Introduction
The SWOT analysis reveals the strengths and weaknesses of Innocent Drinks and addresses the opportunities and threats presented by the PESTLE analysis (Johnson et al 2014).
Strengths
Innocent Drinks strengths lie with its brand reputation for quality and innovation, which is what attracted Coca Cola. Innovation has been seen in both the product and how the business model includes economic, societal and environmental concerns (Innocent 2017, Withers 2017). Innocent has won awards for its brand and products including being recognised as a social brand with strong ethical values which are reinforced by its organisational culture and can provide competitive advantage (Innocent 2017). The investment of Coca Cola also enabled Innocent to access its considerable marketing and media power as well as gain financial security, during a period of falling sales (O'Reilly 2014).
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Weaknesses
In comparison to other fruit juice brands, Innocent Drinks is still relatively new and less well-known. It faces strong competition from Tropicana Products, owned by PepsiCo, which is currently the number one brand in the UK and has an extensive range and experience in this sector. Innocent Drinks also charges a premium price for its products, which has made it prone to a fall in demand during periods of reduced disposable income and the reliance on the UK market does make this a particular weakness (Withers 2017). A further weakness for Innocent is the lack of patent for its products which means that its products can be copied.
Opportunities
The increased health concerns expressed by both the UK government and society may present considerable opportunities in promoting Innocent drinks as an alternative to more sugary drinks with artificial additives (Britvic 2016). The sale of Innocent to Coca Cola has also enabled it to gain access to the investment needed to enter European markets which, after initial losses, has had considerable success with Innocent becoming the largest fruit juice brand in Europe (Withers 2017; O'Reilly 2015). With its success in Europe, the potential for access to emerging markets as trade deals are negotiated during the Brexit process and with Coca Cola's financial backing, Innocent may be able to increase its market share still further.
Threats
Innocent is reliant upon supplies of fresh fruit products for its products (Innocent 2017). The impact of climate change may lead to changes in weather systems, such as floods and droughts, and this will impact on harvests. Furthermore, free movement for EU migrant workers is under negotiation during the Brexit process and there are concerns that this will impact on fruit picking in the UK in terms of access to adequate numbers of workers and the potential additional labour cost (O'Carroll 2016). This is turn may increase the cost of Innocent drinks, which may reduce their demand.
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References
- Angwin, D, Cummings, S and Smith, C (2011) The Strategy Pathfinder: Core Concepts and Live Cases, (2nd ed), Chichester: John Wiley and Sons Ltd, Chichester
- Britvic (2016) 'Britvic Annual Report' [online] Available from http://www.britvic.com/~/media/Files/B/Britvic-V3/documents/pdf/presentation/2016/Britvic_AR_2016.pdf
- Burn-Callander, R. (2015) 'Europe finally develops a taste for Innocent' Telegraph. April 11 [online] Available from http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11528922/Europe-finally-develops-a-taste-for-Innocent.html
- Food and Drink Innovation Network (2016) 'Loyalty and values: a technically strong combination at innocent' [online] Available from http://www.fdin.org.uk/2016/05/loyalty-and-values-a-technically-strong-combination-at-innocent/
- Innocent (2017) 'Being sustainable' [online] Available from http://www.innocentdrinks.co.uk/us/sustainability
- Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regnér, P. (2014) Exploring Strategy, Text and Cases (10th ed.) Harlow: Pearson Education Ltd
- Leahy, S. (2017) 'Innocent Drinks app helps Spain's strawberry farmers slash water use' Guardian, May 27[online] Available from https://www.theguardian.com/sustainable-business/2016/may/27/innocent-drinks-app-helps-spain-strawberry-farmers-slash-water-use
- O'Carroll, L. (2016) 'British strawberries could be wiped out by Brexit, farming leaders warn' Guardian, July 20 [online] Available at https://www.theguardian.com/uk-news/2016/jul/20/brexit-farm-labour-shortages-fruit-vegetable-harvests-national-farmers-union
- O'Reilly, L. (2014) 'How Innocent and Coke have influenced each other' Marketing Week, February 12, [online] Available from https://www.marketingweek.com/2014/02/21/how-innocent-and-coke-have-influenced-each-other/
- Withers, I. (2017) 'Innocent gets a health kick as sales top Tropicana' Telegraph, July 2 [online] Available from http://www.telegraph.co.uk/business/2017/07/02/innocent-gets-health-kick-smoothie-sales-top-tropicana/
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