Snapple Steals Share

1. Point of View

Snapple was founded by Leonard Marsh, Hyman Golden, brothers-in-law, and Arnold Greenberg, a health food store owner and the high school of classmate of Marsh in 1972 (Beverage History, 2011). Their small business was classified as a company of 87 employees. Being a company, this case should be presented to their Board of Directors (BOD) as they administer the general management policies of the company.

Moreover, since they represent the top-level management, their decisions comprise a large share of the planning function for the direction of the company. With this, it can also be said that they exhibit the highest level of conceptual management skill fundamental for the company to prosper. Lastly, the BOD also knows all the important factors to consider as they are knowledgeable of the important and major transactions the company has done. Therefore, it can be said that they are suited for the job of determining which solution the company must undertake.

1. Statement of the Problem

Snapple is a small company that ventured in the iced tea market with the weapon of a preservative-free iced tea which appealed to the people of the 1990s. During its first years, the company experienced success exemplified by their growing share of the iced tea market. This prompted both soft drink giants Coca-Cola and Pepsi to also venture in the iced tea market as they use their national brand recognition amongst other resources to increase competition with Snapple. This case would then suggest an answer to the problem of:

What strategy should Snapple must undertake to continue its thriving success amidst the entrance of heavy competition presented by the large companies of Coca-Cola and Pepsi?

1. Presentation of Case Facts

1. Strengths

• Good Marketing Strategy and Healthy Product

Snapple was in the years wherein the people’s health consciousness is prominent such that healthy alternatives are bought more than the others. Since one of Snapple’s founders and the company’s chief operating officer is a health food store owner, the product was claimed to be healthy which consequently affected the preference of the consumers on buying the product. Moreover, the company has the slogan of “Made from the Best Stuff on Earth” which purposely made up to promote its preservative-free image.

• The Right Market

Snapple entered the ready-to-drink iced tea market which was considered as a booming industry back in 1990s. It was even expected that 60million USD will be spent on the industry by the end of 1993. Small starting companies will easily thrive in the industry as the market has no current monopoly or big-time retailers, and the industry is growing and appealing to the public. The industry was literally wide-open for small businesses to enter and prosper.

1. Weaknesses

• Small Labor Force

Since the company is just starting company, the small labor force restricts the business in production of its product which greatly affects its net income.  Specifically, the company only had 87 employees compared to other businesses part of the competition. Moreover, the iced tea market is an open market wherein a good product is not really a good product unless chosen by consumers over other alternatives.