Assignment 1

Company Description and SWOT Analysis

Daniel Hernandez

BUS 599: Strategic Management

Strayer University

Dr. Theresa Poussaint

October 17, 2019

Company Description

Healthy Alkaline Water 4U was created based on a passion for wellness and the awareness of individuals about the benefits of proper hydration. Healthy Alkaline Water 4U is a privately owned company by an Active Duty Army Sergeant with over 20 years of service. The comrade that was achieved in working and training in the military helped to support this business endeavor. The partnership includes two retired veterans with the same desire to help others better their health. The main objective of this company is to provide healthy water that is refreshing and tasteful that will give the body hydration, minerals, and antioxidants. The company has an internet component, is store-based delivery system. In the store-based facility, consumers have the option to taste test the water source and check the different alkalinity levels of various popular water brands.

Mission Statement

The mission of Healthy Alkaline Water 4U is to provide consumers with the purest quality hydration product and excellence in customer service. To be the best hydration system in the nation that enhances the quality of life for individuals and the leader of a healthy alternative in drinking water. Healthy Alkaline Water 4U is committed to the provision of excellent customer service as we gain the trust of our communities and the nation.

Trends

The profitability of a company depends mostly on the reputation of its products and customer service. Among the typical trends, surrounding the non-alcoholic beverage (NAB) industry is the consciousness of the environment people consume in their bodies. Consumers realize that what they consumed has become the central focus of one’s health and has taken the onus to research nutrients that are healthful and toxin-free. (Brooks, Gortmaker, Long, Cradock, & Kenney, 2017). Consumers look at the functionality of products; if it is personalized, fermentation, products sustainability, and alcohol-free. Consumers are seeking more than just hydration from drinks; instead, they are looking for energy, stress reduction, beauty, and benefits to their immunity (Ungvarsky, 2017). Coco-Cola jumped on board to this new cultural shift and added vitamin, protein, caffeine, and extracts of guarana to their water (The Coca-Cola Company, 2016). According to PR Newswire (2016), hydration products that were infused with Cannabidiol jumped at the chance for its touted pain-relieving properties.

In personalization, PepsiCo gave consumers the option of stating how they want their products. Consumers have the option of adding their individual hydration goals using their smartphones to make choices (Pepsi, 2018). Kombucha is an organic fermented tea with ingredients such as polyphenols and probiotics (Ungvarsky, 2017). According to Donskaya, Drozhzhin, and Bryzgalina (2018), Kombucha supports cardiovascular and intestinal health. BBC Research estimated fermented to have a market value of $30 billion that by year 2020 (Marsh, Hill, Ross, & Cotter, 2014). In sustainability, consumers are leaning towards safeguarding the environment and the reduction of waste concerning products that are not considered biodegradable (Abrams, 2014).

Strategic Position

The perception factor is what sets Healthy Alkaline Water 4U apart from its competitors of customers. Customer Perception Factors is referred to as the “better, faster, cheaper” options, on customer’s evaluation of the company’s product and services relative to the competition (Dotzel, & Shankar, 2019). According to Abrams (2014), this is the most challenging factor to achieve and sustain due to the length of time it might take to build consumer loyalty. For instance, if the company decides to lower the price, the decision has to be made as to the length of time the company is able to sustain a loss with reducing prices.

The direct and straightforward way that companies compete against each other is through price, quality, customer satisfaction, convenience, societal impacts, and features. These are the characteristics of customers’ perception factors (Abrams, 2014). Costco recently reported a loss for keeping the price of its Rotisserie Chicken to $4.99 (Costco Co, 2018).

Distribution Channels

A combination of wholesale, retail, or direct sales, direct distribution and online ordering routes are the distribution channels that are used for hydration products. Most of the business is conducted through direct sales. Also, utilize midsize distribution lines that service wholesale corporations such as Sam’s Club and Costco that generally buy in bulk. In the direct retail sale, consumers enter the store and purchase the products.

Risks

Alkaline water bears the assumption that it provides health benefits that reverses the aging process with the restoration of pH balance. It has the ability to defend the body against harmful free radicals, cancer-fighting properties, immunity support, weight loss, cleansing the colon. Several other health-related benefits are related to this research. There are some risks in consuming alkaline water. Some of the risk factors might be strategic, compliance, or operational risk. Strategic risk of alkaline water includes new development of competitors in hydration markets (Brooks, Gortmaker, Long, Cradock, & Kenney, 2017). Risk mitigation includes the company staying abreast of current research and changing trends and adapt quickly. Compliance risks might include regulatory agencies that have restrictions on bottling processes and water testing process that differs by state laws. These risks are mitigated by complying with the requirements for each state within the delivery routes. Operational risks might include things that are out of the control that could affect production or internet sources. Insurance protection coverage and data assessment management could be used to mitigate these risks and minimize loss.

SWOT Analysis

Strengths

Weaknesses

· Health Conscious

· Unique

· Location

· Environmental Conscious

· Brand Reputation

· Competition

· Misrepresentation

· Third-Party

· Limitations

Opportunities

Threats

· Distribution

· Expansion

· Awareness

· Advertisement

· Competition

· Supplies

· Delivery

· Web

· Legal

Strengths: Veterans founded Healthy Alkaline Water 4U and service members understands the need of healthy hydration. The company has a purification system that is triple-layered for the prevention of contamination. The location favors easy access for people who are concerned about their health. It is located within walking distance to popular health clubs, gyms, yoga studio and several vegan restaurants. The company provides reusable water bottles to encourage customers to use it as to protect the environment.

Weaknesses: Several other hydration companies are located near the company that also have delivery services and web-based entities. This boils downs to purity of products, effectiveness and cost consciousness. If other companies that provide similar products at a lower cost the company may not be able to gain market share. Healthy Alkaline Water 4U also outsource home delivery water canisters to a third party provider. The company risk product shortages, deficiency in production criteria and possible contamination. This could result in image defamation and loss in sales and customers. This new business lacks the overall expertise in key areas that could affect profitability.

Opportunities: The opportunities for the company include securing contracts with health clubs, yoga studios, juice bars, and wholesale clubs. The company will use flyer, advertisement on local channels as well as pop-up advertisement on popular web browsing sites. To increase public awareness on the necessity of ingesting alkaline water and the health benefits. The company will capitalize on the trend of customer’s by introducing new products.

Threats: The rise of local competition and possible water shortages to treatments plants might pose a threat to production. Larger companies that are able to stockpile products will be insulated should this occur. The arrival of a new hydration system in the same location that offers promotion and lower pricing will present a threat to marketing. The company could face shortages from suppliers at peak times and bad weather can affect delivery routes. The possibilities of lawsuits in the event of issues or health related concerns associated with the hydration products might create negative reviews on the company and tarnish its image and brand.

References

Abrams, R. (2014). Successful business plan: Secrets & strategies (6th ed.) Palo Alto, CA: Planning Shop

Brooks, C. J., Gortmaker, S. L., Long, M. W., Cradock, A. L., & Kenney, E. L. (2017). Racial/ethnic and socioeconomic disparities in hydration status among US adults and the role of tap water and other beverage intake. American Journal of Public Health, 107(9), 1387–1394 doi: 10.2105/AJPH.2017.303923

Costco Co, (2018) Retrieved from http://investor.costco.com/stock- information/historical-price-lookup.

Donskaya G. A., Drozhzhin V. M., & Bryzgalina V. V. (2018). Fermented drinks supplemented with whey proteins and water-soluble antioxidants. Vestnik MGTU, (3), 471. https://doi.org/10.21443/1560-9278-2018-21-3-471-480 . Retrieved from: https://eds.b.ebscohost.com/eds/detail/detail?vid=1&sid=a2809b42-8ae8-4408-9d36- d66bd664c308%40pdc-v-sessmgr06&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d#AN=edsdoj.f653a7b112f54d4a8332ce584ba9e9fb&db=edsdoj

Dotzel, T., & Shankar, V. (2019): The relative effects of business-to-business: Service innovations on firm value and firm risk Journal of Marketing, 83(5), 133–152. doi: 10.1177/0022242919847221

Marsh, A., Hill, C., Ross, R. & Cotter, P. (2014). Fermented beverages with health- promoting potential: Past and future perspectives. Trends in Food Science & Technology. 38(3), 113-124

Pepsi Cola (2018). Retrieved from www.pepsi.com/en-us/

The Coca-Cola Company. (2016). The invention of coca-cola: Birth of a freshing idea.

Retrieved from http://www.coca-colacompany.com/stories/the-chronicle-of-coca-cola-birth-of-a-refreshing-idea/

Ungvarsky, J. (2017). Kombucha. Salem Press Encyclopedia of Health. Retrieved from: https://search.ebscohost.com/login.aspx?direct=true&db=ers&AN=125600460&si te=eds- live&scope=site