Essay on Jamba Juice External Analysis

Presented to: WGU Assessment Code: RWT1 Student Name: Carol Wilson Student ID: 000219654 Date: February 22, 2013 Mentor Name: Christina Williams

In accordance with findings based on extensive research, Jamba Juice has encountered a steady decline in its sales and market share value due to a variety of internal and external factors. Although the largest smoothie chain in the United States is foreseeably on the road to non-existence, proper business development can potentially help the corporation turn things around and prosper like it once did.

Consequently, this company can expand the fruit nectar production line to attract new consumers. The down-side to utilizing this structure is that the price at retail will be significantly higher than the other modes of distribution. However, since the target consumer is not sensitive to price and have high disposable incomes, this should not pose a systemic problem for this firm.

First, the strengths are that the overall design, “the creation of the smoothie and juice names, and distribution, was done with multiple stores as the goal.” (Pg. 2) This business model differentiates them from the competition because instead of offering the same flavors, juice names, design, and distribution to all of the locations it is determined by a section of stores rather than the entire market. This tactic allows their business model to be targeted for a specific demographic depending on the external environment.

Bargaining Power of Suppliers: The bargaining power of suppliers in the industry is low. There are numerous suppliers in this industry, and the large department stores have the ability to negotiate for the lowest prices. In addition, the switching costs are low, as the products are not highly differentiated. There are a large volume of purchases in the industry, allowing the department stores to exert even more power over the suppliers.

In the following analysis, we will first identify the key issues that Sunshine needs to tackle. We will then evaluate the current market conditions of the manufactured juice industry, Sunshine, and its competitors. To find a suitable market match for Sunshine, we will look into the behavior and characteristics of orange juice consumers. Afterwards, we

Nantucket Nectars' numerous strengths have led to their success. They produce all natural products that have a great taste, have a very strong management team as well as a strong branding, guerilla marketing skills, possess the ability to exploit small, rapidly changing market opportunities, last good access to single-serve distribution in the New Age beverage market, and is the best vehicle for juice companies to expand into the juice cocktail category without risking their own brand equity. In addition, Nantucket Nectars' management team has the required knowledge and experience with the single-serve business and thus has the ability to add value to large player who wants to roll out new single-serve products.

In the summer of 1998, Nantucket Nectar created a subsidiary of their brand called Juice Guys. This new product was comprised of fresh juice and fruit smoothie drinks that were taking over the West Coast. Within three-and-a-half months, Juice Guys had sold a total of 175,000 items ranging from smoothies, yogurts, sorbets, Nantucket Nectar drinks and fresh squeezed juices. Juice Guys’ revenue went up to 91% and they made a profit of $227,000 in sales.

Our product is Jamba Juice and our target country is Spain. We chose this product because it has grown to become one of the nation’s best-known smoothie chains, emphasizing the benefits of a healthy lifestyle and because the company is looking for international expansion opportunities. We chose Spain as our target country for expansion of our product due to its current economic status and economic growth forecasts for the future. This combination provides the firm with an opportunity to offer our product to a growing economy and marketplace.

Changes in customer preferences, general economic conditions, discretionary spending priorities, demographic trends, traffic patterns and the type, number and location of competing restaurants have a moderate effect on the restaurant industry (Chipotle, 2010). One example of customer preferences being a driver in the industry is the “Whole Food-ism Movement” which has put a large focus on organic, antibiotic-free, and non-processed foods (Mansolillo, 2007). Consumers now look for healthier options when eating and an overall healthier lifestyle. Chipotle has been able to benefit from this movement by carrying on their “Food with Integrity” mission (Chipotle, 2010).

End users are those individuals walking in the company stores, ordering a smoothie and a cookie, paying the cashier and then telling her friend how wonderful the ambiance is. This buyer segment does not purchase large amounts of product at one time and likely chooses Jamba because of the quality of the ingredients. With no switching costs and a growing industry offering many options, patrons of smoothie cafés can freely purchase their delightful cool beverage anywhere. According to the U.S. Census Bureau the number of stores within the “snack and nonalcoholic beverage bars” industry grew from 36,036 in 2002 to 49,463 in 2007 [ (U.S. Census Bureau) ]. This trend means that Jamba Juice will have to increase customer loyalty to battle the increased competition.

The clients leave their stores with a better feeling about themselves since they understand that when they choose Jamba, they have opted for a healthier lifestyle.”(jambajucie.com) Jamba Juice must try to execute this vision statement by adding organic fruits and vegetables and advertising on the new addition. People want to sat healthy and aren’t going to go to Jamba Juice if they find out it is not healthy. Jamba Juice needs to market them so that it can make a better impression of the store in people’s mind.

The segment of the general environment that ranks the highest between the global and socio-cultural considerations is the socio-cultural. The reason being that McDonald’s represents a very strong aspect of the American culture and a major part of the American culture is the food industry. The food industry, in terms of American food consists of a good old- fashioned hamburger, French Fries, and soda and McDonald’s mastered this concept of American food to perfection. On the other hand the global segment especially in

The fast food industry has been growing dramatically during the last few years. For this reason, we should try to find out what are the several factors why fast food consumption keeps growing among young people and adults. Therefore, as we have seen, the popularity of fast food is spreading rapidly among many people due to the following three main reasons: good taste, convenient time, and price. Personally, working for a fast food restaurant for a brief moment in my life, I can attest to this. Marketing also plays a big part to more people eating fast food. It’s in our culture in America to expect fast food companies to market and strategize their ways to make us, the consumers, to buy more food and consume more food so they can make more profit. Especially now with commercials and social media. The fast food industry has thrived in the modern era. It’s thriving so much, the industry is growing faster than the U.S economy, at

Marketing are always trying to spot “cultural shifts” which might point to new products that might be wanted by customers or to increased demand. For example, the cultural shift towards greater concern about health and fitness has created opportunities (and now industries) servicing customers who wish to buy: