JAMBA JUICE

Group 6Duc Dam, Vinh Nguyen, Mary

Kim, Jake Hobbs

Introduction

• Jamba Juice is a leading restaurant retailer of better-for-you food and beverage offerings, with smoothies and juices being the main products

• Vision: To inspire and simplify healthy living• Mission Statement

“Jamba Juice has been aiming at leading people in the world to healthy lives through keeping their traditional and advancing

style.The priority is to provide healthy food and bring happiness to everyone. We treat all of our customers with respect and warm

hearts, and try to bring them fun and energy to last their whole day by purchasing our products.”

History

• 1990 - founded in California• 1993 - opened 2nd and 3rd stores • 2006 - went public as NASDAQ-traded JMBA• 2008 - significant leadership changes• 2013 - 788 locations: 301 company-owned,

454 franchise stores, 33 licensed sites overseas

Value Chain Analysis

• Market opportunity: health-conscious population• Primary Activities– Product expansion:

• Jamba Kids targeting young population• Food and hot beverages aiming to reduce seasonal variability• Consumer packaged goods leveraging on healthy brand

– Marketing: top-of-mind products, word-of-mouth– Operation strategy: franchise stores, reduce costs

• Support Activities– Infrastructure: growing number of stores

Financial Analysis

Total costs/RevenueRevenue Growth

Sales per storeYear 2007 2008 2009 2010 2011 2012Comp-owned stores 501 511 478 351 307 301Franchise stores 206 218 260 391 443 473International stores 0 0 1 1 19 35Total 707 729 739 743 769 809

Company-owned stores Franchise and other stores

DuPont Analysis

Profit Margin Debt Ratio

Asset Turnover Return on Equity

External Analysis

Threat of New Entrants

• Many threat of new Entrants as McDonalds and Starbucks entered the smoothie market after 2009.

• Jamba Juice found this as a validation of the potential of smoothies in the market.

Bargaining Power of Suppliers/Buyers Substitutes• Jamba Juice as a supplier has low bargaining power

as it is now one of many smoothie providers in the market.

• There are many threats of substitution in the market. E.g McDonalds, Smoothie King, Starbucks.

• Buyers have high bargaining power in the Jamba Juice market as they can purchase smoothies of similar varieties at other providers for a cheaper cost.

Stage of The Industry Life Cycle

Maturity Phase- Jamba Juice is currently in it’s maturity phase of the industry life cycle. Jamba Juice has been in the smoothie market for 22 years and is currently just trying to maintain its yearly revenue while staying competitive in relation to other smoothie providers in the market.

Macro Environment Key Rivals

McDonalds- Offers a cheaper alternative to current smoothie options at Jamba Juice.

Starbucks- In the last couple years joined the smoothie race along with already being a seller of coffee.

Panera Bread- Added the smoothie factor to their already healthy line of food items.

Social/Economic Environment

• Jamba Juice usually makes appearances in the media via a charity event to initiate a new store opening.

• Jamba Juice gains attention through appearances in newspapers such as the New York Times and the Wall Street Journal as well as on television on shows such as Good Morning America.

SWOT Analysis

First of its kindFocuses on health

and nutritionStrong brand name in health-conscious

food industry

Seasonal variabilityWeak marketing

strategy

Franchise storesGrowing health-

conscious population

Strong competitionGrowing costs on

fruit transportation

VRIO Analysis

• What is a VRIO Analysis?– Mission/Vision

StatementObjectivesInternal&External Analysis– 4 step question asked about a resource or

capability to determine its competitive potential– The question of Value– The question of Rarity– The question of Imitability– The question of Organization

VRIO - Value

• Is this resource or capability valuable?• Procurement:

– Buys from Sygna (subsidiary of Sysco Foods)• Technology:

– Procedural enhancements– Labor management

• Human Resources– Hires experienced managers– Customer service oriented employees– Financial incentives

VRIO - Rarity

• Is control of the resource/capability in the hands of a relative few?

• Jamba Juice sustains competitive advantage by meeting substantial amounts in supply over time and creates a work atmosphere where everyone believes in their objectives and strategies

VRIO - Imitability

• Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability?

• Jamba Juice gains first-mover advantages in the market by obtaining fresh produce every day compared to their competitors

• Ie: Smoothie King

VRIO - Organization

• Is the firm organized, ready, and able to exploit the resource/capability?

• Is the firm organized to capture value?

• Jamba Juice has broke through the market by being the lead provider of all fresh-made juices, first of its kind, etc.

Jamba’s Three Generic Strategies

Competitors’ Strategies

• McDonald’s – Overall Cost Leadership

• Starbucks – Differentiation

• Panera – Differentiation

Types of Diversification

• Fresh

BCG Matrix

Market share

JamHealthy smoothies

Mar

ket

gro

wth

Hig

hL

ow

High Low

Jamba for KidsConsumer

Packaged Goods

Recommendations

• Continue focusing on healthy products• Target on young customers• Pursue a franchise business model, reduce

amount of capital required• Increase marketing expenditure and expand

more aggressively• Acquire a young business with hot beverage

products (coffee, tea) if possible