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Fruitive - Buy or Build

Essay by   •  March 3, 2013  •  Research Paper  •  1,886 Words (8 Pages)  •  1,179 Views

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Fruitive - Buy or Build

The purpose of this paper is to construct brief strategy for a business concept that would compete directly with Fruitive, the small business I want to buy or build. The rational of the strategy will determine if buying or building is the most appropriate business decision. In addition, it will discuss the proper form of business ownership for the new business, while taking into consideration my current financial situation. Finally, it will also include an outline of the business plan for the Fruitive business.

Business Concept Strategy

The business concept strategy forces the business owner to look at the current and future conditions that might effect his business and then devise a strategy that will allow him to meet the opportunities and challenges it presents.

Mission Statement

Fruitive wants to be the leading healthy juice producer in Virginia and for our logo to be seen and thought of as nutritional and delicious.

Strength and Weaknesses

One major threat facing Fruitive is competition. The direct competition in Virginia is The Heritage Café and Tropical Smoothie, both companies are relatively small and both have weak areas. The Heritage Café & organic Juice Bar is a single location retail business and are recognized for their special order, organic juices. Because the owner of the heritage café & organic juices is more of a niche product, the changes that he will expand his business and open more retail locations if relatively low. Tropical Smoothies has various locations through Virginia, and is fairly common to many local malls. Because they operate mostly within the malls the chances of them expanding into any larger than a small booth is highly unlikely. Our weaknesses are there are few locations and much competition for this area. Our strength are also that there are few direct competition, large population, and tapping into a niche market.

Scan of Environment for Opportunities and Threats

Tropical Smoothie is the leading competition in the Virginia area with over 300 café scattered across 35 states (tropicalsmoothie.com). Despite the direct competition being relatively weak, Virginia Beach offers a large variety of restaurants and cafes to choose from, making it difficult for any one business to capture the market. However, the reason there is such a large market for food and beverage companies in Virginia Beach is due to the growing population and the large number of tourist that visit the city each year.

Another factor that can be consider an opportunity and/or a threat is the local weather. Virginia Beach is located on the east shore of the United States and does experience colder temperatures in the winter months, as well as warmer temperatures in the summer months. Both extremes can pose threats to the business. In the winter month's people are less likely to look for a cool refreshing cold drink. However, after the holidays is usually a prime time to push the idea of new healthier lifestyles with healthy juices. In the summer months, when the temperatures are high, the competition is much higher; there are seasonal huts that open up all over the oceanfront. Because most the tourists are here to visit the beach, the seasonal huts have a much more convenient location. However, the locals will be more likely to visit Fruitive in search of a cold, healthy, and refreshing juice with a known reputation without having to deal with the crowds of tourist.

Key Factors for Success

Three key factors that will allow Fruitive to compete in the smoothie and juice bar market successfully are; high quality products, superior customer service, and an environment that is warm and comfortable to the customers. By purchasing fresh, high quality fruits and vegetables in addition to training the staff on the health benefits of both, we will produce a high quality product every time. To go hand in hand with proper nutritional value training, Fruitive will also train their new employees through an apprentice program and offer continued education in customer service and health benefits of fresh fruits and vegetables.

Analyze the Competition

One major threat facing Fruitive is competition. The direct competition in Virginia is The Heritage Café and Tropical Smoothie, both companies are relatively small and both have weak areas. The Heritage Café & organic Juice Bar is a single location retail business and are recognized for their special order, organic juices. Because the owner of the heritage café & organic juices is more of a niche product, the changes that he will expand his business and open more retail locations if relatively low. Tropical Smoothies has various locations through Virginia, and is fairly common to many local malls. Because they operate mostly within the malls the chances of them expanding into any larger than a small booth is highly unlikely.

Company Goal and Objective

Fruitive's company goals and objectives will focus on profitability, customer service and growth. Fruitive will strive to have a 10% increase in sales each year as well as a 2% decrease in operating cuts each year. The objective used to achieve this is through proper management and superior customer service and products. We will encourage great customer service by implementing a reward program for great service. Also, there will a points system for employees who do not perform well. After three points there will be restrictions applied to the employee and further training offered, if the additional training is not effective the employee will be released of his duty with Fruitive. Fruitive will also set the goal to open one new Fruitive location every other year until the Virginia Beach area is fully covered.

Formulate Strategic Options and Select the Appropriate Strategies

The master plan will mesh with all the major strategies of the business and make them work together. The three major strategies are cost leadership,

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