Case Critique: Black Fly Beverage Company Inc Essay

Black fly is enjoying a comfortable growth, their product has been well stock by consumers and they have also benefited from positive feedback from the media. Now would then be a very good time to undertake an expansion as the comp some(prenominal) would take advantage of the momentum and exposure it currently has to unveil parvenu products or features to the market. Lets evaluate the polar options procurable to Black fly.First Alternative Launching a red-hot piquancyLaunching a unused flavour of an real product has been the approximately common expansion go-ahead taken by companies in the nutrition and beverage industry. It is a conservative approach as it usually does no require a signifi squeeze outt investment mostly because it benefits from economies of scale and a lot does not require any new equipment for the production as it is the gaucherie with Black fly beverages. Furthermore the company currently has enough ability from a production perspective to support th e expansion.However the main risk, as it was assessed by the company, is that the new flavour may cannibalize the original rule and leave not result in an increase of market make out that rather split gross sales between the products. The flavour is slight in all probability to attract consumers and could only be an additional option to existing customers allowing them to choose or switch between flavours which does not increase revenues but rather keeps them steady. to a fault, if we take in consideration the psychological buying mental process of consumers it has not been proven that consumers are more likely to purchase a product because it offers more than one flavour nor does it help a consumer return his choice if he did not like the product in the first base place.Second Initiative Creating a new product line relegate IceThe spiked ice is an innovative idea, a first in its kind to be introduced to the wine and spirit marketplace and like any new idea it is importan t to establish that it is also an opportunity. The LCBO being the largest retail merchant of dipsomaniac beverages in the world, it is safe to assume that it has the best knowledge of trends in the industry as it is almost the only channel of distribution of alcoholic beverages in Ontario.The LCBO is then the best resource a company can use when it comes to product/industry feasibility as it carries out a stringent assessment of quality, price and market potential for each new product. Therefore there is an opportunity and a market potential for this new product since the LCBO is willing to provide shelf space for the banish Ice, furthermore it has a provided a firm commitment for a 4 months order.The Spiked Ice also has the potential real additional revenues since it is a different product and can also target consumers who are not typically fond of vodka coolers (i.e. consumers that prefer drinking beer but whom during the summer month would gruntle their thirst on a freezee w ith a vodka twist) Allowing the company to increase and ray its customer base.This initiative however does require a significant bully investment to upgrade the production facilities and the company would be facing a significant loss should the product not throw enough sales however the company has commitment from LCBO for a large quantity which will also help them boost the roll out of the new product. Also from a managerial/organizational perspective the company has proven that it is suitable of successfully undertaking similar projects.I would recommend the company to open the Spiked Ice as it is the only option that has the potential to generate additional revenues allowing the company to truly expand by penetrating a different segment of the market share. Introducing a new flavour has a low potential as it does not target a new segment or customer base and will most likely not generate additional revenues however it is a good initiative that could be launched for retention purposes to increase customer satisfaction.