BUS 599. Assignment 4: Business Plan-Final. Management Coursework

Non-Alcoholic Beverage company "Nectar Power Juice Bar”
Strayer University
BUS 599
Dr. Andrea Banto and Dr. Cynthia Parmenter
September 10, 2019
Executive Summary
Background
Nectar Power Juice is a new product targeting the millennials in fulfilling their need for an all-natural product that will give them the desired feeling and energy. The company will target individuals in New York as this is the area that has people from diverse backgrounds who will be able to support the company as a startup. The company will face stiff competition from more established competitors such as Starbucks but will employ a price strategy to capture the market and gain a competitive advantage.
The Management Team
Three individuals, the president, the foreman, and the legal advisor, manage Nectar Power Juice Bar. The president has an MBA from Strayer University and five years’ experience in management. The foreman is retired from PepsiCo and offers valuable guidance in the production line. The legal advisor was a senior executive in the Federal Trade Commission from 2007 to 2018 and retired after 30 years; she provides the legal advice needed to ensure that the business satisfies the regulations for operation in the state. 
The Future
Nectar Power Juice Bar management can explore several opportunities to expand operations. As a highly competitive environment, New York City presents an excellent opportunity to understand dynamics of the market. The skills the company gains operating in this area will be essential to its growth.
Financials 
The company expects rapid growth, with gross profits of $132,638 and gross profit margins of up to 50%. These profits will be used to repay outstanding debts and pay dividends to stakeholders; the remainder will be re-injected into the business for self-sustainability. 
Funds Sought
The business requires additional funding of $25,000 from external sources, to be used for working capital. Eighty percent of this amount is to be contributed by the owners, and friends and family are expected to contribute 10%. The remaining 10% will be obtained from other sources. The business seeks to get its funds in one round, which will be in January. 
1 Company Description
Nectar Power Juice Bar is a non-beverage company that seeks to provide young people with an alternative product that will provide power and energy to keep one fresh and focused. It is meant to fill the gap that exists for the young people who wish to have a drink that gives them the much needed energy while presenting no harm to them through side effects. This beverage is similar to the normal juice but has some natural additives meant to boost one’s energy and concentration (Berberich et al., 2016). It will be availed in different flavors like mango, orange, apple, and pineapple. It will be prepared using natural organic ingredients to prevent it from having any harmful effects on the consumers.
Source: https://postmates.com/merchant/nekter-juice-bar-las-vegas-2
1 Mission Statement and Rationale
The mission statement of Nectar Power Juice Bar is to boost the health and experience of consumers through the natural organic ingredients of fruits and give customers energy and flavor. Our company aims to create the worth and positive influence for the beverage sector.
1.2. Trends in the Non-alcoholic Beverage Industry
Nectar Power Juice has excellent prospects for the year 2020, with projections on the possible increase in the number of beverage consumers. These news present the company with an opportunity to grow its market base by capturing more customers and striving to create loyalty among its consumers. Consumers are the blessings for the Nectar Power Juice Bar as they will be important target consumers for this drink. Nectar Power Juice Bar is a popular drink as it provides energy and it also comprises vitamins and proteins which are a useful source of energy. According to the lifestyle of young people who are busy in this century, this drink will be loved by them along with the older generation. One of the factors that will boost the market is the recent increase in market income of up to 20% in November, which may lead an increase in sales of around 20% (Chandel et al, 2018). The company has emphasized the benefits of the beverage and coupled with proper branding, it is likely to have a great impact on the market.
Factor

This year

Next Year

Next 5 years

Total revenue

US$6 Billion

US$7 Billion

US$15 Billion

Total Units Sold

10000 bottles

20000 bottles

100000 bottles

Total Employment

50

194

500

Industry Growth Rate

30%

50%

90%

GDP Growth Rate

2.7%

4.6%

7.1%

1.3 Strategic Position
The success of Nectar Power Juice Bar will be determined by the company’s ability to make strategic decisions and position itself in such a way that it will appear unique and capture some of its consumers. Different approaches would be applied to attain a strategic position like the policies would be set and implemented in the company to develop different products. The variables to be used for the segmentation process will include:
1.4 Distribution Channels
The company will hire renowned distributors who register good profit margins in their sales. Therefore, we will undertake due diligence to establish centers that youths frequent and liaise with distributors in such areas to distribute out products. The company will also focus on selling the packaged drink on wholesale basis to attract more distributors who will be given good discounts (Kao et al, 2018). The distributors will then decide the rate of profit margin and distribute it to the areas which are set. Nectar Power Juice Bar will also approach families to purchase the drink on reduced prices or on promotional basis. The product will also be distributed in hypermarkets and supermarkets (MRF, 2020). The global market has been divided into two segments which are stored based and non-store based. This company will focus on store-based centers for purposes of convenience in storage.
1.5 Risks
Every business involves risk. Only inexperienced people who start their businesses think that their business cannot fail (Collin et al, 2019). Some of the risk included in the company would be
Regulatory Risk: To comply with the strict and regulations that have to focus on some of the risks which are related to labelling which have to be approved by the government according to the law.
Market Risk: Sometimes the market may not respond towards the products as there is no need for the real market, sometimes this type of risk will become quite difficult to overcome. The company will explore appropriate strategies to overcome such risks.
Technology Risk: Technology or the design of the product may, sometimes, not be favourable to the business. This being a potential risk the company will avert it by embracing new technologies and constantly upgrading our systems.
2.6 SWOT Analysis
Strengths
* Price low as compare to other competitors
* • It contains Vitamin C
* • It comes in innovative flavours to get the attention of customers.
* • It is an antioxidant product (Karganova, 2018)

Weaknesses
* Weaknesses
* • The rising cost of manufacturing
* • Set up of distribution is quite weak as compared to another market.
* • The product is not available in other countries.
* • Change the environment of franchises.

Opportunities
* • Great perception in the minds of the customer.
* • More people are now health-conscious and are including juices in their daily diet.
* • The government is also encouraging the industry of food processing.
* • The market has the presence of a few players and they are aggressive.

Threats
* Every competitor in the market is doing promotional activities for their product.
* • Strong competition in the beverage industry.
* • The rising cost of labour.
* • Competitors have a strong image of the brand in the market because of the presence in the market in the early phase.

1 Target Market
The target market of the Nectar Power Juice will be the Millennial customers in the region of New York City. For the purpose of a marketing plan, millennial customers are assumed to belong to the age group of 18 to 29 years. The majority of the individuals in the millennial generation are ready to pay premium prices for the products with high quality (Curtin, 2018). Hence, Nectar Power Juice expects to sell its products through current supermarket stores in New York City.
2.1. Demographics of Customers
Millennial customers in New York City are analyzed in terms of the demographics mentioned below.
1 Customers Age: Millennial customers belong to the age group of 18 to 29 years.
2.1.2. Income Range: The details about the earnings of the millennial customers in New York in different industries from 2000 to 2014 are mentioned in the figure below
Figure 1: Millennial Customers Earnings in Different Industries from 2000 to 2014
Source: (Stringer, 2016, p.18)
From the above table, it is determined that the total average wages of millennial customers in different industries decreased from $37,480 in 2000 to $34,367 in 2014 (Stringer, 2016, p.18). Hence, the NMCC company has decided to introduce the products at low prices in initial stages by the adoption of a penetration pricing strategy.
2.1.3. Occupation: The majority of millennial customers in New York City are employed in the industries of technology and advertising. Customers employed in information technology and other scientific research related fields have increased from 13,300 in 2000 to 16,600 in 2014 (Stringer, 2016, p.17). The customers in the advertising industry increased from 15,900 in 2000 to 21,300 in 2014 (Stringer, 2016, p.17). The number of millennial workers employed in computer-related occupations has decreased from 30,500 in 2000 to 26,600 in 2014 (Stringer, 2016, p.17). These numbers indicate the possibility of an increase in the market of the product, which means better sales for the company.
2.1.4. Level of Education: The percentage of millennial customers with some kind of college degree has increased from 61% in 2000 to 72% in 2014, and 45% of the customers had a bachelor’s degree or higher (Stringer, 2016, p.2).
2.2. Analysis of Actual Data in Local Community
NMCC’s decides to sell its product through supermarkets in New York. The total number of supermarkets in New York City is more than 170 in 2016 (Kaysen, 2016). The total number of potential millennial customers in New York City was more than 200,000 in 2014 and they are expected to increase further (Stringer, 2016, p.6). The average per capita income is $37,863 in New York City in 2018 (Census Bureau, 2018). These numbers provide positive prospects for the company to explore these markets and market itself among the people.
2 Market Competition
The major competitors will include the ready-to-drink coffee segment like Starbucks and International Delight. Starbucks generated a revenue of $85.54 million and International Delight generated a revenue of $74.65 million in the ready to drink segment (Bedford, 2020). Overall. Starbucks market share in the US coffee industry has reached about 40% in 2019 (Brown, 2019). Starbucks market share in ready to drink segment is 21% and International Delight has a share of 18% in 2019 (Statista, 2019). These results show that Nectar Power Juice will have stiff competition from the more established Starbucks and International Delight brands.
Figure 2: Starbucks and International Delight Revenues in Ready to Drink Segment
Source: (Bedford, 2020)
Nectar Power Juice will employ the price strategy to compete by offering its ready to drink coffee at $1. This strategy is expected to help in the achievement of sustainable competitive advantage. Besides, the company will also explore other promotional strategies like offering free samples and gifts.
3 Marketing Plan and Sales Strategy
Nectar Power Juice Bar will market itself based on quality and price. In terms of quality, the company will market the beverage as having incredible taste because of the natural organic ingredients used. It will pride itself as offering high quality ready to drink beverage for millennial customers at just $1 in the city of New York. The price will lure young buyers who wish to taste it but lack sufficient funds to purchase the drink.
2 Marketing Vehicles Used to Develop the Company’s Brand
The company will focus more on digital marketing because it is cost-effective and helps to attract more customers in a short period of time. Nectar Power Juice will launch a social media campaign to highlight the price, facts, and figures associated with the offered products. The campaign will be carried out on platforms like Facebook and Twitter for millennial customers in New York City. Financial capital is also allocated for media advertisements. The campaign will highlight how the product is different from the competitors. The company will launch a website and a mobile application to transfer the information to customers on a continuous basis. Trade shows and informal meetings will be conducted in supermarkets to ensure direct communication with customers.
5. Operations Plan
Nectar Power Juice Bar’s operational plan will serve as a guide to the management team to determine the best approaches to run the business.
5.1. Key Aspects of the Plan
The company will adopt cost-effective approaches for the production processes, therefore, the production facilities will be small and only professional and high skilled employees will be employed to manage it.
5.1.1. Facilities: the production facility will be rented in New York City. The research and development (R&D) department have identified that at least an area of 5000 square foot is required to carry out the production of ready to drink coffee, therefore, the expected rent for this kind of building is about $20,000 to $30,000 per month (Carmiel, 2020).
5.1.2. Production Process: the production process will be carried out in a rented facility. The ready to drink product is manufactured, packaged and delivered to the supermarkets in New York City through the facility.
5.1.3. Equipment: Advanced equipment will be used to produce the product. Nectar Power Juice will use the equipment manufactured by Buhler Company because it offers a cost-effective coffee-preheating unit in terms of energy and helps to convert the raw organic beans to ground coffee within an affordable price range of $30,000 to $40,000 (Buhler Group, 2020). Other than this, the company needs to purchase 100 refrigerators and 10,000 bottles for packaging. The Zoho inventory software is used to track the inventory by the allocation of serial track numbers.
5.1.4. Labor Force Utilization: The employees who will be appointed in the production department will be expected to have complete knowledge about the quality control techniques and methods. Nectar Power Juice Bar will appoint only six employees in the production department and the manager needs to evaluate the employee’s performance on continuous to identify the future human resources needs.
5.2. Cost and Time Efficiencies, and Competitive Advantage
The cost and time efficiencies will be achieved by the implementation of quality control techniques like statistical process control (SPC) and Six Sigma. The SPC provides support to monitor, evaluate and control the quality with the tracking production metrics. The production manager will be responsible for identifying and solving the errors and issues before products are delivered out of the production facility (Graphic Products, 2020). The second tool of Six Sigma helps to ensure that Nectar Power Juice Bar’s product meets the needs of customers and contains no defects (Graphic Products, 2020). Competitive advantage is achieved by the development of high quality ready to drink coffee products offered at a low price of $1.
5.3. Research and Development
The company will employ a quality analyst team who will be responsible for conducting research about the product and seeking for ways to continuously improve it.
6. Technology Plan
Nectar Power Juice requires an effective technology plan to ensure that organizational activities a...