Jamba Juice case Analysis

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  • Post last modified:May 26, 2017

Jamba Juice case study:

The Jamba Juice company at the time it was founded was known as the Juice Club. Five years later, it was renamed Jamba Juice in 1995. The company was initially a made to order smoothie company. However, it had very different plans for the future. Its plan was aggressive expansion. Jamba had planned to evolve into a health and lifestyle brand. The financial results of 2011 were not very impressive. Seeing this the company set some new goals for itself. Moreover, its bottom line results had fallen so short of expectations that Jamba was worried.

The main points of focus which were a part of its future goals were as follows:

  • Improving sales at its stores
  • To build a retail food capability including breakfast, lunch and dinner.
  • To speed up its growth of franchise and traditional stores.
  • To lay down a plan for reducing the expenses.
  • Building consumer products licensing growth platform

These were the key areas of focus for the company in the future. According to the brand’s leadership, the company believed in passion. Passion and energy were communicated in all aspects of its marketing strategy. This was what the vision and values of the company were based upon. It is also what the company tried to communicate through its marketing strategy. The company is feeling the pinch of the losses it had incurred last year. Its plan was to offset the losses through aggressive expansion. It’s trying to work both on its short and long term future. However, if Jamba Juice was to achieve the goals it had set, it must focus on strategic management. Strategic management is a process that analyses where the company stands, where it plans to get and how it can get there.

The new trends in the industry are increasing sales of hygienic products. While consumers still want great taste, they do not want to add calories to their daily consumption. Jamba wants to benefit from the trend and it has focused on offering low calorie food products to its customers. McDonalds and Starbucks are the key competitors of Jamba and their presence has somewhere made the situation tough for the company. Most notable thing is that McDonalds has introduced similar but competitively priced food products for its customers. There are several other competitors of the Jamba Juice Company in the quick service restaurants category also.

The primary strength of Jamba Juice is the brand name that it has created over the limited time it has been in the market. Compared to its competitors, Jamba has been in the market for a relatively shorter period. The product variety offered by Jamba juice is another key strength of the brand. The line of Jamba’s merchandise has continued to grow fast. With it, the brand’s number of stores has also grown. Still, when it comes to competition, the brand is being closely followed by Smoothie King and Planet Smoothie.  There are several other big and small fast food brands too that pose a competitive threat to Jamba . Moreover, the brand had to face severe criticism over some low quality material in its smoothies. While some opportunities may have great rewards hidden in them, there is also a very high chance of unexpected risks. Jamba needs to be careful about the risks that come with such opportunities.

The product variety Jamba offers is a major advantage for the brand. However, the brand should continue to add to its product line in order to enjoy a competitive advantage over its competitors. To expand its customer base, the brand must focus on its product line and be innovative in this regard. The traditional product line is not cannot help it find fast growth. New treats on its menu can also help it penetrate into the customer base of the other brands. Such techniques can prove highly effective at expanding the customer base. Since unique flavors and recipes are always loved by customers, the brand can fastly grow its base by introducing more of them. Over the last four years, the company has not been in a financially significant position and the result is that it would have to try new strategies and set new goals for itself if it wants quick growth.

In terms of managing the human resources, Jamba has proved quite effective. Primarily it has focused on successful attraction and retention of talented staff. It has focused on hiring people with leadership abilities that can help it execute its business strategy and set the platform for future growth. Particularly, it has focused on maintaining a talented team of staff at its stores that can successfully provide the customers with the unique Jamba experience. The staff are well trained to provide great customer service. The brand’s reputation to a great extent depends on the quality of customer service provided by its staff. Moreover, the quality of customer service also decides the frequency of customer visits and affects sales directly.

Most important factor is the emotional connection between Jamba and its customers. The focus of the brand has been on managing the connection that exists between the brand and its customers. It is why it has focused on hiring people that are experienced in customer service and management. Jamba has always strived for a great customer experience. It hires people who are highly customer oriented. Moreover, it has managed its human resources very well by implementing rewards programs that motivate them to do better for their customers. Apart from financial incentives, those who do well are provided with opportunities of advancement. Jamba Juice has been able to motivate and manage its employees in ways that they care for the customers and serve them effectively.

While Jamba Juice has performed relatively well as compared to the other brands in the smoothie industry, its competitors are also in a strong position. Juice it Up, Smoothie King and Smoothie Planet are its main competitors in the Smoothie industry. The entry of McDonalds and Starbucks has however, made the competition stiffen for Jamba Juice. The main strategy Jamba followed in this highly competitive environment is that it positioned its products as a healthy alternative to those from the other brands.   Moreover, the brand has remained committed to fresh and natural products. This has also worked to boost its image. Now, Jamba would be required to focus on two points at least. They are:

  • How Jamba can compete in the market for creating a competitive advantage that can help the brand sustain impressive sales.
  • Apart from it, the competitive advantage must be unique that cannot be substituted easily.

Jamba is also planning to reach new customers through the use of the store within a store concept. Jamba has formulated a strategy that focuses on expanding the existing markets as well as acquiring new customers. Moreover, the brand has opened new stores at airports and malls plus colleges. The customers that are on the move are benefited by it. The company has focused on reducing its costs so that the brand can manage its expenses better. However, it is going to take some time before its cost cutting strategy is going to have its effect. The company will have to focus on expense reduction for years and manage both its labor and other controllable costs till it can achieve something effective through its cost cutting strategy.

Organizational culture is another important factor that is going to impact the brand’s status as well as sales both in the short and the long term. The brand has tried its best to manage a great culture throughout the organization. Its unique culture is also manifested in its staff’s motivation and passion. The company has revised its goals and taken an innovative approach towards managing its future growth. Jamba also entered into an agreement with Nestle to manufacture juices and ready to serve smoothie products. With it, the brand’s possibility of overseas expansion also grows. The products that Nestle is going to make will have non-fat milk that differentiate Jamba’s products from the other competitors. Jamba made another agreement with Pepsico for the distribution of Coconut infused water.

At some points it also seems that Jamba is following the Starbucks model of growth. It has also worked to attract customers in the cold months so that it can achieve higher sales. In this regard, it has focused on the sales of hot food and drink items. One major point of differentiation that Jamba utilized is that of using high quality and healthy products. The brand is trying to differentiate further. However, all the time its focus must remain on doing it in a way that does not hurt its brand image.

Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.