“Innocent drinks” is company that selling famous drinks in The United Kingdom which started by 3 Cambridge students in 1999. This is a drink that makes with 100 percent pure and natural fruit juice. Smoothies are the primary product of “Innocent drinks” and people are aware of it due to its healthy image. The company provides different product range and the distribution of channels covered most of the supermarkets, coffee shops and etc. For every year “Innocent drinks” will donate 10 percent of their profits to charity and this called The Innocent Foundation. This foundation has helped a lot of people. This report will analyses the process of “Innocent drinks” from 1999 to 2013.
There are many types of organization structure, for example, hierarchical structure, matrix structure and etc. For different structure, it has different result, management and objective. “Innocent drinks” was a small business in very competitive markets which is fit to entrepreneurial structure. The advantages of this structure are that the core team can make decisions quickly and for the members they can give some ideas to the core team and solve the problem that they are facing. “Innocent drinks” started from entrepreneurial structure and turned to hierarchical structure after few years. The reason of “Innocent drinks” turned into another structure is because they cannot satisfy their needs.
They want to make themselves to be more famous and to earn more profit. “Innocent drinks” thinks that hierarchical structure has a good scale that can separate into different departments to achieve specialization. This can let the employees know what spot they are doing and they can exert their abilities. For example, in marketing they can help to promote the product or to think of a new design to attract the customers to buy it. When every department do well in the way they have to, it is easy for “Innocent drinks” to manage and achieve expected target like turnover.
According to Finance maps of world ( 2012 ), “Business ownership means having the control over business enterprise and being able to dictate is functioning and operations.” From the beginning of “Innocent drinks” there were created by three Cambridge students who are Richard Reed, Adam Balon and Jon Wright. They used 500 pounds to set up this business with partnership. The advantages of having a partnership are they can share the responsibility and operate for the common goal of making a profit. On the other hand, partnership lack of finance to expend so “Innocent drinks” decided to turn into private limited company in 2007 and it can separate legal identity, which can safeguard the operation of business and the company can debt more money from the bank it is because “Innocent drinks” can be a mortgage.
Moreover, being a private limited company can have the purchase discounts and this can save some money for the company. Two years later, “Innocent drinks” has sold 18 percent of the company to Coca Cola which means that Coca Cola has the right to operate “Innocent drinks”. In 2013, Coca Cola has fully control “Innocent drinks” with 91 percent share. This cause that “Innocent drinks” has only a small minority holding. Hence, “Innocent drinks” turned into consultancy business which can only provide ideas and services.
Investopedia ( 2013 ) point out that “Growth is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another.” Since the market change rapidly “Innocent drinks” has to create new type of product to cater the needs of the customers. From the beginning, “Innocent drinks” has only 3 recipes to almost 30 more over the years. The juice ranges of “Innocent drinks” started from the original taste and evolve to mixed taste. The product ranges is different, including kid, smoothie and thickies. For example, kid drinks are specially made to provide all the essentially vitamins to sustain their growth. In this product, “Innocent drinks” has made a different design and size to cater the needs children.
2.Reason of growth
There are few reasons why “Innocent drinks” can be grown rapidly. Firstly, advertising. “Innocent drinks” has different advertisement on the television and for each advertisement it will represent their main product and shows that “Innocent drinks” never sweetened and never concentrated. The use of the advertisement is to build up a healthy image of “Innocent drinks” so that the customers will start considering to purchase this product.
Secondly, PJ’s smoothies is the main rival of “Innocent drinks”. PJ’s smoothies has changed the image and increased price because it wants to be a premier brand. While PJ’s smoothies increased its price, it lost some loyal customers at the same time. “Innocent drinks” might be cheaper than PJ’s smoothies, therefore, this cause more customers to choose “Innocent drinks”. Finance is another factor that enhances the growth of “Innocent drinks”. In 2004, the annual profit is 968000 pounds and it increases to 3066000 pounds in 2005.
Business strategy is a business plan that takes place long-term in order to help achieve a specific goal or objective. Christina C (N.D.) The company analyzes the external and internal business environment before making an accurate decision. SWOT and PESTLE are the planning methods to evaluate the company. Strengths – “Innocent drinks” products are highly competitive because it made with 100 percent pure fruit juice and high quality and low price these are the advantages over the rivals. Weaknesses – distribution channels are small and weak brand reputation compare to other drink companies. Opportunity – “Innocent Drinks” serve the expectation of producing 100% fruit drinks and change the consumer tastes because the new products can attract their attention. Moreover, the company expands the market including target elderly. This is a unique area that preferable than other competitors.
Threats – weather, the weather might affect the quality of the fruits and the transport and “Innocent drinks” has many rival, for example, PJ’s smoothies, Pepsi and Tropicana. Political – The government is very concerned about health and safety. “Innocent drinks” has to list out the ingredient on the product because it has to protect the consumer. Economic – Since inflation and the increase rate of unemployment will affect the confidence of consumers. Therefore, they tend to buy a cheaper brand instead of ‘Innocent Drinks’. Moreover, the economic condition also influences the company. For example, the high costs of purchasing ingredients and the taxation. Social – education, nowadays people are more concerned about their health therefore they will choose to buy a drink that is healthy for them, for example, 100 percent pure fruit juice and without any sugar. For population, “Innocent drinks” has not only targeted the adults and kids but also the elderlies.
Furthermore, “Innocent drinks” will strengthen their brand through the advertisement, establish the healthy image in the society. Technological – affect the production level of “Innocent drinks” because of the innovative technology. It leads to producing the juice efficiency and reduce the productive average costs by economies of scale. Moreover, the advance of technology can improve the communication flow which is beneficial of making accurate decision. Furthermore, the use of technology is helpful for ‘Innocent Drinks’ to recycle the bottles. Legal – minimum wage, for the company of “Innocent drinks” they have to sign a contract with every worker to protect their pay. Environmental – the trend of the world. The earth is facing global warming which makes “Innocent drinks” decided to recycle the plastic bottles to save the world