Jamba Juice Strategic Plan
Jamba Juice Strategic Plan
Executive Summary
This report presents the strategic plan of Jamba Juice Company. Jamba Juice owns a chain of restaurant outlets within the United States. The firm operates in the food and beverage industry and has specialized in providing healthy foods. Jamba Juice provides fresh fruit drinks, smoothies and light meals. The mission of the organization is to promote the wellbeing of the society.The purpose of a strategic plan is to define the direction of the firm in order to make accurate decisions with regard to allocation of resources. For a firm to define the direction of the business, it needs to know its current position. Thus, the plan encompasses an evaluation of Jamba Juice’s internal and external business environment. Analysis of Jamba Juice’s internal business environment entailed an examination of the firm’s resources and key competencies. This process was essential in identify the organization strengths and weaknesses.Jamba Juice’s external environment was divided into broad categories; the general environment and the competitive environment. Analysis of the general environment focused on examining factors that affect all business that operate in the market. The report examined for main factors including; ecological, social, economical and political. Analysis of Jamba Juice’s competitive environment focused on identifying factors that affect the food and beverage industry.
The report made use of the Porters 5 forces model to evaluate Jamba Juice competitive environment. Analysis of the external environment was essential in assisting the firm to identify opportunities and threats.This strategic plan has been anchored on Jamba Juice’s overall objective. The firms overall goal is to make this firm the largest healthy lifestyle company within the United States. Jamba Juice plans to achieve this by making Jamba Juice products appealing to a wide variety of consumer and by improving the company’s product on a continuous basis. Achieving the firm objectives requires the formulation of a strategy. The plan made use of the value discipline model to establish the most effective strategy for achieving the company’s goals. Value discipline model presents three main strategies for pursuing the firm’s goals; operation excellence; product leadership, and customer intimacy. The plan settled on integrating the product leadership and customer intimacy strategy. Implementation of long term objectives requires firms to identify short term goals that will lead to the realization of the long term objectives.
Jamba Juice’s short term goals include; (1) to enhance the generation of revenues by 6% in the next 1 year; (2) to achieve operating income of 3.0% of revenue; (3) to establish 60-80 news outlets within the United states, and (4) improve the brand awareness of Jamba Juice by 5% over the next 1 years. The strategic plan also encompasses functional tactics that will be used to achieve the firm’s short term goals. The plan has grouped the functional tactics into two main categories; customer focused and product focused tactical plans. The plan has also identified action items and how implementation responsibilities will be divided among the organization work force.The final part of the strategic plan present a mechanism for allocating resources, financial projections, a risk management and contingency plan. The resource allocation mechanisms seek to give priority to activities according to their weight and urgency. The financial projection presents the financial prospect of Jamba Juice in the financial period while the risk management section has identified potential risks. The contingency plan suggests strategies for overcoming potential risks.
2. Company Background
Jamba Juice Company an American company that runs a chain of juice stores around the country (Jamba Inc, 2012). The company operates within the restaurant industry, and has specialized in providing specialty beverage. These beverages include; fresh juice, smoothies, juice blends, yoghurt, tea and coffee. The stores also provide light foods such as sandwiches, oatmeal, mini-wraps, breakfast wraps, bread and other beaked products. Jamba juice operates on franchise model. The firm runs 755 stores in different states (Jamba Inc, 2012). Jamba Juice owns 301 of these stores while the remaining 454 are operated by franchisees. Jamba Juice also has franchise stores in Canada, the Philippines and South Korea.
3. Organization’s Mission
The mission of Jamba Juice Company is to enhance the health and wellbeing of society by providing healthy foods and beverages. The firm’s mission statement is; “is establishing Jamba juice as the world leading source of healthy energy in the form of newly combined beverages with an unwavering commitment of making a difference via values” (Jamba Inc, 2012). Jamba aims at helping its employees to understand the meaning of enriching the daily experience of its customers.
4. Organization’s Vision
Jamba Juice’s vision is to establish an organization that heartens the daily experience of the community, the firm’s customers and the firm through the self nourishing qualities of vegetables and fruits (Jamba Inc, 2012). The idea is to have clients leave the company’s stores with a better feeling about themselves since they understand that when they choose Jamba, they have opted for a healthier lifestyle.
5. Values Statement
Jamba juice stands by its products and believes that it is truly helping all its clients to enhance their life (Jamba Inc, 2012). The company believes that the acronym FIBER gives it all. It stands for fun in what one does, integrity in what one says, balance in one’s life, empowerment in you and respecting yourself.
6. Environmental Analysis
Environmental analysis is the systematic process of examining the context in which an organization operates (Giovanni, Ondrus & Pigneur, 2011). Businesses operate in dynamic environments and, therefore, needs to evaluate this environment on a continuous basis in order to remain competitive. This section presents an analysis of Jamba Juice business environment. The business environment has been categorized into internal and external business environment.
$1a. Internal Environment
Internal environmental analysis focuses on analyzing Jamba Juice resources and core competences. Resources and competencies define the organization strengths and weaknesses.
Resources
Finance is one of Jamba’s essential resources. Companies need finances in order to run the routine operations of their organizations. Firms also need finances in order to make capital investments. Strong financial performance is one of Jamba Juice’s areas of strength. In the last financial period, the firm recorded an operating profit of $17.4 million (Jamba Inc, 2012). The strong financial performance has placed the organization in an excellent liquidity position thus enhancing the organization ability to meet its short term financial needs. Physical facilities are also essential resources to Jamba Juice. Jamba operates 755 stores within the United States (Jamba Inc, 2012). These stores provide the organization with channels for distributing the firm products to customers. Another vital resource for Jamba juice is the company’s brand.
Jamba Juice has achieved brand recognition for providing meals that promote the wellbeing of it clients. The strong brand has not enabled to the organization to increase its market shares, but has also enabled the organization to increase revenues by attracting a large number of franchisee. Currently, the organization has 454 franchisees within the United States. Human resource is also an essential resource for Jamba Juice. However, Jamba juice has been unable to exploit the potential of its human resource. The firm hires young and inexperienced employees. Turnover rate for workers is also high thus increasing recruitment cost of the organization.
Competences
Providing high value for customers is one of Jamba areas of core competency (Jamba Inc, 2012). Unlike most fast food restaurant, Jamba has focused on providing foods that promote the health and wellbeing of customers. This is an indication of the firm’s commitment to delivering value to its customers. Cost saving is also a core competence for Jamba Juice (Jamba Inc, 2011). The company has invested in cost cutting initiatives which have enabled the organization to enhance the profitability of the company. Cost effectiveness has also enabled the firm to offer their products at reasonable rates.
$1b. External Environment
External environmental refers to factors that affect the operations of a firm, but which the firm cannot control. This section evaluates Jamba Juice’s external business environment. This environment has been divided into the general environment and the competitive environment
The General Environment
The general environment of a business refers to external factors that affect all businesses with a certain market. This section has examined five essential general environmental factors that apply to Jamba Juice.
$1i. Political Factors
Political factors mainly relate to governance matters that have an impact on business. With the country striving to be healthy, various stakeholders have made suggestions in favor of imposition of tax on junk food (HuffPost, 2012). If such laws are legislated, unhealthy food will attract higher taxes than healthy foods. This change would present opportunities to Jamba Juice since the firm offers healthy food products. Jamba will gain an advantage over competitors who offer unhealthy food since these competitors will have to pay high taxes.
$1ii. Economic Factors
Economic growth is the most significant economic factor for Jamba Juice. The economy of the country is recovering from the effect of the 2008 financial crisis (Krugman, 2012). This is increase employment, trades and the general standards of living within the country. Consequently, additional people will be able to afford Jamba Juice products leading to increased demands.
$1iii. Social Factors
Enhanced health awareness within the American population is one of the social factors that are likely to affect Jamba Juice future operations. In recent times, there has been increased awareness concerning the link between poor eating habits and prevalence of these lifestyle diseases (Scientist Live, 2012). Consequently, people have shifted from consumption of junk foods to consumption healthy meals (Scientist Live, 2012). As efforts to increase health awareness increase, Jamba Juice is likely to benefit from increased demand for its products.
$1iv. Ecological Factors
Ecological factors refer to matters that relate to the natural environment. One of the ecological factors that are likely to affect Jamba Juice is global warming. Global warming refers to the gradual increase of temperatures in the earth’s atmosphere (Revkin, 2012). Warming temperatures are likely to boost the demand for Jamba Juice’s product. Since the firm offers cold drinks, customer preferences are likely to shift in favor of Jamba Juice’s product if the temperatures continue to rise.
$1v. Technological factors
Technology, in business, refers to elements that facilitate the production process. Advancement in technology is likely to enhance the competitiveness of business by reduce the cost of operation and facilitating efficient management of customers, employees and other company resources.
The Competitive Environment
The competitive environment refers to factors that affect one business or business with a given industry. This section has evaluated Jamba Juice’s competitive environment using the Porters 5 forces model.
$1i. Rivalry
Rivalry refers to the nature of the prevailing competition. Jamba Juice operates in highly saturated industry (KPMG, 2012). This means that the industry contains numerous players competing for the same market. Jamba Juice competes with other beverage companies such as Lish and Medium Size smoothies. Operating in highly saturated industry increase the cost of business for Jamba Juice since the firm has to invest in marketing activities. Fierce competition also drives down prices leading to low revenues.
$1ii. New Entrants
The threat of new entrants in the industry in which Jamba Juice operates is real. The industry has minimal entry barriers thus making the establishment of new organizations easy (KPMG, 2012). Entry of new players would result in growth of competition which is likely to increase costs and push the prices of commodities downwards.
$1iii. Substitutes
The threat of substitute within the industry is also real. Jamba Juice offers healthy drinks as its main product. These products have to compete with other drinks such as soda and alcohol (Delloitte, 2012). Presence of substitutes increases competition within the industry and thus, affecting the prices of the company’s products.
$1iv. Buyer Power
Jamba Juice deals with small individual customers who are fragmented and less organized (Delloitte, 2012). Thus, the power of these consumers over the company is limited. Thus, these consumers have limited ability to influence the prices of products. However, the growing numbers of informed customers within the market is increasing the power of buyers to influence prices (Delloitte, 2012). The informed customers are aware of the existence of competing and substitute products and can use this information to drive down prices.
$1v. Supplier Power
Some of Jamba Juice’s suppliers are powerful (Delloitte, 2012). For Instance, the companies from which Jamba acquires its products are large manufacturing organizations. These large organizations have the power to influence the prices of supplies.
SWOT analysis
SWOT analysis is a technique that is widely used by managers to get a swift impression of the strategic situation of a company. SWOT is based on the assumption that an effective strategy comes as a result of sound balance between the external environment and the internal resources of a firm. The internal resources comprise of strengthens and weaknesses while the external situation comprises the opportunities and threats (Robinson & Pearce, 2004). There are various strengths and weaknesses identified for Jamba Juice.
| Strengths.
Financial resources Product leadership Large retail outlet |
Opportunities.
Warming temperatures. Improving economy Increased Health awareness |
| Weaknesses.
High employee turnover. Extremely young employees. Inexperienced employees. |
Threats.
Increased competition Threat on new entrants Threat of substitute |
7. Long Term Objectives
The main objective of Jamba Juice is to make this firm the largest healthy lifestyle company within the United States. The company plan is to provide an easy solution to healthy living by presenting a variety of snacks and business options. The plan has identified two long terms objectives that will aid in the realization of the firm’s main objective. The first objective is to make Jamba Juice products appealing to a wide variety of consumer. The company intends to expand its operation and make Jamba Juice the brand of choice for most beverage consumers within the United States Market. This will enable the organization to grow it revenues and share of the market. The second objective is to improve the company’s product on a continuous basis. This will ensure that the company attains a sustainable source of competitive advantage.
8. Strategic Analysis and Choice
Value Discipline
Value discipline is a model that helps organizations to choose a central principal that will shape all other strategies of the business (Johnson, 2010). The model has identified three central strategies; customer intimacy; product leadership, and operational excellence. Operational excellence focuses on providing consumers with the best prices in the market (Johnson, 2010). Firms that rely on this strategy seek to reduce cost by making their operation efficient. Product leadership focuses on developing the best and most innovative products (Johnson, 2010). Companies that rely on this strategy focus on remaining ahead of other players. Customer intimacy focuses on delivering superior quality experiences in order to build customer loyalty (Johnson, 2010). This plan will integrate the product leadership value and the customer intimacy value. Product leadership will enable the company to develop a variety of innovative products. This will enable the firm to meet long term objectives of appealing to a diverse market and achieving continuous improvement of products. On the other hand, the company will need to create customer intimacy in order to keep hold of the customer that it acquires. Customer intimacy strategy is a source of sustainable advantage since it creates brand loyalty among consumers.
$11.To enhance the generation of revenues by 6% in the next 1 year. Revenues form the basis of profitability at Jamba Juice. An increase of 6% is vital towards boosting the company’s income.
$12.To achieve operating income of 3.0% of revenue. This will enhance Jamba Juice’s profits, as well as, the firm’s liquidity position.
$13.To establish 60-80 news outlets within the United states
$14.To improve the brand awareness of Jamba Juice by 5% over the next 1 years. Brand awareness is a vital aspect that facilitates for the company’s competitiveness. Brand awareness helps in boosting the demand of the company’s products in both the local and international markets.
Functional Tactics
- Customer-focused Functional Tactics
The first functional tactic for Jamba juice involves the evaluation of customer needs. Different clients have different motivation for purchasing the company’s product (Ireland, 2008). Thus, the company needs to identify vital elements that influence the customer purchasing decision. Most customers purchase a product after comparing its cost with other similar products (Ireland, 2008). Jamba Juice must thus integrate effective pricing mechanisms within its marketing framework. Communication is another critical component of the client-focused approach. Jamba Juice must have an effective communication system that streamlines the flow of product information to customers. The final component of the functional tactics for customers is convenience (Pearce, 2009). Clients should access products from Jamba Juice with relative ease in comparison to other companies.
Product-focused Functional Tactics
Realization of Jamba Juice long terms objectives requires effective tactics that focus upon the company’s products. First, Jamba Juice should establish a comprehensive distribution mechanism for its products. The distribution framework is vital in terms of streamlining the company’s supply chain system. The target consumers should easily access the product through the firm’s distribution mechanisms (Taylor, 2010). Promotion is another vital element for the implementation of the business strategy. It encompasses communicating to the target audience about the company’s products. Through the promotional strategies, consumers are familiarized with the benefits of products from Jamba Juice.
Actions Items
This section identifies the various roles of employees in implementing the business strategy of Jamba Juice. The action items will first focus familiarizing the employees with the necessary standards of providing the best service. In order to implement the business strategy successfully, it is essential to establish a comprehensive training plan for all employees (Farell, 2010). The training program will help employees to understand the operational framework of the company’s business strategy. It will also help employees become familiar with the logistical components of the strategic plan.
Task and Task Ownership
Different members of the workforce will have different responsibilities in the plan implementation process. All employees must participate fully in the promotion of the company’s product. This is not just a responsibility of the marketing department (Speculand, 2009). It is also essential to highlight that employees should be familiar technical details of company’s information systems. This is a critical aspect towards streamlining the productivity of Jamba Juice.
Resource Allocation
The implementation of this strategic plan requires resources. Prudent implementation of resources is paramount to the realization of the objectives of this plan (Faint & Johnson, 2010). Jamba Juice will allocate resources to different activities according to the weight and urgency. Weight refers to degree at which the activity is likely to affect the success of the business (Faint & Johnson, 2010). Activities that have a lot of weight will be accorded priority during the allocation of resources. Urgency refers to the time within which a certain activity needs to be implemented. Priority will be accorded to the most urgent items. This mechanism will help the organization to utilize resources effectively.
Milestones and Deadlines
| Milestone | Deadline | Department |
| Product awareness | 30th November 2012 | Marketing |
| Sales Increase | 31st December 2012 | Sales |
| Enhancement of Profits | 31st January 2013 | Finance |
| Expansion of Business Scope | 28th February 2013 | Planning |
Financial projection is the numerical part of the strategic plan. It indicates what the firm’s prospects in terms of financial performance. This section presents the financial projection of Jamba Juice for the next financial period and compares it with data from the previous financial period.
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Jamba, Inc |
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Consolidated Statement of Operations |
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Periods ending October 2 (figures in Thousands) |
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2012 |
2013 |
|
| Revenue | ||
| Company Store |
61,795 |
64885 |
| Franchise |
3687 |
3870 |
| Total Revenue |
65482 |
68755 |
| Cost and Operating expenses | ||
| Cost of Sales |
14,918 |
15664 |
| labor |
16,457 |
16,800 |
| occupancy |
7353 |
7459 |
| store operating |
9328 |
9450 |
| Depreciation |
2793 |
2450 |
| General and administrative |
9663 |
9950 |
| Impairment of long lived assets |
75 |
55 |
| Other Operating, net |
347 |
150 |
| Total Cost and expenses |
60934 |
|
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