Drink-Up - a Juice Company Case Study

Team 5 Project Final Report

April 24th, 2016

Executive Summary

Drink-Up is a Miami-based juice company with new CEO Luisa Richardson at the helm. The firm dominates the market for juice demand in restaurants and school vending machines. Increasing pressure from the parent company in Chicago has caused Luisa to evaluate the stagnant sales growth and upcoming competition.

Following the merger, Drink-Up retained its small, traditional value structure, finding itself resistant to change in an evolving market. A innovative product proposal from the chief scientist and the marketing director to the former CEO ended in disaster, reinforcing a culture that rejects creativity and originality. Juice offerings by the company are basic, selling standard flavors with limited sales channels.  Advertising and marketing efforts are minimal to nonexistent, failing to engage an information-hungry public.

An action plan developed to propel Drink-Up into the future consists of three main components. The first step is to increase brand visibility, focusing on reminder advertising and utilizing social media to reach a wider audience. Second, developing new product lines aimed at health-conscious parents and teens will allow the company to enter different markets. Creating a website for direct-to-consumer sales is a crucial aspect of this step. Finally, the organizational culture must be revitalized. Renovating the company workplace to promote social interaction within the employees and the generation of fresh new ideas will be key. We also outline a process of reorganizing roles within the company to increase creativity and job satisfaction. Employee motivation techniques and team building activities are highlights of the final step of company-wide rejuvenation.  

Section I - Drink up

Background

Luisa Richardson is the newly-appointed CEO of Drink-Up, a successful juice company based in Miami. Extremely hard-working and drive, Luisa has been a member of the Drink-Up team for 15 years. To date, the company has maintained high market-share in restaurants and school vending machines. Competition has been scarce, further solidifying Drink-Up’s position. Over the last four years, profits have failed to increase and Luisa is under pressure from the parent company in Chicago to address the issue.

From the start, Drink-Up has made minimal changes in their product offerings. Many of the employees have been with the company for the entirety of their careers. Despite the acquisition by the holding company, the traditional organizational values were preserved. These ideals reflected the beliefs of the Cuban-born founder.

Carol Valez, Drink-Up’s chief scientist, teamed up with marketing director Sam Jenkins to create a series of new and exciting drink flavors.  Responsible for improving drink taste, Carol was excited to enhance the juice offerings in an innovative way. Sam was known for his offbeat approach and this was often ill received by other employees. The duo presented their creations to the previous CEO Garth LaRoue, but the drinks were reacted to poorly. Using company time to invent new flavors was deemed as an unauthorized action and Garth was displeased with Sam and Carol. Following the negative product pitch, Sam left the company. He took his ideas to a new start-up, which is now growing rapidly and presenting itself as possible competition. Carol is still in her position, however she has expressed her dissatisfaction with the inability to implement any change and the stagnancy of Drink-Up as a whole.

Carol’s sentiments about the company is one of the many reasons Luisa is concerned for the future of Drink-Up. Previous attempts to revitalize the company’s image have been met with criticism and hesitance from the more tenured employees. Generally they maintain an attitude of preserving tradition and resisting change.

The company does not focus on marketing their products and offer a limited range of basic juice drinks. Losing an innovative employee and the negative reinforcement towards creativity have pushed possibilities of future evolution to the wayside. To see the company succeed, Luisa will need to evaluate the current organizational values, and identify what motivational changes she will need to enact to create positive growth and stay competitive in an evolving market.

Identify the Issues

Drink-Up is experiencing economic and creative stagnation. The company has seen minimal change in their product offerings since their inception. Attempts to introduce new product lines have been met with strong resistance by the company's tenured members. The recent situation with the lead scientist and marketing director shows a negative perception of change by senior management and their influence on the culture. The traditional ways are inhibiting creativity and are also causing a hostile environment for new and innovative employees.