Advantages of the Business Idea to Solve the Problem
Discuss about the Survey of Energy Drinks Consumption Practices.
The consumption of soft drinks in Australia has generally been on the rise especially during sports events or any other celebrations. Studies show that an average person in Australia consumes over 126 grams of sugar on a daily basis (Grimes et al., 2013; Malik et al., 2010). The worst part of it is the side effects of the regular consumption of sugary drinks which has been attributed to several health complications including obesity, asthma heart disease and COPD (Hu & Malik, 2010; Malik et al., 2010). Additionally, research shows that most of the carbonated drinks with high sugar content do not offer any nutritional value (Schwartz et al., 2009). This is contrary to the ingredient labels on most of the soft drinks. More specifically are the side effects of the existing soft drinks on the life, health, and performance of the athletes (Shirreffs, 2009).
Athletes dehydrate a lot due to profuse sweating while exercising and are therefore advised to drink plenty of fluids when training. This prompts them to take in abundance the available soft drinks with high contents of sugar and are detrimental to their health and career. Studies have also attributed poor performance of athletes to their dietary plans (Braakhuis & Hopkins, 2015). Research shows that high levels of sugar in soft drinks increases the risk of diabetes and metabolic syndrome (Hu & Malik, 2010). This is because it sharply raises the blood glucose level. Also, the intake of high sugar content in soft drinks causes significant weight gain which affects the performance of the athlete who needs to monitor their weight (Ballard et al., 2010). The soft drinks may also cause osteoporosis and bone fractures, which is most dangerous to athletes who undergo strenuous bone exercises.
The present customer or market problem requires an immediate solution which will lower the side effects of the current soft drinks while improving the health and performance of the athletes. This is also urgent based on the campaigns from health activists against the promotion and consumption of the popular soft drinks that are detrimental to general human health because of the ingredients especially the high level of sugar content. It is for this reason that Smooth Drinks LTD has been established to offer soft drinks with sugar levels that are approved by the World Health Organization (WHO, 2016). Smooth Drinks Ltd will, therefore, offer hot (tea and coffee) and soft non-alcoholic beverages (carbonated and non-carbonated water) with different flavors.
Business Model
Smooth Drink Ltd is an idea established to solve an already existing problem in the service industry. The objective of the business is to provide healthy hot and cold beverages especially to the athletes who can comfortably be taken before and after training (Buxton & Hagan, 2012), in order to improve their performance and reduce the risk of diseases associated with high intake of sugar.
Our target customers are all athletes and schools in Campbell Town, NSW. This is because it’s inevitable that the athletes will need beverages before and after training. Also, schools hold various sport and non-sport events and will most probably require the supply of soft drinks. The flavors of the soft drinks will be different and will be based on the indigenous fruits of Australia. The price range will be $1-$2 per liter, which is slightly lower than those present in the market. Additionally, the location of the distribution outlet is near the Campbell town Sports stadium which offers a ready market for promotions and sale.
The leading competitor brands in the industry are Pepsi and Coca-Cola. These organizations generate billions on a daily basis (Moodie et al., 2013). But their products have received sharp criticisms from the health and sports sectors because of their high sugar levels and have been branded as unfit for athletes and general human consumption. The approximate price range in the present market for each soft drink is $2 – 4 which is higher than that of Smooth Drink ltd. Our low prices will make our products to be easily recognized than those of our competitors. Furthermore, our products have exceptional features such as health benefit and delicious with the flavor of Australian indigenous fruits.
The name “Smooth Drink” is our brand and it is named so to give insight to our customers of its unique features of health thus making it appealing to athletes who ought to be mindful of their health. Thus Smooth Drinks Ltd will supply their products to the right market (World Health Organization, 2012). The schools will as well be targeted by volunteering to sponsor various sports events and sell Smooth Drink products during the events.
All equipment for production will be acquired before the commencement of the business after proper market research has been and the decision made on which affordable and efficient equipment to purchase. Local manufacturers will be preferred to minimize transportation and delivery costs.
Critical Success Factors
The management of Smooth Drink Ltd will comprise of five officials with me taking the position of chief executive officer. These officials include store manager, HRM officer, operations officer, accountant, and the technical officer. Other employees that will be engaged on contractual basis include two drivers and two delivery persons who will work in shifts. It is the conviction of the company that through the implementation of the right marketing program we will increase our revenue by 6% annually with break-even point within two years.
Smooth Drink Ltd is a Non-alcoholic Beverages Company (NAB) that is suitably located at Campbell Town, Leumeah Road. We sell healthy soft drinks and hot beverages. The cold drinks include multiple carbonated and non-carbonated water with different flavors, whereas the hot beverages include tea and coffee.
Our soft drinks contain the recommended sugar quantity by the World Health Organization. Furthermore, we will begin with standard but effective equipment and technology in the production process as we strategize to expand to large scale production and modern, efficient technology.
Smooth Drink products have been packaged with clear labels of the ingredients and their contents. The bottles have been designed in a way that they can comfortably be held by one hand and are of varying sizes and quantity. The entire production process will take seven main steps right from the review of the raw materials to the time of labeling and final packaging.
The sector of healthy beverages has not significantly been ventured into, and yet the demand for healthy drinks is on the rise due to the increased awareness of the side effects of the high sugar content in the existing soft drinks. Thus, low competition and high demand is the first critical success factor for Smooth Drink Ltd.
The convenient location of the business is another success factor. Smooth Drink ltd is located in Campbell Town, NSW which is home to the Campbell town sports stadium, Campbell town public schools, and many other institutions. This location ensures visibility and continuous flow and big size of target customers. Every major sporting events at the stadium will be an opening to promote and sell our products to the attendees and the athletes who will afterward promote them by use of word-of-mouth (Silverman, 2011) owing to the quality and health benefits.
Moreover, our prices are reasonably low compared to those in the market. This will immediately arrest the attention of the target customer that is the athletes and students. Additionally, the health benefits will much more be appealing to the athletes.
Our structure of leadership is occupied by individuals with proven managerial skills sufficient to successfully manage a start-up business (Abrate, Fraquelli, & Viglia, 2012). We are also committed to constant growth and development in the provision of quality products.
Conclusion
Smooth Drink Ltd is a timely business idea which arrives at the time when there is increasing campaign against the intake of soft drinks to the public across the globe. The competition is similarly low for health soft drinks because the field has not been ventured into. Hence, the business is expected to offer value to the consumers and also help alleviate the suffering that comes with the intake of soft drinks with high sugar content. The costs of establishing the business will be affordable since simple equipment will be used to develop the production site. The strategic and convenient position of Smooth Drink Ltd, its name, and quality of the products are of value since it is a new idea in a less competitive market but with expected high demand.
References
Abrate, G., Fraquelli, G., & Viglia, G. (2012). Dynamic pricing strategies: Evidence from European hotels. International Journal of Hospitality Management, 31(1), 160-168.
Ballard, S. L., Wellborn-Kim, J. J., & Clauson, K. A. (2010). Effects of commercial energy drink consumption on athletic performance and body composition. The Physician and sportsmedicine, 38(1), 107-117.
Braakhuis, A. J., & Hopkins, W. G. (2015). Impact of dietary antioxidants on sport performance: a review. Sports Medicine, 45(7), 939-955.
Buxton, C., & Hagan, J. E. (2012). A survey of energy drinks consumption practices among student-athletes in Ghana: lessons for developing health education intervention programmes. Journal of the international society of sports nutrition, 9(1), 9.
Grimes, C. A., Riddell, L. J., Campbell, K. J., & Nowson, C. A. (2013). Dietary salt intake, sugar-sweetened beverage consumption, and obesity risk. Pediatrics, 131(1), 14-21.
Hu, F. B., & Malik, V. S. (2010). Sugar-sweetened beverages and risk of obesity and type 2 diabetes: epidemiologic evidence. Physiology & behavior, 100(1), 47-54.
Malik, V. S., Popkin, B. M., Bray, G. A., Després, J. P., & Hu, F. B. (2010). Sugar-sweetened beverages, obesity, type 2 diabetes mellitus, and cardiovascular disease risk. Circulation, 121(11), 1356-1364.
Moodie, R., Stuckler, D., Monteiro, C., Sheron, N., Neal, B., Thamarangsi, T., … & Lancet NCD Action Group. (2013). Profits and pandemics: prevention of harmful effects of tobacco, alcohol, and ultra-processed food and drink industries. The Lancet, 381(9867), 670-679.
Schwartz, M. B., Novak, S. A., & Fiore, S. S. (2009). The impact of removing snacks of low nutritional value from middle schools. Health Education & Behavior, 36(6), 999-1011.
Shirreffs, S. M. (2009). Hydration in sport and exercise: water, sports drinks and other drinks. Nutrition bulletin, 34(4), 374-379.
Silverman, G. (2011). Secrets of word-of-mouth marketing: how to trigger exponential sales through runaway word of mouth. AMACOM Div American Mgmt Assn.
World Health Organization. (2012). A framework for implementing the set of recommendations on the marketing of foods and non-alcoholic beverages to children.
World Health Organization. (2016). Evaluation of Certain Food Additives and Contaminants: Eightieth Report of the Joint FAO/WHO Expert Committee on Food Additives (Vol. 80). World Health Organization.
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