Table of Contents
The paper presents a detailed analysis of the Jamba Juice company which owns a chain of restaurants in the US. The company specializes in food and beverages and in particular, provision of healthy foods. The main products are the fresh fruit drinks, light meals, and smoothies. The organization mission is to promote society’s well-being. The paper will also encompass the company’s external and internal environment as well as the key competencies and resources. The paper will identify the strengths and weaknesses of the company and provide recommendations for future growth. It is worth noting that the external environment is segmented into broad categories being the general and competitive environment. The general environment focuses on all the factors that affect the business while operating in the industry while the competitive segment focuses on factors that affect the food and beverage industry.
Jamba Juice is an American business that operates a chain of juice stores in the country. The main operations are within the restaurant industry but mainly specializes in providing specialty beverages. They include fresh juice, juice blends, yogurt, coffee, and tea. The company also offers light foods such as sandwiches, mini-wraps, breakfast wraps, oatmeal as well as other baked products. Jamba Juice operates in a franchise model with over 700 stores in the US, 300 company-owned and the rest by franchisees. The Company also operates in South Korea, Canada and the Philippines (Dess, McNamara, & Eisner, 2016).
The company’s general and industrial environment
For an individual to understand the general environment of Jamba Juice, it is important first to consider the external and internal environment. In this regard, the environment analysis entails the process of evaluating the context in which the company operates. A business needs to remain competitive at all times. Therefore, one way to achieve that end is by evaluating the external environment on a continuous basis. The internal environment, on the other hand, focuses on the key competencies as well as the company resources. It is through the competencies and resources that define the organizational strengths and weaknesses.
Finance is the most imperative component of Jamba Juice resources. Notably, organizations require finances to run the routine operations within their environment. In addition, finances are necessary for making capital investments. The company enjoys a strong financial performance. According to the case study, the financial year, 2012 recorded an operating profit of $17.4. In this case, the strong financial status has placed Jamba Juice in a proper liquidity position thereby allowing the company to meet its short-term financial requirements (Dess, McNamara, & Eisner, 2016). In addition, physical facilities are an important resource for the company. The variety of stores provides the organization with channels necessary to distribute the products to the customers. The brand is also a key resource that the organization thrives on to meet sales demands. It is clear that the company has achieved brand recognition associated with providing healthy foods to the customers. The brand has therefore contributed significantly to attracting a large market share, therefore, increasing revenue collected. Moreover, the brand recognition has also attracted franchisees.
The company also considers its human resources as a key component of the organization’s well-being. Notably, though, the company is yet to exploit the full potential of its human resource. Jamba Juice hires young and inexperienced workers which increases the turnover rate for workers. The key competencies include providing high value for customers. The company is distinct from other fast food providers since it focuses on providing healthy options that promote their well-being.
The external analysis
A PESTLE analysis is necessary in this case to establish factors that affect or are likely to affect Jamba Juice outside the restaurant environment.
The political factors are related to governance matters that affect the business. As many people strive to lead healthy lifestyles, various suggestions towards taxing junk foods have been encouraged in the recent past. If such legislation are to be passed, it is likely that the prices of unhealthy foods will be on the increase which in turn offers Jamba Juice an opportunity to gain a larger market share and attract more revenue. The company will gain a competitive advantage since other competitors will have to cope with high prices for their products.
Economic growth remains the essential factor of any business. The economic status of the country determines the purchasing power of the customers. There is a high unemployment rate in the country which further compromises the buying power of potential customers. People are likely to spend more on the basic needs and cut out on luxuries such as healthy smoothies and sandwiches a factor that is likely to affect the sales. A considerable increase in the fuel prices is also set to affect the business regarding pricing and availability of raw materials. Although farmers have embraced other renewable energy sources, it is yet to be fully embraced. In this case, as the prices of vegetables and fruits go up, the prices of smoothies are also likely to increase which could discourage people from purchasing the products. The main ingredients of Jamba Juice products require fresh fruits and vegetables which require being shipped on a regular basis. Due to the harsh economic conditions, farmers are opting for lesser revenue requiring foods such as corn, abandoning soy or strawberries which in turn has made the available products to go up in pricing.
There is an enhanced health awareness in the US which encourages more people to lean towards healthy options. Recent campaigns have enlightened people on the link between poor heating habits and lifestyle diseases. Such campaigns have positively affected the sales since people opt for a healthy smoothie and sandwich as compared to fast foods with high calories. Therefore, Jamba is likely to increase its sales to the high demand for healthy foods and drinks in the country. Socio-cultural factors also affect and influence consumption ideas, needs, purchase behavior and desires. It is worth noting that the people have acquired a rapid attitude towards modern living which includes avoiding unhealthy options, an advantage for Jamba Juice since they provide the much-needed change in the restaurant industry (Mello, 2015). On the other hand, the franchises pay close attention to consumer preferences in the environment they operate in.
The ecological factors relate to the natural environment. One of the factors likely to affect the company is Global warming. The gradual increase in temperature may lead to less rainfall needed by the farmers. Therefore, they will require alternative water sources to grow the raw products which translate into added costs and high-priced products.
In Business, technology entails elements that facilitate the production process. In this regard, technology is likely to enhance the business since the production process will be made easier and faster, therefore meeting demands while providing organized and effective customer management as well as other company resources.
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The internal resources and intellectual assets
As mentioned earlier, financial strength of the company allows it to meet several needs. In addition, the human resource contributes significantly towards the success of the business. The company trains its young and inexperienced workers to become good producers of healthy products while serving customers with utmost respect. Moreover, the brand name serves as a key resource for the company. Its brand recognition attracts sales as well as those who want to invest in similar business elsewhere as franchisees. On the other hand, the company has intellectual assets such as proprietary knowledge that has led the company to be successful in and out of the country. The company has acquired several other brands such as the premium tea blenders, Talbott Teas, a move that was championed by ABC’s Shark tank venture capitalists Daymond John, Kevin O’Riley and Barbara Corcoran. In addition to such acquisitions, the company continuously brings in innovations such as new juice and yogurt products all meant to appeal to different sets of consumers (Dess, McNamara, & Eisner, 2016).
Under intellectual resources, the company as indicated in the case study created a new healthy living council of nutritionists and dietary experts to help the brand evolve with more healthy options. The idea is to educate the consumers and employees on healthy living (Mello, 2015). Moreover, the council works with schools educating the children and teachers on adopting healthy lifestyles and why it is necessary to do so.
The idea of moving the business into franchises has allowed the company to increase its market share amid tough competition from other restaurants such as the fast food industry. Franchise attract a high flow of people into the stores since their needs are catered for in the expansive menu.
The company’s business level and corporate strategies
Business strategies entail the decisions a company makes in creating, maintaining and utilizing the competitive advantages it has over other similar organizations. Corporate level strategy, on the other hand, is realized when a business considers diversifying from its usual operations.
Jamba Juice Business level strategies
The company has made successful but challenging steps in finding market share in a tough environment. Firstly, the company has made excellent progress on a myriad of key priorities to strengthen the brand with successful juice and smoothie creations while engaging marketing programs with strategic counterparts. Some of the strategies that the company has acquired include:
Brand Activation and Leadership
The main idea is to create total brand value through the multi-channel brand building as well as innovation of products. The company has a variety of smoothies, yogurts among other healthy options that significantly strengthens the brand. The activities include building customer loyalty as well as engaging national and local marketing programs and partnerships. Developing partnerships or acquiring other brands are likely to increase more revenue while still advocating for healthy lifestyles. Jamba Juice has become a leader in leveraging technology that makes the customer experience better through loyalty programs and mobile payment software (Smith & Porath, 2016). The company is popular for its “Whole food nutrition” mantra which entails blending juices and vegetables into convenient foods for either breakfast, lunch, snacking or to go.
The company retains customers through creating loyalty across the enterprise. In 2014, the company rolled out whole food blending and juicing to over 300 systemwide stores. In collaboration with the roll out, Jamba should continue to integrate systems that provide excellent customer service as well as superior product knowledge.
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Expanding retail footprint
Jamba has in the past successfully evolved into a strong franchise oriented type of business. Having more stores as franchises attract a wide customer base, and keeps demands in check as the stores can effectively deliver customer needs. The franchises have provided a competitive advantage over other companies and contributed significantly to enhancing the brand thereby, acquiring more market share.
New products, markets, channels and partners
Continued innovation whereby the company introduces more products to its name is likely to attract an even larger customer base. On the other hand, the Jamba Go is likely to facilitate a healthy menu in schools. Moreover, increased partnerships such as with schools or health care providers to enlighten people on the importance of a healthy living will enhance sales for the company. Jamba Juice has already diversified in other areas such as the sale of hats and t-shirts, which attracts more revenue. In this regard, Jamba should consider extending their product portfolio into new channels and markets.
The company is always looking for ways to reduce costs while increasing profits. For instance, in 2013, the company identified cost savings across the organization which is likely to increase in the future. The company derives its profits from cutting on costs while still maintaining superior products.
Corporate level strategies
The Niche market is the main corporate level strategy Jamba Juice adopts. The products are made specifically for a certain market, in this case, people who are concerned about their health and need to maintain a low-calorie intake while still getting value for their money.
The consolidation strategy has worked well for the company as it has acquired other businesses and made it into its own such as the tea company case. On the other hand, working with professionals who advise the company on the necessary steps towards growth has enhanced the sustainability of profits in a competitive market.
Diversification is another type of corporate strategy the company has acquired. Jamba Juice does not only make juices for their customers; it allows them to have a place to enjoy a variety of beverages as well as light meals for breakfast, lunch or as a snack. Moreover, the company has diversified in other areas such as selling branded company products (Smith & Porath, 2016). Jamba Juice also has integrated a series of good campaigns in schools to maximize healthy lifestyle adoption. Such campaigns are likely to divert customers from unhealthy fast foods to adopting healthy lifestyles.
E-commerce is also a corporate level strategy which a company can attract to learn the specific needs of the Customers as well as advertising to reach a wide clientele. E-commerce allows a focused customer process and effective customer support.
Online platforms such as Twitter, Instagram, and Facebook among others can also be adapted to reach the young clientele while educating them on healthy lifestyles.
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Recommendations for future growth
The company should first start by employing qualified people as employees particularly in the shops. Alternatively, the employees should go through intensive training to understand business operations as well as the importance of the company’s products. In addition, the employee should be treated how to handle the customers respectfully at all times. The human aspect of the organization is crucial for every organization. By training employees, they are likely to offer efficient services and therefore improve their productivity. Moreover, working closely with the management will ensure that they feel valued. Such a move will automatically enhance employee retention. Retaining workers over long periods of time becomes cost-effective for the organization since lesser costs are incurred for recruiting and maintaining others. Quality of the products is also maintained.
The company can also invest in advertising through social platforms over the next few years. Technology has allowed companies to move from traditional and costly forms of advertising to reach the customers through quick and efficient means online (Smith & Porath, 2016). Online advertising is cost effective as compared to conventional methods of advertising. In addition, social media offers increased brand awareness, better customer-oriented services as every need is addressed as well as an opportunity to provide proper feedback to the customers. Social media opens new opportunities, leads to brand loyalty and increases sales.
The company can also embrace technological advancements in maintaining their data of the clients, products and the entire business. In addition, the company should come up with an application where customers can order customized products through software or an app, and show actual delivery time as well as an effective method of payment. Technology can also be incorporated to ensure efficiency when serving the customers in the stores.
Timetable required for achieving the strategies
|March -June 2018
|Offer training to the employees (New recruits)
Hire employees who are qualified thereby reducing the cost of training.
|Finances for hiring trainers
Facilities for training
|Social media advertising
| Social media managers
|January 2019 to January 2020
|Create an app that customers can access to place their orders or for other activities
Testing and evaluating the application
Creating a system for a better management of data basis
|Information technology managers
All the company’s managers
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- Affordable prices
It is apparent that the company enjoys certain strengths and opportunities that remain underexploited. With proper management and recommendations, the Jamba Juice can increase its traffic and eventually their sales. Albeit its successes, the company has undergone several challenges that can now be avoided using the appropriate corporate and business level strategies. The business level strategies and corporate strategies include diversification, acquisition, brand activation, and leadership among others. The recommendations include the consideration of new technology to maintain client databases, new software to maintain efficiency and hiring of workers with proper qualifications to enhance efficiency further while reducing costs. Every company must understand its environment both internal and external to withstand the forces presented by the market. In this case, the external and internal forces are well detailed and how they affect the Jamba Juice company. On the other hand, the company is set to achieve great strides stemming from its effective leaders as well as appropriate strategies.
- Dess, G.G, McNamara, G. & Eisner, A.B. (2016). Strategic Management Text & Cases, New York, New York: McGraw-Hill Education.
- Mello, J. A. (2015). Strategic human resource management. Stamford, CT, USA : Cengage Learning.
- In Smith, B., & In Porath, A. (2016). Global perspectives on contemporary marketing education.