The offer to Joint Juice Inc. by both Albertsons, the nation’s second largest grocery chain, and Safeway, the second largest grocery chain to sell Joint Juice’s products through their nationwide chain stores posed a challenging decision to the company. To sell its products throughout the nation is no doubt a great opportunity for Joint Juice, particularly as a start-up business. However, this offer challenged the company’s original strategy of staying regional for several more years and learning while growing. The management of Joint Juice was faced with making a critical decision - whether to stay with its established plan, or accept the offer to go national.
Joint Juice invented a product that deliver the nutritional supplement
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Joint Juice had little knowledge about consumer purchase behavior in other regions of the country, as well as estimated sales. So it would be difficult for it to be prepared with appropriate products in terms of packaging, design and pricing in a short period in response to national sales. Lack of knowledge of estimated sales would also challenge its current supply chain. The lead time from placing an order to receiving a complete product took four months. Without an accurate sales estimate and efficient supply chain, Joint Juice could not provide accurate delivery to stores across the country. The disruption of supply would turn the expansion opportunity into a disaster to the company.
According to the case, it is estimated that Joint Juice needed to raise at least $5 million to support sales nationwide, even $7 million for a more aggressive plan. The large funds required would dilute the company’s ownership. On the other hand, it would also greatly increase financial risk in case of repayment default.
Based on the above analysis along with the analysis of pros and cons as shown in the appendix 3, it is concluded that Joint Juice was not ready to take the strategy of going national at this stage. Acceptance of going national at this moment would pose great challenges to the