Innocent Drinks Case Study Essay examples

993 Words Nov 5th, 2008 4 Pages
The Innocent Drinks Case Study
The Present
Innocent Drinks was founded in 1998 by a group of people that, first and foremost, wanted to work together. The specific idea rose from that desire, and the way that the 3 founders of Innocent Drinks work together is a key aspect to understand how the company’s decision making process works, and how the company got to where it is.
After 6 years of existence, Innocent Drinks is at a crossroad. The three founders of the company need to choose if they are to take the growth or the harvest path, and in case they choose the first option, if they should expand internationally or internally with new product lines. These two different growth paths reflect two different visions of the company: is it a
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Finances
With both growth and expansion options requiring equivalent amounts of investment, Innocent Drinks now faces the challenge of raising the money. In my opinion, the three founders should strive to keep a debt to equity ratio of no more than 50%, so that between all of them they would always have a controlling position. Having sold 20% of the company for £250.000 at the initial phase of the process, this should pose no problem considering the company is now a lot more valuable, and they only need £500.000. I believe their current brand equity will be enough to attract new investors.
Conclusion
In my opinion, Innocent Drinks will need to undertake several of these paths at the same time. I agree with Adam Balon.
To keep up with the momentum that’s been built up in the UK, the expansion into new product lines seems inevitable – careful not to loose focus and, mostly, expertise on the core though. This would be my very first move. Following it, I would try to take up on the interest revealed by the US retailer, as it will probably fade away in favour of some other producer if Innocent Drinks doesn’t make a quick move. In such a mature market, this opportunity will probably not repeat itself. In the US market, I’d go for some kind of brand licensing scheme, so that the bulk of the work be done by a local partner. The European expansion is also a good path, with the lower investment

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