Case Study : Healthy Potion ( Hp )

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Case Study
Healthy Potion (HP) is a small, unique business operating within the $1.1 billion Australian functional beverage industry (Gargano 2014). HP specialises in the production and sale of a single health beverage product. In the past two years the company has made significant profits and has found a niche in the industry with a loyal customer base. However, reliance on a single product raises concerns about instability and profitability in the future and thus HP’s vision has evolved into one of growth and expansion. Through the use of a SWOT analysis coupled with Porter’s Five Forces Model, this report will explore potential business development strategies and will recommend, along with a fund raising plan, the most
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• Reliance on single supplier: Porter (2008) argues that if a supplier has significant control over an important input in a firm’s production process, changes in the supplier’s condition is outside the firm’s control. Therefore if the supplier increases the price of its product, HP is forced to pay this new price thus increasing expenses.
• Branding: Porter (1979) suggests that brand recognition particularly in the beverages industry provides a barrier of entry to new firms. HP does not have a recognisable brand, thus, if a firm with a successful marketing campaign entered the industry, HP could lose market share very rapidly.
• Size: As a sole proprietorship with one supplier and one brick and mortar store, HP has a small presence in the market with limited channels of distribution. According to Stan (1946) HP therefore lacks the resources for long-term financing and R&D. Legal battles and stringent government regulation will also become a problem.
• Positive image: HP has had no public relation hiccups. A survey conducted by Ipsos MORI, found that 83% of consumers say that a company’s social responsibility is important when considering a purchase (Ramrayka 2006). This is to HP’s advantage because having done nothing ethically irresponsible, consumers are more likely to be satisfied with their purchase.
• Growing market: HP is operating
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