MGT 4800 – Strategic Management
Case Study Write Up – Jamba Juice
April 8, 2013
Major trends in the general environment
Jamba Juice has tried to capture a good portion of health conscious consumers by providing healthy smoothies and other nutritious foods for customers on the go. Even though there are direct competitors such as Planet Smoothie, Starbucks, Dunkin Donuts, Panera Bread and McDonalds, Jamba Juice remains competitive by offering its unique blend of smoothies. They are made with real fruit and 100% fruit juices that are blended to order. They are also rich in vitamins, minerals, proteins, and fiber. No other competitor comes close to providing such a healthy substitute. In addition, Jamba Juice is trying a new tactic by offering baked goods, oatmeal, wraps, sandwiches and flatbreads in order to attract more customers. To stay on trend with the hot beverage market, Jamba has recently added its hot blends products which include ...view middle of the document...
This is great timing for Jamba Juice, especially in the wake of First Lady Michelle Obama’s initiative to combat childhood obesity.
Five forces driving industry competition affecting the profitability of your organization
Threat of Entry
Since there are already a number of well-known established fast food restaurants that enjoy customer loyalty, threat of entry is low. Each company is pretty much known for the foods and beverages they offer, therefore it would be hard for a new restaurant to compete unless they introduce something unique. Jamba remains a tough competitor due to its healthy menu.
Threat of Rivalry
Threat of rivalry is high as Jamba is competing against several brand name rivals that have the ability to influence the industry. Jamba Juice is offering similar foods as the rest of its competition, many of which are much larger, thus it tries to differentiate itself by offering healthy alternatives to its competitor’s products.
Threat of Buyers
The threat of buyers is high. Since there are many products and restaurants to choose from, Jamba must provide a memorable and pleasant experience to its customers to entice them to return. In addition, it must continue its marketing strategy of informing the public of the benefits of its products in an effort to keep up its clientele. However, Jamba Juice must ensure that marketing strategies don’t become too costly and cut into its profits.
Threat of Suppliers
The threat of suppliers is high for Jamba Juice since it depends heavily on high quality supplies of fresh fruits and vegetables throughout the year. It had to find distributors that were willing to flash-freeze the produce and agree to store it at their facilities until it was ready to be shipped to stores. In order to lower distribution costs, the company must cluster future store developments.
Threat of Substitutes
Many substitutes exist in this industry, therefore the threat is high. Jamba Juice must be wary of the cost conscious consumer that has no qualms about sacrificing healthy nutrition for a cheaper option. Jamba must instill the idea that eating healthy food is essential so that customers will not think twice about paying a premium price for nutritious food.