Essay on Jamba Juice Case Study

3192 WordsMar 30, 201213 Pages
External Analysis The General Environment of the Industry Jamba Juice and its immediate competitors operate under the industry entitled “snack and nonalcoholic beverage bars” [ (U.S. Census Bureau) ]. According to the U.S. Census Bureau the official description of the snack and nonalcoholic beverage bars is as follows: “This U.S. industry comprises establishments primarily engaged in (1) preparing and/or serving a specialty snack, such as ice cream, frozen yogurt, cookies, or popcorn or (2) serving nonalcoholic beverages, such as coffee, juices, or sodas for consumption on or near the premises. These establishments may carry and sell a combination of snack, nonalcoholic beverage, and other related products (e.g., coffee beans,…show more content…
In analyzing the bargaining power of buyers, it is important to look at both categories under a separate scope. End users are those individuals walking in the company stores, ordering a smoothie and a cookie, paying the cashier and then telling her friend how wonderful the ambiance is. This buyer segment does not purchase large amounts of product at one time and likely chooses Jamba because of the quality of the ingredients. With no switching costs and a growing industry offering many options, patrons of smoothie cafés can freely purchase their delightful cool beverage anywhere. According to the U.S. Census Bureau the number of stores within the “snack and nonalcoholic beverage bars” industry grew from 36,036 in 2002 to 49,463 in 2007 [ (U.S. Census Bureau) ]. This trend means that Jamba Juice will have to increase customer loyalty to battle the increased competition. The second type of buyer is the franchisee, which pays Jamba Juice for the right to use its trademarks and proprietary business information (recipes, processes, menus, and other resources). As noted in the case, Jamba engaged in a growth strategy in 2007 that involved acquisition of a majority of the franchised locations. This approach reduced the franchisee’s buying power and allowed Jamba to have the upper hand. With the downturn of the economy forthcoming, franchise demands would likely deteriorate. In spite of the growth opportunities offered by franchises, Jamba maintained

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