Healthy Potion Case Study
The following is a case study of Healthy Potion which is an Australian beverage company and relies on imported herbal from China as material. This paper will analysis strategy by SWOT and Michael Porter’s model. And it will also compare which strategy is better for new business development. Moreover, evaluation of debt and equity financing and plan for raising funding will be discussed at the end of this paper.
This section represents a brief strategy analysis of Healthy Potion by using SWOT and Michael Porter’s ‘Five Forces’ model analysis. Strategy analysis have serious beneficial for business outperforming than competitors for the long run. (JI K 2015a). ‘SWOT’ is the abbreviations of four words’ initials which …show more content…
Pressure from big beverage industry such as coca cola could be one of the most important threats for Healthy Potion. Coca Cola Company has the best global brand in the world, which has world’s largest market share in beverage and still promote sales by set personalize marking device and sale share to increasing investment. (Collier Karen A 2014).
While, SWOT is not completed, therefor, another measurement about strategy is Michael Porter’s ‘Five Forces’ model which include power of suppliers, threats of new entrants, power of consumers, threats of substitutes and competitive rivalry. (Yang L 2015). Katherine Arline who is Business News Daily Contributor found that SWOT analysis is not a perfect tools to investigate strategy, while the five forces model may improve it. This model looks at five specific factors that help determine whether or not Healthy Potion can make profit, based on other businesses in the industry .(Arline K …show more content…
Firstly, by achieving further productivity and operational efficiency in the future Healthy Potion could purchase herbal seeds which import from china and cultivating in Australian and also patent it. (JI K 2015a). Furthermore, between same level’s competitors Healthy Potion has a core character which is the special taste extracts from herbal and contributes superiority of Healthy Potion. For example, coca cola invented the new taste of drink which combines sweet and carbonated water. Because of the distinctive belong to the fortune 500 companies. (Pendergrast M 2000). Admittedly, cultivating herbal by themselves and apply patent is not always an effective strategy to avoid risks because of purchasing fees and higher costs of human resources management. Due to cultivating process, Healthy Potion has to employ more workers to ensure the normal operation, which also could imply high costs. Therefore, those who oppose this strategy might agree that purchasing and patenting are not necessary. For example, Red Bull is an example that contents are not patented, and all the ingredients are listed on the body of the slim silver can but still control respectable market shares worldwide. (Power S 2004). However, high human resources costs and purchasing fees are in short run, while, that is in the long run increasing revenue could cover these cost. (Wait A 2015). In addition, as red bull company, there are some strategies behind