Assignment 2- Honest Tea

Assignment 2- Honest Tea

•What are the characteristics of the market, such as size, barriers to entry, and competitors?

Honest Tea has entered the tea market after finding out that tea has become the second largest drink in the world after water. Thus the firm along with providing iced tea and sports drinks in the past quickly filled the space of providing tea to its customers. The increasing demand of the customers have enabled the firm to gain confidence there is a market which need to be catered otherwise any other company could have entered. Thus the market analysis in which Honest Tea deals show that there is no room for mistakes. The size of the market is big because there are many local as well many international brands in the market. The tea market to do not have strict barriers to entry and firms can easily enter the market but the difficultly is to sustain and create their name in a highly competitive market. There are many national and international competitors in the market that can snatch the share of the market. Although Honest Tea has been able to create its brand value and has competitive advantage but it needs to quickly adapt the changes occurring in the market on daily basis. This is the reason why Honest Tea need to come up with a new strategy in a very short-time period.

•How important are rapid growth and going national?

In order to achieve the targeted profits and sales it is important to expand so that benefits of economies of scale can be achieved. In order to respond to the increasing demands of the customers it is important that the firm should expand its growth and search for new markets with the same products or grow in the same with ...