VIThit
Enterprise & Development Take Home Exam
Q1 (1)
Micro Analysis
The optimum method for analysing Innocent Drinks micro environment is by utilising Michael Porters 5 forces model (Porter, 1980).
Threat of existing rivalry
Existing rivalry is a substantial threat to Innocent Drinks. The intensity of current rivalry is high. There are numerous rivals already within the smoothie/juice industry in the UK each with loyal fan bases, and similar market share meaning profits are shared and there is difficulty for Innocent to dominate.
Innocent have significant competition in this market from PJ, store own brands and all other smaller smoothie companies. PJ were their main brand competitors as they were the only others selling premium smoothies. Their brand reputation and established innovations within similar markets meant they are a strong rival to Innocent. In the US, the rivalry is even stronger. Odwalla is the largest and most established brand and was bought by Coca Cola in 2001. Odwalla would have the financial might and commercial clout of Coca Cola, one of the world’s most successful beverage companies backing them through heavy marketing, advertising, powerful competitive strategy and lower pricing. All of which would give Odwalla a weighty competitive advantage over Innocent, making the threat of Odwalla perhaps too strong for Innocent to compete with.
However, innocent did enjoy reasonable success in Ireland. Furthermore the estimated small market size in Europe would suggest that perhaps the threat of existing rivalry might not be as intense and something Innocent should/are considering.
Bargaining power of Suppliers
Bargaining power of suppliers is high. Innocent Drinks initially struggled to find a manufacturer for their product. Back in 1998 there were no manufacturers set up to create the fresh smoothies Innocent wanted. While the existing manufacturers could adapt, many would only do it for large profitable, well established companies like main
Q1 (1)
Micro Analysis
The optimum method for analysing Innocent Drinks micro environment is by utilising Michael Porters 5 forces model (Porter, 1980).
Threat of existing rivalry
Existing rivalry is a substantial threat to Innocent Drinks. The intensity of current rivalry is high. There are numerous rivals already within the smoothie/juice industry in the UK each with loyal fan bases, and similar market share meaning profits are shared and there is difficulty for Innocent to dominate.
Innocent have significant competition in this market from PJ, store own brands and all other smaller smoothie companies. PJ were their main brand competitors as they were the only others selling premium smoothies. Their brand reputation and established innovations within similar markets meant they are a strong rival to Innocent. In the US, the rivalry is even stronger. Odwalla is the largest and most established brand and was bought by Coca Cola in 2001. Odwalla would have the financial might and commercial clout of Coca Cola, one of the world’s most successful beverage companies backing them through heavy marketing, advertising, powerful competitive strategy and lower pricing. All of which would give Odwalla a weighty competitive advantage over Innocent, making the threat of Odwalla perhaps too strong for Innocent to compete with.
However, innocent did enjoy reasonable success in Ireland. Furthermore the estimated small market size in Europe would suggest that perhaps the threat of existing rivalry might not be as intense and something Innocent should/are considering.
Bargaining power of Suppliers
Bargaining power of suppliers is high. Innocent Drinks initially struggled to find a manufacturer for their product. Back in 1998 there were no manufacturers set up to create the fresh smoothies Innocent wanted. While the existing manufacturers could adapt, many would only do it for large profitable, well established companies like main
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