Business Studies

                      Oxford Business College
                            Business Studies
                            Assignment Two
                            Carmel Conway

Please answer all questions in the case study.                                                  

  Bubbling up nicely

Henrik Mansell established Zest Ltd in 2001. The company supplies high quality soft drinks without preservatives or artificial flavours which gives the company a unique selling point (USP) in its market. The company supplies drinks made from spring water with flavours from imported plants. Zest Ltd enjoys favourable media reviews for the quality of its products; product is the key element of the company’s marketing mix and it spends relatively little on marketing. Zest Ltd faces competition from large rivals such as Coca-Cola who can sell at lower prices. The first major UK supermarket to stock Zest Ltd ’s products found that sales of these products rose by 12% within three months. Further orders followed from other retailers, restaurants and bars who were impressed by the quality of Zest Ltd ’s products. Building on its reputation for quality and its rapidly rising sales, Zest Ltd launched other soft drinks with natural ingredients, including lemonade and ginger ale. It plans to launch more new products. However, Henrik has become concerned about the performance of the company’s managers because the workforce has grown so quickly. The workloads of the company’s managers have increased and some have complained that they lack the necessary skills (and time) to carry out their roles. Labour productivity has fallen, and the company has set a target of a 5% improvement in this area over each of the next three years. Henrik is worried about the company’s relative lowprofit margin (9.2%) and its poor cash balance. Its bank is supportive and has granted a £2 million overdraft, although Zest Ltd ’s cash position has deteriorated...