Quick Sip: A Rejuvenating Health Drink For All

Product

Question:

Discuss about the Entrepreneurship for Contemporary Strategy Analysis.

In a saturated global market, it has become much vital to analyze the market well before the commencement of a new venture. If this is not done properly, then there lay a great risk in the project. Basic things that are needed to be analyzed are opportunity of the product in the desired market of operation, self-analysis of the elements, a detail market research along with technical and financial feasibility are required. Apart from these, a successful business venture also calls for having the insight of possible responses and scalability of the product in the proposed market.

The task is based on analyzing the same scenarios related to industry as well as market analysis. The product taken as a case study for conducting the research is a Health Drink in the market of Singapore. It is very important to form a business idea to implement it in the new business venture.

Opportunity analysis:

A successful entrepreneur or a business man has the insight of viewing the opportunity of trading a product in a market. His vision, mission and ideology towards the launch of a new product are what make him successful in the business market (Ahmad et al. 2015). A self analysis can be done for the same aspect.

Elements of self analysis:

As stated by Gyaviira (2016), in the entrepreneurial behavior theory, three major human capitals are required for the commencement of a business. These are:

General human capital: General qualities such as skills, managerial capabilities, education and demographic control variables as well.

Entrepreneurship specific human capital: This includes entrepreneurial capability, parental background and attitude towards the business.

Venture specific human capital: Good knowledge of the domain of the business and motivation towards the business.

Based on the above mentioned criteria, it can be said sufficient human resources are required for venturing a new project.

Description of proposed venture:

The new product proposed for the business venture is a Health Drink named ‘Quick Sip’. It is a soft drink based health drink that provides a rejuvenated experience to the consumer (sani 2015). In summer season, sale of soft drinks and other beverages increases to a large extent. However, in recent time people have become more conscious about their health and avoid having high calorific drinks (Caamaño et al. 2015). Thus, if the same drink provides the rejuvenation of the warmth of the climate and at the same time give certain nourishment to the consumer then there is a greater scope for the product to be accepted by people in the market.

Market research:

As opined by Philip (2016), certain factors namely, behaviorist, geographic, psychographic and demographic characteristics of the people of the region are greatly responsible for shaping the desire of the consumers to buy products. However, understanding the four basic Ps of marketing is very important. An analysis of these factors can be done below:

Product	‘Quick sip’ is a rejuvenating drink. It is different from other beverages because it serves both as refreshment as well as a health drink. The nutrients and the constituents increase the energy level of the consumers.
Place	The drink can be targeted to sell in the entire market. The drink is to be available at general stores and also in departmental stores (Seringhaus 2015). The product could be easily disseminated in major cities all over the country.
People	The drink will not contain much calorie and would have much nutritional component. Thus, the target group of people are mainly the teenagers; the college and office goers who have a habit of consuming soft drinks or juice at a regular interval. However, children or the school goers can also enjoy the drink.
Promotion	For the promotional activity, the USP of the drink could be highlighted stating the beneficial factors of consuming the drink (Reed 2016). Promotional activities by the means of social media and on store publicity might prove effective.

Industry analysis:

Place

There are several soft drinks and other refreshment drinks already available in the market. However, consumers look for better options and varieties and are happily ready to try new products. In this respect, industry analysis can be done by the means of Porter’s Five Forces:

Factor	Analysis	Threat level
Threats of new entrant	In the era of globalization and open market, the threat of new entrant of companies is always there. However, the demands of these products are quiet high nad it can be a fruitful venture.	High
Threat of substitute products	There are already many health drinks and soft drinks available in the market. Moreover, depending on an individual’s taste, people might also prefer to have other beverages as well. People prefer variety of options and so the product can be manufactured in various flavors.	High
Bargaining power consumers	Since, there is already the availability of a number of products in the market, bargaining power of the consumers automatically increases. A competitive price is to be set.	High
Bargaining power of supplier	Raw materials are indeed required for the purpose of manufacturing the drink. The supplier might bargain from their side as well. A negotiation process could be implemented.	Medium
Intensity of competitive rivalry	Products like soft drinks have great sale in the market and thus attract many entrepreneurs to choose this product for their business. It is expected to do a good business.	High

Study of technical feasibility:

Technicality is required for every aspect of business. Although the product is a consumption product and does not deal with technical aspects such as a soft ware or any other technical parts, still some technicalities might be required for the packaging of the product. For manufacturing the drink, it is evident that there will be a manufacturing plant where the components of the drink will be processed and the manufacturing will be done (Grant 2015). For the sake of packing the product, technical support is required. It is very important that the ingredients with their calorific values are mentioned in the packaging along with the price of the product. Setting up a manufacturing firm is therefore indeed important (Wills et al. 2015).

Study of financial feasibility:

As opined by Visted et al. (2015), that the foremost thing to be done at the time of planning a new business venture is to form a specific budget that would include all the expenses and other requirements that are needed to be fulfilled for successfully running the business in the market. Budget includes, manufacturing cost of the product, labor charges, fixed charges like rent of the place or electricity or other charges. Apart from that promoting the product is also an important part of business venture that is also needed to be included in the budget of the product (Nielsen et al.2015). A table can be made for showing the budget of the proposed business venture for coming five years: (figures representing amount are in dollars $)

Period ending	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016
Total revenue	532,200	542,235	521,235	492,230	486,324
Cost of revenue	321,215	372,325	365,325	384,231	324,256
Gross profit	210,985	169,910	155,910	107,999	162,068
Operating Expenses
R & D	20,300	22,420	20,321	18,235	18,325
Selling and Administrative expenses	10,100	9,400	9,800	10,000	9,000
Total operating expenses	30,400	31,820	30,121	28,235	27,325
Operating income or loss	180,585	138,090	125,789	79,764	134,743
Income from continuing operations
Total other income/expense net	6,000	6,400	7,200	5,000	5,600
Earnings before interest and taxes	156,185	112,670	102,868	56,529	113,018
Interest expense	54,664	39,435	36,003	19,785	39,556
Income before tax	131,921	105,055	96,986	64,979	100,787
Income tax expense	11,213	8,929	8,244	5,523	8,566
Minority interest	455	876	–	–	903

Table: Proposed budget of Quick Sip

Source: Created by the author

Scenario version:

An entrepreneur must also have the vision of identifying the future scenario of the business (Spinoglio et al. 2015). Thus, a possible responsive version of the approach of the business can be given below:

What would be the proposed startup capital for the business?

In this case, the imposed budget could be aligned to reduce to a level of fund that might be generated internally.

In case, a similar product is launched prior to ‘Quick sip’?

In this case, target market and consumers might be readdressed for better sale of the product.

If an already existing strong brand come up with same idea?

Another market might be chosen or focus should be made on the specificity of the product. Certain competitive advantage like product differentiation or pricing strategies can be applied.

In case, a big company proposes a merging offer?

Merging might be possible depending on the profit or sales figure. However, acquisition is not preferred in the recent years of business.

Scalability of the new venture:

Scalability implies the process of growing the business venture, at the same time keeping the core mode of operation intact. Once the scalability of the new venture is done, there remains no dilemma in compromising with the profitability or increase in the expenditure. The foremost thing for this purpose is a business plan (Hummel and Amiryany 2015). Making a plan is indeed necessary to ensure the growth of the new venture. Secondly, it is also expected that there should be an entrepreneurial approach towards the business. The person must be enthusiastic enough towards the business and should keep focused on the further expansion of the business. It is the spirit of a businessman that differentiates the person from other individual. Understanding the market scenario and the target consumers are the two important factors that are needed to be analyzed for a new venture.

Conclusion:

The task highlighted the necessity of drawing a business plan prior to any operation in the business. The ideas proposed in the task are based on the feasibility of the business in the recent scenario. Various factors related to internal and external environment have been analyzed. It was important to get knowledge of self analytical capability as an entrepreneur. This has also been done. A strategic approach has been taken for the sake of conducting the business of health drink in a proposed market. By the end it can be said that for a new approach, risk factors are inevitable. However, fighting with the competitors and other stopping factors in the business is what makes a successful entrepreneur. The success of a product in the market in terms of profit is what proves the ability of an entrepreneur. Thus, a target strategic plan needs to be set for better results.

Reference list:

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Caamaño, M.C., Gutierrez, J., García, O.P., Ronquillo, D., Martinez, G. and Rosado, J.L., 2015. Increased Calorie Intake at a Specific Mid-morning Meal and Increased Intake of Soft Drinks are Strongly Associated with Obesity in Mexican Rural Women. Ecology of food and nutrition, 54(2), pp.157-174.

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