Smooth Drink Ltd Business Report: Feasibility and Market Analysis

This business report examines Smooth Drink Ltd, a service industry venture based in Campbell Town, NSW, aiming to provide healthy, low-sugar soft drinks primarily targeting athletes. The report details the customer problem of high sugar consumption and its health implications, presenting Smooth Drink Ltd as a solution. It analyzes the business's advantages, including its unique product, competitive pricing, and strategic location near sports facilities and schools. A feasibility analysis is conducted, along with a business model outlining product offerings and marketing strategies. Critical success factors are identified, such as low competition and convenient location. The report projects revenue growth and a break-even point within two years, supported by appendices including a business canvas model and a group contribution sheet. The report highlights the potential of the business to meet the growing demand for healthier beverage options.

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Executive Summary
Smooth Drink Ltd is a business in the service industry located in Campbell Town, NSW. The
motive for the initiation of the company is to provide healthy soft drinks with the required
sugar levels to the consumers especially to the athletes around Campbell town. This is
because of the rise in campaigns from health activists on the side effects of the current soft
drinks with abnormal levels of sugar. The athletes are the primary target because of their
constant reliance on sports drinks before and after training. The business is exceptional
because it is the first to be started in Campbell town and the product itself is unique. The
price of Smooth Drink products are relatively lower compared the market prices. The
business is conveniently located near the Campbell town sports stadium and some schools
which provide a ready market for the products. The organization expects to increase its
revenue by 6% yearly and break even within two years.

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Table of Contents
Customer/Market Problem.....................................................................................................5
Advantages of the Business Idea to Solve the Problem........................................................6
Feasibility Analysis...................................................................................................................6
Business Model.........................................................................................................................7
Critical Success Factors...........................................................................................................8
Conclusion.................................................................................................................................9
References...............................................................................................................................17

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Customer/Market Problem
The consumption of soft drinks in Australia has generally been on the rise especially during
sports events or any other celebrations. Studies show that an average person in Australia
consumes over 126 grams of sugar on a daily basis (Grimes et al., 2013; Malik et al., 2010).
The worst part of it is the side effects of the regular consumption of sugary drinks which has
been attributed to several health complications including obesity, asthma heart disease and
COPD (Hu & Malik, 2010; Malik et al., 2010). Additionally, research shows that most of the
carbonated drinks with high sugar content do not offer any nutritional value (Schwartz et al.,
2009). This is contrary to the ingredient labels on most of the soft drinks. More specifically
are the side effects of the existing soft drinks on the life, health, and performance of the
athletes (Shirreffs, 2009).
Athletes dehydrate a lot due to profuse sweating while exercising and are therefore advised to
drink plenty of fluids when training. This prompts them to take in abundance the available
soft drinks with high contents of sugar and are detrimental to their health and career. Studies
have also attributed poor performance of athletes to their dietary plans (Braakhuis &
Hopkins, 2015). Research shows that high levels of sugar in soft drinks increases the risk of
diabetes and metabolic syndrome (Hu & Malik, 2010). This is because it sharply raises the
blood glucose level. Also, the intake of high sugar content in soft drinks causes significant
weight gain which affects the performance of the athlete who needs to monitor their weight
(Ballard et al., 2010). The soft drinks may also cause osteoporosis and bone fractures, which
is most dangerous to athletes who undergo strenuous bone exercises.
The present customer or market problem requires an immediate solution which will lower the
side effects of the current soft drinks while improving the health and performance of the
athletes. This is also urgent based on the campaigns from health activists against the

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promotion and consumption of the popular soft drinks that are detrimental to general human
health because of the ingredients especially the high level of sugar content. It is for this
reason that Smooth Drinks LTD has been established to offer soft drinks with sugar levels
that are approved by the World Health Organization (WHO, 2016). Smooth Drinks Ltd will,
therefore, offer hot (tea and coffee) and soft non-alcoholic beverages (carbonated and non-
carbonated water) with different flavors.
Advantages of the Business Idea to Solve the Problem
Smooth Drink Ltd is an idea established to solve an already existing problem in the service
industry. The objective of the business is to provide healthy hot and cold beverages especially
to the athletes who can comfortably be taken before and after training (Buxton & Hagan,
2012), in order to improve their performance and reduce the risk of diseases associated with
high intake of sugar.
Feasibility Analysis
Our target customers are all athletes and schools in Campbell Town, NSW. This is because
it’s inevitable that the athletes will need beverages before and after training. Also, schools
hold various sport and non-sport events and will most probably require the supply of soft
drinks. The flavors of the soft drinks will be different and will be based on the indigenous
fruits of Australia. The price range will be $1-$2 per liter, which is slightly lower than those
present in the market. Additionally, the location of the distribution outlet is near the Campbell
town Sports stadium which offers a ready market for promotions and sale.
The leading competitor brands in the industry are Pepsi and Coca-Cola. These organizations
generate billions on a daily basis (Moodie et al., 2013). But their products have received
sharp criticisms from the health and sports sectors because of their high sugar levels and have
been branded as unfit for athletes and general human consumption. The approximate price
range in the present market for each soft drink is $2 – 4 which is higher than that of Smooth

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Drink ltd. Our low prices will make our products to be easily recognized than those of our
competitors. Furthermore, our products have exceptional features such as health benefit and
delicious with the flavor of Australian indigenous fruits.
The name “Smooth Drink” is our brand and it is named so to give insight to our customers of
its unique features of health thus making it appealing to athletes who ought to be mindful of
their health. Thus Smooth Drinks Ltd will supply their products to the right market (World
Health Organization, 2012). The schools will as well be targeted by volunteering to sponsor
various sports events and sell Smooth Drink products during the events.
All equipment for production will be acquired before the commencement of the business after
proper market research has been and the decision made on which affordable and efficient
equipment to purchase. Local manufacturers will be preferred to minimize transportation and
delivery costs.
The management of Smooth Drink Ltd will comprise of five officials with me taking the
position of chief executive officer. These officials include store manager, HRM officer,
operations officer, accountant, and the technical officer. Other employees that will be
engaged on contractual basis include two drivers and two delivery persons who will work in
shifts. It is the conviction of the company that through the implementation of the right
marketing program we will increase our revenue by 6% annually with break-even point
within two years.
Business Model
Smooth Drink Ltd is a Non-alcoholic Beverages Company (NAB) that is suitably located at
Campbell Town, Leumeah Road. We sell healthy soft drinks and hot beverages. The cold
drinks include multiple carbonated and non-carbonated water with different flavors, whereas
the hot beverages include tea and coffee.

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Our soft drinks contain the recommended sugar quantity by the World Health Organization.
Furthermore, we will begin with standard but effective equipment and technology in the
production process as we strategize to expand to large scale production and modern, efficient
technology.
Smooth Drink products have been packaged with clear labels of the ingredients and their
contents. The bottles have been designed in a way that they can comfortably be held by one
hand and are of varying sizes and quantity. The entire production process will take seven
main steps right from the review of the raw materials to the time of labeling and final
packaging.
Critical Success Factors
The sector of healthy beverages has not significantly been ventured into, and yet the demand
for healthy drinks is on the rise due to the increased awareness of the side effects of the high
sugar content in the existing soft drinks. Thus, low competition and high demand is the first
critical success factor for Smooth Drink Ltd.
The convenient location of the business is another success factor. Smooth Drink ltd is located
in Campbell Town, NSW which is home to the Campbell town sports stadium, Campbell
town public schools, and many other institutions. This location ensures visibility and
continuous flow and big size of target customers. Every major sporting events at the stadium
will be an opening to promote and sell our products to the attendees and the athletes who will
afterward promote them by use of word-of-mouth (Silverman, 2011) owing to the quality and
health benefits.
Moreover, our prices are reasonably low compared to those in the market. This will
immediately arrest the attention of the target customer that is the athletes and students.
Additionally, the health benefits will much more be appealing to the athletes.

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Our structure of leadership is occupied by individuals with proven managerial skills sufficient
to successfully manage a start-up business (Abrate, Fraquelli, & Viglia, 2012). We are also
committed to constant growth and development in the provision of quality products.
Conclusion
Smooth Drink Ltd is a timely business idea which arrives at the time when there is increasing
campaign against the intake of soft drinks to the public across the globe. The competition is
similarly low for health soft drinks because the field has not been ventured into. Hence, the
business is expected to offer value to the consumers and also help alleviate the suffering that
comes with the intake of soft drinks with high sugar content. The costs of establishing the
business will be affordable since simple equipment will be used to develop the production
site. The strategic and convenient position of Smooth Drink Ltd, its name, and quality of the
products are of value since it is a new idea in a less competitive market but with expected
high demand.

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Appendices
Appendix 1: Business Canvas Model
KEY PARTNERS
- Campbell
town
Sports
stadium
KEY ACTIVITIES
- Making
Smooth
Drink
- Marketing
- Selling
VALUE
PROPOSITION
- Healthy-
low-sugar
Smooth
Drink
RELATIONSHIPS
- Personal
CUSTOMER
SEGMENT
- Athletes
- schools
KEY RESOURCES
- Ingredients
- Sales
executives
CHANNELS
- Manual
distribution
COST STRUCTURE
- Ingredients
- Equipment
- Salaries/ commission
REVENUE STREAMS
- Smooth Drink sales

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Appendix 2: Group Contribution Sheet
MGMT20143: Assessment 2 Contribution Rubric (one for each member of your team)
Name of Team Member:
Weight
ing
Fail-III Fail-II Fail-I Pass Credit Distinction High
Distinction
Contribution to the
team: Individual
students has
demonstrated they
worked productively in
the team, including
brainstorming with
others to generate a
viable set of ideas and
10% No team
and/or
collaborative
skills
demonstrated
.
Very poor
team and/or
collaborative
skills
demonstrated
.
Poor team
and/or
collaborative
skills
demonstrate
d.
Satisfactory
team and
collaboratio
n skills
demonstrate
d.
Good team
and
collaborativ
e skills
demonstrate
d.
Very good
team and
collaborativ
e skills
demonstrate
d, including
an ability to
identify
good ideas
Superior
team and
collaborativ
e skills
demonstrate
d, including
an ability to
identify
good ideas

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to solve problems
collaboratively.
by working
with others.
and solve
difficult
problems by
working
with others.
Achieving group
consensus: Individual
student has helped the
group reach consensus
on the most viable idea
to take forward for
Assessment 3.
10% No evidence
of any effort
by the
individual
student to
work toward
group
consensus.
Very little
evidence of
any effort by
the individual
student to
work toward
group
consensus.
Little
evidence of
any
constructive
effort by the
individual
student to
work toward
group
consensus.
Satisfactory
effort was
provided by
the
individual
student to
work toward
group
consensus.
The
individual
student has
provided
constructive
input to help
the group
reach
consensus
on the most
viable idea
Very strong
evidence
that the
individual
student has
been
instrumental
in helping
the group
reach
consensus
Substantial
evidence
that the
individual
student has
used a
variety of
approaches
that have
helped the
group reach

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to take
forward.
on the most
viable idea
to take
forward.
consensus
on the most
viable idea
to take
forward for
Assessment
3.
Portfolio of materials:
Evidence that the
individual student has
been proactive in
contributing to the
development of the
portfolio of materials
for the pitch in
Assessment 3.
10% The
individual
student has
been absent
from most
discussions
pertaining to
development
of materials
The
individual
student has
not provided
any effort to
development
of the
portfolio of
materials for
The
individual
student has
not provided
any
meaningful
effort to
develop the
portfolio of
The
individual
student has
provided
satisfactory
effort to
developmen
t of the
portfolio of
The
individual
student has
been
reasonably
proactive in
contributing
to
developmen
Very strong
evidence
that the
individual
student has
proactively
contributed
to
developmen
Substantial
evidence
that the
individual
student has
proactively
contributed
to
developmen

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for the pitch
in
Assessment
3.
the pitch in
Assessment
3.
materials for
the pitch in
Assessment
3.
materials for
the pitch in
Assessment
3.
t of the
portfolio of
materials for
the pitch in
Assessment
3.
t of the
portfolio of
materials for
the pitch in
Assessment
3.
t of
materials for
the pitch in
Assessment
3.

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Appendix 3: Assessment of Business Idea

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References
Abrate, G., Fraquelli, G., & Viglia, G. (2012). Dynamic pricing strategies: Evidence from
European hotels. International Journal of Hospitality Management, 31(1), 160-168.
Ballard, S. L., Wellborn-Kim, J. J., & Clauson, K. A. (2010). Effects of commercial energy
drink consumption on athletic performance and body composition. The Physician and
sportsmedicine, 38(1), 107-117.
Braakhuis, A. J., & Hopkins, W. G. (2015). Impact of dietary antioxidants on sport
performance: a review. Sports Medicine, 45(7), 939-955.
Buxton, C., & Hagan, J. E. (2012). A survey of energy drinks consumption practices among
student-athletes in Ghana: lessons for developing health education intervention
programmes. Journal of the international society of sports nutrition, 9(1), 9.
Grimes, C. A., Riddell, L. J., Campbell, K. J., & Nowson, C. A. (2013). Dietary salt intake,
sugar-sweetened beverage consumption, and obesity risk. Pediatrics, 131(1), 14-21.
Hu, F. B., & Malik, V. S. (2010). Sugar-sweetened beverages and risk of obesity and type 2
diabetes: epidemiologic evidence. Physiology & behavior, 100(1), 47-54.
Malik, V. S., Popkin, B. M., Bray, G. A., Després, J. P., & Hu, F. B. (2010). Sugar-sweetened
beverages, obesity, type 2 diabetes mellitus, and cardiovascular disease
risk. Circulation, 121(11), 1356-1364.
Moodie, R., Stuckler, D., Monteiro, C., Sheron, N., Neal, B., Thamarangsi, T., ... & Lancet

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NCD Action Group. (2013). Profits and pandemics: prevention of harmful effects of
tobacco, alcohol, and ultra-processed food and drink industries. The
Lancet, 381(9867), 670-679.
Schwartz, M. B., Novak, S. A., & Fiore, S. S. (2009). The impact of removing snacks of low
nutritional value from middle schools. Health Education & Behavior, 36(6), 999-
1011.
Shirreffs, S. M. (2009). Hydration in sport and exercise: water, sports drinks and other
drinks. Nutrition bulletin, 34(4), 374-379.
Silverman, G. (2011). Secrets of word-of-mouth marketing: how to trigger exponential sales
through runaway word of mouth. AMACOM Div American Mgmt Assn.
World Health Organization. (2012). A framework for implementing the set of
recommendations on the marketing of foods and non-alcoholic beverages to children.
World Health Organization. (2016). Evaluation of Certain Food Additives and
Contaminants:
Eightieth Report of the Joint FAO/WHO Expert Committee on Food
Additives (Vol. 80). World Health Organization.