Strategic Management and Financial Analysis of Smoothie Company

Smoothie Inc., a successful beverage manufacturer established in 2005, has carved out a niche in the highly competitive market by focusing on high-quality smoothies using fresh, organic ingredients. Based in California, Smoothie Inc. operates two production facilities and distributes its products across major U.S. cities through both retail partnerships and e-commerce platforms. This assignment requires an analysis of Smoothie Inc.'s strategic approach to business operations, including production strategies, supply chain logistics, and sustainability initiatives. Key elements such as the company's use of biodegradable packaging, solar energy, and water recycling systems reflect its commitment to environmental responsibility while also providing a competitive edge. Financial aspects like break-even points, sales forecasts, and breakeven analysis for various product lines are critical components in evaluating Smoothie Inc.'s operational efficiency and market strategy. Ultimately, the assignment will explore how these strategic elements contribute to maintaining Smoothie Inc.’s leadership position in the smoothie industry.

Running head: Executive Summary 1
Executive Summary
Student’s Name
Institutional Affiliation

Executive Summary 2
EXECUTIVE SUMMARY
1.1 BUSINESS DESCRIPTION
The business name shall be SMOOTH DRINKS LIMITED, and it is a sole proprietorship
form of business that will be located off Fort Johnson Road opposite the Edison James Island
restaurant in Charleston, South Carolina. The business location is very appropriate because
the objective of the company is to reach all the customers in the entire area of Charleston
such as the nearby James Island Charter High School, the Edison James Island restaurant,
Bay view Soccer Complex, the Pemberton Farms and many others. The business location is
near the Atlantic Ocean which is the primary raw material for the enterprise hence this will
relatively reduce the transportation cost of the raw material to the business. The business will
be not only a means of earning a living but also a source of employment. The industry will be
a service industry selling hot and soft Non-alcoholic Beverages. Hot beverages comprise tea
and coffee whereas as soft drinks commonly referred to as cold drinks include the carbonated
and non-carbonated water, a sweetener and a separate flavor (Rani, 2014). (Ashurst, 2016).
The size of the business is average and therefore will engage employees both on permanent
and contract basis. The business will be advertised massively with a focus on offering quality
products with excellent terms and conditions with an objective of securing and maintaining
loyal customers.
1.2 MARKETING PLAN
The enterprise principally aims at consequent production and selling of its Non-alcoholic
beverages which include energy drinks, sports drinks, juice, carbonated water and instant tea
and coffee. Selling will be accomplished through advertising, distribution and promotional
technique to the its customers which include supermarkets, sole buyers, sports people in
training camps, restaurants, schools and institutions and other shop outlets. The primary

Executive Summary 3
mission of the business is to make healthy drinks which have low levels of sugar content
beneficial to both athletes while training (Stiles & Stratil, 2012) and patients.
a) Industry Analysis and Trends
Competition is expected from the major existing companies in the industry namely Pepsi and
Coca Cola (Hitt, Ireland & Hoskisson, 2012). These companies are indeed established in the
industry. However, their products face challenges in the market due to their extremely high
content of sugar and thus have been criticised as detrimental to patients and athletes. Smooth
Drinks Limited has initiated plans to produce drinks with minimal levels of sugar content
which can even be consumed for leisure (Sholtis et al., 2013). The other challenge for the
business in venturing into the industry is market positioning hence the decision to venture the
niche market of energy drinks. The enterprise expects a growth of revenue by 6% annually
with the implementation of an appropriate marketing program and a thorough industry
analysis which has enabled Smooth Drinks Limited to understand its position in the market in
comparison with the companies of similar products (Player, 2014)
b) Strategic Position and Risk Assessment
To measure the competition and customer service of business, Smooth Drinks Limited has
undertaken their strategic positioning by providing their products to the right market (World
Health Organization, 2012). The company will make use of sports events such as a
distribution channel by first sponsoring them and after that selling the products to the athletes
and fans (Wilson and Gilligan, 2012).
Smooth Drinks Limited is has carried out its risk assessment and discovered three critical
threats to its operations and the respective solutions:

Executive Summary 4
i) Technological Hazards: The business is most likely to face the challenge of insecurity of
its technical equipment and data, but plans are in place to hire consultants.
ii) Regulation: The enterprise is to deal with food items and thus sanitation of the highest
level is to be maintained as per the state laws.
iii) Competition: This is the primary challenge of any organization (Sharma, 2012). The
industry consists of companies that are well established, and it will take time and effort to
have their market share.
1.3 ORGANIZATIONAL AND MANAGEMENT PLAN
Vertical organizational authority will comprise the business management. The recruitment
and subsequent appointment into all the organization departments will solely be done on the
basis of qualification and skill. The employees will be motivated based on the established
benefits and compensation program. Also, the company will carry out staff appraisal for
identification of performers and also non-performers with an objective of encouraging the
workers to work hard and be performers towards the achievement of the company goals and
mission. It is the wilful intention of the business to develop a vibrant upward and downward
communication process which supports two-way communication. The management will be
inclusive to incorporate the opinions of the staff in decision making and to work on them
promptly. The strategic plan of the organization adheres to ethics and social responsibility
(Scholtens & Kang, 2013) and is already offering jobs to persons with lower qualifications
without any discrimination on any basis (Fraedrich, Ferrell & Ferrell, 2013).
1.4 OPERATIONAL/PRODUCTION PLAN
The business is projected to attain high operation standards to satisfactorily meet the demands
of the customers. All tenders shall be considered reasonably. Health and safety Regulations to

Executive Summary 5
employees and the environment are to be observed strictly by the management since the
company is making beverages that are healthy and of quality (Khan, Muttakin & Siddiqui,
2013). This further enhances business social responsibility to the community, the state and to
the staff which is to improve the corporate image.
1.5 FINANCIAL PLAN
Smooth Drink Limited requires $285,790 as a start cost to advance the business prospect. The
amount will service the cost of raw materials, machinery, personnel, pre-operational costs,
and licences. The anticipated business structures include:
Capital required $285,790
i. Owner’s equity $265,790
ii. Friends and family $20,000
The capital to be employed in the business $285,790, the pre-operational cost shall be
$265,790. The estimated working capital for years 2013- 2017 is as follows:
Year Amount
2013-1St quarter $ 47897
2013-2nd quarter $ 71,143.00
2013-3rd quarter $ 142,994.00
2013-4th quarter $ 278,785.00
2014 $ 1,163,088.00
2015 $ 2,839,781.00
2016 $ 8,215,239.00
2017 $ 22,595,608.00

Executive Summary 6
The summary of the respective ratios is as follows:
Year 1 (2013-
2014)
WC
(Working
Capital)
CR
(Curren
t Ratio)
QR
(Quic
k
Ratio)
CT (Cash
Turnover
)
DE
(Debt
to
Equity
)
RoI
(Return on
Investment
)
RoS
(Retur
n on
Sales)
RoA
(Retur
n on
Assets)
Quarter 1 $47,897 5.85 5.85 8.63 0.07 -10% -6% -9%
Quarter 2 $71,142 5.09 5.09 6.82 0.08 11% 6% 10%
Quarter 3 $142,995 4.48 4.48 3.98 0.12 27% 17% 24%
Quarter 4 $278,785 28.20 28.20 2.40 0.02 35% 26% 35%
Year 2 (2014-15) $1,163,088 N.A. N.A. 3.60 0.00 85% 27% 85%
Year 3 (2015-16) $2,839,781 N.A. N.A. 2.93 0.00 73% 27% 73%
Year 4 (2016-
2017) $8,215,239 N.A. N.A. 2.05 0.00 85% 42% 85%
Year 5 (2017-
2018)
$22,595,60
8 N.A. N.A. 1.52 0.00 83% 55% 83%
A summary of the break-even analysis is as follows:
Year 1 (2013-2014)
January $151,385
February $151,343
March $151,300
April $151,258
May $151,217
June $151,175
July $151,133
August $151,092
September $151,051
October $151,010
November $150,969
December $150,928
Monthly Average $151,155
Year 2 (2014-2015)
January $156,128
February $156,086
March $156,044
April $156,002
May $155,960
June $155,919
July $298,682
August $298,607

Executive Summary 7
September $298,531
October $298,456
November $298,380
December $298,305
Monthly Average $227,259
Year 3 (2015-2016)
Quarter 1 $1,381,992
Quarter 2 $1,380,998
Quarter 3 $1,380,635
Quarter 4 $1,379,629
Average (Quarterly) $1,380,814
Year 4 (2016-2017)
Quarter 1 $1,912,757
Quarter 2 $1,911,319
Quarter 3 $1,909,862
Quarter 4 $1,908,382
Average (Quarterly) $1,910,580
Year 5 (2017-2018)
Average (Annual)
$10,028,10
9

Executive Summary 8
References
Ashurst, P. R. (2016). Chemistry and technology of soft drinks and fruit juices. New Jersey:
John Wiley & Sons.
Fraedrich, J., Ferrell, L., & Ferrell, O. C. (2013). Ethical decision making in business: A
managerial approach. South-Western/Cengage Learning.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic management cases:
competitiveness and globalization. Cengage Learning.
Khan, A., Muttakin, M. B., & Siddiqui, J. (2013). Corporate governance and corporate social
responsibility disclosures: Evidence from an emerging economy. Journal of business
ethics, 114(2), 207-223.
PLAYER, G. T. H. T. (2014). Amazon. com, Inc. Strategic Management and Business
Policy: Globalization, Innovation and Sustainability.
Rani, K. I. R. T. I. (2014). A novel biodegradation study of toluene driven chemically
modified egg albumin preparation for release of entrapped Glycine max amylase with
alkaline proteases. Int J Pharmaceutical Res, 6(4), 100-103.
Scholtens, B., & Kang, F. C. (2013). Corporate social responsibility and earnings
management: Evidence from Asian economies. Corporate Social Responsibility and
Environmental Management, 20(2), 95-112.
Sholtis, S. A., LeClair, T. F., Ihrie, R. W., & Del Favero, J. R. (2013). U.S. Patent No.
8,554,644. Washington, DC: U.S. Patent and Trademark Office.

Executive Summary 9
Stiles, P., Uhl, A., & Stratil, P. (2012). Meta management. A Hanbook of Business
Transformation Management Methodology (Uhl, A. and Gollenia, LA, Eds), 1, 13-29.
Wilson, R. M., & Gilligan, C. (2012). Strategic marketing management. UK: Routledge.
World Health Organization. (2012). A framework for implementing the set of
recommendations on the marketing of foods and non-alcoholic beverages to children