Britvic soft drink has a long and rich history that extends back to Victorian England and further. The British Vitamin Products Company – from which Britvic takes its abbreviated name – was founded in the mid-nineteenth century in the market town of Chelmsford in Essex. The company was then little more than a home business run from a chemists shop, not unusual for a soft drinks producer of the time. Soon the company was producing all kinds of concocted soft drinks including lemonades, minerals waters, non alcoholic ales and tonics.
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It was in 1938 that the Britvic ranges of juices that we know today were first produced – thanks to Ralph Chapman, owner of the British Vitamin Products Company. During Great Depression in the UK, he realised the need to supply fresh and affordable source of Vitamin C to its customer that’s when to bottle fruit juice. His juices were sold in small glass a bottle which ensures easy transportation. The idea was immediately successful but it was only in 1949 that the Britvic Brand was formally launched into the marketplace.
In the years after Second World War, Britvic went strength to strength by building a modern factory in its hometown of Chelmsford. In its leading brand appeal it changed its name to Britvic. In 1968, Canada Dry Rawlings -a company formed by the merger of Bass (now IHG) and Whitbread’s soft drinks interest came together with Britvic to form Britvic soft brink. The company went to buy the soft drinks business of Beechams and acquire the UK, franchises of Pepsi and 7UP. In 1995 Britvic added Robinson to the fold and acquired Orchid Drink, Aqua Libra and Purdey’s Brands. In 2000 Britvic acquired the UK and Irish rights of the energy drink Red Devil. In 2004, Britvic acquired the water business of Ben Shaws, which includes Pennine Spring. In 2007, Britvic acquired the soft drinks and distribution businesses of C&C Group plc.
Business Mission, Aims and Objectives:
Importance of organizational structure:
According to Michael A. Hitt and R. Duane Ireland (2009) defines organisational structure as “Organisational structure specifies the firm’s formal reporting relationships, procedures controls and authority and decision making process.”
Britvic has always been a growing company which makes it necessary to get the organization structure right. If the organization lacks the capabilities and hold over the company’s affair, it becomes then difficult to fix the problem when it has grown too big. Because of the growing company its makes more important to have right structure as it provide good chain of command making it easier to the decision maker.
Span of control determines and quantifies the actual of people under one department, having a different department within an organization with right functional division such as sales, marketing and so on makes it easier to determine the responsibility with right authority and having the power to make decision. The Diagram below gives a clear picture of Organization Structure:
Diagram 1: http://www.ehow.com/facts_5157072_importance-organizational-structure.html
There are number of department in Britvic which enables it to work efficiently and effectively to maintain its market position.
Customer Management Director: It heads up this section of the company, which is responsibility for the strategic development and profitable growth of our business across a diverse number of sales channels. This area covers 250,000 outlets that sells the brands and has responsibility for around 700 sales people at all levels of seniority, from new graduate to senior management.
It allows to the channel structure within customer management allows Britvic to maintain a balanced focus on established and growth channels with clear line of sight to customer groups.
Convenience and Impulse
Channel Marketing and Customer Insight
The structure of customer management also incorporates regional sales and third party, has been designed to stretch and develop all areas of business management by managing clients as varied as major retailers, corner shops and national restaurant chains.
To be successful in this environment calls for an acute customer focus, commercial acumen and the ability to communicate well with people at all levels.
Supply Chain: It is a crucial part of the business that is responsible for producing the company’s demand forecast to enable the sourcing of raw materials and services, which in turn are used for manufacturing high quality products which is ultimately, is delivered to the customer. This is head by Supply Chain Director. There are number department that is interring linked.
2.1. Production: The main objectives of the production team are to manufacture products which meet quality, cost and time objectives and to prepare the factories and people to meet future requirements.
There are 7 factories with over 1000 of workers working in there and producing 110 million cases every year. This is dynamic, fast, moving, high velocity environment where maintaining high quality along with high speed production is important.
2.2. Logistics: The overall objective of the logistic team is to produce unbeatable availability delivered together in order to achieve that objective must be built on high quality plans working with customers and suppliers and meeting customers delivery schedule through complex distribution network.
It consists of Customer Logistics and Supply Logistics teams. Using SAP system they forecast the demand before processing the bulk orders.
There are 300 vehicles working on sites across UK, Britvic transport and deliver 15,000 customers making 500,000 deliveries every year.
2.3. Technical Development: New product development is the engine of growth for Britvic business. The technical development team bring the blue sky thinking of marketers into reality.
They manage complex products, packaging and engineering projects that are key to keeping Britvic ahead of the competition.
Technical development team is responsible to bring value for money out of an annual multi million pound investment.
Optimising processes for highest efficiency and lowest cost.
2.4. Central quality, safety and environmental: The central quality, safety and environment ensure that Britvic have the system in place to guarantee that only products of the highest quality are produced.
Products, materials specifications or raw materials are all tested in the laboratory to ensure the quality is at the highest level.
They all work closely with relevant legal authorities such as Environment Agency, Health and Safety executive, Food standards Agency and Local Authorities to make sure that everything is as per the rules and law / legislation.
2.6. Procurement: The procurement team has a critical role to play in working collaboratively with all areas of the business. They are responsible to ensure that all goods and services are gaining value for money.
Finance director manages the Central Services function which comprises IT, company secretariat, and risk management, legal and estates and corporate finance and investor relation.
3.1. Finance: this department operates at all heart of the company, working to provide proactive support to all areas of the business by delivering the best return for shareholders.
3.2. IT: We believe in using leading edge technology to exploit business opportunities and create a competitive advantage. Leading technology and to maintain and protect technology platform for growth is an important job of IT team.
IT team not only ensure that a company is technologically efficient and smooth running but works in partnership with business managers to identify future opportunities and drive major change incentives. There work has contributed more importantly on improving sales order processing, production and distribution, scheduling and invoicing and cash collection.
3.3. Risk management: This aims to help the business achieve maximum efficiency wherever possible.
3.4. Legal and Estates: Their important part is to work for all legal issues been sorted out. It may contracts, trademark infringement or property matters.
Marketing: Britvic operates in highly competitive industry and manages brands in a way that enables it to match the brand strategies and market tactics to consumer needs. This department is dividing Brand marketing, marketing, innovation, category insight and corporate affairs.
4.1. Brand Marketing: This area of marketing aims to drive brands from Pepsi to Robinsons maximise their brand equity to consumers and value to the shareholders. This team is divided is into three key areas: Robinsons, Carbonates and Adult & Water each headed to by Brand Director.
4.2. Marketing: This team enables our commercial plans to be put into action with trade, ensuring smooth working. It manages events and co-ordinates the development of all Britvic extensive artwork.
4.3 Innovation: This team focuses on team predicts and interprets new trends and strives technologies and sees how they can be used to deliver the nest great Britvic product.
4.4. Category Insight: This team is at the heart of the Marketing operation. To understanding and determine the changing needs of the customers. An invaluable function it provides the information that the neighbouring departments needs to base their work on.
4.5. Corporate affairs: This team keeps communication channels open between employees and management while handling Britvic’s external image. Increasingly it acts as a Liaison with government bodies at home and EU over policy development and proposed legislation.
Human Resources: HR mission is to add value through delivering the right people, with right blend of skills and knowledge to grow the business. At HR function is headed by HR director and is divided into three distinct teams. HR business: HR business partners, People & Organizational Development and Compensation & Benefits. These teams all have individual responsibility but effectively work together.
Strategy: This team head by Strategy Director who has responsibility for strategy and planning, including strategic insight and performance management. It develops strategy plans for Britvic for next five year strategy. Annual Plan and performance monitoring and reporting mechanism.
Britvic International Ltd: This subsidiary company is responsible for all sales of Britvic brands outside the mainland of UK. Britvic international overseen by it Managing Director, exports to over 50 countries around the world and has employees based in Ireland, the Netherlands, Belgium and Spain. As a focus for investment has launched it product from the Robinsons range in 7 countries in the last 2 years, has plans to expand rapidly over the next 5 years.
Diagram 2: http://www.tescosw.eu/Files/organizaÄní%20struktura%20EN.pdf
Consumer and Customer trends in Britvic:
Customer serves the purpose of the business existence. They are the integral part of any organization. For any business to be successful or unsuccessful depends on the customer satisfactions.
Britvic serves customers and consumers to the great extent of highest quality.
The breadth and depth of Britvic’s portfolio enables it to target consumer demand across a wide range of consumption occasions, It has extensive and balanced portfolio of stills and carbonates brands such as Robinsons, Pepsi, 7Up, J20 and Fruit Shoot. The strength of Britvic brand portfolio is underpinned by its consumer’s insight and product development capability which has consistently enabled it to produce innovative products, packaging formats and promotional activity.
Britvic has a strong customer base which helps to survive in the competition. In take – home, Britvic’s customers include the “Big 4” supermarkets (Tesco, J Sainsbury, Asda and Wm Morrison) together with a number of other important grocery retailers. The group has significant supply arrangements with a number of key players in the GB pub sector and Leisure and catering channels. Through introducing brands such as Robinson and Fruit shoot in the market outside GB, Britvic International has built on the success.
In 2008, Britvic saw a decline in soft drinks sales as the consumer downturn forced consumers to review their shopping baskets, soft drinks has proved to be resilient but not immune to these pressures. Current trends has seen the plain water, smoothies and pure juice categories come under significant pressure as consumer narrow their soft drinks and seek better value for money. Cola and juice drinks have benefited from shift in consumption.
Looking ahead to the longer term we expect soft drinks will grow by around 3% with stills leading the growth. Currently the value share in the take home market is 56% and 44% carbonates.
In on promise the value spilt is 47% stills and 53% carbonates, where
According to Gregor Gossy (2008) stakeholder is defined as “any identifiable group or individual who can affect the achievement of an organisation’s objectives or who is affected by the achievement of an organisation objectives”
“Our stakeholders have vested and differing; interest in our business- its performance, its impact, and its broader social responsibilities.” Sometimes they are wholly supportive of what we do, at other times, less so. Regardless of their attitude, listening to and understanding their concerns is critical to our own approach to managing or corporate responsibilities.
Investors: They are interested in the financial performance and growth strategy, managing risk and responsibilities such as health. There is regular meeting to present trading results which is held every two months in line with a typical financial calendar
Consumer: They are interested in the products if they are good and safe to consume. This is improved through conducting focus group, survey. They are engaged with the consumer on every day of the calendar year.
Customer: They priorities are focused on the buying safe and high quality products. This achieved through meetings and trade media. Regular meeting is held to ensure the work is done.
Government: They are more interested if the organization is complying with safety, labelling and marketing regulations, paying taxes and addressing environment impact. This achieved through meeting the needs with government bodies such as DEFRA department of health and the food standards.
Employees: They want to know they have a safe, productive and happy environment to work. This engaged through employee opinion surveys and via Employee Involvement Forums. This survey is conducted through employee survey twice a year and at least forums are also held at least twice a year.
Suppliers: They are more interested to keep up with consumer trends and new product development, fair trading terms and support on ethical sourcing. This is achieved through procurement teams and industry groups such as AIM progress.
NGO’s: They are more interested in a wide range of issues including environment, ethical sourcing and health and well being.
Communities: Community that reside close to the operational area, the priority is to have safe communities. Through company policies, employees are engaged to spend time with their local communities.
Diagram 3: http://nathaliebellanger.blogspot.com/2008/02/stakeholders-public-and-audiences.html
Communication in Britvic:
According to Susan Alvare and Diana Dugan (2005) communication is defined as “Communication is the exchange of information with others. It is a process of sending and receiving messages. People communicate with signs and symbols, such as words, drawings, and pictures. They also communicate with behaviour.”
The methods of business communication have rapidly evolved since the early days of business. There are abundant amounts of ways in which business can communicate both internally and externally.
Britvic has internal communication involves the communication that exist within a company and can take many form success of an organization is communication from within. Communication is essential internally to achieve goal or objectives.
Britvic has strong external communication how a provider interacts with outside their own organization. This includes public, employers, community organization, local authorities, job centres, career offices, and other training.
Britvic interact with internal and external people to have an effective management work activities.
Management of work activities:
In most stages in an organization it is necessary to identify the common management that informs the model of the knowledge action. The companies include both the managers and knowledge workers, and again the researcher’s acts as facilitators. In order to facilitate the process the following common management roles were used to guide the discussions: Co-ordinator, Leadership, control and measurement.
In considering the leadership influences effective management of knowledge assets and knowledge manipulations skills (e.g. Organising training courses) and the creations of conditions that are conducive to sharing relevant information in Britvic (e.g. Networking and Socialising) were explored. Basically the control was considered on the basis of how the management of Britvic manage the provision of knowledge assets including the quality and quantity of the knowledge assets used by Britvic, access and security issues related to confidentiality were on the acquisition of knowledge assets.
Diagram 4: http://www.palgravejournals.com/ejis/journal/v16/n6/full/3000721a.html
New product development:
In Britvic, a number of new brands and brand extensions have been launched in the first half of the year all aimed at the growth segments of the market. All innovation launches planned at the time of float have been delivered on time. Three new brands, Drench, Pennine Spring and Fruit Shoot H2O have been successfully delivered on time and are performing in line with management expectation. In pure juice drinks, not from concentrate Britvic squeezed Orange and Pressed Apple juices were launched into the on premises market.
Carbonates non added sugar variants continue to grow. Pepsi brand support has hence been focused behind the low calorie; sugar free variant Pepsi Max, the launch of Pepsi Max Cino and 7UP for free. There also been developed two new flavours under the Tango Clear Brand.
The best to have product development is through innovation. Innovation will be guided by the consumer trend towards health and well being, developing Britvic’s significant presence in emerging and faster growing categories including non added sugar carbonates, adult functional, sports drinks and water. Britvic has a strong track record of successful innovation and Business Transformation Programme has ensured a reduction in the time taken from concept to launch by one third enabling new product to market more quickly.
Consumers are at the heart of our business. What concerns them, concern us. We live in a world in which lifestyles have changed dramatically. Health and well being issues are driving consumers’ choices. They want products that are more natural and healthier. They are also increasingly interested in the environment footprint the product they buy.
Stewart joined the soft drinks company in Feb 2008, replacing high profile marketing chief Andrew Marsden.
He did a hard core advertising for the Tango and J2O from CHI & Partners, which continues to work on water brand Drench. Britvic evolved £50 million marketing strategy to increase the emphasis on digital. Britvic has been too traditional in its approach.
No one can deny that UK’s second biggest soft drinks firm has taken risks over recent years as its attempts to diversify beyond carbonates, which are falling out of favour with consumers.
In 2005, it launched Drench into the competitive UK water market, and last June introduced Robinsons Smooth Juice, the first ambient juice sold in plastic packaging.
Pepsi Xtra Cold, a patented dispenser system that cools and mixes the cola below the bar, rather than in glass, as a traditional cola and steal share from the market leader Coca – Cola.
Innovation is an important part of Britvic marketing strategy, according to him, its favourite brand, in terms of Business model is Apple, which is able to get money out of loyalty.
Quality is a basic business principle for Britvic Soft Drinks.
We will consistently provide our external and internal customers with products and services which fully meet their expectation of Quality, Safety and Compliance with Legislation.
We will achieve Quality through the continuous development of our people, procedure and systems.
Diagram 5: http://www.borealisgroup.com/images/about-us/quality/quality-management-chart.jpg
In Britvic, it is very important to maintain high quality in the entire product to be at forehead of the competitors.
Soft drink manufacturer adhere to strict water quality standards for allowable dissolved solids, alkalinity, chlorides, sulphates, iron and aluminium. Not only is it in the interest of public health, but clean water also facilitates the production process and maintains consistency in flavour, colour, and body.
Microbiology and other testing occur regularly. The national soft drink association and other agencies set standards for regulating the quality of sugar and other ingredients. If the product such as soft drink is produced with low quality sugar, articles in the beverages will spoil it, creating floc.
To prevent such spoilage, sugar must be carefully handled dry, sanitized environments.
It is crucial for soft drink manufacturers to inspect raw materials before they are mixed with other ingredients because preservatives may not kill all bacteria.
All tanks, containers and pumps are washed thoroughly sterilized and continuously monitored. Cans are made of aluminium alloy or tin coated low carbon steel, are lacquered internally to seal the metal and prevent corrosion from contact with the beverage.
Soft drink manufacturers also recommend specific storage conditions to retailers to insure that the beverages do not spoil. The shelf life of soft drink is generally at one year.
Britvic is committed to operating to the highest standard of food safety and quality. Britvic quality policy is reviewed and agreed by the senior management and disseminated throughout the organization.
Britvic has operated and developed its quality systems over many years and has maintained ISO accredited systems since the early1990’s. These systems included detail Britvic Technical Codes of Practice for both good manufacturing practice and hazard analysis and critical control point systems, which are routinely audited by the Central Quality Assurance team.
Manufacturing sites have also been audited by our Pepsi Franchisor. In order to standardise these audits and reduce audit duplication, all sites have recently gone through the process of obtaining accreditation by EFSIS to the BRC Global Standard- food.
The quality of Britvic products in the market is continuously monitored through two key processes.
We purchase our own products in a variety of outlets across the country and these are returned to the Central Laboratories for analysis against Quality Specifications and Taste and Appearance. Monthly target are set for compliance and these are linked to individual and team reward schemes.
We closely monitor any customer and consumer complaints and react very quickly to any emerging issues. Again targets are set for improvement and monitored monthly, these are linked to individual and team reward schemes and reported every four weeks to the executive committee.
Health and Safety:
Health and safety continues to be significant public issues and there is important part to play in helping those people that Britvic interact with directly that is consumer who chooses the drinks and for employees to lead healthy and balanced lifestyles.
Consumer is at the heart of our business. We recognise that we can play a role in addressing some of the health and well being that nation face. This is provided by a wide variety of soft drinks to meet their needs.
Marketing the drinks responsibly and promoting health, well being and nutrition.
Working with partners:
Britvic can make a bigger difference to focus on areas by working with specialist organization and industry bodies and the partner includes MEND (Mind, Exercise, Nutrition, and Do-it) a wide UK wide programme advising families on healthy lifestyles.
Business4life – a coalition of industry partners, supporting the Government’s Change4Life initiative.
Employee’s safety means motivated and engaged employees with a good work life balance. People strategy focuses on Leadership, performance, nurturing talent and embedding behaviour essential to personal and business success. The health and Safety of our employees is also crucial and there is stretching annual improvement targets and supporting practices. Britvic policies and actions are designed to develop and support employees, promoting flexibility for all.
There is an continue effort to build on the good and health and safety through extensive training and engagement of employees.
Health and Safety at the sites:
Britvic continues to build on the good health and safety record and actions that have helped to reduce 68% in accidents over last five years and an 81% reduction in working days lost through injury.
Recently Huddersfield site of Britvic obtained certification for it ‘ Health and Safety Management to OHSAS 18000’ and our Rugby site achieved a ‘British Safety Council International Safety Award’ and RoSPA Gold Award for Safety’
Every site offers extensive training and focus on the identification of hazards and early correction to avoid potential accidents.
An example of this or Rugby factory stopped production for a week to provide it 200 staff with a series of interactive training sessions. The actively week was designed procedure and new health and safety legislation. Throughout the week employees received training on fire extinguisher training and were trained in the principles of first line machine maintenance.
Britvic has also launched online safety training, extended across all sites and covers home working, driving and lone travel.
Risk Management in Britvic:
Risk management process: There is an risk management in place which is an ongoing process for identifying, evaluating and managing the significant risks faced by the group, which has operated throughout the financial year. This process involved a quarterly assessment of Functional risk which is then reviewed and signed off by the group Risk Committee.
The group’s risk management framework is designed to support this process and is the responsibility of the Group Risk Committee. The risk framework governs the management and control of both financial and non financial risks. The adoption if this policy enables a consistent approach to the management of risk at both regional and business unit level.
Through the monitoring processes the board conducted review of the effectiveness of the system of internal control.
Risks and Uncertainties that Britvic may face are the as below:
Risks relating to the Group:
A decline in certain key brands
A termination or variation of its bottling and distribution arrangements with Pepsi development in the PepsiCo relationship.
A further consolidation in its customer base
Any interruption in or change in the terms of, the Group’s supply of packaging
Any failure in the processes or the IT systems implemented as part of the Business programme.
Contamination of raw materials or finished products.
Litigation, complaints or adverse publicity in relation to its products.
Loss of key employees
Any failure of Group’s operational infrastructure.
Changes in accounting principles or standards
Risk relating to the market:
A change in consumer preference, perception and / or spending
Potential impact of regulatory development.
Poor economic conditions and weather
Actions taken by competition authorities or private actions in respect of supply or customer arrangements
Actions by the Group’s competitors
Our Strategy for Growth
Britvic has a clear and focused strategy for growth:
Supporting and growing Britvic core brands such as Pepsi, 7UP, Robinson squash, Tango, Fruit Shoot and J20.
Innovating and developing the seed brands such as Drench, Gatorade, Raw, V Water and Lipton Iced Tea.
Managing efficiency by improving margins and free cash flow.
Expanding into Europe ( Britvic International and the first full year of Britvic Ireland
Britvic is one of the leading soft drink manufacturers in UK and Ireland.
Britvic has grown market share and revenue across all of the categories with a strong performance from both our core and seed brands, despite continued difficult trading conditions. The principal key performance indicators that management uses to assess the performance of the group in addition, volume growth by increasing in number of litres sold by the group relative to prior period, Average Realised Price (ARP) is the average per litre sold, revenue growth is the increased in sales achieved by the group relative to prior period.
Britvic intends to grow within GB, Ireland as well as internationally:
Market Volume growth: It is estimated by Britvic that an average 2-3% market growth per year in the medium and long term. This growth is expected to grow by the stills category as consumers renew their focus on health, wellbeing and a natural agenda. Per capita consumption of purchased soft drinks will be in turn driven by:
Cohorting: Younger generations drink more purchased soft drink and less tea, diary drink and tap water than previous generations.
Population growth: over the next 20-25 years, the British population is expected to reach 70million from the current population of around 60million.
Continuing trend: The per capita soft drink consumption continues to increase against 2% of diary drink, 4 % of hot drink and 8 % of alcoholic drink reduction.
Innovation: it typically adds 1.0 – 2.0 % to Britvic GB’s revenue line in a full year.
ARP growth: It is derived from promotional management, product / channel mix and headline price increases.
Distribution opportunities: Britvic does not yet have near omnipresent distribution within the GB soft drink market and particularly under trades in attractive routes to market such as convenience, Impulse and Leisure / catering. In Ireland, the structure of the business is now appropriate for a r
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