Page 12 - CIMA MCS Workbook November 2018 - Day 1 Suggested Solutions

CIMA NOVEMBER 2018 – MANAGEMENT CASE STUDY

EXERCISE 1 (continued)

GRAPPLE must ensure that it matches its strengths to any opportunities identified when
considering future strategic development options. Failure to do so will leave GRAPPLE exposed to
unnecessary risk by attempting to achieve strategic options without the resources or
competences to fulfil those options.

In addition, failure to address and remove weaknesses may leave the organisation exposed to
future threats. This is particularly relevant for GRAPPLE given the increasing social and health
concerns and the resultant increase in complexity associated with soft drinks manufacture. As
with any business, ultimately customer demand governs success and enhances the
manufacturer’s brand. Brand is a key factor in dictating the future success of GRAPPLE.

Customers have considerable choice as to which soft drink they choose and although the market
is “sewn up” by the two main providers, GRAPPLE will need a detailed and continuous flow of
information on customer demand, social trends, technological developments, environmental
issues and spending patterns etc. to ensure that the right product is available at the right time and
in the most cost effective format.

Alternatives available to GRAPPLE are:
 Market penetration. GRAPPLE could opt to maintain or increase its share of existing

markets with existing products but in a changing environment, with the industry having to
meet increasingly innovative production processes, technology and social change, this is
unlikely to succeed. The industry is used to being dependent on product development both
in the aspects of new flavours, taste s and packaging. GRAPPLE will need to maintain an
innovative approach to survive e.g. by responding to environmental, regulatory and socio‐
demographic trends and enhancing their products as appropriate.
 Product development. GRAPPLE could develop strategies based on launching new products
or by enhancements to existing products to its existing markets e.g. continuing to innovate
with new sugar free drinks, mixers and fruit juices. The market has become dependent on a
range of factors and taste and price are no longer the only criteria for beverage launches:
brands need to meet consumer demand for health, natural ingredients, responsible
sourcing and sustainability. e.g. Vimto Remix Watermelon, Strawberry & Peach; “sugar
free” Red Bull or botanical soft drinks from AG Barr who launched Strathmore Botanics in
Orange & Mandarin, Apple & Elderflower and Pear & Elderberry
 Market development. GRAPPLE could develop new markets for existing products e.g.
expanding into other countries close to Zedland or further afield such as China, Asia, Brazil,
Japan, India and Germany.
 Diversification. GRAPPLE could launch new products into new markets e.g. health drinks,
sports drinks or “clean” energy drinks. If GRAPPLE has a range of insufficiently profitable
products it might find it makes the most strategic sense to establish a new range maybe via
a joint venture with another company or create an alliance to facilitate.

Each of the above suggestions would need to be evaluated before implementation which entails
considering each strategic option in terms of its feasibility and fit with the strengths and core
competences of the business.

62 KAPLAN PUBLISHING