Table of contentsPolitical factorsSocial factorsLegal factorsPorter's five forcesCompetitive rivalrySupplier powerRebrandingThis is a very competitive industry dominated by large multinational corporations. As an industry, it is also very volatile and subject to many external factors, which can make it difficult for a small startup business to succeed without a solid business plan. These factors include, but are not limited to, consumer brand loyalty, economic and financial fluctuations at both the company and consumer level, and environmental and legal implications that limit their ability to manufacture products. and constitute obstacles to production. Vit-Hit was founded due to a gap in the market for tasty and healthy soft drinks, as the majority of popular energy drinks and soft drinks are full of sugar and calories, which consumers no longer want (Students , 2017). Vit-Hit made this healthy vitamin drink its USP and exploited the market gap and growing consumer demand to become the leading supplier of health drinks in Ireland and a significant presence overseas, particularly in the United Kingdom. Uni (Students, 2017). While they struggled to turn a profit in the beginning, mainly due to unclear direction from management and a lack of consumer demand due to a different consumer mindset at the start. At the time, they managed to turn things around through focused activity and expansion. and are now forecasting unprecedented growth for the years to come (Students, 2017). This represents a radical change in fortunes and also reflects the volatility of the sector in which they operate. This change in fortunes without changing the product itself shows how essential good leadership and marketing are. Without it, a product is doomed to failure, regardless of its quality. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”?Get the original essayPolitical FactorsThere are a number of political factors that affect beverage production in the health drink and soft drink industry. Firstly, the tax issue is obviously a major concern for any business and this is particularly true for companies in the health drinks sector. The question of corporate tax is central when creating a business because the rates vary enormously depending on the country. Vit-Hit was very fortunate to establish itself in Ireland as the country has one of the lowest corporate tax rates (12.5%) in the world and has been classified as a "tax haven" by some . Additionally, taxes affecting products, such as the new “sugar tax” in Ireland, are a major concern and affect different businesses differently depending on the sugar content of their drinks (Students, 2017). For example, Vit-Hit benefited from this measure. because their products are low in sugar and the tax means that the price of alternative drinks with more sugar has increased to match the price of Vit-Hit products. Second, the issue of recommended daily allowances (RDA), which vary between countries and are set by governments, must be taken into account. For example, Vit-Hit had to reformulate its products for Scandinavia because the RDA of vitamins in the Nordic countries is lower than in Ireland (Students, 2017). Economic Factors Like any industry that provides products to consumers, the health products and soft drinks industry is affected byeconomic factors. In order to sell large quantities of their products, businesses need the economy to be doing well so that their customers have more disposable income and can afford to purchase their products. This is especially true if the product in question, like Vit-Hit, is slightly more expensive. If the economy is not doing well and consumers do not have as much disposable income, more expensive products will lose out to cheaper alternatives. The challenge of obtaining financing can also be difficult depending on the economic climate. This is particularly true for start-ups attempting to launch into the sector as they are classified as small and medium-sized enterprises (SMEs) which struggle to obtain financing from traditional financial institutions. This directly affected Vit-Hit, as they could not obtain a loan from the usual sources and had to look for alternative sources in order to obtain the necessary financing to finance the growth and development of the company (Students, 2017) . This problem does not affect large multinationals as much, as they are large enough to be able to finance their own expansion with their own capital. Social Factors Consumer attitudes have changed in recent years and the health and soft drink industry has had to change to keep abreast of these changes. These changes primarily led to the explosion of the health drink sector and the evolution of the soft drink industry to produce more "diet" and low-calorie versions of popular drinks. This is mainly due to the change in consumer attitudes that began in Ireland and the rest of Europe around 2010, and a few years before that in America. Companies must also match their target markets to the image of their product. For example, Vit-Hit has a youthful product image and therefore targeted countries with a youthful image such as Scandinavian countries and Iceland. They have deliberately avoided expanding into France and Germany, as these countries have an older, more traditional mentality and would not find the Vit-Hit product line as appealing. They have also adapted their products to social preferences in South Africa. They achieved this by repackaging their products into slim cans rather than bottles to meet consumer preferences (Students, 2017). Technological Factors Technological advancements and developments are essential to this industry and businesses must keep abreast of new technology developments in order to stay up to date. This is essential to avoid stagnation. It is also essential to keep production facilities up to date in order to maximize production, minimize costs and make the production line as profitable as possible. New technological developments can also facilitate the development of new products that would not have been possible previously, for example products with a longer shelf life or lower sugar versions that taste the same as the original products. Vit-Hit has taken advantage of technological developments in their production facility by using aseptic filling. This had a dual effect: preserving the vitamins added to the drink and allowing them to use thinner plastic in their bottles. This had a positive effect on both their costs and their environmental concerns (Students, 2017). Environmental Factors Environmental factors and their implications are a major concern for businessesoperating in the health products and soft drinks sector. This is especially important right now as people are very aware of the delicate balance of the environment and want to see large companies care about the impact of their products and production processes on the environment . Nowadays, people actively avoid products if they discover that the producer is harming the environment or has not taken necessary precautions to avoid affecting the environment in a negative way, either in the production process, or by using non-recyclable packaging. Vit-Hit could follow this path by using fruit juices grown in a natural and environmentally friendly way and using recyclable packaging. Legal Factors Legal factors are a major problem for any business, but especially for those that create and supply products for human consumption. It is so important that their products are not harmful and do not cause illness in consumers, that there are many legal requirements that companies must follow. Firstly, there are workplace health and safety requirements that the company must comply with to ensure the safety of its employees and prevent product contamination during the production process. In order to stop contamination, there are strict hygiene laws which must be followed by all staff members who come into contact with the product at any time before it is placed on the shelf for the consumer to purchase. . There are also strict regulations on additives, such as colors and sweeteners, that can be added to products (FSAI, 2015). These regulations can vary from market to market and these variations affected Vit-Hit as it sought to expand in America. A problem arose because their product line included the amino acid L-Carnitine, which is allowed under Irish regulations but banned in America (Students, 2017). This resulted in additional costs for their expansion into America, as they had to spend more time and money reformulating the product without L-Carnitine in order to obey US legal requirements. Porter's Five ForcesThe Threat of New Entrants: The threat of new entrants to the US market. market is not a significant factor for already competing companies in the industry, due to the already strong competition and brand rivalry that currently exists in the soft drink and health drink industry. A major problem or concern for new start-ups entering the market is the strength of these well-established companies. Most of them are large multinationals that have great financial power and the ability to oust small start-ups from the market. They also have an established consumer base that maintains a high level of brand loyalty, making it difficult for start-ups to gain market share (Patrick Lucas, n.d.). This means that start-ups must have a well-planned and organized growth strategy in order to even gain a foothold in the market. This is a good thing for Vit-Hit because although it was a problem for them in the early days, it prevents potential competitors from taking off and taking customers away from them. The competitive nature of this industry meant that Vit-Hit had to find a marketing strategy that both differentiated its product from the competition and appealed to its target market (health-conscious young people). The Threat of Substitutes: This is a major problem in this industry and one that all companiesmust take into account. Vit-Hit taps into the mindset of today's youth, who are health-oriented and shun unhealthy soft drinks and look for a tasty and healthy alternative. If people started caring less about their health, Vit-Hit would face a major problem and lose market share as people would choose cheaper, more well-known alternatives such as 7up or Pepsi instead of trying a newer and more expensive product. Vit-Hit is also at risk of replacement and depends on whether people prefer convenience. Nowadays, many people prefer to create their own smoothies at home and bring them to work. This reduces the demand for Vit-Hits products. The soft drinks industry as a whole is also at risk of substitution, as their low value means consumers are more likely to drink alternatives such as MiWadi, which represents much better value and is relatively healthy. (Patrick Lucas, nd) (Students, 2017) Competitive Rivalry Vit-Hit operates in a very competitive industry sector. In effect, they are trying to carve out a market niche in the well-established soft drinks sector and the health drinks market with a product that is the first of its kind and doesn't really fit into any one sector. Vit-Hit has many competitors, from well-established soft drink brands such as Coca-Cola, Pepsi and 7 to newer healthier alternatives such as Innocent smoothies and Fruice juices. The quantity and variety of competitors creates a healthy level of competition that benefits the consumer. That said, there is no product that directly competes with Vit-Hit in providing a great-tasting, vitamin-rich, low-sugar drink. Nonetheless, they must market themselves aggressively and keep their prices low in order to stay in touch with their soft drink competitors, whose prices tend to be lower than those of Vit-Hit. (Patrick Lucas, n.d.) Power Suppliers The majority of suppliers in the soft drink industry do not have much bargaining power. This is especially true for the bottling and packaging supplier that many beverage companies outsource to. This is mainly due to the abundance of companies in this area and the ease with which a large company can change suppliers. This puts pressure on suppliers to lower their prices and provide a service that is both better and cheaper than their competitors (Patrick Lucas, n.d.). Vit-Hit might be facing a bit of pressure from its suppliers as it uses fruit juice and tea as the main ingredients in its products. Due to the Irish climate, some fruits and teas will need to be imported from abroad. This poses a challenge for Vit-Hit as their suppliers might charge them higher prices and they might have no choice but to accept their suppliers' demands. (Students, 2017) Buyer Power: Consumers hold all the power in the soft drink and health drink market. They have certain key requirements that will remain constant and beverage companies have no choice but to meet these demands if they want to succeed. These requirements are: to provide a product that tastes good, represents good value for money and can be consumed safely and healthily without any unwanted side effects. There are other requests which may vary by market or period. For example, there was no demand for low sugar health drinks in Ireland in the early 2000s but there is today and there is little.