The most powerful competitive pressure or pushes determine the success of an industry and so are of best importance in strategy formulation. For instance, a good company with a strong position in an industry unthreatened by potential entrants will earn low return if it encounters superior or a lowers-cost substitute product, as the leading manufacturers of vacuum pipes and coffee percolators have learned with their sorrow, so that in such situation, dealing with the substitute product becomes the main strategic concern.
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Diagram 1
Resource from: http://www. mindtools. com/pages/article/newTMC_08. htm
The risk of substitutes
The first pushes are the threat of substitutes; substitution of Jamba Drink Company's product can be quite high. Predicated on the case study, "competitors started offering similar healthy juices and smoothies in the marketplace", this will makes customers have many brands to choose that based on their interest, because of that there have a lot of brand product of drink can replace the Jamba Juice, in line with the circumstance, there show niche juice and smoothie industry is their competitor and it's will be the substitutes for the Jamba Juice. Not only that, another reason to the high risk of substitutes for the Jumba Drink is the transitioning cost is low, the customer can better to change the juice as they like. When the substitutes become more available for sale, both demand and the price of the merchandise becomes more flexible. (Gigantino, 1999). Refer to Jamba Juice circumstance scenario, the risk of substitutes is high because Jamba Juice has many competitors such as Smoothie King, Maui Wowi, Starbucks and so forth which also provides such kind of healthy products. For Smoothie King is a Louisiana-based franchise specializing in nutritional, fresh fruit combined smoothies. Smoothie King offers healthy alternatives such as sports beverages, enegy bars snacks and natural vitamins and so on, Smoothie Ruler is Jamba Jiice most note-worthy rival.
Threat of distributor bargaining power
The second forces are the threat of supplier bargaining vitality. In this pushes can be very high. Based on the research study, Predicated on the case study, the suppliers of Jamba Juice Company can pick to provide to other companies that providing the same product with Jamba Juice Company. The suppliers can source to Smoothies King or Starbucks as well. And another idea that the dealer bargaining vitality which is exert on the business enterprise by increasing the prices and lower the quality to market to the purchasers. In this case, the Jumba Juice should look for another strong company to provide to them as an acceptable price available transaction. Jumba Drink is more looking for the natural material because of their making the merchandise such as fresh fruit, sugar, cup roughly on. In the event the supplier has an objective to keep boost the price however the quality is good it ought to be no problem, however in other hand once the quality is average therefore Jamba Juice can switch to some other supplier.
The Risk of buyer's bargaining power
The third push will be the threat of buyer's bargaining ability for the Jamba Drink. In this drive toward Jamba Drink is high because the purchasers have a lot of opportunity to switch to another drinks product. For instance like Starbucks, Smoothie Ruler, and Coffee Been. Which means there are way too many competition around Jamba Juice, and the various brand of beverages can cause the Jamba Juice sell drop and also easy to replace the Jamba Drink.
Not only that, the client switch to some other brand of refreshments which means they aren't a royalty customer and because of the cost of transitioning is low so that can boost the bargaining electric power of the potential buyers. However, it is similar with the threat of suppliers bargaining electric power could it be because both are vice versa. Buyer's bargaining vitality are the pressure that given from the buyers to the suppliers.
The threat of new entrant
The fourth causes would be the threat of new entrant for the Jamba Juice. For this threat of new entrant is high since there is not only Jamba Drink in this beverages market. Beside Jamba Juice, there acquired Starbucks, Smoothie King, Coffee Been, and there are much more of the similar drink product on the market. In order that, the new entrant can enters the marketplace easier because there have most of the opportunities to allow them to target different level of customer. The threat of new entrant is rely upon the risk of new opponents in the drinks industry. (Swathen, 2011). In this day, customers are definitely more toward to the health drink product. And it appeals to more competition to type in this refreshments industry, because this type of business is profitable and easy to gain money. After the beverages brands are famous and nice to drink, it'll easy to entice more young generation people. Young generation are the concentrate on portion to the threat of new entrant it is because the young generation's people will bring up the style of drinking healthy juice.
The risk of existing rivalry
In the last pressure in the Jamba Drink which is threat of existing rivalry. In such a threat is considered high because there revealed Jamba Juice has competition highly fragmented in the area of expertise juice and smoothie industry in the case study. Besides, they'll try to stealing the market share and potential earnings in one another. (swathen, 2010) Usually they targeted on competitors who are well-known. For samples, Starbucks, Smoothies Ruler it is the existing rivalry to the Jamba Drink credited to both company have some juice bar, smoothie, and yogurt which act like Jamba Juice. So that, the client will easy to improve their favourite to another brand shop because the merchandise is nearly the same.
General environmental
Demographic
In the Jamba Drink Company the objective to the primary marketing purpose is to make Jamba Drink the largest energetic, healthy lifestyle company in the United Kingdom and use this success to eventually broaden it into other marketplaces. Because credited to Jamba Juice continues to be new brand in the UK and also unidentified brand in the UK also, an advertising budget is needed to increase brang understanding in the new market. So that Jamba Juice Company plan to achieve this task by following a tactical plan using these specific steps; identify Jamba Juice target audience, the merchandise does not focus on any particular get older or gender, so all demographics will be looked at. However, the business primary marketplace that Jamba Drink will try to attract those people age ranges between 15 to 34 years of age. Develop specific advertising campaign objectives; the business objective is to gain 30 percent of the marketplace show of the get and go drink market within 4 years. However Jamba Drink Company will be reselling direct to their consumer and by transferring intermediaries and also to other distribution stations. Therefore Jamba Juice will provide more potential employees and they has been trained and can use personal offering and trade advertising strategy as promotional tools to their goal customer. (Phoenix, U. o. 2010)
Economic
In the portion of monetary towards to the Jamba Drink Company, the focus on for the 13 weeks concluded October 2012 compares to the 12 weeks eneded Oct 4 2011, the business owned comparable store sales has increased 3. 9% and franchise managed comparable stores sales has increased 1. 0% and the system -wide comparable store sales increased 2. 5%, all are increasing the ratio which is good lead to the financial record. In the foreseeable future Jamba Juice Company perspective for season 2013, based on the financial final result, the business will deliver positive company owned similar store sales of 4% to 6% and store level margin of 20% and achieve income from businesses of 2. 5% to 3% of revenue. (Dierks, D. , 2012)
What inner resources and assets does Jamba Drink have that may give it a competitive benefits?
Michael Porter's defined the value string. It's the theory that underlies activity centered management and inevitably, Norton and Kaplan's balanced scorecard. By examining the process movement through business, figuring out the critical success factors for the main element processes,
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Diagram 2
Value String Activity
Primary:
Inbound logistics
In this inbound logistics towards to the Jamba Juice, Jamba Drink should syndication facilities, materials control systems and offer more warehouse designs.
Operations
Jamba Juice must have the reliable work movement design and the quality control system, so that it will maintain the royalty customer to the business.
Outbound logistics
Conditions of goods should provide 100% to the customer and efficient scheduling, finished goods handling.
Marketing and sales
In the marketing office, the head of the division should motivated sales representatives, progressive advertising and campaign, effective prices, customer segments, and distributive programs; therefore, it will bring more revenue to the business.
Service
Ability to require customer feedback and respond, ask for the feedback is basically because Jamba Juice company need to improve to serve easier to the customer.
Secondary or Support :
Procurement
Win-win romance with suppliers so that the supplier will give the better offer to the company.
And will reduced reliance on single distributor.
Technology development
State of the art work hardware and software, impressive culture and qualified personnel
Human source management
Effective recruitment, incentives and retention mechanisms
General administration
Effective planning systems to establish goals and strategies, usage of capital, effective top management communication, romance with diverse stakeholders
Intangible property of the Jamba Drink Company
In intangible possessions of the Jamba Juice Company, the intangible assets are amortized over their projected useful lives using a approach to amortization that reflects the pattern in which the economic advantages of the intangible belongings are consumed or elsewhere realized. Approximated useful lives for the franchise contracts are 13. 4 years. The useful life of reacquired franchise privileges is the rest of the term of the particular franchise agreement. The useful life of the favourable rent portfolio intangible is dependant on the related rent term. Which mean the main intangible possessions is the franchise arrangement because of the time is 13. 4 years. (Jamba Inc, 2012).
