Nantucket Nectars

1342 WordsJan 14, 20126 Pages
Nantucket Nectars: Case Study Carl Medeiros 5/1/2010 Tom Scott and Tom First started Allserve, a floating convenience store serving boats in the Nantucket Harbour during their summer holidays in college. After graduation, during the winter of 1990, Tom First recreated a peach fruit juice drink that he came across in Spain and started a side business selling his fresh juice. Everyone loved the product and they went on to open the Allserve General Store on Nantucket's Straight Wharf. They named the fruit juice "Nantucket Nectars". Tom and Tom invested both of their life savings, which was about $17,000 to contract a bottler and finance inventory in the first two years. The next two years saw them operating in an undercapitalized…show more content…
Threat Competition in the beverage industry is extremely intense. Competitors continually introduce new innovative products and consumers are bombarded by numerous choices and promotions. Nantucket Nectars has been successful with increasing sales and continually innovating new products, and grown to a middle-sized company. This position proves to be a dangerous one as it does not possess the financial strength of a large company but yet may not have the quickness and innovativeness of a small company. In addition, the entrance of big players such as Coke, Pepsi and Tropicana/Seagram with strong financial standing may reduce their revenue. Also, the past few years saw Nantucket maturing and it has begun to stabilize as a company. This is a dangerous period for the company as it might cause a crisis if they do not undergo renewal in order to rejuvenate and stay relevant and competitive. Should they go IPO? The advantages of going through an IPO would be that it would provide Nantucket Nectars interest free capital to finance growth as well as raise the company’s profile which would allow them to attract high quality customers, alliance partners and employee’s. However, the disadvantages of an IPO would be that it’s an expensive and time consuming process and would require all company information to become public knowledge. Also, it may mean that Tom and Tom would have to

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