IV. Current and Future Prospect
A. Competition
The My Company is one of the largest nonalcoholic beverage companies, however, this industry is highly competitive. Changes in market trends translate into emerging numerous competitors who offer the same and/or new beverages that affect the market share of My Company. For example, in the past few years, Boba milk tea took over a large portion of the market. This Asian drink became popular in different parts of the world; opening up a strict competition over nonalcoholic sparkling soft drinks, flavored waters, and dairy-based drinks. Boba milk tea is available in packages sold in supermarkets or as ready-to-drink in cafes or malls. Others treat it as more natural and sometimes organic that comes in different flavors. Competitions impact The My Company’s pricing, market shares, brand recognition and consumers retention.
B. Strength
The My Company has built their brand image to the world for several decades. This
allows them to become one of the leading nonalcoholic beverages around the world. The company has different distribution and manufacturing facilities that help them to distribute efficiently and introduce their products effectively. Aside from that, their wide selection of beverages (as mentioned in page 1), allows them to cater to a wider range of the market. The company has become successful in providing products to different groups of customers based on their preference and geographic location.
C. Risk Factors
According to the financial statements reported by The My Company Company in 2021,there are several risks and factors that affect their current and future operation, and financial condition. Below are some of the risks facing that company and the proposed current and future prospects of the company based on the analysis provided above.
1. Health-related concerns including obesity could potentially reduce the demand for some of their products.
Consumption of sugar-sweetened beverages has brought attention to the public as well as to the health officials. The growing health-related concerns like obesity and diabetes could potentially result in an increase in taxes on sugar-sweetened beverages by government agencies. This would not only affect the sale and revenue of the company but also affects the stock market. New and/or increased taxes would affect the image of the company, resulting in reduced demand and increase in the cost of production.
Possible solution: Address evolving consumer products and preferences based on current trends and market preferences.
Every year, consumers change preferences on different kinds of products including beverages. To avoid reduced sales, The My Company needs to observe the consumption patterns of customers. More and more consumers are now concerned with their calorie and sugar intake from sugar-sweetened beverages and the artificial ingredients on it. Therefore, the company
needs to take a look at possible expansion of their beverage options with new sources of natural ingredients and raw materials. As the consumer lifestyle and preference changes, the ability of the company to adapt quickly would prevent negative impact to their sales and overall financial performance.
2. Increased competition.
The My Company is one of the largest commercial beverage industries. Competition in the market within the same industry could cause the company to reduce its price to gain or maintain share of sales.
Possible solution: Address evolving consumer products and preferences based on current trends and market preferences.
Strengthen the marketing department through advertisement that would reach not only
the current consumers but also new target market. It is also important to maintain brand loyalty by offering rewards and incentives in every purchase. In the long run, the increase in the number of sales and customer retention would reflect in the financial growth of the company.
3. Increased cost of production due to scarcity and natural causes.
Due to global and environmental problems, production of beverages in the company
affects the manufacturing process. As stated in the financial statement of the My Company, water is the main ingredient for almost all of their products and as well as important in the agricultural production of the ingredients.
Possible solution: Innovate
Evolving and improving existing and future beverage products through innovation could solve the supply-demand problem. The company could also focus their research and development in finding a cheaper and more environmental way of production and distribution.This could not only save them in manufacture but also would provide a great image for their company.