Innocent drink case study analysis: Innocent drinks are a unique business selling 100% natural fruit smoothies. (Innocent drinks) There are many factors that contribute to the company’s successful development so far. Firstly, and most importantly, their unique selling point which is using just fresh fruit in their drinks. This is a major strength to the company as they fit in today’s trend of a healthy eating lifestyle. “They contain even more antioxidants than the average five a day” (Adams 2007). Moreover Innocent has environmentally friendly packaging; their bottles are clear with simple product information in one colour.
Straight away this makes it stand out more than the rest on that shop shelf. “They were the first company in the world to put drinks on shelves in 100% recycled plastic bottles” (Oracle 2008). However they did not carry out in depth research, they only asked consumers one question: “Do you think we should give up our jobs to make these smoothies? ” (Bains et. al. 2008). No questions related to the product that could help them in the future were asked. Moreover the founders abided by their principles and they only produced their products how they wanted to.
This had moved them from a niche market to a nationalised company, now holding more than half of the market share. Furthermore they have met their social responsibilities in many ways such as projects in India, providing food for the homeless and the big knit- providing warmth for the elderly. “We knitted 20,000 hats to raise ? 10,000 money for Age Concern” (Innocent drinks) Another factor of success to Innocent is their fun and informal business style. Their organisational structure is unique as their staff get bonuses on having children and snowboarding holidays.
Even their website is fun-filled excitement; it has its own attractive style it tells you everything about them. Lester (2007) explains “Their Company’s offices are among the friendliest and relaxed in the world” However the difficulties that company’s like Innocent drinks face are firstly lack of experience and knowledge. Lester (2007) describes “Its founders had no real experience in the sector. ” Moreover raising capital, the founders of Innocent being foolish gave their jobs up straight away without any solid plans.
Lester (2007) explains “They needed to raise money to buy fruit and bottles and get the smoothies made. ” However capital problems can be solved by finding ‘Business Angels’. Innocent also found theirs – a wealthy American Maurice Pinto, had the experience and the `money; he was highly impressed by Innocent. “Maurice decided to invest ? 250,000 in return for 20% stake in the business” (Lester 2007). Furthermore many new businesses underestimate things like how much raw material they will need, this was similar to Innocent. They had only ever made small quantities of their juices but were looking to expand across the nation” (Lester 2007). But using fresh fruits meant that the drinks will be perishable quicker and will have to be sold really quickly. Having too many founders can also be an obstacle to a small business. Innocent had three founders, which meant there were conflicts and every decision had to be discussed and debated before reaching a conclusion. This can slow down progress. Innocent have many more business opportunities now that they are a successfully developed business.
They have already started to expand their product range in making further products like desserts. They could furthermore develop their product range from ice-creams to maybe even meals, keeping to their principles of healthy eating. Moreover, with the right market research, if these products became successful, they could even open up shops, even restaurants or cafes and possibly start selling online too. These are opportunities because “By differentiating the products or service the company increase the value of its operators and hence, improves performance” (Bradley 2002 p21).
They could further enhance their existing products starting with new packaging, a new style, new combination of colours or even new sizes (king/snack size). Ali (2001 pg 24) suggests firms should “Keep products fresh by introducing new variants and improved versions”. Using incentives is a good way to get attention, Innocent could offer a free soft toy cow, or a free membership pass to a gym. Innocent use testimonials on their website, they could use famous faces to make these testimonials stand out more.
Ali (2001 p11) also explains that a business should “Look at the various aspects of their business that customers use to form a view of you” Lastly Innocent could sponsor big charity events and music shows, this way they are being ethically responsible and they raise awareness about their products. All of these suggestions would contribute to reducing the risk of business failure for Innocent drinks in the future. Innocent is a fast growing business and one of the most successful. However Page, Ralph and Jones (1989 p 1-55) explain fast growth in a short period of time is a threat.
Having to produce on a large scale and making deliveries on time can be difficult. Forecasting demand and market growth is essential; firms almost fail predicting this incorrectly. A fast growing business like Innocent, need to keep track of forecasts as accurately as they can, or they can lose their reputation and money. For example, “Firms need skill in measuring and forecasting the size, growth, and profit potential” (Kotler 1994 p 245). Also Innocent will have to be aware of changing trends and tastes in their market, drastic changes in the market can affect Innocent.
However there are also external threats to Innocent like competition (Myroslaw 1987 p 45). They need to keep a constant watch on competitors to make comparisons with their own business. Moreover change in economic conditions effect firms, currently the economy is suffering a recession; (www. news. bbc. co. uk) during these times it would be best to lower prices. Even more technology changes can be threatening to the position of a firm, Innocent might need to update their current technology and re-train their employees.
Finally meeting their liabilities, avoiding bad debts and cash flow problems will contribute to a firm’s success. In conclusion Innocent drinks is proven to be a surprisingly successful business even after all the struggles, they came through as a strong and honest business. However they now need to be extra careful because they have reached a high level of success, and the higher you are the harder it becomes to maintain that position. Word count: 1,062 Bibliography: Anthony S. Page, Ralph C.
Jones (1989) ‘Business Growth – How to Achieve and Sustain It’, Leadership & Organization Development Journal, 10(2) p 1-55. Ali, M. (2001) Marketing Effectively, Hampton, Dorling Kindersley. Baines, P. Fill, C. and Page, K. (2008) Marketing. Oxford: Oxford University Press. Bradley, F. (2002) International Marketing Strategy, Dublin, Pearson Education. Kotler, P. (1994) Marketing Management, USA, Prentice Hall. Myroslaw J. (1987) ‘customer service competition business to business and industrial market’ Journal of Business & Industrial Marketing, 2(4) p45-52. ttp://www. innocentdrinks. co. uk/us/? Page=our_story Accessed 21/11/08 http://www. innocentdrinks. co. uk/bored/ Accessed 21/11/08 http://money. aol. co. uk/small-business/innocent-drinks-coming-to-fruition/article/20070814091309990004 Accessed 19/11/08 http://www. oracle. com/customers/snapshots/innocent-drinks-demantra-snapshot. pdf Accessed 21/11/08 http://www. drinks-business-review. com/article_feature. asp? guid=55937F47-8134-4E4F-A9A4-881AE440062F Accessed 21/11/08 http://news. bbc. co. uk/1/hi/magazine/7686531. stm Accessed 01/12/08