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Innocent Swot and Pestle Analsis

In: Other Topics

Submitted By DavinaB
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My chosen Company is Innocent.

It was founded by three friends who met at Cambridge University in the early 1990's.

They sold their first Smoothies at a music festival having spent £500 on fruit for the Smoothies. When finished their Smoothies, customers were asked to put their empty bottles in either a “Yes” bin or a “No” bin. The question the customers were asked was whether the guys should quit their jobs to make Smoothies. When they checked the bins, the “Yes” bin was full with only three bottles in the “No” bin. So the guys quit their jobs the next day.

They have since opened offices in Paris, Amsterdam, Copenhagen, Germany and Austria.

Innocent sold a share of their Company to Coca Cola in 2009. Coca Cola now hold a 58% stake in the Company though Innocent say that they have a “hands-off” approach.

Their product range now includes Innocent Smoothies (which contains 2 of your 5 a day), Fresh Juice, Kids' Innocent Smoothie Cartons, and Innocent Kids Juice. In 2008 they launched Veggie Pots (which has 3 portions of your 5 a day in every pot) and in 2009 they invented Fruit Tubes for Kids.

Innocent's mission statement is :
“to make natural delicious food and drinks that help people live well and die old”
(Source: www.binarymoon.co.uk, 2011)(i)

The Logo

The design brief (such as it was) aimed to emphasise the purity and naturalness of Innocent drinks. “We didn’t have any sophisticated marketing plan,” explains Dan Germain (Head of Creative, Innocent)(ii)

They chose a lower case font, it's very simple, it has a friendly feel about it.

The Innocent Foundation is a UK-registered charity that gives grants to non-government organisations and other charities, typically in the form of three-year partnerships. It was set up in July 2004 “with the idea of bringing nature and communities closer together for mutual benefit” (Source: www.innocent.co.uk, accessed November, 2012)(iii). This allows Innocent to donate 10% of its profits to charity. The majority of funding goes to support rural development projects in the countries where the fruit that innocent uses comes from. The current theme is “sustainable farming for secure futures” (Source: Innocentfoundation.co.uk, accessed November, 2012) (iv). To date, they have helped over 330,000 people and committed over £1.3 million.

Their strategy has three key elements:
Focus our investment.
Work in partnership.
Be wise with our money.
(Source: www.innocentfoundation.co.uk)(v)

The Innocent Foundation is “a charity that is funded through Company profits. Projects include buying cows for farmers in India to planting trees in deprived estates in London”. (Source: Simon McDermott – City to Cities. www. Slideshare.net, September, 2012) (vi)

Innocent had a huge campaign called, “The Big Knit”, where they asked people to knit tiny caps for their bottles of Innocent. Innocent then donated a portion of every purchase of a bottle with a cap to an organisation that provided warm clothing to the elderly. In 2007, more than 400,000 hats were received by Innocent, while their customers posted photos on such sites as Flickr and Facebook. This campaign resulted in a 100% lift in sales for Innocent.

S.W.O.T. ANALYSIS

STRENGTHS:

All their Smoothies are made with fresh fruit which has a shelf-life of 8 days and so guarantees a high quality product. They offer a service to retailers of daily deliveries which gives the brand the advantage of zero waste. It also maximises product availability. Their products are highly competitive and have the potential to fulfil the current demand of the consumers.

They have 32 different types of labels which they change every 3 months. All their packaging has jokes on it. They add extra ingredients to their bottles such as ‘0 x Plastic Duck’. Humour makes people feel good and when it's used in communications it creates positive feelings about the brand.

Innocent is still quite a young company and it has highly experienced management staffs that have previous market knowledge. The Company has a group of efficient, motivated, dedicated and skilled workforce who want the Company to succeed.

They give 10% of their profit to charity and continually participate in fund-raising activities such as 'The Big Knit'.

Innocent is seen as a progressive, friendly, down to earth company. They have now progressed into Facebook and Twitter. Innocent has the 9th biggest Twitter following out of all brands in the U.K. They also have blogs and YouTube videos. They have been recently voted the 7th most socially responsible brand in the U.K. They believe that these are good ways of communicating and good ways to have conversations with their customers and to learn from them.

Innocent is the No. 1 Smoothie brand in the U.K. It has a market share of 63% of the domestic market. Their turnover is set to reach £100m. (Source: Richard Reed, www.growingbusiness.co.uk) (vii). Innocent sells over one million Smoothies each week in over 7,000 outlets. It is the only range of 100% pure fruit Smoothies, rather than concentrate.

Innocent use 100% recycled bottles and 25% recycled paper for its labels. The premium price of their products make retailers want to buy Innocent products because they make a bigger profit than other cheaper brands. They currently sell 36 varieties of Smoothies, which gives retailers and customers greater variety.

Innocent have a special relationship with their customers, they have an “open door” policy where they encourage their customers to make a visit to their Head Office which they call “Fruit Tower”. They use green electricity. They encourage customers to call the “Banana Phone” where they can call to give their opinions, ideas and ways to improve the Smoothie product. By doing this Innocent can then satisfy their customers’ needs and wants. They have grass covered delivery vans. They connect with people.

Innocent’s above the line spending is five times greater than the rest of the market combined. They have brilliant Public Relations, constant new product innovation, distinctive packaging and its annual promotion of a free summer music festival called Fruitstock (81,000 people came).

Every bottle says exactly what it contains (12 raspberries, 26 cranberries, etc.). People love a company that is honest and socially responsible.

Innocent what they call the “Innocent Family”. They printed their website details on their packaging and asked if people would like to receive emails of any news that Innocent have. They now have 120,000 people registered to receive the emails.

[pic]

WEAKNESSES:

Innocent’s high retail prices means that there will always be a segment of the market that will not purchase Innocent but will purchase the cheaper version.

Innocent targets young children and adults in the market. They do not segment their marketing according to their customers' needs. For instance, they do not market the needs of elderly consumers. They need to change their target market so they can meet all their customer's expectations.

Some consumers believe that Innocent are becoming a big corporation having sold a percentage of their company to Coca Cola.

Even though Innocent is always changing their labels (they have 32 different labels) and introducing new products to the market but in other aspects they have become very monotonous. One example is the “Regents Park Fruitstock Festival” people love it but is the same every year.

Being a company that is about improving things, everything they do is designed to be ethical, and sustainable. There is always room to improve the world we live in. We need to look after it, as much as we look after ourselves. To this end they try to make everything they create recyclable. Innocent help the people who grow their fruit to make sure they earn a decent wage for the work they do, and they give a percentage of their earnings to charity every year (even when they make a loss)!
OPPORTUNITIES:

Government is trying hard to make people educated about healthy diet and drink. It is a good opportunity to work with the Government in the same strategy so that Innocent would gain their own objectives.

The market Innocent that Innocent operates in is still growing as more and more consumers are becoming health conscious and are moving away from processed foods. This is a big opportunity for Innocent to take more of the market share. People now do not just see fruit drinks as children’s drinks but they have realised that they are a good part of healthy diet. With their hectic and busy lifestyles, people are now more interested in being physically fit and healthy.

They could increase their product range to include vegetable, dairy and healthy grains / seeds.

Coca Cola has huge distribution channels all over the world and for a brand like Innocent that could make them achieve one of their goals which is to become “The Earth's favourite little food Company” in a much shorter period of time. Because of the investment from Coca Cola, people will be more inclined to try it.

Innocent could come up with new brands of such as non-alcoholic cocktails in a variety of flavours. This helps the company to catch up with the changing tastes and preferences of customers for products with new flavours.

[pic]

THREATS:

Innocent's direct competitor in the UK is “Tropicana”. They are now putting healthier juices and also a line of Smoothies on the market at a low price which they are trying to gain some of Innocent's market share. Tropicana's sales have increased over the year and they could extend their range even more.

Innocent's product range has become quite repetitive. People always like to try new products.

The weather will have a big impact on Innocent's Smoothies. Such disasters as America's “Katrina” hurricane will affect the growth and their supply of fruit. These hurricanes and other disasters have done huge damage to the fruit supply which will have huge effects on the fruit supply to the UK.

Language plays a big part in Innocent’s success. Their funny, witty little stories on their bottles may not translate well and may create a barrier in foreign countries should they expand globally.

As the company grows, Innocent's values are going to be subject to greater scrutiny based on their actions, as they are now with selling stakes to Coca-Cola .

PESTLE ANALYSIS

POLITICAL:

Obesity is rising amongst younger people. The HSE recommends that each individual should try to aim to eat 5 fruits or veg a day. Drinking Smoothies would help towards the recommended amount.

Government policies such as trading standards can effects innocent Smoothies as the policy requires companies to focus on trading standards to ensure there is fair trading, ensuring consumer safety while maintaining high quality standards.

Source: http://www.reading.gov.uk/business/tradingstandards/tradingstandardsnews(viii)

The Department of Health in the UK ruled that Smoothies can count as two of the recommended daily amount of fruit and vegetables.

The Trading Standards ensure that consumer safety. They also make sure that fair trading and quality standards are kept.

ECONOMIC:

Increased wages and the price of oil will lead to higher inflation in the near future.

As inflation is lower now the price of materials is reasonable. But it is uncertain how long it will be like that as there is such uncertainty about oil prices, housing prices and consumers' spending.

Innocent have had to find manufacturers willing to take on the expensive ways of manufacturing their drinks without added preservatives.

[pic]

SOCIAL:

10% of Innocent's profits go to the Innocent Foundation. They ensure that all their fruit is ethically grown in acceptable work conditions for the fruit pickers.

Health awareness has risen and Innocent has used this to its advantage by highlighting the key health benefits to their products, 100% fruit content (not concentrate) and each bottle contains your 2 a day.

Innocent realised that consumers would be willing to pay a higher price for their products because they contained 100% fruit. They also manufactured a large variety of Smoothies to increase the customers' choice.

Because they used TV advertisements and outdoor poster advertising, the company grew faster and has strengthened the Innocent brand image.

TECHNOLOGICAL:

Big improvements are being continually made in industrial machinery and new technology. These can lead to a reduction in costs and increase revenue.

Innocent introduced the very first 100% recycled plastic bottle. Their labels are also 25% recyclable.

LEGAL:

With all Government legislation, Innocent's products have to “conform to safety laws”.

Innocent's manufacturing processes are subject to pollution controls.

ENVIRONMENTAL:

The environment can have huge impact on the industry as they make their products from the fruits directly and with no artificial ingredients so they rely heavily on the supply of fruit and; as mentioned previously, any natural disaster (such as Hurricane “Katrina”) can interrupt this supply or may stop it indefinitely.

[pic]

Innocent Drinks’ is seen as a fun, straightforward, non-corporate and honest brand.

Innocent is seen to have an internal creative culture which it has managed to sustain despite an extended period of development, both in the UK and Europe. Skilful recruitment and effective communication lie at the heart of the company’s cultural development, ensuring creative involvement from every department and a company-wide commitment to success. Creativity has always been an integral part of Innocent. A powerful culture of creativity still exists and is actively encouraged among the company’s 120 employees.

“We invest lots of time finding smart people to come and work at Innocent. Smart people are creative, driven, funny, friendly and focused. Without great people, Innocent wouldn’t be here today”. Dan Germain (Innocent’s Creative Director)(ix) is keen to point out that creativity within the workplace is not just a feature of traditionally creative disciplines such as design and communication. “It is just as pronounced in the way that we come up with new ideas for drinks, or in our operations and logistics teams – they’re the ones who have to solve incredibly complex problems at only a moment’s notice.”

“Actively encouraging communication and creativity is a core part of company life at Innocent,” as Germain explains. “If people aren’t involved in all decisions, big and small, then they start to feel unloved and removed from the business and its success. So we get together as a company as much as possible, so that people can share their thoughts and ideas.”
Innocent arranges quarterly meetings, monthly forums for debates on hot topics and a weekly catch up involving the whole company.

“These all help to democratise the ideas generation process”, says Germain.

“Without great ideas that help us to improve the business, we wouldn’t exist as a company”
(Source: Dan Germain, Innocent's Creative Manager)(x).

The values of the company are most important. After that it seems that initiative, intelligence and experience influence their recruitment process.

Richard Reed (one of Innocent's Directors) said that their website is the most successful hunting ground for staff but he will try everything and anything for the best candidate. He says that headhunters, recruitment consultants, job advertisements and internal recommendations only go so far. Dinner parties, conference speaking gigs, trade shows and its' free summer music festival Fruitstock, which features JobStock, are all opportunities.

(Source: Richard Reed 1 January 2007; Challenge Recruitment and Selection http://www.growingbusiness.co.uk) (xi)

It is a relaxed and dynamic workplace. People are not seated by department. Innocent invest in people and make work fun to improve motivation. New employees will find a flower at their desk and a mug with their name on it. For the first two weeks they are taken to lunch by a different member of staff. There is also a £1,000 staff award to pursue activities outside work and a yearly “Nature Weekend” where the whole company goes snowboarding.

Innocent run a number of courses that enhance and develop skills, knowledge and behaviour that they believe are important for everyone in a business like theirs.

The Innocent Academy

This is a 2 day programme which gives employees the simple tools and ideas to help staff be more effective back in the office. Everyone across the company gets to go on the Academy and it is a great way to learn from people you might not work with on a day-to-day basis.

They also have a course internally to teach core business skills, project management and finance. They have other courses designed for employee's giving more tips, tools and tricks on how to get the most out of your role with Innocent.

“Each team at Innocent has a learning plan which is all about keeping them at the top of their game. For some teams it might involve studying for professional exams, for others it might be about honing certain skills - for example, their sales team do a lot of learning around great negotiation, and their technical team will be focused on the latest methods for keeping our drinks safe from bugs.”
(Source: www.innocent.co.uk) (xii)

Richard Reid (Innocent's Director) is adamant Innocent’s attitude towards its staff is simply the way things should be. “It makes absolute business sense. You realise the only determinant on how successful a company is going to be is the actions of every single person. So you have to do your absolute best to get the happiest most motivated team possible.” (xii)

Recommendations

These days, in recessionary times, customers have much less disposable income. They look for value for money. Therefore I believe it would benefit Innocent if they did a BOGOF strategy (buy one get one free) offer. I think if Innocent offer value for money and reduce their prices, they will gain a larger customer base. I think many lower middle class people still see these 'so called healthy drinks' as 'nonsense' and are unwilling to pay a premium price for a bottle compared to a can of Coke or 7Up.

Inocent could develop a new range of Smoothies for older people. They could make Smoothies with added vitamins and minerals beneficial to the eldery.

Innocent should definitely create and launch a Smoothie range of 'non-alcoholic' cocktails. But then again, it might damage the Company's reputation because customers may see Innocent in the off-licence and not in the healthy fridge section.

CONCLUSION

I believe that Innocent's future looks very bright.. The combination of its witty humour and the unique health benefits of its products make it a company to be aware of. They have completely taken over the Smoothie market and have even encouraged other manufacturers and Smoothie companies to try and make their drinks fresher and healthier by reducing additives and using real fruit.

I emailed Innocent asking them about expanding their brand. They told me that they were looking at Innocent Baby Products and Innocent Body Care products.

However, with more Smoothie manufacturers rapidly coming up with innovations in an attempt to gain some ground, Innocent may have to move a little quicker.

I believe that Innocent’s Company will need to continue to innovate, not only in their product development but in their advertising to ensure they remain different and on top of their game.

So, perhaps it was a clever move by Innocent to allow Coca Cola to buy the shares in Innocent. In the future we may see the US soft drinks giant as the owner of a decidedly more successful Smoothie firm in the very near future.…...

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...PESTLE analysis stands for "Political, Economic, Social, Technological, Legal, and Environment analysis" and it is a business measurement tool, looking at factors external to the organization. It is often used within a strategic SWOT analysis (Strengths, Weaknesses, Opportunities and Threats analysis). In contrast to a SWOT, PESTLE encourages you to think about the wider environment and what might be happening now and in the future which will either benefit or be of disadvantage to the organization, individual, and etc. It acts as a kind of radar which picks up trends and developments in the external environment which can be used to inform longer term planning and strategy making. P - Political factors are how and to what degree a government intervenes in the economy, for instance tax policy, employment laws, environmental regulations, trade restrictions and reform, tariffs and political stability. E - Economic factors include economic growth, interest rates, exchange rates and the inflation rate; that is what is happening within the economy. S - Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety, i.e. what is occurring socially in the markets in which you operate or expect to operate. T - Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. This describes what is......

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Pestle Analysis

...1. Organisation is analysed using the PESTLE framework. The impact of the macro - environment is evaluated. 2.1 The PESTLE is a management tool that involves identification of the political, economic, sociological, technological, legal, environmental factors that had an impact on an organisation in the past, and could affect organisation in the future. Carry out PESTLE along with SWOT analysis, assist in strategic decision- making, and setting realistic objectives. 2.2 The PESTLE analysis is attached as Appendix 1. 2.3 The SWOT analysis is attached as Appendix 2. 2.4 The evaluation of high impact environmental factors based on PESTLE analysis. 2.5.1 The Department of Health is making provisions to a number of changes to the NHS dental contract, based on capitation, quality and registration, rather than UDA system. The two prototype contracts will begin operating in 2015-2016 for a two year trial, before a general new contract is introduced for everyone, in consequence it is difficult to predict a full impact on our organisation until the trial is finished. This requires contract monitoring for the time being. 2.5.2 Due to providing assurance and reporting to the commissionaires in line with CQC and GDC requirements, our practice has been forced to invest over £100000 to meet mandatory standards by the end of 2012. This involved building of an extension and allocation of separate decontamination room, along with a staff......

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Pestle

...PESTLE is an Environmental Framework used to understand the impact of the external factors on the organization and is also used as strategic analytical technique. PESTLE Analysis is used to examine the current and future state of the industry an organization belongs to. This helps in the strategic planning and gaining the competitive edge over the other firms in that industry. This analysis can not only be used for an organization as a whole but various departments can also be inspected under this framework. For example, it makes more sense for a company with diversified product range to analyze its departments separately than the organization as a whole. Importance of the factors varies depending on the nature of the industry and company. For example environmental factors are more important to tourism sector where as economic and political factors are more important for the Banking sector. The main purpose of this analysis is to create a strategy that will leverage as many of these external factors as possible to the company’s favor. These factors have their own advantage and disadvantage to industry. Political factor define the legal and regulatory parameters within which firm must operate. This factor is a major consideration on manager on formulating company strategy. It affects the organizations in terms of government regulations and legal issues and defines both formal and informal rules under which the firm must operate. Economic factors concern the nature and......

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Pestle

...the transaction cost (Stephen P. Ferris and Narayanan Jayaraman 1997, pp. 367-395). However, in Porter’s Five Forces, competitors are relative to company’s profit, somehow, considering the sum competition, it perhaps lead a result of zero- sum competition (Michael E. Porter 1979, pp.85). 2.To what extent does Toyota have influence of external environment–tariff to pursue two options? In the passage, we know that many foreign countries put high tariff or customer tax on Australia, which may somehow influences the imported components and exported cars and makes it impossible to gain approval for foreign-made cars. Thus it is necessary to consider the influence of Toyota’s partners’ tariff to it. The external environment is one of the PESTLE system’s item which is represented by E. It has essential impact on business operating. Furthermore, each country has different tariff towards different kind of goods. Tariff also influences trade barriers. The less tariff, the narrower the trade barriers is (Michael Keen and Jenny E. Ligthart 2002, pp. 489-507). And some other factors affect the tariffs, inflation and wealth lead to lower tariffs whereas higher imports lead to higher tariffs, which means if one of the factors changes, the tariff will change simultaneously (Zorica Srdjevic, Ratko Bajcetic and Bojan Srdjevic 2012, pp. 3379-3393). Thus, controlling tariff is important. Moreover, the more exported by foreign countries, the lower the tariffs are (Sean D. Ehrlich 2009, pp.......

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Pestle-Analysis

...PESTLE Analysis Strategy Skills Team FME www.free-management-ebooks.com ISBN 978-1-62620-998-5 Copyright Notice © www.free-management-ebooks.com 2013. All Rights Reserved ISBN 978-1-62620-998-5 The material contained within this electronic publication is protected under International and Federal Copyright Laws and treaties, and as such any unauthorized reprint or use of this material is strictly prohibited. You may not copy, forward, or transfer this publication or any part of it, whether in electronic or printed form, to another person, or entity. Reproduction or translation of any part of this work without the permission of the copyright holder is against the law. Your downloading and use of this eBook requires, and is an indication of, your complete acceptance of these ‘Terms of Use.’ You do not have any right to resell or give away part, or the whole, of this eBook. PESTLE Analysis Table of Contents Preface 2 Visit Our Website 3 Introduction 4 PESTLE Analysis 6 PESTLE Factors 10 Political Factors 12 Economic Factors 13 Social Factors 15 Technological Factors 16 Legal Factors 18 Environmental Factors 20 Summary 22 Other Free Resources 23 References 24 ISBN 978-1-62620-998-5 © www.free-management-ebooks.com 1 PESTLE Analysis Preface The PESTLE Analysis is a useful method to use in order to identify the external factors that......

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