On January 3, 2017, Dave Pace, CEO of Jamba Juice, rang the Opening Bell of the Nasdaq MarketSite in

Times Square. As part of what Nasdaq had done for the last six years during its annual "Fit Week," Jamba
Juice's appearance was meant to focus attention on those companies that helped individuals lead
healthier lifestyles. It was especially appropriate for Jamba Juice, because the lifestyle brand with a
passion for making healthy living fun was undergoing a refresh of its own. To be announced in March
2017, preliminary financial results for fiscal 2016 had indicated a decrease in revenue and a loss for the
year. Although the company had tried to explain this by pointing to the non-recurring expenses of
business model adjustment and corporate relocation, investors were wary as the stock price continued
to slide.' The largest shareholder and activist investor, Engaged Capital, had called on the company to
"slash costs and close unprofitable stores" which CEO Pace was in the process of doing.

In May 2016 Pace had announced that Jamba would move its headquarters from California to a less
expensive location in Texas, restructure the overall organization, and make changes to the leadership
team to ensure support for the transition from company-owned stores to a full franchise model.
Commenting on this decision, Pace said, "Jamba has pursued our vision to inspire and simplify healthy
living for 26 years, starting with a single juice shop in San Luis Obispo, but as we continue to spread our
healthy living mission globally, it has become increasingly clear that a relocation of our support center
will better position the company to extend our brand and continue to support our franchise partners for
the long term."

In January 2017 Jamba Juice announced the launch of its ReSet Super Blends, a protein smoothie line
developed in collaboration with celebrity fitness trainer Harley Pasternak. The new line of protein
smoothies included real fruit fortified with calcium, riboflavin, and phosphorus, making for an ideal pre-
or post-workout snack or midday "pick-me-up."

But the question remained, would these ongoing initiatives, mixing up the product line and starting
afresh with franchise partners, be enough to keep Jamba Juice top of-mind with its current customers
and attractive to new

This case was developed by Professor Alan B. Eisner, Pace University, associate Professor Pauline
Assenza, Western Connecticut State University, Professor Jerome C. Kuperman, Minnesota State
University-Moorhead, and Professor James Gould, Pace University. Material has been drawn from
published sources to be used for class discussion. Copyright © 2017 Alan B. Eisner.

consumers, especially given the increased competition from smoothies served at the likes of
McDonald's, Burger King. and Dairy Queen?

Company Background

Juice Club was founded by Kirk Perron and opened its first store in San Luis Obispo, California, in April
1990. While many small health-food stores had juice bars offering fresh carrot juice, wheat germ, and
protein powder, dedicated juice and smoothie bars were sparse in 1990 and didn't gain widespread
popularity until the mid- to late 1990s.

Juice Club began with a franchise strategy and opened its second and third stores in northern and
southern California in 1993. In 1994 management decided that an expansion strategy focusing on
company stores would provide a greater degree of quality and operating control. 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.

In March 1999 Jamba Juice Company merged with Zuka Juice Inc., a smoothie retail chain with 98
smoothie retail units in the western United States.

On March 13, 2006, Jamba Juice Company agreed to be acquired by Services Acquisition Corp.
International (headed by Steven Berrard, former CEO of Blockbuster Inc.) for $265 million." The
company went public in November 2006 as Nasdaq-traded JMBA. Jamba Juice stores were owned and
franchised by Jamba Juice Company, which was a wholly owned subsidiary of Jamba Inc.

In August 2008 Jamba Juice faced significant leadership changes. Steven Berrard agreed to assume the
responsibilities of interim CEO. In December 2008, James D. White was named CEO and president, while
Berrard remained chairman of the board of directors. Prior to joining Jamba Juice, White had been
senior vice president of consumer brands at Safeway, a publicly traded Fortune 100 food and drug
retailer. During what CEO White called the turnaround years from 2009 to 2011, he worked to eliminate
short-term debt, innovate, expand the menu, and change the business model by refranchising stores,
growing internationally, and commercializing product lines.

Ongoing Strategic Initiatives

Jamba pursued elusive financial health during James D. White's tenure as CEO. Although revenue had
been down, the company was profitable, and things appeared to be back on track in 2015 as White
moved forward with

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?

Company Background

Juice Club was founded by Kirk Perron and opened its first store in San Luis Obispo, California, in April
1990.6 While many small health-food stores had juice bars offering fresh carrot juice, wheat germ, and
protein powder, dedicated juice and smoothie bars were sparse in 1990 and didn’t gain widespread
popularity until the mid- to late 1990s.

Juice Club began with a franchise strategy and opened its second and third stores in northern and
southern California in 1993. In 1994 management decided that an expansion strategy focusing on
company stores would provide a greater degree of quality and operating control. 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.

In March 1999 Jamba Juice Company merged with Zuka Juice Inc., a smoothie retail chain with 98
smoothie retail units in the western United States. On March 13, 2006, Jamba Juice Company agreed to
be acquired by Services Acquisition Corp. International (headed by Steven Berrard, former CEO of
Blockbuster Inc.) for $265 million.7 The company went public in November 2006 as Nasdaq-traded
JMBA. Jamba Juice stores were owned and franchised by Jamba Juice Company, which was a wholly
owned subsidiary of Jamba Inc.

In August 2008 Jamba Juice faced significant leadership changes. Steven Berrard agreed to assume the
responsibilities of interim CEO.8 In December 2008, James D. White was named CEO and president,
while Berrard remained chairman of the board of directors. Prior to joining Jamba Juice, White had been
senior vice president of consumer brands at Safeway, a publicly traded Fortune 100 food and drug
retailer. During what CEO White called the turnaround years from 2009 to 2011, he worked to eliminate
short-term debt, innovate, expand the menu, and change the business model by refranchising stores,
growing internationally, and commercializing product lines.

Ongoing Strategic Initiatives

Jamba pursued elusive financial health during James D. White’s tenure as CEO. Although revenue had
been down, the company was profitable, and things appeared to be back on track in 2015 as White
moved forward with his “BLEND 2.0” strategic priorities. This BLEND strategy was part of a business
redirection that included shifting from a company ownership to a franchise ownership model, refreshing
the product line, and accelerating global retail growth through new and existing formats. When he
retired in 2015, White had been partly successful, growing revenue and returning the company to
profitability in fiscal 2012, only to see a loss in 2014.

When White announced his retirement in October 2015, he felt the accelerated refranchising initiative
was virtually complete, and that the company would benefit from a “new generation” of leadership.9
Nearly two years earlier, Jamba Juice CEO White had also rung the opening bell at Nasdaq in New York
City. Headlines had announced “Jamba Juice Rings in the New Year with the Unveiling of Brand-New
Jamba Kids™ Meals.” This new menu targeting Jamba’s newest and youngest customers involved smaller
9.5-ounce sizes of fruit smoothies—Strawberries Gone Bananas, Blueberry Strawberry Blast-off, Popp ‘in
Peach Mango, and Berry Beet It—plus two new food items: a Pizza Swirl with Turkey and a Cheesy
Stuffed Pretzel. The idea for this kid’s menu came from listening to customers, who had struggled to
share the larger smoothie drinks with their young children. It also meshed with Jamba’s overall strategy:
to create “good-for-you food that tastes good” and to continue to add more full-meal options to the
menu for both kids and adults. The Jamba Juice Company had been expanding its product line over the
years to offer Jamba products that pleased a broader palate. In addition, Jamba had been pursuing an
aggressive expansion program, evolving from a made-to-order smoothie company into a healthy, active-
lifestyle company.

Turkey and a Cheesy Stuffed Pretzel. The idea for this kid's menu came from listening to customers, who
had struggled to share the larger smoothie drinks with their young chil- dren. It also meshed with
Jamba's overall strategy: to cre- ate "good-for-you food that tastes good" and to continue to add more
full-meal options to the menu for both kids and adults.10 The Jamba Juice Company had been expand-
ing its product line over the years to offer Jamba products that pleased a broader palate. In addition,
Jamba had been pursuing an aggressive expansion program, evolving from a made-to-order smoothie
company into a healthy, active- • Accelerate global retail growth through new and lifestyle company.

an accelerated growth BLEND Plan 2.0. By 2016 this plan had evolved into BLEND 3.0 and included the
following:

Become a top-of-mind brand by simplifying and sharpening Jamba's healthy food and beverage
marketing message to better clarify value and make the brand more relevant through brand activation
and leadership.

Create new products, provide category leadership in smoothies, juices, and bowls.

existing formats.
Just after his arrival as the new Jamba Juice CEO in 2008, White had instituted a set of strategic
priorities. Believing it was necessary to revitalize the company, White had outlined the following
goals:"1

Drive the asset-light business model to enhance shareholder value, continuing to reduce operational
costs, driving store-level productivity and profitability, and improving efficiency in the supply, sourcing,
and distribution process.

Transform the chain through refranchising existing stores.

According to White, these strategic priorities supported the company's mission to "accelerate growth
and development of Jamba as a globally recognized healthy, active life- style brand."13

• Initiate international growth.

• Build a retail presence with branded consumer packaged goods and licensing.

• Bring more food offerings to the menu across all dayparts-breakfast, lunch, afternoon, dinner.

Top-of-Mind Brand

By 2017 Jamba Juice was the smoothie brand leader and #1 retailer for fresh squeezed made-to-order
juices. Jamba also boasted over 1.8 million Facebook fans and over 100 mil- lion annual visits to its
stores. The consumer messaging was centered around the theme "Blend in The Good," centered on
"Whole Food Nutrition," designed to focus consumers

• Implement a disciplined expense-reduction plan and improve comparable sales.

In 2012, Jamba Juice had pronounced this turnaround complete and begun to focus on achieving a
second phase of growth. CEO White had called this next set of initiatives
This new menu was targeted toward children ages 4 to 8, with a complete meal-a smoothie plus a food
item- containing fewer than 500 calories. The items included whole grains, 2.5 servings of fruit or
vegetables, and no added sugar.

One of the key objectives of Jamba's growth strategy was to market itself in a way to increase sales year-
round and significantly decrease weather and seasonal vulnerabilities. Seasonal issues were serious
since the traditional driver of Jamba's revenue and profit was the sale of smoothies during hot weather.
In southern states (e.g., California), where the weather remained warm year-round, Jamba experienced
fairly steady sales. However, in the northern states (e.g., New York), where there was a cold and fairly
lengthy winter season, Jamba experienced severe seasonal variability. To counter the seasonal slump,
Jamba pushed to increase the presence of nontraditional stores inside existing venues.

Nontraditional Locations

Jamba had generally characterized its stores as either traditional or nontraditional. Traditional locations
included suburban strip malls and various retail locations in urban centers. Traditional stores averaged
approximately 1,400 square feet in size and were designed to be fun, friendly, energetic, and colorful to
represent the active, healthy lifestyle that Jamba Juice promoted.

Nontraditional stores were considered those located in areas that allowed Jamba to generate awareness
and try out new products to fuel the core business. Jamba's nontraditional opportunities included store-
within-a-store locations, airports, shopping malls, and colleges and universities.

Store-within-a-store: Jamba Juice had developed franchise partner relationships with major grocers and
retailers to develop store-within-a-store concepts. The franchise partnerships provided it with the
opportunity to reach new customers and enhance the brand without making significant capital
investments. An example of this was the 2016 opening of a combination Timothy's World Coffee and
Jamba Juice franchise location within a Stop & Shop store in Long Island, New York. 18

Airports: Jamba operated several airport locations and had the opportunity to develop stores in
numerous additional airports. Jamba Juice Company's highly portable product appealed to travelers on
the go and provided them with an energizing boost.

Shopping malls: Jamba had opportunistically established stores in shopping malls that presented
attractive expansion opportunities. In addition, as with the airport locations, the indoor setting helped to
alleviate weather and seasonal vulnerabilities that challenged traditional locations.

Colleges and universities: The Jamba brand were appealing to the average college student's active, on-
the-go lifestyle, and Jamba had developed multiple on-campus locations across the United States.

Other potential nontraditional store locations: Additional high-traffic, nontraditional locations existed.
Many large health clubs included a juice and smoothie bar within their buildings. Jamba could partner
with a major gym chain or individual private gyms with high membership rates. Another possibility was
to partner with a large school district. Schools across the country were under increasing scrutiny to offer
healthy alternatives to the traditional fat-, carbohydrate, and preservative-rich foods served in
cafeterias, especially as a number of states were prohibiting the sale of junk food on K-12 campuses.

Jamba had introduced self-service Jamba GO auto- mated drink stations in nontraditional locations,
including schools. Taking roughly the space of a soda fountain beverage dispenser, the Jamba Go format,
which CEO White called a wellness center, included the chain's branded pack- aged products, as well as
the option of several preblended smoothies. The Jamba GO concept was a way to reinforce Jamba as a
healthy, active lifestyle brand that was also convenient and portable. This licensed concept represented
no capital investment for Jamba and used the razor/razor blade net profit model. White was hoping
Jamba would become "the go-to resource for healthy solutions for school foodservice directors."19
However, current CEO Dave Pace announced plans to exit the JambaGo platform in 2017, stating "the
Jamba team has committed to strengthening its core retail business, improving franchise profitability,
accelerating ongoing global development, and updating the Jamba Juice brand position. After a detailed
review, the Company determined that the JambaGo platform does not align with these objectives and is
not a viable option through which to drive long-term profitability and share- holder value."20
Interestingly, customer feedback had indi- cated that the quality of the JambaGo product was not up the
standards that consumers expected from Jamba; there- fore Jamba management felt JambaGo would
degrade the brand and impact the company's opportunity to grow the core business and brand over the
long term.

Building a Global Consumer Packaged Goods Platform

Jamba Inc. was also aggressively pursuing licensing agreements for commercialized product lines in the
areas of Jamba-branded make-at-home frozen smoothie kits, frozen yogurt novelty bars, all-natural
energy drinks, coconut water fruit juice beverages, Brazilian super fruit shots, trail mixes, and fruit cups.
The objective was to reinforce the Jamba better-for-you message with convenient and portable products
available at multiple consumer locations.

In aggressive moves, Jamba had expanded licensing agreements to include a line of fruit-infused coconut
water, to be distributed through the Pepsi Beverage Company, Brazilian super fruit shots, and all-natural
fruit cups to be produced in partnership with Zola and Sundia Corporation.
Other Jamba-branded consumer products included yogurt and sorbet frozen novelty items
manufactured under license by Oregon Ice Cream LLC out of Eugene, Oregon, and Jamba-branded
apparel, including cotton T-shirts, bean- Exhibit 3.) ies, and a canvas tote bag, developed in partnership
with licensee Headline Entertainment.

Jamba also promoted "At Home Smoothies," a kit con- taining fruit and yogurt with a healthy
antioxidant boost, one full serving of fruit, and 100% daily value of vitamin C. Available in the local
grocer's fruit aisle, the package made two eight-ounce servings by adding juice and blending. The
blending was facilitated by Jamba's new appliance line, offering a juice extractor, manual juicer,
professional blender, and a "quiet blend" blender for quick midnight meals.

Transition from Company-Owned to Franchise "Asset-light" Format

Originally, Jamba Juice Company had followed a strategy of expanding its store locations in existing
markets and only opening stores in select new markets. Jamba soon began acquiring the assets of Jamba
Juice franchised stores in an attempt to gain more control overgrowth direction. Under CEO Paul E.
Clayton, Jamba acquired several franchise stores and expected to continue making additional fran- chise
acquisitions as part of its ongoing growth strategy. However, the company-owned franchises were not
as pro- ductive and accounted for a disproportionately low portion of company revenues. 21

Clayton stepped down after eight years and was ulti- mately replaced by James White. White reversed
the trajec- tory of the company-owned growth strategy, focusing on the acceleration of franchise and
nontraditional store growth. The more heavily franchised business model tended to require less capital
investment and reduced the volatility of cash flow performance over time. However, revenue to Jamba
Juice. sources then came more from royalties and franchise fees rather than retail sales. This plan, set
into motion by CEO White in December 2008, saw the percentage of Jamba's stores that are franchised
increase from 30 percent to nearly 90 percent. Jamba Juice was recognized by Forbes in 2014 as one of
the Top 10 Best Franchises in America.

Current CEO Dave Pace planned to oversee the continu- ing transition. The "asset-light" franchise model
had several efficiencies that translated to increased profitability. When a company placed most of the
risk for running a business in the hands of a franchisee, the franchisor, Jamba Juice in this case, did not
have to pay for employees, rent, or upkeep on the store assets. The franchisee was expected to put his
or her capital to work, running the business. In this case, store management was "more likely to act in
the best inter- est of shareholders because the franchisee's net worth is more often directly correlated
with the outcome" of his or her store.22 The incentives were clear. The franchisee took the risk and
earned the profits, while the franchisor made 7.5 to 10 percent royalty on all sales, and collected a
marketing fee.

Going into 2017, Jamba Juice had 896 locations, con- sisting of 69 company-owned and operated stores
and 759 franchise stores, with 68 licensed sites overseas. (See

International growth was also a priority. Starting with the first South Korean location in January 2011,
Jamba Juice had grown to 68 stores internationally by 2017, with outlets in Indonesia, South Korea, the
Philippines, Taiwan, United Arab Emirates, Mexico, and Canada, with addi- tional franchisees to open in
Thailand. International stores were located in prominent locations like the Mall of Asia, the largest
integrated shopping, dining, and leisure destina- tion in the Philippines.23
Competition

Jamba was the smoothie industry leader and initially had several competitors with similar health and fit-
ness focuses, such as Juice It Up!, Planet Smoothie, and Smoothie King, but over time that had changed.
Starbucks and Panera Bread had entered the smoothie market, and McDonald's brought its marketing
machine into the frozen drink category, launching its line of smoothies with a value pitch. When
McDonald's introduced a 12-ounce smoothie for $2.29, Jamba Juice's berry smoothies started at $3.55
for 16 ounces. When asked about the McDonald's push into its competitive space, Jamba Juice's CEO
White said, "We view the entry of McDonald's into the smoothie category as an overall validation of the
potential of smoothies. Their advertising will expand interest in the category." Burger King had also
entered the smoothie market, and Starbucks, with its smoothies already in place, had acquired both
Evolution Fresh, the premium juice bar operator, and Teavana Teas. This positioned Starbucks as a head-
to-head competitor

Jamba Juice Company's desire to grow by expanding its selection of non-juice menu items seemed to
follow the Starbucks model. Although originally just a coffeehouse, by 2012 most Starbucks stores
offered a variety of muf- fins, fruit plates, sandwiches, quiches, and desserts. And with the 2012
acquisition of juice bar operator Evolution Fresh and premium loose tea purveyor Teavana, Starbucks
had pushed boundaries even further. This menu expan- sion helped Starbucks attract customers who
were looking for a light meal or dessert to go with their coffee and also attracted non-coffee drinkers
who just came in for the food, tea, and juice beverages. Offering iced coffees, teas, and juices helped
Starbucks overcome some of its seasonal vari- ability, giving customers a cool-drink offering during hot-
weather months. Offering ready-to-go-drinks in grocery and convenience stores also enabled Starbucks
to get its prod- ucts to a wider customer base.

Likewise, Jamba had set out to strengthen its customer reach by offering ready-to-drink products, and
hot food and drink items to attract customers during the cold-weather months, plus a range of breakfast
and lunch food items to

The juice and smoothie bar industry had seen a reduction in growth since 2012 as competition increased
from fast-food chains and yogurt shops. The category of smoothies and juices had seen increasing
consumer acceptance as health claims become more commonplace, especially juice from chopped
spinach, kale, and ginger, gained in popularity. However, the juice category was still relatively expensive
compared with other refreshment options, and more informed consumers became concerned about the
high sugar content from natural fructose. This, combined with the fact that the regular quick-serve
restaurants such as McDonald's and Burger King were reported to make up nearly 40 percent of the
juice and smoothie bar market, meant that the pure juice and smoothie providers such as Jamba Juice,
Planet Smoothie, and Smoothie King were facing difficult growth options. Clearly international growth
was possible, and there was always the additional possibility of consolidation through merger,
acquisition, or other co- branded partnerships.

CEO Dave Pace's remarks during the third quarter earning call in 2016 restated the challenge: "I'd just
like to reiterate the importance of the work being done by the new team in 2016 to eliminate
distractions, tightening refocus of the portfolio, and thus allow us to direct our energy to reigniting core
sales, and sales and profit growth in 2017 and beyond. You'll see us continue to implement disciplined
processes including deeper consumer insights and analytical vigor into all of our decision making.... 2016
is obviously a year of significant transition for Jamba. But as I hope you can see, we're developing the
organization, executing the strategy, and building the environment that we need to successfully deliver
value to our shareholders over the short, medium,
Corporate-wide > Focus:

1. Monitoring major scientific and technical developments

2. Knowledge-building
3. Creating new options
4. Technology positioning
5. Technical and human resource development

Firms diversify into related businesses – sharing intangible and tangible resources which can enhance
market power via pooled negotiating power and vertical integration. Also known as horizontal
relationships.

RELATED DIVERSIFICATION – enables a firm to benefit from horizontal relationships across different
businesses in the diversified corporation by leveraging core competencies and sharing activities (e.g.,
production and distribution facilities.

Leveraging core competencies involves transferring accumulated skills and expertise across business
units in a corporation. Corporations also can achieve synergy by sharing activities across their business
units. These include value-creating activities such as common manufacturing facilities, distribution
channels, and sales forces.

Often an acquiring firm and its target may achieve higher level of sales growth together than either
company could on its own. Example: Starbucks and Teavana. Starbucks can add value to Teavana
through their market exposure as Starbucks offer these products for sale in the national retail chain

2. Vertical Integration

 Occurs when a firm becomes its own supplier or distributor

 An expansion or extension of the firm by integrating preceding or successive production

processes

The number of franchised stores increased year-on-year and the number of company-operated stores
decreased year-on-year, resulting in a 15.76% cost reduction from 2010 to 2011 and his 2.8% cost
reduction, lowering the company's costs. indicates that you are 2010-2011 2011-2012. Since then, 44
licensing deals have been signed, and as the brand expands into other markets and the value of the
brand increases, we have been able to acquire more customers. Basically, we had a licensed company
make a product, ship it to retailers and start selling it to customers, but the origin of the raw materials
was not disclosed. At Jamba he also has two customers. The one who buys the real merchandise and the
one who buys the license for his franchise. As a result, Jamba has two supply chains. One for prospects
and one for franchisees.
Diversification is a strategy, which means that the company continuously creates new products in order
to ensure its penetration into different markets. Starbucks has a myriad of products, which include
coffee flavored ice cream, food items, coffee beverages, coffee beans and various kind of equipment for
making hot drinks. The main rule of the diversification strategy lies in creating new products, which
would meet the highest standards of quality and satisfy customers’ needs at the same time. Thanks to
the diversification strategy, Starbucks has successfully enhanced its profitability, extended its
competitive advantages, reduced threats from the business environment in the form of new
competitors, maintained its reputation and image, and managed to extend the boundaries of its
performance by adding new stores to its network (Hutt, 2016). In addition, the company continues to
impress its customers with new products, taking care of its brand and reputation, which play a
significant role in shaping the attitudes of customers, partners, and suppliers.

Integration is another part of the company’s corporate-level strategies, which continues to benefit the
overall development of the multinational corporation (Strohhecker & Größler, 2012). The main step in
the process of integration is a continuous increase of farms belonging to Starbucks. In this way, the
company not only reduces the rate of unemployment, but also takes care of the quality of its resources.
In addition, Starbucks continues to acquire other companies, which have a specialization in the fields
related to the coffeehouse industry. In such a way, Starbucks started offering tea to its customers by
acquiring small businesses specialized in the production of tea.

In the diversity of corporate-level strategies, diversification is the most important one. It enhances the
company’s ability to navigate through the needs of its customers by offering new products to them. In
case of Starbucks, diversification is an optimal choice, which can help it to explore the market even
further and evaluate the customer’s ever-changing needs. In the continuous race for excellence and
competitiveness, it is most likely that Starbucks will always find the best approach towards satisfying the
needs of every customer. However, competition plays a significant role in shaping the company’s
profitability and overall development.

In case of Starbucks, one may outline three main corporate-level strategies, which include
diversification, integration, and acquisition. Diversification means that the company aims at developing
itself in an active way in order to allow it entering new markets by offering new products to its
customers. Starbucks successfully implements this strategy by offering its customers coffee-flavored ice-
cream, coffee beverages based on milk, food items, coffee beans, equipment, and even music CDs. In
general, it is obvious that Starbucks is willing to expand the boundaries of its performance by adding
new products to its line and impressing customers by offering unique products with outstanding quality.
As a result, the company managed to enhance its revenue, gained a myriad of competitive advantages,
reduced risk related to the entrance of new competitors in the market, developed strong brand
management, and managed to reach wide geographical coverage. In general, all these activities of the
diversification strategy helped the company to win loyalty of its customers and increase its reputation in
the eyes of its partners and competitors (Braun, 2015).

Starbucks’ corporate level strategy is to fully establish itself as the leading source of the finest coffees in
the world, while maintaining their principles as they continue to grow. The principles of Starbucks are to
supply the highest standard for its product while continuing to maintain diversity, great work
environment and customer satisfaction. Every staff member in its retail stores works in a great
environment and is provided with many benefits. As Starbucks acquires the finest source and
continuously adds and changes the products they offer, it upholds their diversity and assurances of the
highest product standards. The company satisfies customers and provides unmatchable service while
giving back to the community. Starbucks continues to be profitable and live by a strict, slow growth
policy. Before setting its sights on further expansion, Starbucks ensures complete domination of a
market. Though it may be difficult and costly at first, this strategy has given Starbucks the advantage of
becoming one of the fastest growing companies in the country.

The following strategy map outlines the objectives within 4 perspectives that must be considered when
formulating a strategy. It works on an ‘if/then’ basis, for example, if Coffee Bean and Tea Leaf employ
highly skilled workers and train them to become knowledgeable and productive employees, then they
will be capable of delivering the best tastes and aroma in stores. This capability will increase customer
satisfaction, and thus increase the company’s revenue.

The McDonald’s long-term target outlines its growth and increased performance intents within a
specified time. The company has a variety of corporate-level strategies to assist its continued growth. It
can focus on staying on a single activity in the industry with the chief purpose of creating a competitive
position. McDonald’s defines its industry as fast food. It does not intend to change the industry. Indeed,
by focusing specifically on the fast foods industry, the organization has established a very strong
worldwide brand image and loyalty. The only challenge is how to sustain this achievement in the long-
term.

As a second corporate level strategy, McDonald’s can diversify its products by moving into new business
lines. It can compete in similar industries and engage in similar activities to build a strong business
synergy (Bowen & Wiersema, 2005). Alternatively, it can engage in unrelated diversification. This aspect
calls the organization to enter a new industry and then focus on building a new brand portfolio. The
view that McDonald’s is a leader in the fast-food industry nullifies this option.

McDonald’s can also focus on vertical integration. This moves aids in reducing costs via the provision of
methodologies for forward integration, establishment of channels of distribution, inputs, and selling of
outputs. Lastly, it can focus on international expansion as a mechanism for performance sustenance.
Expanding internationally permits a company to “compete in more than one market to serve the needs
of other markets and/or countries”

strategy also demands diversification of products in a bid to meet cultural needs for different people in
the global fast-food markets. Through its creative and innovative team for new products design,
McDonald’s can come up with appropriate products to meet specific needs for the new markets.

Corporate Strategy
- Expansion Strategy - McDonald’s has adopted a Market Development strategy for expanding into
growing economies, especially those of Asian countries. The Golden Arches have set their sights on
penetrating Asian markets, as those markets have high income potential. McDonald's already enjoys
unqualified success in Tokyo, Seoul, Beijing, India, and the United Arab Emirates, to name a few Asian
markets. There are many other markets throughout the Asian region that offer the promise of high
sales, market share and profit for the creative fast-food company that is fast enough on its feet to set up
operations there.

- Franchising
- Adaptation Strategy/Diversification
- Horizontal diversification (Food line, drinks, toys, clothing)
-

Jamba Juice recently entered into a distribution agreement with Gordon Food Service. They use prestige
pricing by using high-end ingredients to attract anyone who may be seeking a healthy treat. More
luxurious than their competitors. Sales promotion such as coupons, premiums, and discounts.

We are constantly looking for ways to reduce costs and improve our overall service while focusing on
continuous quality improvement. Due to SYGMA's strong national distribution network, particularly to
non-traditional outlets such as airports, universities, and malls, we expect that our alliance will not only
help us achieve those goals, but also positions us well to drive additional growth."

Jamba Juice Company and Systems Services of America today announced the formation of a supply
chain distribution alliance for service on the West Coast. The alliance is expected to enable greater
supply chain efficiencies and enhance service to existing Jamba Juice locations, while broadening the
reach Jamba has into new territories as it considers future growth opportunities

Jamba is constantly looking for new ways to reduce costs and increase productivity through access to
value-added resources and technology. We believe that this alliance will provide greater supply-chain
efficiencies and enhanced service to Jamba Juice outlets as well as facilitate rapid supply distribution in
the face of our anticipated growth into new re Geographic Diversification

Firms may also diversify through expanding geographically. Big box stores such as Target and Best Buy
use this strategy. Starbucks and KFC have found success with international expansion as well as
domestic expansion. Synergy is developed in several ways. Many of the administrative functions such as
logistics, procurement, human resources, and legal can be consolidated at the corporate level, so they
do not need to be duplicated at each location. New store development is also made easier. Having
already developed new stores, the firm can establish a process that it has learned from previously
establishing stores, and can implement this best practice to efficiently build out, equip, and supply new
stores.gions

Monitor Branding and Franchises

Describe or define the strategy

It is important for Jamba Juice to monitor the franchises that carry their name across the United States
and Asia. This can be done through an annual evaluation of the franchises. A Franchiser evaluation form
will be distributed yearly based on different relevant factors, then an evaluation score will be given. High
performance franchisers will be rewarded. As for maintaining franchises, a retention rate must be
monitored. A Franchiser retention rate is the percentage of remaining franchisers in total since the
beginning of the year. This should be monitored annually.

Target Market Analysis – The main target market in Jamba Juice is medium to high class, ready to pay a
price premium for good quality; Seasonality has a part to play in northern areas owing to weather
changes. With the extension of the menu, including hot beverages and meals, purchases in northern and
southern countries might have potential all year round

Goal 2

Customize products according to the geographical location of the company’s target audience.
Objectives1. Jamba Juice has locations across the world, yet it's apparent that each location's flavor and
climate are extremely different. While residents in warmer climates enjoy smoothies and cold
beverages, those in colder climates want hot beverages. Therefore, it is mandatory to introduce
customized products instead of standardized ones. 2. The company's rivals such as McDonald's and
Starbucks have customized their product offerings according to the market they serve which has helped
them to position themselves as market leaders. Therefore, Jamba Juice must expand its product range
and bring customization to build a competitive advantage against rivals. in this sector by introducing
some nutritious beverages

Customers seeking flavor and variety when they dine out. Emerging flavor trends, including tropical-
inspired, such as coconut, watermelon and passion fruit. Customers demanding natural, better-for-you
options. Continuous innovation and limited time offers. The chain recently launched a sweet and tart
limited-time flavor
Smoothie Cubes allow busy adults to create blender-free, real fruit smoothies, making enjoying a
nutritious snack easier than ever