Company Description and SWOT Analysis of Rainbow Smoothie

Company Description and SWOT Analysis

Trends in the Industry

Market projections indicate that the global smoothies market will have a compound annual growth rate of 7.2 percent in the forecasted financial period of 2020 and 2025. In the United States, the smoothie industry generates annual sales amounting to $2 billion. Also, in the past five years, the consumption of smoothies in the American market increased by 120 percent. There are key market trends that are perceptible in the industry affecting Rainbow Smoothie's product offerings.

1. Increased consumption of healthy beverages

Like a product offering, smoothies comprise fruits and vegetables, which are considered part of a healthy diet. Furthermore, mounting health awareness amongst consumers and transforming the standard of living and food preferences, together with health advantages, are dispositions that are pushing the smoothies industry's growth. In the contemporary setting, most populaces' consumption habits comprise avoiding meals and capitalizing on snacks as alternatives. The consumption of carbohydrates, fundamentally when the smoothies are produced devoid of sugar, is minimal. As a result, most health advisers and even gym enthusiasts suggest that persons ought to consume smoothies to facilitate weight loss. As a result, smoothies have emanated as an ideal meal compared to snacks, as they are tasty and convenient, and portable (Modor Intellience, 2021).

2. Raw materials and packaging

In recent times, one of the mounting trends is the high pricing levels for smoothies and concerns about the product offerings' packaging. Smoothies are made purely out of raw materials, including fruits and vegetables. The change in the harvesting of these raw materials, especially due to natural events, significantly hampers the amount of harvest and therefore altering the levels of demand. These are key factors limiting the rapid growth of the smoothies market (Robeks, 2020).

3. Growth in demand for green smoothies

Off late, there has been a mounting trend and disposition for green smoothies. In particular, there is an increase in demand levels for smoothies that are manufactured using green leafy vegetables, for instance, green cabbages, kale, lettuce, and spinach. Consumers largely prefer this to facilitate enhanced digestion and boost the immune system, in addition to curtailing cravings that are unhealthy. Moreover, owing to rapidly rising health care expenses, consumers are predisposed to capitalize on smoothies as a form of a breakfast meal. The mounting demand for meals and beverages that are functioning is rapidly pushing the market's growth. These green smoothies will stimulate the smoothie market growth for numerous years to come (Market Data Forecast, 2020).

4. Health Boosters

Progressively more consumers are seeking health boosters to get rid of poor habits and addictions such as caffeine in exchange for smoothies that offer healthy alternatives. In the present day, the supplements incorporated in smoothies provide consumers with natural boosts to achieve alertness and high energy. Therefore, consumers can obtain a jump start in the morning or devoid of consuming unhealthy products such as coffee or becoming addicted to the substances. The high-energy raw materials within the smoothies are also sought after by athletes to accomplish their topmost body performance (Robeks, 2020).

Strategic Position

A firm's relative position within its industry of operation plays a pivotal role in performance. Imperatively, strategic positioning mirrors a firm's choices about the sort of value it will generate and how that value will be created differently compared to competitors. Rainbow Smoothie's strategic position will encompass both differentiation and cost focus. First, differentiation strategy is centered on the perspective that a firm necessitates a clear and distinctive positioning. Differentiation leadership emphasizes the provision of perks that facilitate value addition for consumers. Rainbow Smoothie will differentiate itself from the other players in the market by developing a wide range of product offerings. These will comprise fitness smoothies, wellness smoothies, slimming smoothies, and fun smoothies (Porter, 2011).

The second strategy for Rainbow Smoothie is cost strategy. Significantly, cost leadership endeavors towards diminishing costs to the minimum possible level to provide consumers with lower prices and, as a result, increase the cost savings. Rainbow Smoothie will attempt to achieve economies of scale by purchasing raw materials in bulk directly from the local farmers. By establishing a long-term relationship with these farmers, the company will capitalize on bargaining power to negotiate low prices for the raw materials (Porter, 2011). Secondly, Rainbow Smoothie will implement high capacity utilization to guarantee high productivity in creating the different smoothies. The company will also employ lead production approaches such as the Just-In-Time method as a strategy for minimizing costs (Porter, 2011). Diminishing the production costs will enable the company to increase profitability while concurrently ensuring that its quality is not compromised.

Distribution Channels

A distribution channel signifies a sequence of businesses or intermediaries via which the eventual purchaser buys a good or service. It is critical to assess that not all of the existent distribution channels are functional for all products, and therefore it is pivotal for firms to select the appropriate one. The selected distribution channel ought to align with the company's overall mission and strategic vision (Kenton and Drury, 2020). One of the distribution channels that will be employed by Rainbow Smoothie is wholesale distribution. The company will largely focus on developing and producing smoothies and capitalizing on intermediaries to enable final consumers to obtain access. Specifically, Rainbow Smoothie will sell its products to close by wholesale distribution channels such as Home Depot and Wal-Mart. This will give Rainbow Smoothie accessibility to a wide variety of consumers that are already devoted consumers of these retailers (Baker and Saren, 2016). Rainbow Smoothie will also capitalize on a direct-to-consumer distribution channel whereby the company will sell its smoothie products directly to the final customers. This distribution channel is also preferred to generate greater revenue because it ceases being dependent on the retailer and wholesaler. This will also enable Rainbow Smoothie to sell to its nearby consumers since it will be operating within a 100-mile radius from my home address (Armstrong, Kotler, and Ze, 2005).

SWOT Analysis

Strengths

1. No additional sugar or preservatives. The product offerings by Rainbow Smoothie will be from purely fruits and vegetables. The products will be healthy for consumers.

2. Tasty and wide array of product offerings. The company will offer a wide range of tasty flavors for the different smoothies.

3. Personalized juices with healthy boosters. The smoothies will include boosters such as protein and essential and natural vitamins to facilitate high energy and healthy eating patterns.

4. Raw materials are grown and harvested sustainably. All of the fruits and vegetables used in Rainbow Smoothie will be farmed and harvested by local farmers and will be organic and safe for consumption for all consumers.

Weaknesses

1. Competitors in the market can offer similar products speedily. Rainbow Smoothie will face plenty of competition in the market from the various other smoothie companies.

2. Restricted flexibility in the pricing of the products. Competitive pricing will result in choosing strategic price points to capitalize on the product offerings ideally. The high competition in the market leads to low market prices and a limitation in placing high prices because it will be simple for consumers to switch to rivals.

3. Minimal shelf life. Due to the fresh fruits and vegetables, the smoothies will have minimal shelf life losses without any additional preservatives.

4. Minimal consumer awareness. Rainbow Smoothie is a new company on the market. The company is yet to gain significant consumer awareness and recognition compared to other established companies in the market.