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In the future, do the goals and needs of the company need to change in order to fit the modern environment? If so, how? If
In the future, do the goals and needs of the company need to change in order to fit the modern environment? If so, how? If not, why not?
Case study references are attached.
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How It All Started \"It was all very subsistence. We literally ju st were hanging in there and I worked nights doing dishes in a restaurant, and we were definitely hand -to-mouth,\" remembered Roger Harris, Director of Sales and Marketing and also one of Phoenix's founders. Phoenix relied on government business development money and personal scrimping to get the company going in those early days. Harris met Managing Director, Chris Morrison, and partner Deborah Cairns in 1987all part of a circle of people involved in organic urban gardening. Morrison and Cairns had started a small business making naturally fermented ginger fizz in their Auckland at. \"We used to go around the pubs and pick up the old Steinlager bottles and take them home and soak them in our bath to get the cigarette butts out and all that filthy stuff,\" Morris on remembered. A friendly restaurant owner let them sterilise the bottles, which they then took back and refilled with ginger fizz using a jug and fun- nel. \"All very primitive,\" Morrison admitted, but a product whose natural properties they all felt attuned to. Morrison and Cairns made ginger fizz for about a year. The business started to grow, taking over more of the couple's time. Cairns dropped out of the course she was taking and the couple had the first of four children. All was well, if hectic and slightly chaotic, when Morrison met Harris. \"He had a similar vision to usto make a healthy alterna- tive to the drinks out there, one with a premium edge,\" Morrison said. Harris tells it slightly differently. \"I think they saw me as the big mouth that wouldn't shut up . . . that could be quite useful out there in the trade, selling,\" he said. Harris had his work cut out for him. Ginger fizz was developing a strong following, but was a challenge to market and sell to cafes. \"I was out there growing distribution, but the product was not ideal. One of the problems was that it really needed to be treated as a very volatile, fresh product, but the perception was that it was just another soft drink.\" He had to explain to puzzled cafe owners that the ginger fizz had to be han- dled gently and refrigeratedor it would blow up! The ginger fizz had a kick that could be downright dangerous. In hot weather it could explode and ricochet around the old van that Harris used for deliveries. Once a crate took off like a rocket and smashed against the roof of the van. Harris decided the business needed to upgrade. \"I thought, there's got to be a better way, we can't keep doing this, it's going to kill me,\" Harris said. From a Flat to a Firm Phoenix began as a part-time partnershipalmost a hobby for the three founders. \"We had lived it quite fluid and loose and I think that was a good idea because you just don't know what is going to happen,\" Harris said. But moving to a professional business required the trio to make some very strategic decisions about what they wanted to achieve. Harris believed there was one key decision that saw Phoenix grow from a little- known bathtub brew to an internationally recognised brand: pasteurisation. \"That was C0582 PHOENIXDRGANIC 55 (from previous page) Other Options SNZ Water (Self help) Free Coffee Short black 300 Eapputino 0 Long black ' Flat white 3.50 Latte - Mochaccino 0 Hot Chocolate 4.00 Soy Milk .50 Tea English Breakfast - Earl Grey ' Lemon and Ginger 0 Green 350 Peppermint 0 [ha momi le Milkshakes Kaen Krazy 0 Chocoholic . Strawberry Fields * Bananarama . Vanilla 450 Ice 0 Sublime l[reaming Soda Future Challenges . . . Ironically, Phoenix's successes had started to work against it in some segments of the market. There were some very top-end cafs that would not take the Phoenix brand because it was getting more commonplace. The company was also attracting more attention from the big players in the New Zealand beverage industry, which was one of the reasons Phoenix was looking so closely at its Australian options. To continue op er- ating only in New Zealand and maintain historical growth levels, Harris said Phoenix would have to find ways to take the brand bigger, which would mean selling cheaper or launching other products. Either option would likely draw fire from bigger competi- tors like Coca-Cola and Frucor. The company was leery about going head to head with the really big players. \"Going directly against Coke or Frucor is inherently stupid in my opinion,\" Harris said. He found the Phoenix niche a safer scene. \"There are certain rules for survival in this game and a lot of them are around understanding your market, understanding your niche. Once you get that down, you know your niche, then you can see what your tolerance is for other decisions.\" The recent grth trends augured well for Phoenix's immediate future; however, Morrison was aware of the risks. \"We've still got to be realistic. We're not a huge com- pany and we're still vulnerable. There could be something that happened that pulled us down.\" One risk he saw was the danger of growing too big and losing the focus on 65 CASE STUD'IES IN SUSTAINABILITY MANAGEMENT AND STRATEGY: THE OIKOS COLLECTION sustainability. \"I believe that there are some significant issues related to sustainability for businesses that get beyond a certain point. Issues that the Stephen Tindalls of this world face every single day." Tindall was owner of New Zealand's largest discount retailer and chairman of the New Zealand Business Council for Sustainable Develop- ment, a complementary but somewhat rival organisation to the one Morrison chaired. Going out on the hustings for sustainability didn't worry Morrison. He was committed to the idea and believed there was much work to be done in convincing others to take up what he saw as a necessary but ongoing challenge, even for businesses like his own. . . . and Opportunities To maintain growth, Phoenix was hoping to get its products into more service stations and more distant overseas markets such as Japan and Malaysia. But the biggest growth was coming from supermarkets and Australia. \"With our brand and our type of prod- uct, after the service stations, my view has been that we need more export business, we need Australia,\" Harris said. In terms of new products, the Phoenix team accepted that Phoenix was going to remain a beverage company. But within that frame there was plenty of room for inno- vation. Hot drinks were one possibility, Harris pointed out. \"The trade we work with deals in hot and cold beverage, and we want to be meaningful and useful to our trade, and give our salespeople a year-round opportunity." The company was already mar- keting \"the Chai experience." Chai is a creamy, milky, spicy teaand Harris was enthu- siastic about its potential. \"We're talking about students . . . we're talking about people who haven't become coffee fanatics yet. They're looking for something that maybe isn't the mainstream, that isn't like everyone else.\" Phoenix wanted to increase its focus on organics, but knew that could prove difficult in a number of ways. Not surprisingly, the founders had considered the what-if scenario of a buyout by a larger corporation. Morrison was unenthusiastic, acknowledging the hard work done by Phoenix in establishing the organic beverage niche. What if organics became much more popular? Would one of the big players suddenly become very interested? Morri- son did not dismiss the possibility entirely but saw a danger that public companies and shareholders would be completely focus ed on the financial bottom line. Plus, Morrison still maintained his enthusiasm for the job: \"I don't think we're halfway through the journey and I'm very keen to see us grow. I find it very stimulating and exciting and get a huge amount of my personal needs met out of business.\" So growth remained very much part of Phoenix's agenda in May 2004.. The relevant questions were how would growth impinge on the business's core sustainability values? And which grth options would be most sustainable all roundStep by Step Solution
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