BM533 Contemporary Business Economics CW1 Assignment Sample

Introduction Of BM533 Contemporary Business Economics CW1 Assignment

Contemporary business refers to a business activity, carried out by the organization to utilize strategies to attain success. The present study will be based on a company Innocent Drinks, engaged in offering natural fruit smoothies. The report will outline non-traditional business way of Innocent Drinks and its associated advantages and drawbacks. Further, it will by using economic behavioural theory evaluate whether the decision of selling part of the business to Coca-Cola is right or not. It will also implement PESTLE and SWOT analyses to recognize the risks and opportunities of business. The report will also highlight some of the recommendations for Innocent Drinks to become more successful.

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Task 1

Non-traditional business way of Innocent Drink, its benefits and drawbacks

Non-traditional business way refers to the unorthodox and unique methods to effectively promote goods and services to the target customers. In other words, non-traditional business way usually helps to capture the interest of the consumers via creativity and unpredictability. Innocent Drinks is well-known for its natural fruit smoothies and has a good reputation in the market for doing things in a little different manner. The company use non-traditional business ways to create demand as well as promote its product in the market. Innocent Drinks uses event marketing in a non-business traditional way. It is a promotional strategy that includes face-to-face contact between the organization and their customers at special events such as concerts, fairs and sporting events (Bowdin et al, 2023). It is identified that Innocent Drinks to promote and conduct original market research uses event marketing as a non-traditional method.

During a music festival in London, the company at the time of selling smoothies to its customers asked to put an empathy container in a baying with a tag of “yes” or “no” considering whether the company should get into the business of selling smoothies. This non-traditional business way aids Innocent Drinks to promote its business uniquely and grab the attention of different customers. Another non-traditional decision-making method is product pricing policy, the company sets the price of its products according to the real-time feedback of the customers against traditional market research. For example, Innocent Drinks by identifying the reviews of the customer as well as the demand for their product in the market set prices for smoothies. Good responses from the customers in event of London for smoothies enable the company to charge cost plus pricing (Chaudhuri et al, 2021). The non-traditional way aids the business in making informed decisions regarding charging prices considering the satisfaction of both the customer as well as company. Further, referring to the pricing the company can provide smoothies at an affordable cost while earning enough amount of profit margin.

In addition, referring to the non-traditional business way and decision-making methods, Innocent Drinks has some advantages and drawbacks such as:

Advantages

• Customer-centric approach: Using event marketing in a non-traditional way, the organization can conduct business by emphasizing customer feedback. It leads to effectively building the best experience for customers as well as brand loyalty for the business. The methods ensure higher customer satisfaction and competitiveness for the business.
• Real-time feedback: Event marketing allows Innocent Drinks to get real-time feedback from the customers and accordingly make changes in its products and services, leading to competitive advantages in the market (Rust et al, 2021).

Drawbacks

• Lack of appropriate predictability: Lack of correct predictability is one of the drawbacks of Innocent Drink's non-traditional methods. Depending on the unusual approach of bin experiments does not provide sufficient information about the market and customer choice (Thakkar and Chaudhari, 2021).
• Limited Scalability: The strategy is only useful for small levels, and may have an issue when a company tries to increase market share.

Apart from this, by evaluating the non-traditional ways of marketing, it is identified that Innocent Drinks implements a behavioural economic theory of framing. The theory is concerned with the way the information is presented that leads to influences the choice of the customers. Innocent Drinks by adopting the framing of economic behavioural theory presents its smoothies product engagingly and innovatively that leads to grabbing the attention of customers and influencing their choice to purchase the products (Homar and Cvelbar, 2021). The use of bins in London events helps the company to introduce its smoothie product innovatively to a wide range of customers. Apart from this, Innocent Drinks adopted the behavioural economic theory of pricing as a positioning tool. Pricing is one of the subconscious tools, usually, consumers shop the products due to their price as high prices are judged as the quality of the product. The cost plus pricing of the Innocent Drinks grabs the attention of customers who judge the quality of the product according to its price. It helps the business to increase its customer base for its natural ingredients products.

Task 2

Application of economic theory to evaluate the decision to sell business to Coca-Cola

Innocent Drink sold its 10-20% of business for r £30 to Coca-Cola in 2009 and in 2013, 90% of the ownership of Innocent Drinks was held by Coca-Cola (Why Innocent’s ethos survived Coke acquisition, 2025). According to the Nudge theory of behavioural economics, positive reinforcement and indirect suggestions to attain non-force compliance lead to influence the incentive, motive as well as decision-making of groups and individuals (Mejía, 2021). The theory is concerned with behaviour science, consumer behaviour, social psychology and decision-making. The theory outlines that the actions and behaviour of individuals are influenced if modification is made in the way preferences and choices are made more predictably Apart from this, by selling a stake to Coca-Cola, Innocent Drinks can enhance its financial gains as well as resources that are crucial for the growth of the company. The Company can use financial resources to help Innocent Drinks to enhance its current offers, use current technology as well as strengthen its competitive advantage within the market. In addition, by selling of stake to Coca-Cola, Innocent Drinks can use an effective supply chain network of Coca-Cola to reach the global customer in an effective as well as efficient manner.

However, selling the business directly or negatively impacts and threatens Innocent Drink`s independence as well as its unique business identity in the market. Referring to the nudge theory, selling the business to Coca-Cola generates several difficulties as there is an immense difference in the product range of both companies. Innocent Drinks deals with natural and fresh smoothies while Coca-Cola deals in sugary drinks, selling the business to Coca-Cola adversely harms the brand image of Innocent Drinks which is identifying the comments of loyal customers of the company on social media. Selling part of the business leads to weekend the brand's identity as well as loyalty of the devoted customer base. In addition, selling the part of the business also impacts the company's way of doing business uniquely and differently. After selling part of its business, Innocent Drink was not able to decide independently as it lost control over the company`s operations as well as decisions significantly.

Thus, via the critical evaluation of Innocent Drink`s business move of selling part of its business to Coca-Cola, it is identified that there are several benefits to the company by selling its stake such as increasing market share, customer base, enhanced services via wide range of offerings as compared to the drawbacks. Therefore, via the evaluation it is identified that the company made the right decision as it led to an increase company`s product offering to the international market that leads to help the company to become well-known in the international market as well (Coke’s Innocent buy-out offers threats and opportunities, 2025). The company gained benefits from the effective marketing strategy and experience of the Coca Cola as a result able to attract a large number of customers for the products Innocent Drinks.

Apart from this, one of the justifications for saying Innocent Drinks' decision right is because of the benefit of grabbing the opportunity of greater market access. Also if the company has not done this then it becomes difficult and costlier for Innocent Drinks to get a global presence independently. In addition, via selling part of the business company was able to compete with the intense rivals in the domestic as well as international markets which were quite onerous if the company strives to do it single-handedly. Innocent Drink with the help of Coca-Cola able to enhance its product offering by adding several different products according to the needs and preferences of the customers, this leads to providing a great competitive advantage to Innocent Drinks in complex as well as dynamic environments. Hence, the decision to sell 90% of the stake to Coca-Cola was right at the end of the Innocent Drinks.

Task 3

Pestle and Swot Analysis

PESTLE Analysis

In a dynamic and complex environment, several direct and indirect factors lead to impact the operation of the business. To identify such a factor, PESTLE analysis is used. Evaluation of the external environment of Innocent Drinks is as under:

• Political Factors: This factor includes rules and regulations of the government. The rules regarding food and beverage safety, advertising standards, and labelling lead to a significant impact on the marketing strategies and product development of Innocent Drinks. Compliance with the regulation helps the business to maintain brand integrity while avoiding legal complications.
• Economic factor: It includes factors such as economic growth, consumer spending, inflation rate, employment, wage rate and so more. During 2024, the inflation rate in the UK was 2.5 % which is less as compared to the previous months. The decline in the inflation rate leads to an increase purchasing capacity of the customers as a result significantly increased demand for Innocent Drinks products (Ampudia, Ehrmann and Strasser, 2024). This enables the business to increase revenue and profitability.
• Social factor: The factor is concerned with factors such as lifestyle, taste preference and so more. In the present time, the customer become health conscious as a result prefers to eat healthy food items. It leads to increase demand for organic, natural and low-sugary beverages enabling Innocent Drinks to increase demand for its product (Wang, Neilson and Ji, 2023). In addition, changes in demographic factors like income, family structure and age lead to influence purchasing behaviour and preference. For example increasing population of younger consumers leads to increased demand for health-conscious products and sustainability leads to increased target market and product offering.
• Technological factor: In the era of digitalization, Innocent Drinks uses several technologies such as artificial intelligence, automation, big data and sustainable technologies. Optimizing big data allows the company to get insight into customer behaviour, trends and preferences. The data-driven approach helps the company to make informed decisions, determine marketing strategies and development of the product based on customer needs and preferences (Gade, 2021).
• Environmental Factor: To minimize the concern towards the adverse impact on the environment Innocent Drinks is committed to decline carbon footprint via using renewable energy sources, sustainable packaging and implementing eco-friendly practices. This leads to allow the organization to enhance its brand image (Pestle Analysis, 2024).
• Legal Factor: Innocent Drinks compliance with several legal requirements and standards regarding food safety, labelling, advertising, employment law, anti-discrimination policies, environmental regulations and so more. Compliance with the law assists Innocent Drinks to enhance its reputation in the market.

SWOT Analysis

The analysis allows the business to recognize the company or brand`s strengths, weaknesses, opportunities and threats.

Strengths

• Effective brand reputation: One of the strengths of Innocent Drinks is its robust brand image in the market due to its quality natural ingredients smoothies, social responsibility and sustainable practices. This leads to grabbing health-conscious and eco-conscious customers towards the business (Argenti, 2022).
• Efficient Marketing strategy: The investment of Coca-Cola in Innocent Drinks acts as a strength for a company to make its marketing impactful. Efficient marketing leads to help in attracting a large number of customers towards business.

Weaknesses

• High or Premium price: Charging high prices for the products acts as a weakness for the company. Optimizing natural ingredients and use of sustainable practices leads to an increase in the cost of production, rendering the company`s products higher than its rivals, hence make onerous to attract a large number of customers.
• Greater dependence on the UK market: Innocent Drinks smoothies business highly depends on the UK market, fluctuation in the economy in terms of inflation and interest rate leads to a declining demand for company products, directly impacting its profitability.

Opportunities

• International Expansion: Innocent Drinks has an opportunity to expand its business at the international level to increase its market share, customer base and profitability, which leads to help in overcoming the weakness of high dependence in the UK market.
• Technological advancement: The Company has the opportunity to adopt technologies to conduct operations smoothly. Technological advancement will allow the organization to decline its cost of operation as well (Barykin et al, 2021).

Threats

• Intense competition: The Company faces a threat from new entrants as well as existing rivals in the market such as Tropicana, Vita Coco, GU Energy Labs and so more.
• Economic Uncertainty: Fluctuation in the domestic and international economy, exchange rate, and inflation rate leads to a direct impact on the demand for Innocent products, hence, it acts as a one of great threat to the organization.

From the PESTLE and SWOT analysis of Innocent Drinks, effectively identify the key risks and opportunities of the business. Referring to the PESTLE analysis, recognize that greater fluctuation in the economic factors like inflation, interest and employment rate act as a risk for Innocent Drinks as it leads to declined demand for the company`s product. In addition, it is analysed that the premium pricing policy of the company is a risk for the business to grab customers towards business from the rivals. As compared to this, the key opportunity for the business is increasing demand for the company`s product due to changes in the taste and preferences of the customer. Further, the company has the opportunity to increase market share by international expansion and enhance services and operations via technological advancement. 

Conclusion

To sum up, it has been articulated that non-traditional business ways play a crucial role in the success of the business. The report outlined that Innocent Drinks uses non-traditional business ways like event marketing to create demand for its product. The benefit of the way includes getting real-time feedback and the drawback is limited scalability. From the evaluation, it is analysed that selling part of the business to Coca-Cola is the right decision for Innocent Drink as it helps the company to increase its market share. In addition, PESTLE analysis identified that government regulations and changes in the inflation rate impact a company`s demand. Through SWOT analysis identified that a good brand image and effective marketing are strengths, high dependence on the UK market is a weakness and the company has risks from intense competition and economic uncertainty.

Recommendations

• Innocent Drinks should expand its business by entering in international market via joint ventures and partnerships to help in the decline of dependence in the UK market.
• The company should focus on declining its cost of production by collaborating with suppliers that provide natural ingredients at affordable prices.
• The company is advised to focus on product development to make its offering unique from the rivals by doing market research and making products according to the preferences of customers.

REFERENCES

Books and Journals

• Ampudia, M., Ehrmann, M. and Strasser, G., 2024. Shopping behaviour and the effect of monetary policy on inflation heterogeneity along the income distribution. Journal of Monetary Economics, p.103618.
• Argenti, P.A., 2022. Integrating multiple voices when crafting a corporate brand narrative. In The Routledge Companion to Corporate Branding (pp. 259-280). Routledge.
• Barykin, S.Y., Kapustina, I.V., Kalinina, O.V., Dubolazov, V.A., Esquivel, C.A.N., Alyarovna, N.E. and Sharapaev, P., 2021. The sharing economy and digital logistics in retail chains: Opportunities and threats. Academy of Strategic Management Journal, 20, pp.1-14.
• Bowdin, G.A., Allen, J., Harris, R., Jago, L., O'Toole, W. and McDonnell, I., 2023. Events management. Routledge.
• Chaudhuri, A., Datta, P.P., Fernandes, K.J. and Xiong, Y., 2021. Optimal pricing strategies for manufacturing-as-a-service platforms to ensure business sustainability. International Journal of Production Economics, 234, p.108065.
• Gade, K.R., 2021. Data-Driven Decision Making in a Complex World. Journal of Computational Innovation, 1(1).
• Homar, A.R. and Cvelbar, L.K., 2021. The effects of framing on environmental decisions: A systematic literature review. Ecological Economics, 183, p.106950.
• Mejía, G.M., 2021. Theory-driven or theory-informed? A review of behavioural economics in design. The Design Journal, 24(4), pp.567-587.
• Rust, R.T., Rand, W., Huang, M.H., Stephen, A.T., Brooks, G. and Chabuk, T., 2021. Real-time brand reputation tracking using social media. Journal of Marketing, 85(4), pp.21-43.
• Thakkar, A. and Chaudhari, K., 2021. Fusion in stock market prediction: a decade survey on the necessity, recent developments, and potential future directions. Information Fusion, 65, pp.95-107.
• Wang, Y., Neilson, L.C. and Ji, S., 2023. Mindfulness through agency in health consumption: Empirical evidence from committed dietary supplement consumers. Journal of Consumer Affairs, 57(2), pp.871-905.

Online

• Coke’s Innocent buy-out offers threats and opportunities. 2025. Online. Available through: <https://www.marketingweek.com/cokes-innocent-buy-out-offers-threats-and-opportunities/>
• Pestle Analysis. 2024. Online. Available through: <https://pestelanalysis.education/pestle-analysis-of-innocent-drinks/>
• Why Innocent’s ethos survived the Coke acquisition. 2025. Online. Available through: <https://www.raconteur.net/global-business/what-happens-when-ethical-trailblazers-are-acquired-by-multinationals >