case critique dark colored fly beverage company
Black fly can be enjoying a comfortable growth, all their product has become well received by consumers and they have benefited via positive feedback from the multimedia. Now would then be a very great time to undertake an development as the company would use the momentum and exposure that currently must introduce new products or features to the market. Let’s assess the different options available to Black fly.
First Option: Launching a new Flavour:
Launching a brand new flavour associated with an existing item has been the most common expansion initiative taken by businesses in the meals and drink industry.
It is just a conservative strategy as it generally does no require a significant investment mainly because it benefits from economies of scale and frequently does not need any new equipment pertaining to the production since it is the case with Black soar beverages. Furthermore the company currently has enough capacity via a production perspective to aid the enlargement.
However the key risk, when it was assessed by the company, is that the new flavour may “cannibalize the original recipe and will not really result in a boost of business but rather divided sales between the products.
The flavour is less likely to attract buyers and could be an additional option to existing clients allowing them to select or move between flavours which does not increase earnings but rather will keep them steady. Also, whenever we take in consideration the psychological buying process of consumers it has not been proven that consumers are more likely to obtain a product because it offers several flavour neither does it support a consumer revisit his decision if he did not just like the product to begin with.
Second Effort: Creating a new product line ‘Spiked Ice
The spiked ice cubes is an innovative idea, a primary in its kind to be introduced to the wine and spirit marketplace and like any new thought it is important to ascertain that it is likewise an opportunity. The LCBO being the largest retailer of alcohol based drinks in the world, it really is safe to assume that they have the best understanding of trends in the market as it is practically the only funnel of division of alcohol based drinks in Ontario.
The LCBO is then the best resource a firm can use with regards to product/industry feasibility as it does a stringent examination of quality, price and market likelihood of each new product. Therefore there may be an opportunity and a market prospect of this new item since the LCBO is ready to provide corner space intended for the Spiked Ice, furthermore it has a provided a firm commitment for a some months buy.
The “Spiked Ice also has the potential “real additional profits since it can be described as different item and can as well target customers who are generally not typically attached to vodka coolers (i. e. consumers that like drinking ale but to whom during the summertime month would quench their very own thirst on the freezee using a vodka twist) Allowing the corporation to increase and diversify it is customer base.
This initiative nevertheless does need a significant capital investment to upgrade the availability facilities as well as the company can be facing a significant loss if the product not really generate enough sales nevertheless the company features commitment from LCBO to get a large quantity which will also make them boost the turns out of the cool product. Also by a managerial/organizational perspective the company has verified that it is capable of efficiently undertaking related projects.
I would suggest the company to launch the “Spiked Ice as it is the sole option which includes the potential to create additional revenues allowing the business to truly grow by penetrating a different section of the market share. Introducing a brand new flavour contains a low potential as it does not target a new segment or customer base and will not likely generate further revenues however it is a good project that could be released for retention purposes to boost customer satisfaction.
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