Pinkberry Case

1) Background of the product/business

Pinkberry Company was founded in 2005. The company's co-founders are Hye Kyung Hwang and Young Lee. It specializes in products like frozen yogurt, smoothies, fruit parfait, and fresh fruit bowl . The company opened its first overseas branch in the State of Kuwait in 2009. And in the span of 2 years the company has its branches in 14 other countries like Russia, Canada, United Kingdom, and Mexico and operates more than 100 stores in USA, mostly in southern California . Pinkberry is open to any investors who would wish to open its franchise in any country. Company's headquarters' is situated in Los Angeles, California . The main product of the company is Frozen Yogurt. It is a frozen dessert containing yogurt and other dairy products. Frozen Yogurt is little more tart than ice-cream.

2) Analysis of the product/business and the company's strengths and weaknesses

Strengths

Strength 1- Already a Global Brand

Pinkberry is a global brand already and operates in countries like Bahrain, Canada, Saudi Arabia, Kuwait, Oman, Peru, Russia, Turkey, United Kingdom and few others . Its strategy to expand internationally is to franchise a local company with retailing know-how in the new country to develop and operate new Pinkberry stores. It is a good strategy in the sense that, in 5 years of its existence it likes to establish itself as a global brand and already operates in 15 countries other than Continental US. Good leadership and a strong track record are some of the most important qualities it looks for in a potential partner company . Pinkberry store launches grew steadily and successfully. It has plans to launch at least 15 new stores in domestic and international markets.

Strength 2 - Healthy & High Quality Products

Pinkberry's offers products that are made fresh with highest quality ingredients. For frozen yogurts, it uses freshly cut fruit and seasonal fresh fruit toppings . In addition to the products being superior quality, Pinkberry uses low fat contents to make it even healthier. This is surely a distinction and a healthy option for customers.

Strength 3- Wide Variety Menu

Pinkberry offers a variety of flavors in frozen yogurt. It also offers customization which reflects flexibility to adapt to changing needs of customers. Such a variety of menu provides the natural benefit of choice to the consumers attracting them each and every time with its distinctive flavor.

Weaknesses

Weakness 1 - Limited Target Market

Pinkberry has a limited target market since it operates in a niche market. Frozen yogurt is relatively a new niche when compared to ice-cream (the main substitute to frozen yogurt). It is also relatively less popular in international markets when compared to ice-cream. This is one of the reasons why frozen yogurt has a limited target market.

Weakness 2 - Inconsistency

The taste of frozen yogurt in one outlet of Pinkberry is comparably different from another outlet. This is one of the weaknesses of Pinkberry. To gain repeat customers, maintaining consistency is very important. Though this can be attributable to differing taste of the fresh fruits Pinkberry makes use of, it should come up with a strategy and work around to maintain its consistency.

Weakness 3 - Zero Market Share

Pinkberry has zero market share in India since it did not start operating in that particular country. It is also very difficult to penetrate deep into the market because it offers a product that is relatively new niche competing with a powerful substitute. This can be a potential weakness and it should try and overcome this by focusing on its strategy to increase the awareness of its brand.

3) Threats & opportunities based on PEST analysis

We analyzed the frozen yogurt industry in India in a PEST framework analysis. PEST analysis is mostly concerned with the environmental influences on the business. PEST can be expanded as Political, Economic, Social and Technological issues that could affect the strategic development of a business. Let's discuss each factor one by one keeping in mind the opportunities and threats associated with each point.

Political Analysis:

A major political issue that pink berry could face in India is country's lack of intellectual property protection policies. Indian dairy market is very large and local retailers can imitate the products in no time if intellectual property protections are not in place. Mr. Timmons has described in his article "Retailer Knockoffs Abound in India" that Gary Locke, the commerce secretary, told a group of Indian executives visiting Washington this month, "U.S. businesses need assurances that when they come to India, they'll be operating in a secure and reliable environment for intellectual property." Indian government is working to deal with such intellectual property issues in order to attract more foreign investments and giving a boost to the dairy industry because India's growing educational and aspirational middle class is demanding a better retail environment and more global brand and styles. This is where industries like pink berry see an ample amount of opportunities. Being the world's largest producer and consumer of dairy products, India represents one of most lucrative dairy markets . IMARC Group, one of the world's leading research and advisory firms, finds that the sales of dairy products in India will nearly double its size from INR 2.6 Trillion (US$ 60 Billion) to around INR 5.1 Trillion (US$ 115 Billion) by 2016.

Economic Analysis

Opportunities:

As the Indian economy is growing very fast, number of people in middle class category is increasing; in a nutshell consumer spending is sky rocketing to new heights. An industry such as Pink berry is definitely going to have a competitive edge over other domestic firms because of its brand name. Value addition products are being demanded by the people in emerging countries in India as their standard of living is increasing day by day. All in all, Pink Berry has a very good chance of growth in this market considering the economic prospects of Indian economy.

Threats

This industry does not require so much investment for a start-up and many domestic companies can come up and increase the competition. This is a very un-organized sector; many small startups don't