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Tom Scott and Tom First met while studying in at Brown University. During their summer they created ALLSERVE. A floating convenience store serving boats in in the Nantucket Harbor. At this time they sold ice, beer, soda and cigarette etc. They didnt sell juice at that time.

They first created a peach juice. Which was discovered during Spain trip. Initially they started selling it in blenders, milk cartons and wine bottles in the boats. Got tremendous response from the customers. In 1st year Nantucket ALLSERVE sold 8000 cases of its renamed juice. It increased to 20,000 in the following year with a new name of Nantucket juice.

Both these founders invested their collective life savings of 17,000$. Also generated small loan from a bank. Once while recalling: We were scraping alone, everything was going back into the company. By early 1993 our few employees hadnt been paid in a year, never mind that Tom and I hadnt paid ourselves in three and a half years. But we worked all sorts of odd jobs on the side, especially during the winter. It was especially tough because we could see the juice really taking off

The two founders along with Ned Desmond persuaded Mike Egan to invest 600,000$ in exchange of 50% of the company. Ned Desmond also became the director of sales and marketing later. The founders 1st met Mike Egan while serving him a boat during the early days of ALLSERVE.

He was the founder and former CEO of Alamo Car Rentals and still maintained 93% of that companys stock. Egan performed the function of trusted advisor while not meddling in day to day operations of the business. Once while sharing his expressions I really made the investment because it makes me wake up in the morning and feel like Im twenty-five again, trying to grow another company

Improved their distribution and increase inventory. Secured better independent bottlers. Time of decision to distribute their beverages 1. Implement a large advertising campaign for brand awareness while moving their product through an independent distributor channel which could carry multiple brands at the same time. 2. Contact retailers directly to create trade promotion. 3. Distribute the product yourself.

Make their own unique private distribution strategy. Where they themselves sold, delivered and stocked the product.

we were doing it all. We leased some warehouse space, bought an old car and went up and down the street selling Nantucket Nectars and our passion to make the brand succeed. The retailers immediately loved our story and enjoyed seeing us stock the shelves ourselves. Becoming our own distributor allowed us to control the positioning of our product. We often rearranged the shelves to ensure that Nantucket Nectars was better positioned than Snapple.

New beverage companies face tough time in order to market themselves. Knowing this difficulty the founder decided to focus on a simple vision without the help of any outside agencies They created high quality product, also gave samples, sponsorship for road races and summer sports leagues. Also dressed up people as fruit. Courtesy to Egan capital they also gave some radio ads. Placed messages under the bottle cap

The early days were extremely frustrating for the founders. Customers like the Nantucket Nectar. It had 3 flavors 1) Cranberry fruit 2) Lemonade 3) Peach orange.

Founders were unsure how to grow the business. Tom Scott explained

The frustration that we dealt was immense. We didnt know what point of sale was, we didnt know what promotion was, we didnt know what margin we should be making

Category Ready to drink teas Water Juices Sports drinks

Year (1992-1995) 24 34 32 12

High quality at lower price Developing brand image through solid promotion Blocking the smaller and less powerful players to get shelf space New age and traditional beverage companies New age had opportunity in short term profits and traditional fight for best in mass market and also response to new trend.

Emphasis on quality, lower profit margins Used four time more natural fruit juice than others 1st fiscal year 1995 result higher cost due to shortage of cranberry harvest.

Launch super nectar(herbal, fruit juice, honey and green tea) Four favours of 80% fruit juice and 2 flavours green tea and honey (chil green tea, protein smoothie, vital C etc ) Sales location
Super market 1% Convenience stores 6% Others (service sectors etc) 93%

North us 38% South us 29% Mid west 9% West 9% International 15%

founder decided to make more promotion on service sector as well as super market.

1994 snappel deal acquired by Quicker oats from Thomas Lee for $1.7 billions. Quicker sold it to Triarc for $300 million Reason because of distribution channel from old to new one. Other one firing the Ch. Executive William Smithburg

Faced IPO problem Auction or sell out Decision to see it positively upside and acquire different other brands

Internal brainstorming Plus points (taste, natural product, current management) Guerrilla's marketing skills Stabilizing cost structure Threes ways of distinction
Discounted cost flow Comparable acquisition Comparable trading

Founders were very concerned with the outcome after sales. Having 100 employees of which there were 15 accountants, 20 marketers, 57 salespeople, 5 sales administrators and 3 quality control people. Organizational structure was complex enough to reach the bosses called as the two tombs. Non-Formal dress code. Important TOMB words, Destroying the entrepreneurial spirit that has made the company special is one of my biggest fears. Once you start departmentalizing, you lose that. It is essential that we maintain our culture so that work is still fun.

From the PDF File

Competition surfaced in three major ways in the New Age beverage world. First, competitor might simply undercut in pricing to flood the market while also offering a high quality or innovative product. Various competition tact's can be based for achieving competitive advantage

Born in Alexandria,5A,1966. Spent his childhood in Chevy Chase. Attended Landon School in Bethesda. Continued education in Brown University. Brown provided the plat form to lead foot ball, theater and outdoor programmes. Earned degree in American Civilization and started a business during his summers on Nantucket Island. In the summer of 1988, Tom founded Nantucket Allserve, a boat business which serviced boats in Nantucket Harbor. He soon joined by his current partner, and college friend, Tom First. From this first business, grew their second venture and most notable accomplishment to date, Nantucket Nectars. Tom currently lives in Boston and Nantucket and is accompanied at all times by his dog, Becky.

In the summer of 1988, Tom founded Nantucket Allserve, a boat business which serviced boats in Nantucket Harbor. He soon joined by his current partner, and college friend, Tom First. From this first business, grew their second venture and most notable accomplishment to date, Nantucket Nectars. Tom currently lives in Boston and Nantucket and is accompanied at all times by his dog, Becky.

Tom first was born in Boston in 1966 and raised in Weston, MA. Attended concord academy. Continued education in Brown University. Where he met his closest friend TOM SCOTT. Aspiring to continue on to architecture school, Tom spent some of his time at the neighboring art institute, Rhode Island School of Design. Tom First enjoyed playing lacrosse and sailing for Brown. After graduating from Brown in 1989, the two Toms moved to Nantucket and focused on strengthening their boat business. Ambitious by a thirst for cooking, he was determined to recreate the taste of a peach nectar that he had sampled during his travels in Spain. Tom resides in Cambridge and Nantucket with his wife Kristan and dog, Pete.

Both Tom and Tom were dropped out from accounting from Brown University.

We are Juice guys

Apple Quenchers (Very Fine line extension) Arizona Iced Tea Boku Crystal Light Chillers (Very Fine line extension) Evian Fruitopia Gatorade Jones Soda Lipton

Minute Maid Mistic Nestea Ocean Spray Orangina Poland Springs Powerade Snapple Tropicana Seasons Best Very Fine

Seagram (Tropicana) Tropicana maintains the strongest distribution in the grocery segment for juices which should provide Nantucket Nectars with a strong platform to expand. Furthermore, Tropicanas strength in the Northeast US (70% market share) matches Nantucket Nectars business perfectly.

Ocean Spray The founders knew the Ocean Spray senior management from industry conferences and believed that there was a good match of culture. Ocean Spray was private which would allow Nantucket Nectars to operate in a similar fashion: less disclosure, less hassle, and less short-term pressure to hit earnings.

Pepsi Pepsi seems more prepared to take risks with new products in the New Age segment. Pepsi recently terminated its distribution arrangement with Ocean Spray which will take effect sometime in early 1998. In late 1996, Pepsi launched a cold, ready-to-drink sparkling coffee drink with Starbucks coffee called Mazagran. In 1995, Pepsi also launched Aquafina, a bottled water drink.

Triarc (Snapple and Mistic) The founders believed that Triarc provided the best platform to grow the Nantucket Nectars business the most over the next two years. Through ownership of Snapple, RC Cola and Mistic, Triarc has immediate access to a national single-serve network to push the Nantucket Nectar product.

Cadbury(Schweppes Ginger Ale) The sheer size of Cadbury makes a takeover unlikely. The production strategy is to use an assorted group of independent bottlers as well as long-term agreements with Coke and Pepsi. While Cadbury has deep pockets to operate a New Age beverage company appropriately and for strategic reasons might decide to bid aggressively for Nantucket, there current company strategy does not create much operating improvements or increased distribution strength.

Starbucks Nantucket Nectars had recently consummated an agreement with Starbucks calling for all Starbucks coffee shops to carry the Nantucket Nectar products.

Welchs Concerning product innovation, Welchs has maintained a strong philosophy of reacting to the marketplace. CEO Dan Dillon described corporate strategy: The whole industry seemed to be going in one direction, with faddish kinds of products. We have gone in a different direction, by giving the consumer products that have got substance to them. With our grape-based items, that means providing a very distinct, robust-tasting product.

Coca-Cola Coca Cola has demonstrated strong concern in the past about acquiring businesses with smaller margins than their core carbonated soda business.

What were the entrepreneurial things they implemented here.