Swot And Porter 's Expansion Into The Australian Juice Industry
Over ten years Healthy Potion (HP) has become a multi-store business in the food and beverage industry, driven by the reputation of its unique drink infused with Chinese herbal concentrate. However, a strategic analysis of HP through SWOT and Porter’s Five Forces (1979) exposes weaknesses in operating a seasonal and single-product business. This essay supports HP’s expansion into the Australian juice industry which has experienced steady 9.8% annually growth between 2011-2016 (Tonkin 2016, p. 3), benefiting most from pursuing a differentiation strategy.
Porter argues an effective strategy positions businesses to respond to competitive forces, being ‘customers, suppliers, potential entrants, and substitute products’ (Porter 1998, p. 4). It is therefore imperative for HP to capitalise on its internal strengths, address weaknesses, pursue external opportunities and minimise threats as identified by SWOT (Bovee and Thill 2015, p. 190). STRENGTHS
Healthy Potion’s most profitable asset and core competency (Bovee and Thill 2015, p. 563) lies in its distinctive product. The uniqueness of the Chinese herbal concentrate is what has driven consumer demand and have strengthened HP’s financial surplus (Snyder and Fromkin 1980 cited in Lynn and Harris 1997, p. 602). By utilising the health benefits of the product to pull customers, HP has effectively acquired ‘perceptions’. Another strength is HP’s simple and less costly business processes involving…