Nantucket and Nectars Analysis - Case Study Example

Nantantucket Nectars Case Study Analysis of the of the Table of Contents Table of Contents 2 Introduction 3VRIO Analysis 3 Value 3 Rarity 3 Imitability 4 Organization 5 SWOT Analysis 6 Strength 6 Weakness 6 Opportunity 7 Threat 8 Problem Identification 9 The different Problems 9 Evaluation of the different Problems 10 Opportunity Identification 11 Requirements 11 Resources Available 11 The Timeline 12 Projected Results 13 Return on Investment 13 Evaluation Methods and Metrics 14 Conclusion 15 References 16 Introduction The paper would tend to analyze the case of Nantucket and Nectars through the use of different types of analytical models like VRIO Framework and also the use of SWOT Analysis. Use of the above models would contribute in the generation of effective inferences related to the case. Further the use of financial analysis would also be incorporated to generate a holistic picture of the position of Nantucket and Nectars. The inferences relating to the different analysis would rightly contribute in the generation of effective recommendations for the company. VRIO Analysis Value Nantucket and Nectars reflects enhanced value in terms of generation of effective juice brands for the consumer market. The juice products are developed on a natural basis and reflect greater taste to be relished by consumers. The company reflects the existence of an effective management team that is creative and innovative in nature. Moreover the company aimed to create the product brands that are memorable and eccentric in nature. This contributes in the growth of word-of-mouth marketing for the company thereby creating greater competitive advantage for Nantucket and Nectars in the larger consumer market. The company also reflects greater potential to expand along in the international market that helps in the development of an effective market in the near future (Harvard Business School , 2014). Rarity The rarity analysis of Nantucket and Nectars reflects on the expertise, knowledge and management skills of the higher management related to the development of product business for the juice products and drinks in both the regional and international markets. The Guerilla marketing skills of the management team of the company also is considered as a rare approach that is undertaken by the company management to gain a larger market space in the international market. Moreover the development of the internal talent base of the company to help exploit in budding opportunities available in the external market is considered as an effective resource base of the organization that is rare in nature. The potential of the company to generate considerable investments related to advertising and marketing and also for distribution activities is observed to reflect considerably rarity compared tom other companies. A stabilized cost and organizational structure for the company also reflects greater rarity compared to other companies. Existence of a single-serve distribution base for the company reflects greater rarity in helping Nantucket and Nectars gain a potential market base in the beverage market (Enz, 2010). Imitability The existence of needed creativity and thinking potential and power of the company management reflects a potential resource that cannot be easily imitated by other companies. The development of an effective brand and storyline for the company also reflects a potential resource that would be difficult to be imitated by other companies. The distribution, marketing and advertising potential of the company is also observed to be an effective resource base hard to be imitated by another company. Development of a closely knit organizational culture built on the essence of greater flexibility and team work is considered as an effective resource that cannot be rightly imitated or substituted by another organization (Peng, 2013). Organization The organizational climate relating to Nantucket and Nectars reflects an existence of a closely knit community where decisions are taken in a grouped and collective fashion. Operating in a closely knit community the decisions are taken to help in the generation of welfare of both the internal and external stakeholder groups relating to varied levels. Similarly the generation of a closed community network also contributes in the sharing of potential information related to the mission and company objectives with the different people in the organization related to different levels. This culture is taken to help in the generation of needed productivity and performance of the different organizational members both managerial and non-managerial in helping in the achievement of stated objectives. Another effective organizational and company culture created and reflected by the organizational employees relate to the setting up of a productive and performance wise example to be followed by other organizations. Another key feature in the organization relates to the development of an effective teamwork that contributes in the potential sharing of responsibilities and duties for the accomplishment of the company objectives. Similarly the management of Nantucket and Nectars aimed in creating a homely culture in the organization where the employees would be free to take up decisions and also incorporate effective thoughts to help in the generation of needed productivity. Generation of a flexible work framework contributes in enhancing the productivity and skill base of the employees. Finally the development of effective parties in the organization contributes in helping create a culture of togetherness and binding that in turn contributes in enhancing the productivity and performance potential of the people in the organization (Sanchez, 2008). SWOT Analysis Strength The key strengths of the company, Nantucket and Nectars can be effectively underlined as follows. The first key strength relates to the development of an effective storyline for the company reflecting the pattern of development of the company and the different brands. The second strength of the company relates to the development of quality products to help serve the needs of the extended market base. Nantucket and Nectars reflected another key strength related to the ability of the organization to potentially respond to the changes in the external environment and also in the changes in consumer needs. An agile operational structure contributed in the generation of key strength of the company to produce products that would help in meeting the needs and tastes of the different types of consumers. Further the company also gained needed marketing and distribution potential in terms of effective word-of-mouth marketing potentials and also an effective distribution and marketing network to help in reaching the products to the consumers. The potential of the company to generate huge investments relate to advertising, marketing and distribution activities also reflect a key strength of Nantucket and Nectars in the global beverage market. Another key strength of the company relates to the strong corporate and organizational culture build on effective community development and shared resources to help in the development of holistic employee productivity and efficiency. The reflection of a loyal employee and customer base of the organization also contributes in the development of the needed potential for the company to largely excel. Weakness The potential weaknesses of the company relating to the conducting and sustaining of the beverage juice business relates to the existence of inexperienced management and organizational staffs. Existence of greater experience related to production, marketing and distribution functions related to beverage products would have generated greater productivity and performance in the long run. Further the sourcing activities for the raw materials relating to the development of the beverage and juice products also reflected existence of increased cost. This fact in turn also enhanced the cost of the products thereby affecting the consumer market for the same. Again the inexperienced nature of the business managers and staffs relating to Nantucket and Nectars reflected the inability to effectively forecast the sales and revenue figures for the company. It also failed to reflect needed growth for the company in the future period. Another potential weakness of Nantucket and Nectars is observed for the firm’s ability to rightly connect and create distribution contract with larger beverage distributors. This weakness created a problem for the company to help in gaining an effective market for the beverage products both in regional and international markets (Böhm, 2009). Opportunity The beverage and fruit juice business for Nantucket and Nectars reflected greater opportunities for the company to rightly expand both along domestic and international markets. The growing demand for the juice and beverages products for the company reflects an increasing chance for the company to expand both along national and international regions. The growth of retail chains in the global market like supermarkets and also other convenient retail chains along a worldwide basis is observed to potentially contribute in generating an effective opportunity for the company to largely expand along an international marketplace. Distribution and promotion of beverage and juice products along such retail chains is observed to help Nantucket and Nectars effectively market its products to a huge customer base. Further the activity of the business managers to publicly list the shares of the company in the stock exchange and also focus on the generation of an IPO is observed to help the company gain the advantage of potential investments. Gaining of potential investments is taken by the company to help in generating a large business market in the global platform. The management of the company based on the above opportunity can also focus on the selling of a part of the company to external vendors for gaining of greater amount of capital and also in gaining an effective presence in the larger business market (Wylie, 2009). Threat The company in the scope of conducting its business operations is observed to counter the growth of potential threats. The same can be potentially underlined as follows. Firstly it is observed that the juice and beverage market in the region has reduced trade barriers. This contributes in the entry of foreign companies in the juice and beverage market. The same is thus observed to largely enhance the competition for the company both in the regional and international markets. The growth in the level of competitor products and also in the availability of greater number of brands is observed to largely increase the switching costs for the company in the juice and beverage market. This also accounts for the fact in requiring the company to generate high amount of spending for promotional, advertising and marketing activities to generate increased awareness for the company in regional and international markets. The growth in a large number of substitute products in the form of cheaper ranges of juice and beverage products produced by different regional and local companies also create a potential threat for the company in conducting its juice and beverage business. Similarly the competitor companies are also observed to focus on the generation of low priced products for the consumers. This fact in turn affects the marketing and business potential of the company in the international and domestic market. The action of its competitors in generating a new juice or beverage product also accounts to act like a potential threat to the business company. Generation of changes in the government regulations and also in the increase in the tariff rates and duties relating to the movement of products along different regions also accounts to generate increased threat for the conducting of the retailing and distribution activities of the company along larger and international markets (Ferrell & Hartline, 2010). The above entailed is an effective discussion of the SWOT Analysis of Nantucket and Nectars in the category of juice and beverage business. Problem Identification The different Problems The different problems countered by Nantucket and Nectars in conducting its business in the juice and beverage market can be effectively underlined as follows. In the first case, the company is observed to conduct its business based on the use of only three flavors like the Cranberry Grapefruit, Lemonade and another like Peach Orange. This reflects that the business of the company is highly restricted and limited to be based on only three main flavors. It affects the decision making pattern of the customers. The second main problem relating to the company is that the owners of the company failed to reflect effective knowledge related to the conducting of business activities. The lack of effective business know-how affected the decision making styles of the managers to generate greater growth and business productivity in the long run. The third problem related to the business activities of Nantucket and Nectars is that the company focused on outsourcing a part of the distribution channel. This accounts for a major problem owing to the need for generating a team that would exercise greater control on the external distribution teams. It would also require the allocation of increased cost for managing and conducting the outsourced distribution activities. The fourth problem countered by Nantucket and Nectars relating to its business activities in the juice and beverage market is that it focuses on the hiring of an external sales force that would tend to visit the stores in a direct fashion. Evaluation of the different Problems The limited product range of the company accounts to be a major problem in that the competitor companies tend to conduct their business based on the incorporation of a larger number of product ranges thereby giving ample scope to customers to make concerned choices. The lack of needed business know-how accounted to be a major problem for the company in that it generated greater opportunity for the competitor companies to develop their businesses and gain on larger returns. The lack of effective business and managerial know-how curbed their productivity in designing effective business and marketing strategies to generate adequate returns in the future. The outsourcing activities relating to the distribution functions are observed to increase the cost of administration and monitoring the distribution activities of the company. Moreover the outsourced distribution functions can also tend to affect the brand image and also the productivity of the distribution functions of the company. The employment of an external sales force by the company for visiting the stores and retail outlets for marketing the products of the company accounts to be a major problem in that it tends to increase the cost of marketing the products while it also requires the company to generate greater control on the external employees. It thus employs a greater time and resources of the company thereby generating greater cost. Opportunity Identification In the first case the growth of retail market in the regional and international markets in the form of creation of large number of departmental stores and also other convenience outlets is taken to promote the large scale distribution of the beverage and other juice products to the consumers. The distribution of products through the use of the retail shops and establishments is taken to largely help in reaching a larger section of consumers. In the second case the development of electronic commerce activities is also observed to effectively contribute in helping the company gain an effective opportunity to largely market its products to a large customer base both in the regional and international markets. Use of electronic commerce also contributes in helping the company generate effective comfort and convenience to the customers relating to the gaining of the products. It would thus contribute in enhancing the parameter of customer loyalty. Thirdly the company can effectively use the social media networks for development of an enhanced presence of its product brand and company image to a larger market base across geographical borders. It would also help in development of effective marketing and supply chain networks. The above are three main opportunities that can be rightly gained by the company in the form of marketing and distribution of the beverage and juice products in the regional and international markets. Requirements Resources Available The resources required for conducting the assessment of the business position of Nantucket and Nectars reflects on the need of accounting reports for the company along with other available information from the internet relating to the market opportunities and challenges gained and faced by the company in a respective fashion in terms of conducting the business activities related to the sales of beverage and fresh juice products in the regional and international markets. The case study however reflects essential information related to the above categories like the fiscal position of the company and also other market and business related information of the company along the different periods. Other resources gained related to the conducting of the study are the literary resources in the form of books and other literary information that are used for clarifying the different concepts that are used for conducting the analysis of the company. Use of Microsoft Excel 2007 is used for the conducting of the analysis related to the financial position of the company and thereby to generate effective recommendations related to the same. The incorporation of different types of resources entailed above is taken to rightly help in enhancing the quality of the report made related to Nantucket and Nectars. The Timeline The timeline for the project activity would be based through the use of the Gantt chart. Use of the Gantt chart would rightly contribute in prioritizing the activities to be conducted in each of the different stages to help in the formulation of the report. The Gantt chart related to the report activity of Nantucket and Nectars can be effectively produced as follows.   Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Understanding the Case                 Accumulation of Findings                 Conducting of Analysis                 Reporting the Findings                 Framing the format of the report                 Submitting the Report for Approval                 The above Gantt chart reflects the different activities that are needed to be conducted along the different stages for the formulation of the report. It distributes the total number of activities into different periods ranging from Week 1 to Week 8 in which the priority of conducting the different activities are ascertained and duly divided. The generation of the Gantt chart thus presents an effective picture of the conducting of the different functions related to the formulation of report for Nantucket and Nectars. It reflects the phases in which the different activities are needed to be rightly accomplished to help in the effective preparation of the total report (Bidgoli, 2004). Projected Results Return on Investment The return on investment for Nantucket and Nectars can be effectively calculated along the different periods ranging from 1994 to 2002. Estimation of the Return on Investment (RO1) would be generated through the use of two main components like the Cost of Sales and the Gross Profit (Phillips, 2012). The estimation of the ROI along the different periods can be effectively generated as under.   1994 1995 1996 1997 1998 1999 2000 2001 2002 Cost of Sales 6831 11,024 20,511 32,780 43,083 57,904 75,999 91,769 1,07,920 Gross Profit 1514 4311 8982 17246 26634 35796 46982 56730 66715 Return on Investment 22.2 39.1 43.8 52.6 61.8 61.8 61.8 61.8 61.8 The above estimation reflects that the Return on Investment for the company rightly increased from 1994 to 1998 from 22.2 percent during 1994 to 61.8 percent during 1998. The ROI however remained standardized from 1998 to 2002 at 61.8 percent. Evaluation Methods and Metrics The Gross Profit Margin for the company also reflects a growth from 34.5 percent during 1997 to around 38.2 percent during 1998. The Gross Profit Margin however is observed to remain standardized at 38.2 percent from 1998 to 2002. EBITDA margin for the company however is observed to counter an increase along the periods ranging from 1997 to 2002 during which it increased from 4.5 percent in 1997 to 11.5 percent during 2002 (Chandra, 2008). This reflects a growth of around 7 percent during the stated period. The Inventory Turnover Ratio for the company is reflected in the following fashion.   1994 1995 1996 1997 1998 1999 2000 2001 2002 Cost of Sales 6831 11,024 20,511 32,780 43,083 57,904 75,999 91,769 1,07,920 Inventories 1139 1328 4754 5409 6032 6948 9120 11012 12950 Inventory Turnover Ratio 6.0 8.3 4.3 6.1 7.1 8.3 8.3 8.3 8.3 This reflects that the number of times the total inventory of the firm has gained a larger number of rotations from the period 1994 to 1995. Though the same is observed to decline from 1995 to 1996 it again took a stride from 1996 to 1999. From the period ranging from 1999 to 2002 the inventory turnover ratio for the company is however observed to remain constant at 8.3. This reflects a positive position for the company in terms of increased rotation of inventories for the production of needed commodities relating to beverages and juices to be sold in the market. Conclusion The analysis conducted related to the beverage and juice Production Company Nantucket and Nectars based on the use of different analytical models like VRIO framework, SWOT Analysis and also through the use of financial analysis reflects that the company gains needed strength in the form of effective manpower and also production and marketing resources. It also reflects on the different challenges faced by the company in terms of conducting its beverage and juice business like the growth of increasing competition, reduced trade barriers and also in the form of changing market and consumer needs. The analysis also focuses on the increasing opportunities gained by the company in terms of developing retailing trends and also through the growth of internationalization practices. Potential threats faced by the company in terms of faulty business policies like the outsourcing activities taken by the company for distribution and sales function is also highlighted in the case. Effective recommendations are put forward relating to the inferences gained from the analysis to help in improving the position of the company. References Bidgoli, H. (2004). The Internet Encyclopedia, Volume 3. United Kingdom: John Wiley & Sons. Böhm, A. (2009). The SWOT Analysis. Germany: GRIN Verlag. Chandra, P. (2008). Financial Management. United Kingdom: Tata McGraw-Hill Education. Enz, C. A. (2010). The Cornell School of Hotel Administration Handbook of Applied Hospitality Strategy. United Kingdom: SAGE. Ferrell, O. C., & Hartline, M. (2010). Marketing Strategy. United States: Cengage Learning. Harvard Business School . (2014). Nantucket Nectars. Boston: Harvard Business School. Peng, M. (2013). Global Strategy. United States: Cengage Learning. Phillips, J. J. (2012). Return on Investment in Training and Performance Improvement Programs. New York : Routledge. Sanchez, R. (2008). A Focused Issue on Fundamental Issues in Competence Theory Development. United Kingdom: Emerald Publishing Group. Wylie, K. (2009). SWOT Analysis of Cisco Systems, Inc. United States: GRIN Verlag. Read More