Jamba Juice

ISSUES
As noted throughout this analysis, Jamba Juice has a number of organizational issues. Primarily, Jamba Juice mismanaged their rapid growth, which reduced their margins, increased their operating expenses, and stalled their cash inflows. Failure to instill any organizational culture of financial discipline allowed these problems to permeate throughout the company. The seasonal demand of smoothies was another issue, as it created downturns in revenue at certain times of the year. A lack of thoughtful marketing and advertising strategies, especially as Jamba Juice expanded across the nation, failed to take advantage of their strong brand and create more awareness and interest.
SIX ALTERNATIVE STRATEGIES
• Reject – Backward Integration:
If it harnesses this brand image, it could experience significant success and growth by adopting a related diversification strategy and creating a new product line of warm nutritional drinks such as tea, chai, or herbal coffee. This strategy would be appropriate given the noticeably unattractive nature of the smoothie market. Knowledge of food-creation processes, relationships with suppliers, and excited, friendly employees would be key success factors in this strategy. Management would need to develop focus testing procedures in order to ensure both the existence and specific locations of demand for these products. Marketing would need to work with management to assess potential target markets and determine if these warm beverages are more suitable for current customers or new customers. These new products would likely be high-margin and fairly expensive, so Marketing would need to create an advertising campaign that makes theses new products attractive despite their price. Operations would need to determine which suppliers to partner with in this new endeavor and negotiate for long-term contracts in order to alleviate the concern of increasing materials costs. As these new products catch on, Operations should also implement a mass customization system which would give consumers flexibility in choosing and altering their products. Finance would need to need to obtain financing for these new
This would involve a contraction period where unprofitable, poorly managed stores would quickly be closed and some employees would need to be let go. This period would be followed by a consolidation phase where the greater emphasis would be placed on growth in existing, efficient stores. Management would need to implement a re-engineering strategy to overhaul old, ineffective programs and implement more efficient operating procedures at the store level. Management would also need to monitor employee morale and visit the remaining stores to try to not allow workers to get discouraged, especially given the importance of enthusiastic employees to the Jamba brand. Marketing would need to implement inexpensive promotional methods, such as social media promotions, that excite consumers, even in the face of significant store closures. In the face of negative publicity, Marketing should be prepared to spin these closures in a favorable manner. Operations would need to stabilize and streamline operations by implementing a system of continuous improvement that focuses on not getting caught in the same old, inefficient patterns. Creation of cross-functional teams with different areas of expertise would help create competencies in this area. Purchasing would need to negotiate and leverage market power to ensure that materials costs