Case Synopsis

In 2017, Dave Pace, CEO of Jamba Juice, rang the Nasdaq opening bell, focusing attention on a company that helped individuals lead healthier lifestyles. However, Jamba Juice was undergoing a health check of its own: both revenues and the stock price were down. Investors were calling for the company to slash costs and close unprofitable stores, which CEO Pace was planning to do. Jamba Juice had been the smoothie industry leader, but there was increased competition from the likes of Starbucks and quick-serve restaurants like McDonald's.Could CEO Pace mix up the product line and start afresh with franchise partners, and would that be enough to keep Jamba Juice top-of-mind with current customers and attractive to new ones?

Juice Club (which would eventually become Jamba Juice Company) was founded by Kirk Perron and opened its first store in San Luis Obispo, California in April 1990. The company began with a franchise strategy and opened its second and third stores in Northern and Southern California in 1993. In 1995, the company changed its name to Jamba Juice Company to provide a point of differentiation as competitors began offering similar healthy juices and smoothies in the marketplace. The company went public in November 2006. In December 2008, Steven Berrard, the interim CEO, named James D. White, formerly president of Consumer Brands at Safeway, as the new CEO and president of Jamba Juice.

Jamba's core customers were health-conscious consumers who led, or aspired to lead, a healthy lifestyle. Therefore, Jamba positioned its products as healthy alternatives to conventional American fare, such as hamburgers, French fries, and ice cream. Due to vast options in size, caloric density, and relative sweetness, Jamba smoothies could serve as a light snack, a sweet treat, or even as a meal replacement for on-the-go customers who wanted to avoid highly processed or sugar rich convenience foods. Recent additions to the menu included fresh juice, yogurt, salads, flatbread sandwiches, hot oatmeal and made-to-order organic coffee. The company's commitment to fresh fruits and natural products bolstered its image as a leading provider of natural food and beverages, allowing it to benefit from the healthy alternatives trend.

CEO White had instituted several sets of strategic priorities, following a business philosophy focused on branding (attention to the product attributes, and company vision and values), category leadership (smoothies, juices, bowls, and new products), business planning (for long-term global retail growth), and operations (cost cutting through productivity, efficiency in supply, sourcing, and distribution). Jamba's growth strategy included the development of new stores, increasing same store sales, increasing customer frequency, developing alternative brand channels, and increasing nontraditional and franchised stores, all with an expanded menu.

With competition highly fragmented in the specialty juice and smoothie industry, Jamba Juice had a unique opportunity, but the expansion plan to evolve the business into an active lifestyle company might have been too aggressive. With its new menu items, Jamba Juice would now be competing against McDonald's and Starbucks. CEO White had succeeded in turning the company around, posting a profit in 2012 for the first time in six years, and presented these strategic initiatives in support of the company's mission to "accelerate growth and development of Jamba as a premier healthy, active life-style brand." When White announced his retirement in 2015, he felt he had been successful, especially by transforming the chain through refranchising existing stores, and the company would benefit from a "new generation" of leadership in the person of CEO Dave Pace. Could Jamba succeed with this new leadership as it now competed against the big guns?

Discussion Questions

1.How should Jamba Juice compete? What are key forces in the general and industry environments that affect Jamba Juice's choice of strategy?

2.What internal resources and assets does Jamba Juice have that may give it a competitive advantage? How should Jamba Juice manage growth?