Innocent Drinks

To: Adam Balon, Richard Reed, and Jon Wright

Regarding: Next steps for Innocent Drinks

Situation: Having sustained an exceptional pattern of growth and superior market penetration in the first four years of operation, Innocent Drinks is looking to expand beyond the current limited UK smoothie market, and has several growth opportunities available.

Objectives & values:

* Strong brand awareness through unique, quirky, offbeat personality

* Convenient and healthy beverage alternative for active urbanites

* Sustainable growth and innovation of the brand

Key issues & barriers:

* Losing Innocent Drinks’ competitive advantage of brand image: Innocent Drinks' differentiation is largely based on their brand image. Cultural and operational barriers could exist in the geographic expansion options, which would result in diluting the brand’s identity.

* Employee resistance to change in company culture: Employees are strongly supportive of the independence and creativity of the brand, as well as the company’s established objectives and values.

* Corporate structure: Although the co-CEO model has proven successful thus far, it can prevent rapid decision-making and requires consensus decision-making, which could be cumbersome and time-consuming.

* Supply chain development: Innocent Drinks does not have an established infrastructure in Europe or the United States, nor have they fully vetted the supply chain for an additional product in the UK.

* Market environment: Some markets are highly saturated, others would require Innocent Drinks to invest in developing the market, and the industry has low entry barriers for new competitors (Exhibit A – Porter’s Five Forces).

* Financial implications: Unknown development, implementation, and advertising costs for geographic or product expansion.

Options:

* Product expansion: develop an additional product (such as ice cream or yogurt), under the Innocent Brand

* Geographic...