Not all cultures yet have awareness for environment/health
  - global warming influences farming, growing raw materials
  - Internationally different income levels

Political, Governmental, Legal
   - Government supports sustainability projects
   - Increasing Taxes
   - International Labour Organization (worker’s rights)
   - Import / Export Regulations
   - Strict Hygiene Standards

Technological
   - Renewable Energy Sources
   - Renewable Materials

Competitive Forces
  - Market Saturation  Trendy concept is copied

External Factors Matrix
Competitive Profile Matrix
For the competitive analysis, we chose the two main competitors in Switzerland:
Mövenpick and Betty Bossi Smoothies. In comparison to those, Innocent is the best
Smoothie, winning through its Innovation, Brand, Marketing and Sustainability. The
competitors strenghts are in Price and Quality.




      Internal Audit
Managment
  - Has won the award „Employer of the Year“
  - Reward System: Share Options, Extra Holidays, a new hat
  - Introduced objectives so that people could manage workload better
  - „well-being committee“ to help balance work/life
  - committee to care for the environment and culture
  - No clear strategy / plan / goals known...

Marketing
  - Very good in using alternative marketing strategies
  - Distribution & Delivery used for brand promotion (cow vans & lorries)
  - Distributors need to be signed up at international Labour Organization
  - Good network of local retailers as distribution channels
  - Environmentally friendly sourcing, special policy (GCTTF)
  - Ethically sourced supplies
  - Company Name & Design of the Brand differentiates product offer clearly
  - Market segments: Adults, Children // or: Smoothies, Kids Smoothies, Thickies
  - Target Group: Young Urban Professionals
  - Price: quite high! But quality is also high
  - Communication with customers via: Blog, Weekly E-Mail News, Flickr Group,
     Facebook, YouTube, Twitter, Website
  - „Won cause related marketing“ reward (knitting hats)
  - In-house creative team
  - Only operating in Europe (yet)

Finance
   - Revenue is growing constantly (now: 120 million £)
   - Market Share (of chilled juice market) is growing constantly (2008: 14%)
   - Coca Cola is a minor investor (10-20%)
Production / Operation
   - 100% natural, healthy, renewable ingredients; top quality
   - reducing carbon footprint by 15%
   - creative culture among the workforce

Research & Development
  - 100% recycled PET bottles
  - They send people out to find the suitable fruits
  - Product development team that looks for new recipes
  - Keep to constantly remove carbon footprint
  - Involve the whole community / stakeholders in the development process

Managment Information Systems
  - A lot of information comes directly through community communication

      Internal Factors Matrix
      IE Matrix




Innocent has an external score of 2.95 and an internal score of 2.9 which places the
company in field V, but very near of field I, which shows that they are successful.

They could therefore pursue strategies of growth, like expanding into new markets
(geographically) or developing their product line into the food industry, as is their
long-term vision.

External challenges they face and could try to address are that the access to the
farmers that grow fruit in a sustainable and ethic way is difficult and expensive, so
Innocent could use backward integration to acquire a suitable supplier in their area
9-cell SWOT Analysis




BCG Matrix
      Strategic Alternatives
Through the analysis we identified the main strenghts and weaknesses: Innocent
has a strong brand and marketing, but serving only a niche market while having high
production costs caused by external factors. The matrices helped to identify how
the company could make use of the market opportunities. We propose the following
three strategies:

Market Penetration / Market Development
 In order to penetrate and develop the market, Innocent has to take advantage of
their own distribution channels. They could introduce their own flagship store, open
up an internet store and use their special cars to distribute in moving booths.

Backward Integration
 Acquire a suitable supplier that produces in the ethical and environmental
standards required by Innocent. This would reduce production costs and avoid the
difficulties of finding suitable suppliers.

Product Development
 In order to pursue the Innocent long-term vision, Innocent has to diversify into the
food industry.

      Quantitative Strategic Planning Matrix (QSPM)


      Strategy for Innocent – Market Penetration / Development
The strategy we chose for Innocent is to penetrate the existing market, gaining
market share and increasing profit. We want Innocent smoothies to become a cash
cow product that produces enough revenue to be able to launch new product lines
in the food industry and to become what they aspire to be – „the worlds favorite little
food company“.

This can be achieved by introducing three new distribution channels that help to
promote the brand and make it more popular:

Flagship store
To increase brand awareness, Innocent sets up flagship stores in the big cities of
their existing market (UK, Germany, France, Scandinavia, Switzerland).

The flagship store could be an experience center where not only the products are
sold, but where customers can discover the brand and experiment with the
products, for example by doing their own customized smoothies. This stores could
also be used as an health education centre.

Internet shop
This might be a suitable solution to enter new markets, e.g. Eastern Europe, Japan
as well as offe more conveniency for existing customers.

One innovative solution for the internet shop could be to offer smoothie-
subscriptions for offices, which enables them to receive weekly deliveries of
smoothies directly to the office.

Movable stalls
In order to have a flexible and cheap tool for promotion and sales, we propose to set
up a fleet of movable stalls, similar to their existing distribution vehicles called „cow
vans“. Those stalls can be used at festivals, fairs or for any other occasion.

      Concept for Implementation

Management
The implementation of the flagship stores will be done gradually with the first store
in London. This shop serves as a prototype shop where feedback and information
can be gathered and if it is a success, the concept will be applied to other cities.

The internet shop will be realized as soon as the right people are found.

The movable stalls will also be introduced gradually, depending on their success.

In top management no changes are necessary. But there are new employees to care
for as the flagship stores and movable stalls are staffed.

Marketing
The concept for the flagship store needs to be created by a project team. A
communication concept is also necessary to inform about the changes, i.e. the new
shop and the internet options.

Finance / Accounting
The internet shop and movable stalls are a good way to quickly gain revenue, which
then can be used to set up the stalls.

Production / Operation
If the IT team is not able to implement the new internet shop, someone needs to be
hired to set this up and maintain it.

Research & Development


Management Information Systems