The NAB company name and its significance
The name of My NAB Company is “Ice Crystal”. The significance of the beverage is for everyone who enjoys the taste of ice cold and crystal clean water. The name is easy to remember it will stick to your customers. It clearly reflects the main goal of the product – refreshing and healthy experience from the ice cold and crystal clean water.
The Company’s Mission Statement
Our Mission is the production of environmentally friendly non-alcoholic beverages using advanced technology and quality standards. We are committed to providing enjoyable, healthy and refreshing experience for each customer.
Trends in the non-alcoholic beverage industry
In general, demand for mineral water is seasonal. The greatest demand for the products of the market of mineral water, in particular, carbonated and canteens of water are observed in the period from May to October.
Over the past few years (2013-2014 gg.) a decrease in demand for highly carbonated water, an average of 5-7%, and the growth in consumption of non-carbonated or lightly carbonated water.
As regards the volume of consumption, the most popular in the hottest period of time the remaining capacity of 0.5-0.7 liter category is a popular carbonated bottled water in 1.5 liters, preferably non-carbonated water is purchased by consumers in the volume of 5-6 liters.
Every year, a European consumer consumes 39.2 liters of mineral water (both carbonated and non-carbonated so). Depending on the type of packaging, there is a consumer gives preference to the plastic packaging than glass. In addition, one of the influential factors on the choice of the consumer is the design of water - the shape of the bottle and label design
Production of mineral water in Europe for several years remained practically at the same level, the annual production growth is 0.2-0.3 Market of bottled mineral water is the most dynamic in the food industry, “currently represents an annual consumption of 97 billion liters” (WWF, Nestle, 2013). Experts predict that from 2015 to 2017. Trend growth in production will be preserved in subsequent years. As it is stated in transparency Market Research: “In terms of volume, TMR says that the global bottled water market stood at 267.91.billion liters in 2013 and will rise remarkably to touch 465.12 billion liters by the end of 2020.” (Mr.Sudip S, 2015)
Mineral water market continues to grow steadily in the first place, this is due to the popularity of the trend towards healthy eating and lifestyle of the population, with the deterioration of the quality of water from the tap, as well as with record temperature marks in the summer months.
Overall, the market of mineral waters in Europe is very promising, due to such factors as:
The market potential. A growing number of Europeans in recent years, health-conscious and tend to consume high-quality and healthy products, including drinking water. In connection with which annually increases the level of consumption of bottled water.
Market volume. More than 77% of Europeans consume bottled mineral water. According to experts, the annual growth in consumption will be 15-20%, there is no crisis in the economy and the "avalanche" reduction of income citizens.
Strategic position for the company
Our company will choose Niche Strategy considering the fact that the European market of Mineral water has distinct leaders with huge market share and customer base. We will create the market segment that is not yet occupied – water that is sold only cold, the customer will not be able to purchase the bottle that is hot. It will be achieved by special instructions to our retailers and marketing companies. Our water will be distributed in the unique plastic bottle that will change its color after water is cool enough for consumption. We will commit to producing the cleanest water on the market.
Overview of company’s distribution channels.
Considering the fact that “Ice Bottle” will be positioned as a niche product for customers who cares about clearness of the water and are willing to get ice cold refreshing experience, therefore, the two main distribution channels will be vegan grocery stores and sports venues.
Delivery will be organized using specially equipped minivans. Each vehicle will be equipped with special hardtops for the transport clean water capacity of 72 large bottles as well as fridges. Water will be always contained under below 0 calcium temperature.
Cars will be purchased in stages, according to the planned increase in sales volumes and, consequently, increasing the demand for transport.
Risks (including any regulatory risks) that your business faces. Our company’s plan to mitigate such risks.
The risk of loss of profits and consumer risks - this is the indirect risk (side) of financial loss (non-received profit) as a result of non-implementation of an activity (e.g., failure of planned sales) or, if one considers the global option, termination of the enterprise.
Risk reduction solvency of the consumer - this risk can be caused by deterioration of the economic situation in the region what can cause the drop in the solvency of the target consumer.
Resource risk and implementation risk - this risk is related to the fact that during the implementation of the project business strategy will not be achieved by the end of planned results. The level of this risk has an average value and will depend upon selected suppliers, their remoteness, the conditions of work with them, as well as compliance technology of the work.
Regulatory risk – the main regulatory risk is related to the high level of standards to the level of purity and concentration limits of the minerals in the water. “Natural mineral waters are subject to an authorization procedure carried out by the competent authorities of the EU Member States or by European Economic Area (EEA) countries. (European Commission policy,2014). Prior to starting the venture water should be authorized.
The way a company is going to mitigate the risk
The risk of loss of profits and consumer risks - a lot of attention should be paid to the changes in customer’s tastes. The company should invest in analytics reports as well as external consultations in order to timely react and be ahead of the competitors.
Risk reduction solvency of the consumer - this risk is not under company control. There are two possible strategies to mitigate this risk. First is to diversify the brand portfolio, be ready to introduce low price product that will be more affordable. The main disadvantage of this strategy is the fact that it can potentially have serious impact on company revenue.
The second strategy is to develop customer loyalty. Big amount of investments should be made towards building a recognizable brand with distinct values and acquiring and developing the loyal customer base. It can be made by using a diverse tool set of advertisement as well as hiring a senior marketing team.
Regulatory risk – in order to mitigate regulatory risk company should conduct regular, scheduled independent quality control of the product. Prior to starting production company may consider an option of hiring a consultant firm that will audit all the facilities (self-possessed and owned by suppliers)
SWOT analysis for NAB company
In order to utilize and develop all the company’s strengths company should try to rapidly enter the market. The main focus should be made on developing loyal customer base with the propaganda of healthy lifestyle. The product should have the strong association with healthy nutrition.
The second priority should be to diversifying brand line as quick as possible by introducing a new line of products with the same brand values: healthy and refreshing experience. This activity will help to reduce potential impact of main threads.
European Commission policy. (2014, Aug 28) Natural Mineral Waters and Spring Water. Retrieved from: ec.europa.eu.
WWF, Nestle, TNS World Panel. (2013) Mineral water, champion of the food industry. Retrieved from: Sleever.com.