Black Fly Beverage Company is a small beverage company based in London Ontario. The company has achieved recent success in the selling and promoting of their first alcoholic beverage, the cranberry/blueberry vodka cooler. The immediate success of this product presents two critical issues that the company must address. These critical issues are: •Black fly must expand its product mix in order to capture a larger market share in order to compete with larger established brands within the market place •Black Fly must also address capacity issues that will arise with an increase in demand or introduction of a new flavor Analysis
Black Fly’s cranberry-blueberry vodka cooler has been well received by consumers due to its natural tasting ingredients and no chemical sweeteners producing a premium product different than existing similar beverages. The company now must take this opportunity to give their consumers another product to further explore the brand. Attempting to penetrate deeper within their current product will not allow its customers to further explore their favorite brand of vodka cooler. This will cause Black Fly to begin to lose their customers to other competing companies that offer multiple products and flavors (see exhibit 9). Black Fly also must also address the company’s capacity issues in order to allow them to meet the LCBO’s average order lead-time of seven days. At full capacity Black Fly is meeting the required lead time with minimal margin of error to account for delays, however, during the holiday season, which will occur as early as next month, the company will not be able to keep up with the increase in demand and will fail fulfill the LCBO’s order in time (see exhibit 7). Options
The first option available to Black Fly would be to expand its product mix with the addition of a new flavor to compliment their existing cooler. The company will be able to take advantage of economies of scale through...