Case Analysis for Silk Soymilk
Since the mid 1970’s, White Wave Foods Company has become one of the most recognized, leading, and influential food and beverage corporate establishment in North America and Europe. Throughout the years, multiple subsidiaries have joined the manufacturing giant, including Horizon Organic, Silk, Vega, and many other smaller companies. One of those brands, called Silk, which focuses on manufacturing a variety of healthy and delicious dairy-substitute products, such as Silk Soymilk, has been quite successful in 2005 due to the firms’ effective household penetration strategy that has assisted Silk in acquiring a consistent revenue growth. However, in 2006 that same strategy proved to be no longer adequate, useful, …show more content…
The Silk brand name has become a powerful market force in a short time period for two main reasons. Silk soymilk owns a relatively high market share (75%), and it holds the “first mover” advantage, which gives the firm a tremendous competitive advantage towards other rivalry companies that specialize in similar dairy products. Although, Silk soymilk is genetically pre-disposed to attract new consumers and strengthen customer’s loyalty to the product, there is an imminent threat coming from other soymilk brand competitors, such as 8th Continent, which are gaining popularity. Such companies have heavily invested on product innovation in order to diversify their soymilk by offering the product in different varieties and fruit flavors, such as strawberry-vanilla fat-free / low fat soymilk and others. Applying this method to Silk soymilk would be far more beneficial when combined with the products’ existing advantages because in that manner, Silk soymilk would increase value to its customers, enhance brand quality, and promote product sales. The main drawback of implementing this product development strategy would be associated with the high cost of entering such an intense competition, necessary for Silk soymilk brand
Since the mid 1970’s, White Wave Foods Company has become one of the most recognized, leading, and influential food and beverage corporate establishment in North America and Europe. Throughout the years, multiple subsidiaries have joined the manufacturing giant, including Horizon Organic, Silk, Vega, and many other smaller companies. One of those brands, called Silk, which focuses on manufacturing a variety of healthy and delicious dairy-substitute products, such as Silk Soymilk, has been quite successful in 2005 due to the firms’ effective household penetration strategy that has assisted Silk in acquiring a consistent revenue growth. However, in 2006 that same strategy proved to be no longer adequate, useful, …show more content…
The Silk brand name has become a powerful market force in a short time period for two main reasons. Silk soymilk owns a relatively high market share (75%), and it holds the “first mover” advantage, which gives the firm a tremendous competitive advantage towards other rivalry companies that specialize in similar dairy products. Although, Silk soymilk is genetically pre-disposed to attract new consumers and strengthen customer’s loyalty to the product, there is an imminent threat coming from other soymilk brand competitors, such as 8th Continent, which are gaining popularity. Such companies have heavily invested on product innovation in order to diversify their soymilk by offering the product in different varieties and fruit flavors, such as strawberry-vanilla fat-free / low fat soymilk and others. Applying this method to Silk soymilk would be far more beneficial when combined with the products’ existing advantages because in that manner, Silk soymilk would increase value to its customers, enhance brand quality, and promote product sales. The main drawback of implementing this product development strategy would be associated with the high cost of entering such an intense competition, necessary for Silk soymilk brand