Innocent Drinks Business Analysis

Topics: Strategic management, Marketing, Gross profit margin Pages: 18 (3531 words) Published: May 23, 2011
BA (Hons) Business Studies

Word Count: 2,729


Macro Environmental Analysis4
PEST Analysis4
Porters 5 Forces6
Threat of Entrants6
Power of Suppliers6
Power of Customers6
Threat of Substitutes6
Competitive Rivalry6
Internal Analysis7
Resource Analysis7
Physical Resources –7
Financial Resources –7
Human Resources –8
Intellectual Capital –9
SWOT Analysis10
Core Competencies11
Primary Activities -11
Inbound Logistics11
Outbound Logistics12
Marketing and Sales12
Support Activities -12
Firm Infrastructure12
HR Management13
Technology Development13
Maintaining Growth14
Glossary of Terms18
Appendix A – Innocent Annual Report 200722
Appendix B – Innocent Facts and Figures23
Appendix C – Dec 2008 Financial Report24


The purpose of this report is to assess Innocent Drinks, a UK based company who operate within the soft drink FMCG industry. This case study was derived from seeking the answer to how the organisation has achieved the growth, and how this can be sustained Our hypotheses suggests that the management approach to business has shaped the culture of the organisation into one which allows staff to be proactive and free thinking, allowing Innocent to be flexible to changes in the environment. This is reflected through the first of their five values which is entrepreneurial. Further analysis suggests a multitude of other factors which have enabled Innocent to distinguish them from competition. This is related to their next two values, being responsible and generous. Innocent have always stood by these values, meaning that by giving ten percent of their profits to charity and ensuring that all raw produce is sourced from sustainable farms they have achieved a competitive advantage through differentiation. Furthermore Innocent are focused on natural ingredients, this adheres not only to their values but exists within their mission statement which is to ‘make food good’. This is based their “promise that everything innocent ever make will always be natural, delicious, healthy and sustainable”. This is reflected in their original unique selling proposition, which focused on producing fruit smoothies containing fresh fruit and juice with no concentrates. The business has now diversified its portfolio to compensate for copycat products brought onto the market. Their current USP is to focus on NPD which includes pro-biotic yogurt, fruit puree, orange juice and veg pots. This report provides a review of Innocents through both their external and internal environments drawing on appropriate management tools to help develop an insight into the company and how they may continue to grow and achieve their vision of being “Earths favourite little food company” (Fig.1) Fig.1



Macro Environmental Analysis

Using macro environmental analysis will help show how the business can use situations to their advantage and identify areas which they could focus on to reduce costs and increase net profits.

PEST Analysis

These are “external factors which can affect an organisation, but largely cannot be controlled, however have a huge influence on an organisation’s performance” (Kotler et al, 2008, p12). For Innocent they are:


• Shipping and Quarantine of foods – Foodstuff from particular countries can’t be exported or imported; this could be particularly prohibitive if Innocent began trading in Austraila. • Trade restrictions becoming even more reduced as more countries join the European Union


• Cost of good quality foods – GM crops and low pay in developing...
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