Applying the Business Management Toolkit (DP IB Business Management): Revision Note

✔ Strong brand recognition

• Myt PLC is a multinational company with operations on six continents, giving it a strong global presence

✔ Large product portfolio

• Initially producing one root beer, Myt now sells over 30 different drinks, catering to different consumer preferences

✔ Social media marketing

• Myt effectively uses social media influencers to reach younger customers and increase engagement

✔ Plans for modernisation

• Myt intends to make its factories greener, which could improve cost efficiency and brand reputation

❌ Health concerns about sugar and caffeine

• Many of Myt’s drinks are high in sugar and caffeine, which is linked to obesity and diabetes. This may negatively impact sales

❌ Risk of backlash from sugar substitutes

• While sugar-free alternatives help reduce sugar content, some consumers worry about the health effects of artificial sweeteners

❌ High costs of modernisation

• Making factories greener and investing in digital advertising (avatars) could be very expensive in the short term

❌ Challenges of entering new markets

• The healthy snacks market is highly competitive, and Myt may struggle to differentiate itself from established brands

✔ Growing demand for healthier drinks

• Consumers are increasingly choosing low-sugar, caffeine-free, and functional beverages

✔ Expanding bottled water market

• The bottled water industry is expected to grow, and Honest Water gives Myt a foothold in this sector

✔ Sustainability as a competitive advantage

• Reducing waste, carbon emissions, and plastic use could attract environmentally conscious customers

✔ Technology in marketing

• The use of computer-generated avatars in advertising could give Myt a stronger digital presence

❌ Strict government regulations

• Many countries are taxing high-sugar drinks, and some might introduce limits on caffeine levels

❌ Strong competition

• Myt faces competition from PepsiCo, Coca-Cola, and health-focused beverage brands

❌ Consumer trust issues

• If the taste of reduced-sugar drinks changes, some loyal customers may switch to competitors

❌ Pressure groups and activists

• Myt could face criticism from health and environmental organisations if changes are not meaningful

• Increasing consumer demand for healthy drinks and snacks

• Consumers are more aware of obesity, diabetes, and caffeine addiction, pushing Myt to reduce sugar and caffeine

• Growing environmental awareness

• Consumers want biodegradable packaging, ethical sourcing, and sustainable business practices

• Changing consumer habits

• Many customers prefer functional drinks (prebiotics, vitamins, low-calorie options) instead of traditional soft drinks

• Use of AI and avatars in advertising

• Myt is investing in computer-generated avatars to create more interactive and engaging digital marketing campaigns

• Factory modernisation

• Focus on making Myt factories greener

• Possible use of energy-efficient production methods and recycling initiatives

• Global inflation and rising costs

• The cost of raw materials, packaging, and transportation is increasing, which could reduce profits

• Premium pricing for healthier drinks

• Healthier and eco-friendly drinks often cost more to produce, but consumers may be willing to pay higher prices for sustainable and healthy products

• Potential financial risks of acquisitions

• Expanding into coffee and bottled water requires heavy investment, which may take time to become profitable

• Sustainability goals and green factories

• Myt is investing in modern, energy-efficient production to reduce its environmental impact

• Recycling and biodegradable packaging

• Governments and consumers are demanding less plastic waste, and Myt may develop more sustainable packaging

• Ethical sourcing concerns

• Bottled water businesses sometimes face criticism for using too much groundwater, which could create negative publicity for Honest Water

• Government health regulations

• Many governments have introduced sugar taxes and caffeine limits, forcing Myt to reformulate its products

• Trade policies and tariffs

• Myt operates globally, so trade restrictions, import/export taxes, and geopolitical instability could impact its supply chain

• Laws on advertising and food labelling

• Regulations on how Myt can market “healthier” drinks might limit advertising claims

• Data privacy laws

• If Myt collects customer data for targeted digital marketing, it must follow data protection laws

• Corporate Social Responsibility (CSR)

• Myt is focusing on greener factories, healthier drinks, and sustainable products

• Ethical issues with artificial sweeteners

• Some consumers worry about the long-term health effects of sugar substitutes, which could cause controversy

• Avoiding “greenwashing"

• If Myt claims to be eco-friendly but does not make real changes, it could lose consumer trust

High

Low

High

Stars

• Bottled water (Honest Water) could be a significant brand within a growth market

• Myt may continue to invest in these in the hope that they will become cash cows

Question Marks

• Lotssa Coffee needs investment to grow, though there is significant risk involved

• Competitive pricing and aggressive promotional activity are likely to be expensive

Low

Cash Cows

• MYt's root beer and top-selling soft drinks are established brands that could generate cash to support other products

Dogs

• High-sugar, high-caffeine drinks may decline in popularity

• Myt may decide to divest these products

❌ Changing consumer preferences

• Some customers may not like the reformulated drinks if the taste is different

❌ Health concerns still exist

• Even with lower sugar, Myt may still face criticism for artificial sweeteners

• If successful, Myt can increase its market share and strengthen its existing brand presence

• Maintaining sales of core drinks (like its original root beer) is crucial while expanding into new markets

❌ Product development is expensive

• Research, testing, and market launch costs can be high

❌ Competition is strong

• PepsiCo, Coca-Cola, and smaller health-focused brands are also expanding into healthier beverages

❌ Customer acceptance

• New products must be well-received, or they could fail in the market

• If successful, Myt can capture more market share among health-conscious consumers

• Expanding its product range beyond carbonated soft drinks reduces risk if traditional soda sales decline

❌ Cultural and legal differences

• Different countries have different health regulations and consumer preferences

❌ Logistics and supply chain issues

• Expanding internationally requires strong distribution networks and brand positioning

• If successful, Myt can increase revenues by entering high-growth markets where demand for bottled water and coffee is rising

• Expanding Lotssa Coffee and Honest Water allows Myt to diversify income streams beyond soda sales

❌ High risk

• Entering completely new markets requires significant investment, research, and strong branding

❌ Uncertainty in success

• Not all diversification strategies succeed (e.g., Coca-Cola’s past failure with its energy drink brands)

• If successful, Myt could reduce its reliance on soft drinks

• Acquiring Lotssa Coffee and Honest Water expands Myt’s brand influence across multiple industries