Prensentation EPP (Nantucket)

16
NANTUCKET NECTARS HARVARD BUSINESS SCHOOL

Transcript of Prensentation EPP (Nantucket)

Page 1: Prensentation EPP (Nantucket)

NANTUCKET NECTARS

HARVARD BUSINESS SCHOOL

Page 2: Prensentation EPP (Nantucket)

Group Members :

Fadilah Bin UmarMohd Fadzli Bin IsmailKamsar Bin Muhamad BahronMohd Hafizul Hilmi Bin Mohd Noor

Page 3: Prensentation EPP (Nantucket)

Increase Profit

1994 1995 1996 1997 1998 1999 2000 2001 2002

-$4,000

-$2,000

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

-2252

-200369

978

2324

4001

6312

8922

11875

Net Income of Nantucket Nectars (1994-2002)

Year

Net

Inc

ome

STRENGTH

Page 4: Prensentation EPP (Nantucket)

Brand and Promotion

• Established brand – has its own trademark• Creative but minimum cost of promotion style

– donation of product only• Salespeople dress up as fruit• Promote through radio• Symbol of company on cap bottle

STRENGTH

Page 5: Prensentation EPP (Nantucket)

Product Development

• Replacing high fructose corn syrup with only pure cane sugar

• Containing four times the juice of other major brands

• increasing 12 to 17.5 ounce bottle (other competitor – 16 ounce bottle)

• Developing 27 flavors across 3 product line

STRENGTH

Page 6: Prensentation EPP (Nantucket)

Super Nectars

• Herbal products• 6 flavors

o 4 - 80% real juiceo 2 - steeped from green tea and flavored with real

fruit juice and honey

STRENGTH

Page 7: Prensentation EPP (Nantucket)

Product Marketing

Supermarket Convenient Stores

Others0

102030405060708090

100

1 6

93

55

35

10

Marketing Location

Nantucket NectarsOthers

Location

Sale

s Pe

rcen

tage

STRENGTH

Page 8: Prensentation EPP (Nantucket)

Raw Fruit Supplier• Nantucket Nectars selective on quality ingredient, use more

fruit in product• Cause themto compete with big companies in beverages

industry• Management has difficulty to predict the growth of the

company• Cannot get contract from fruit supplier to maintain

continuous fruit supply from a specific harvesting plantation.Eg: when cranberries has a poor harvesting, Nantucket

Nectar has a difficulty in getting this raw fruit supply since it is control mostly by Ocean Spray.

WEAKNESS

Page 9: Prensentation EPP (Nantucket)

Product development• In early days, Nantucket product development is

too drastic. Adding 27 new flavors on their product line. This increases money spends and the

management has difficulty in predicting the profit growth of the company.

• They should start it slow by doing a test market first before adding any new flavor So that money can be spend on the promotion

and marketing purposes.

WEAKNESS

Page 10: Prensentation EPP (Nantucket)

Increasing Liability• The liabilities of Nantucket Nectar Company

keep increasing every year.

1994 1995 1996 1997 1998 1999 2000 2001 20020

5000

10000

15000

20000

25000

TotaL liabilities (000s)

TotaL liabilities

WEAKNESS

Page 11: Prensentation EPP (Nantucket)

Decreasing in revenue growth

• The revenues growth of Nantucket Nectar decreases.• The selling actually does not recover the total money

use in whole processing of Nantucket Nectar product.

1997 1998 1999 2000 2001 20020

10

20

30

40

50

60

70

80

90

100

Percentage of Revenues Growth

Revenues Growth

WEAKNESS

Page 12: Prensentation EPP (Nantucket)

1% 6%

93%

Sales Location (Channels) for Nantucket Nectars, 1996

Supermarket Channel

Convenience Chains

All Others (Delis, educational Insti-tutions, etc)

OPPURTUNITY

Page 13: Prensentation EPP (Nantucket)

Bidders : Give an advantages to the company.

Example : Seagram (Tropicana) is the strongest distribution in the grocery segment for juices. So that, by using it as an opportunity, it can be a strong platform for Nantucket Nectar to expand.

OPPURTUNITY

Page 14: Prensentation EPP (Nantucket)

Major beverages company flood the market by lowering the price while maintain the quality of the product.

Big company such as Cola and Pepsi control the market by numerous ways:• Vending machine• Shelf space• Distributors • Brand awareness of the

public concerning

Proved by most of Nantucket Nectar Sales are from fragment channel.

TREAT Competition

Page 15: Prensentation EPP (Nantucket)

CONCLUSION

Should not sell the company totally. The major problems are in marketing, raw fruit resources, and management. Decesion : Nantucket Nectar should

Maintain 70% of the company ownership equity 30% of the company ownership should be given to other

potential bidders that have strength in marketing and raw fruit material.

One of the suitable bidders for this 30% ownership is Seagram (Tropicana)

The strongest distribution in grocery segment for juice Has well and balance raw fruit

Page 16: Prensentation EPP (Nantucket)

Ocean Spray is also one of the suitable ownership of the 30% company ownership.

Has many fruit supply from berries, tropical and other exotic fruit that serve as an alternative drinking juice.

Maintain a network of 5 captive bottling companies which can help Nantucket Nectar to cut several cost on the marketing and juice processes.

CONCLUSION