Nantucket Nectars Case Solution

1. Develop your own possible choices for the company, Nantucket Nectars. 

One of the options in my opinion for Nantucket Nectars is acquiring another silent partner like Mike Egan who could provide investment while not interfering in the management of the business. The business can use this investment to negotiate with supermarkets and convenience stores to shelf their product. Similarly, new distributors who are skilled and have good relations with supermarket and convenience stores owners could be reached out and collaborated with using this investment from a new silent partner. However, this option does not guarantee the growth that the two co-founders are looking for in their fresh-based juice business as competition is high in the industry.

Another option is to sell a share to a company that has a good distribution channel and can provide the benefit of economies of scale to Nantucket Nectars. Numerous potential buyers exist including Seagram, Ocean Spray, Pepsi, Triarc, Cadbury, Starbucks, Welch's, and Coca-Cola. Of all these bidders, a strategic agreement with Starbucks has already been achieved which will allow the company to improve distributions and reach out to more consumers. Similarly, companies like Ocean Spray, Pepsi, and Triarc have reached out to Nantucket Nectars to buy it. This shows the promising value that this business holds for these big players of the industry in the evolving market. 

Of the three bidders that reached, Pepsi and Ocean Spray seem to be most beneficial for Nantucket Nectars. Pepsi’s brand name would enable Nantucket Nectars to reach more points of sales and a bigger distribution channel. While Ocean Sprays good cashflows, culture fit, manufacturing economies of scale due to agreements with major bottlers, and finally their expiring contract with Pepsi and subsequent loss of revenue would motivate them to bid a higher price for acquiring a share at Nantucket Nectars. Nantucket Nectars should choose to sell the company to the one that offers higher bids and better terms for the business which will enable the company to grow the most, and which company would guide better while giving the authority to the current management of Nantucket Nectars. 

2. Explain how your answer was derived.    

Nantucket nectar is a growing brand in a fad category in a highly competitive industry. Its unique story and smart yet inexpensive marketing strategies have enabled it to distinguish it amongst the other market players of the industry. In addition, its high-quality product helped it grow rapidly. 

The brand as well as its offering is a promising one. However, Nantucket Nectars is not able to reach its potential consumers because of the barriers that exist in the industry. Big players of market control access to raw materials and manufacturing like Snapple controlled access to bottling plants while Ocean Spray controlled most of the cranberry’s supplies. Similarly, the retail shelf spaces in supermarkets and convenience stores were controlled by big players of industry who also had the potential to reduce their prices and drive new entrants out of the market.