Jamba Juice External Analysis

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Case Analysis #1: Jamba Juice
Sociocultural Factors
Sociocultural factors influence and restrict consumption ideas, needs, desires and purchase behavior. People from different countries and different regions have different life patterns and different sociocultures. These differences directly influence the products that industries want to produce because people may even have different attitudes and value toward the same product due to different sociocultural factors. With the rapid development of modern society and the continuous improvement of living standards, the degree of attention paid to health has increased. “Franchise businesses continue to pay close attention to their customers' need for convenience, new flavors and, yes, healthier options” (Fenwick, 2011). In order to provide products that can satisfy consumers, Jamba Juice’s marketing team “reviews reports, health trends, product innovations, as well as consumer focus group input on what… [their] own consumers think… [they] should be offering” (Fenwick, 2011). Due to different socialcultures, Jamba Juice also introduces hot beverages and foods to their regular fruit smoothie menu to meet different customers with different desires in different areas. Technological Factors

Jamba Juice is identified by its healthy and nutritive ingredients. The company said “it uses only 100-percent real fruits and fruit juices in its beverages. The menu offers not only smoothies but also fresh-squeezed juices and snacks, such as Jamba Breads and Jamba Pretzels. The smoothies are available in three sizes: 16-, 24- and 32-ounce servings” (Cannon, 2004). Jamba Juice demands large amounts of fresh or fresh-frozen vegetables and fruits. Hence, keeping these raw materials in good, fresh quality becomes one of the most important issues for each Jamba Juice store while making sure shortage of raw materials will not occur. In order to ensure the raw materials’ fresh quality and enough provision, Jamba purchases all raw materials a year in advance. It also conducts assurance testing at the time of packing the raw materials to make sure the vegetables and fruits will not rot during the lag time. With the aim of becoming the fast food alternative, Jamba Juice’s foods and beverages need to be prepared and ready in a very short time. Hence, the company purchased many fast-cooking types of equipment to help them make beverages and foods so that customers can grab and go without waiting. Threat of Entry

The entry level for restaurant retailer industry is considered low. This is indicated by the high economies of scale and high capital requirements. Economies of Scale
“As of January 3, 2012, there were 750 locations in the United States consisting of 307 Company-owned and operated stores and 443 franchise-operated stores. In addition, as of January 3, 2012 there were 19 international locations” (Jamba Juice). Economies of scale have played an important role in cost reduction. Jamba Juice advertized its products with the motto of health and fitness. It demands great amount of organic vegetables and fruits. Purchasing all of next year’s required materials simultaneously at the height of the season helped to reduce the unit cost and avoid a shortage of raw materials during production. Capital Requirement

The capital requirements needed to produce these soft drinks are high. Jamba Juice offers a variety of beverages in order to attract different customers with different flavors. Hence, it needs to stock a large amount of projected produce that requires large amounts of investment. In addition, technologically superior equipments are needed to keep these raw materials in good quality that implicates another large investment. Finally, in order to differentiate Jamba Juice from its competitors and increase profit and sales, the company needs to spend a certain amount on adverting and marketing. These financial investments together contribute to the low entry of entering the market. Power of Buyers...
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