Business Plan for Tesco's Organic Energy Drink

This report discusses the business plan for Tesco's new product, an organic energy drink, including market analysis and opportunities.

Enterprise and
Entrepreneurship

Executive Summary
Enterprise is the business which is developed by the creative mindset using innovative
business idea. Entrepreneurship is the mindset which create that business and become
entrepreneur. Many start-ups are taking place in the market and become popular because of their
innovative ideas which leads them to become successful. Tesco is the second largest supermarket
ranges in retail industry in UK. It develops a new business plan to launch a product which is
organic energy drink. It is created with organic substances and helps the consumer to maintain
the energy level in them. This report discusses their new product with the market analysis and
opportunities.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
Business Plan...................................................................................................................................4
Product/Service............................................................................................................................4
Identification of Customers.........................................................................................................4
Competitors..................................................................................................................................5
Skills Analysis.............................................................................................................................6
Profit and Loss account with 2 years cash flow..........................................................................7
Sources of Funds..........................................................................................................................9
Resources.....................................................................................................................................9
Management Information System..............................................................................................10
Vision of Business Idea.............................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Enterprise the business which is developed by the person for profit motive.
Entrepreneurship is the mindset of the person who uses it to develop the business. Innovative
idea in business are appreciated in market. So in this report, the business plan is introduced for
the Tesco's new product which is organic energy drink. This report discusses the future of the
business proposal, identification of the target market, competitors, skills assessment,
investments, resources and vision is described.
Proposed product: The new product which is offered by the company is organic drink which is
specially designed to those people which helps to improve their overall health and also make
them energize. As most of the customers are quite concern regards to their health and that is
why, offering them the new energy drink will be more better and leads to fill them with energy.
Business Plan
Product/Service
Tesco is leading name in the retail industry in UK, as it has huge range of supermarkets
in the market at global level. They provide the grocery items to their consumers at affordable
prices. Now the company thinks to launch new product which is organic health drink. This new
product is based on the organic substances used in it to prepare it. As it is an energy drink for the
people, it fresh the mood of people and fill them with new energy. Many energy drinks are
available in the market but this will be different from others like it has organic substances in the
drink which is healthier for the people. It launches in different packages and also other flavours
are available in the market. So the company launches this product with intellectual property use
like trademark of the company, so they will maintain their identity and other will not copy it
(Kerrison, 2018). Also, company can patent their new product.
Identification of Customers
Tesco has huge market coverage, so they can target they target youth for the consumption
of their new health drink which is organic. As it is very healthy for the health it will be get fame
soon, people appreciate this product because it energise them and give freshness. But company
has many supermarket stores, so anybody can purchase the drink from their stores. It is
beneficial for health so any age group can drink it. Company target to sale their new products as
much as they can reach to the people, like customer who come to their stores for visit or
shopping the products, they target them and cross selling will be adopted at stores. Also this

product will be available online, so they can grab more consumers for their products. For
enhance in the sales of the products company USP the (unique selling price), it is the lowest cost
for product (Meyr, Wagner and Rohde, 2015). Customers will attracted for such health conscious
products at low prices it leads to more consumption of the new product in market. Today's
generation is very fast and health conscious, so they need the same energy for doing the work in
whole day, the proposed product will meet the customers criteria, as youth needs it more. Energy
drink is beneficial for them without harming their heath as it contains the organic substances.
Company has good position in market so in market research it is analysed that company's
product are appreciated more than other companies and trustworthy So the target segment of
Tesco has need of such kind of innovative products. According to the demands of the consumers
company thinks to launch the organic energy drink in market (Meyr, Wagner and Rohde, 2015).
Target people: As Tesco offer new product and for that the target customers are based upon
demographic profile such that people whose age is in between 18-35 and lower middle, upper
middle and high class people are target which in turn leads to improve the financial position. As
these age groups are more conscious and that is why, company select these group only. On the
other hand, with the help of differentiated marketing style, company is able to meet the define
aim and also target range of customers towards it.
Competitors
Tesco has various competitors for the new products which are already stable in market so
the company have to market research about its competitors, they have to compete with Red Bull
Energy Drink, Monster Energy Drink, Rockstar Zero Carb Energy Drink, Zipfizz Energy Drink,
VPX Redline Xtreme RTD (Ready-to-drink Energy Drink), Starbucks Refreshers, Living
Essentials 5-Hour Energy, CytoSport Fast Twitch RTD. These are the key player in the market
which already exist, and they have good position.

These key players in market have share a lot, so the Tesco had to suffer a lot to sale their
new products with competitors like Red Bull, burn etc. But company has uniqueness in their
product as they added the organic substances in their product which help the consumer to
maintain their health (Madanhire and Mbohwa, 2016.). So the customer can choose their product
over these brands. Through the above, it is interpreted that there are so many competitor which
Tesco face and that is why, the pricing strategy should be developed after analysing other’s
price. Such that Cloud 9 is occupied 25% of the total market share of an energy drink and while
on the other side, the highest share is occupied by Redbull i.e. 60% from the total and thus, this
shows Tesco needs to be change its overall strategy after analysing the market share and this will
help to improve the overall performance as well. As in the competitive era, every company wants
to be stay ahead in the competition and that is why, there is a need to develop strategy that assist
to improve the overall performance in positive manner.
Skills Analysis
Company have to put efforts for the launch of their new products in the market as it is
new in market it needs to be promoted and at higher level so that people come to know about the
products. So the company has good marketing skills as they have already a brand name in the
market. So company needs the business skills in terms to launch new product in market, and
they have to build new strategies for marketing the products. Company already have innovative
Illustration 1: Market Share of key player

skills to think about new business idea which gives profit to them. Communication skills is also
needed by the company to reach more customers, and they can convince the customers to try
their new products (Candeia, Santos and Lopes, 2015).
As company developed their technical skills to prepare the model of new product. They
take suggestions from their employees so that this will lead to success. But there may be lack of
the leadership skills for motivating their employees to sell their products, as the employees need
to be leaded and guided to sell their products. It will increase their sales. But if it is neglected
then it will lead to failure.
In addition to this, there is a need to have a financial management skills which in turn
leads to set the budget and effectively manage the finance of a business. Also, a strong
negotiation skills is also required which help to convince the people on the basis of need.
Moreover, company’s manager should also possess delegation and management skills that leads
to manage the entire work and this in turn leads to take a business towards a further level of
success. Along with this, manager delegate the specified roles and responsibilities to their
employees with a motive to meet the define aim. Overall, interpersonal skills are also required in
order to manage the entire work and with the help of innovative skill, communication skill,
technical skills, leadership, financial and delegation skills, company is able to meet the define
aim and take a business to further level of success.
Profit and Loss account with 2 years cash flow
Profit and Loss Account for two years (2018-2019)
Particulars 2019 2018
Opening stock 412 367
Purchases 73465 45666
Direct Expenses 58789 36557
Gross Profit 4225 3467
Total Operating Expenses 62019 56009
Profit 1324 1222

Non-Operating expenses 5696 3489
Operating income 12334 10566
Non-operating Expenses 23243 21434
Exceptional items 34356 14655
Finance Cost 89867 79348
Depreciation 80 -
Net Profit Before Tax 1705 1209
Cash Flow for 2 years
Operating Cash 2019 2018
Sources of Cash
Receivable Collection 10000 8000
Customer Deposits 5000 3000
Loan from bank - -
Total sources of cash 15000 11000
Uses of Cash
Payroll and Taxes 1500 1000
Purchases of Fixed assets 2000 1500
Owners compensation 2500 2000
Rent 1500 1000
other 5000 4000
Total of uses of Cash 12500 9500

Difference of total sources of
cash and total uses of cash
2500 1500
Hence company has arrangement of cash flow which help them to run the business further.
Sources of Funds
Tesco is very big retail company, it has so much investors and stakeholder which can
invest in the new product. As company proposed the business plan about the new product, it is
approved by all the investors, funders of the company then it can get the help to grow their
business. As company has shareholders, so that they can invest into it (Zwick and Jurinski,
2019). Company have no problem from funding but its return the investment amount in profit to
their investors. According to the market analysis the company can take the competitive
advantage as they have innovative business idea which gives lots of profit to the company. They
can grab this business opportunity for sustaining future for long term.
So, having a brand image at international level and string financial ability, company is
able to manage the fund by their own such that its shareholders who invest into the business with
an aim to get positive return.
Resources
Company is working since many years so it has all business experiences and it knows
how to utilise the resources. So they can use the tangible and intangible resources to enhance the
productivity and sales of the product. They have to export new machineries at their product units
which help them to produce the item. Also, they appoint new employees and worker at their sites
so that they can work more to give productivity. They will not disturb the existing team members
so that their business will not suffer from loses. They also use the intangible resources like they
improve their quality of the services so that it enhances their sales. It will produce good result for
the company (Butler, 2016).
Tangible resources: These resources are touched and in order to develop new business,
company require tangible resources such that employees who use their innovative skill and
develop the same in order to attract range of customer. Also, it needed machine which assist to
make the juices easily and then hire new suppliers who easily reach to range of customers.

Intangible resources: These type of resources are not touch by hand and thus, its goodwill,
innovative packaging style are consider as an intangible resource that helps to sustain the brand
image of the company.
Investment also included the cost of the resources so that it may suffer from loses in
future it will provide aid to the company, and company will not suffer from such things. They
have back end amount to provide the costing of labours and machineries at their plant.
Management Information System
Tesco should gather all the data about their customers, and their competitors in the
market. So this will help them for further analysis of market. Data analytics tools which are
available online company can use them to gather required data about the market. Also, if the
company launches new product in the market, their manufacturing or production units should
maintain the communication about the inventory so that it will prevent from the inventory losses.
It needs high -tech gadgets used in the company so that they can enhance their productivity. So
to maintain such things there is need of proper management information system. Top authorities
should communicate with managers and then managers will distribute the roles and
responsibilities to the executive sand worker of production and manufacturing units. It maintains
the flow of information, if anything went wrong then managers should be informed on time so
that they can communicate properly and resolve the issue on time. It has effective control all
over the process of the products from raw material to sales (Wood, and Butler, 2015). Then
analysis of the sales and growth in the business is analysed by the company to take further
actions.
In addition to this, company also uses management reporting system which in turn helps
to design the report which assist to produce reports about operation and finance of all level of
management in a company. Through this MIS, manager of Tesco also compare the performance
of company with past performance and then realized the expected outcome as well. Hence, this
report is used by the upper management in order to determine the financial output and its
efficiency of operations with a set goals as well.
Vision of Business Idea
Company launches the new product organic energy drink with aim of healthy life for all,
which is beneficial for the health and it is a cost-efficient product. This product secure the future

of the company and leads to launch more likely product in the market in upcoming 6 months.
Tesco vision is to cover the energy drink market and become leading in industry as well. So, by
developing this new product within a market, in future the company will become the top leader
in drink and compete its competitor within 1 year.
CONCLUSION
Tesco has business plan to launch a new product which is organic energy drink. It is
beneficial for health, as youth are more attracted towards such products, so it may become
successful. As company hold a good market share so this product will help the company to
enhance in their growth and profit share.

REFERENCES
Books and Journal
Meyr, H., Wagner, M. and Rohde, J., 2015. Structure of advanced planning systems. In Supply
chain management and advanced planning (pp. 99-106). Springer, Berlin, Heidelberg.
Kerrison, E. M., 2018. Risky business, risk assessment, and other heteronormative misnomers in
women’s community corrections and reentry planning. Punishment & Society. 20(1).
pp.134-151.
Madanhire, I. and Mbohwa, C., 2016. Enterprise resource planning (ERP) in improving
operational efficiency: Case study. Procedia CIRP. 40. pp.225-229.
Candeia, D., Santos, R. A. and Lopes, R., 2015. Business-driven long-term capacity planning for
saas applications. IEEE Transactions on Cloud Computing. 3(3). pp.290-303.
Zwick, G. A. and Jurinski, J. J., 2019. Tax and financial planning for the closely held family
business. Edward Elgar Publishing.
Butler, S., 2016. Tesco delayed payments to suppliers to boost profits, watchdog finds.
TheGuardian.
Wood, Z. and Butler, S., 2015. Tesco cuts range by 30% to simplify shopping. The Guardian.