IndexPolitical factorsSocial factorsLegal factorsPorter's five forcesCompetitive rivalrySupplier powerRebrandingThis is a very competitive sector dominated by large multinationals. As an industry, it is also very volatile and is subject to many external factors, which can make it difficult for a small start-up business to succeed without a solid business plan. These factors include, but are not limited to, consumer brand loyalty, economic and financial fluctuations, both at the business and consumer levels, as well as environmental and legal implications that limit their ability to produce products and provide barriers to production. Vit-Hit was founded due to a gap in the market for healthy and tasty soft drinks because most of the most popular energy drinks and soft drinks are full of sugar and calories, something consumers no longer want (Students, 2017 ). Vit-Hit has made this healthy vitamin drink its USP and has capitalized on the gap in the market and growing consumer demand to become the leading supplier of health drinks in Ireland and a significant presence abroad, particularly in the UK ( Students, 2017). Although they struggled to make a profit at first, mainly due to management's unfocused direction and lack of consumer demand due to a different consumer mindset at the time, they managed to turn their fortunes around thanks to a focused business and expansion plan and predict unprecedented growth in the coming years (Students, 2017). This represents a dramatic change in fortunes and also reflects the volatility of the industry in which they operate. This change in fortune without changing the actual product shows how essential good leadership and good marketing are and without them a product is doomed to fail no matter how good it is. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Political Factors There are numerous political factors that influence beverage production in the health and soft drink industry. Firstly, tax is obviously a key concern for any business and this is especially true for companies in the health drinks industry. The issue of corporate tax is crucial when starting a business as rates vary greatly from one country to another. Vit-Hit has been very fortunate to be established in Ireland as it has one of the lowest corporate tax rates in the world (12.5%) and has been classified by some as a "tax haven". In addition to these taxes affecting products, such as the new “sugar tax” in Ireland is a key concern and affects different companies differently depending on the sugar content of their drinks (Students, 2017). For example, Vit-Hit benefited tax as their products are low in sugar and the tax means that the price of alternative drinks with more sugar is increased to match the price of Vit-Hit products. Secondly, the issue of the recommended daily allowance (RDA) must be considered, which varies in different countries and is established by governments. For example, Vit-Hit had to reformulate their 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 and soft drinks industry is influenced by economic factors. To sell large quantities of their products, companies require the economy to gogood so that their customers have more disposable income to be able to afford to buy their products. This is especially true if the product in question, such as Vit-Hit, is slightly more expensive. If the economy is not doing well and consumers do not have enough 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 especially true for start-ups attempting to enter the industry as they are classified as small and medium-sized enterprises (SMEs) that have difficulty obtaining funding from major financial institutions. This directly affected Vit-Hit as it failed to obtain a loan from the regular sources and sought alternative sources to obtain the necessary finance to finance the growth and development of the company (Students, 2017). This problem does not concern larger multinationals, as they are large enough to be able to finance their expansion with their own capital. Social Factors Consumer attitudes have changed in recent years and the health and soft drinks industry has had to change to keep pace with these changes. These changes have primarily led to the explosion of the health drink industry and the shift in 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 occurred in Ireland and the rest of Europe around 2010, and a few years earlier in America. Furthermore, companies must adapt their target markets to the image of their product. For example, Vit-Hit has a young product image, so it targeted countries with a young image such as Scandinavian countries and Iceland. They have purposely avoided expanding into France and Germany as these countries have an older, more traditional mindset and would not find the Vit-Hit product range as attractive. They also adapted their products to South Africa's social preferences. They did this by repackaging their products in thin cans instead of bottles to meet consumer preferences (Students, 2017). Technological factors Technological advances and developments are fundamental to this sector and companies must always be aware of new technology developments to stay up to date. This is essential to avoid stagnation. It is also essential to keep the production facility updated in order to maximize production, minimize costs and make the production line as cost-effective as possible. New technological developments can also make it easier to develop new products that previously would not have been possible, such as products with a longer shelf life or low-sugar versions that taste the same as the original products. Vit- Hit took advantage of technological developments in their manufacturing facility by using aseptic filling. This had the dual effect of preserving the added vitamins in the drink and allowing them to use thinner plastic in their bottles. This has had a positive effect on both costs and environmental concerns (Students, 2017). Environmental Factors Environmental factors and their implications are a key concern for companies operating in the health and soft drinks industries. This is especially important right now as people are very aware of the delicate balance of the environment right now and want to see big companies care about the impact of their products and production processeson the environment. Nowadays people will actively avoid products if they find that the manufacturer is harming the environment or has not taken the necessary precautions to avoid affecting the environment in a negative way, either in the manufacturing process or by using non-recyclable packaging. Vit-Hit could achieve this by using naturally and environmentally grown fruit juices and using recyclable packaging. Legal Factors Legal factors are a big issue for any company, but especially those that create and supply products for human consumption. It is so important that their products are not harmful or cause illness to consumers that there are many legal requirements that companies must meet. First of all, there are health and safety requirements at work that the company must comply with to guarantee the safety of its employees and to prevent contamination of products during the production process. To stop contamination, there are strict hygiene laws that must be followed by all members of staff who come into contact with the product at any time before it is put on the shelf for purchase by the consumer. There are also strict regulations on which additives, such as colors and sweeteners, can be included in products (FSAI, 2015). These regulations can vary from market to market, and these variations affected Vit-Hit as it sought to expand into America. An issue arose due to the fact that their product range included the amino acid L-Carnitine which was permitted by regulation in Ireland but is banned in America (Students, 2017). This led to additional costs for their expansion into America as they had to spend additional time and money reformulating the product without L-Carnitine to meet US legal requirements. Porter's Five Forces The threat of new entrants: The threat of new entrants to the market is not a major factor for companies already competing in the industry, due to the already strong competition and inter-brand rivalry that currently exists in the beverage industry non-alcoholic and healthy. One of the major issues or concerns for new young companies entering the market is the strength of these established companies. These are, for the most part, large multinationals that have great financial power behind them and have the ability to push small start-ups out of the market. They also have an established consumer base that maintains a high level of brand loyalty, which makes 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 establish themselves in the market. This is good for Vit-Hit because, although it was a problem for them in the beginning, it prevents potential rivals from taking off and taking away their customers. The competitive nature of this industry meant that Vit-Hit had to find a marketing strategy that would differentiate its product from the competition and appeal to its target market (health-conscious young people). The threat of substitutes: This is a big issue in this industry and one that all companies need to take into account. Vit-Hit is based on the mindset of today's youth, who are health-conscious people, who avoid unhealthy soft drinks and look for a tasty and healthy alternative. If people started caring less about their health, Vit-Hit would face a big problem and lose market share as people would choose cheaper, better-known alternatives like 7up or Pepsi instead of trying a new, more expensive product. Vit-Hit is also at risk of substitution and relies on people who prefer thecomfort. Many people nowadays prefer to make their own smoothies from scratch 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 poor value means consumers are more likely to drink alternatives such as MiWadi which represents much better value and is relatively healthy. (Patrick Lucas, n.d.) (Students, 2017)Competitive RivalryVit-Hit operates in a very competitive industry area. That's because they're trying to carve out a market niche in the well-established soft drink industry and health drink market with a product that is the first of its kind and doesn't really fit into one industry. Vit-Hit has many competitors, from established soft drink brands such as Coca-Cola, Pepsi and 7up to newer, healthier alternatives such as Innocent Smoothies and Fruite fruit 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 rivals Vit-Hit by providing a healthy, vitamin-rich, tasty drink that is low in sugar. Even so, they must market themselves aggressively and keep prices low to stay in touch with soft drink competitors, whose prices tend to be lower than those of Vit-Hit.(Patrick Lucas, n.d.) Supplier PowerMost Suppliers in the soft drinks 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 prices and provide better and cheaper service than their competitors (Patrick Lucas, n.d.). Vit-Hit may be facing some pressure from its suppliers as it uses fruit juices and teas as primary ingredients in its products. Due to the Irish climate, some fruit and tea will have to be imported from abroad. This presents a challenge for Vit-Hit as its suppliers may charge higher prices and they may have no choice but to accept their suppliers' demands. (Students, 2017) Buyer Power: Consumers hold all the power in the soft and health beverage market. They have some key demands that will remain constant, and beverage companies have no choice but to meet these demands if they want to succeed. These demands are: to provide a product that tastes good, represents good value and is safe and healthy to consume without negative side effects. There are other demands that may vary depending on the market or time period. For example, in the early 2000s there was no demand for low sugar health drinks in Ireland, but now there is and there is low demand for Vit-Hit type products. in Germany and France due to their preference for drinks with a higher fruit juice content (Students, 2017). Customers are also very sensitive to the price of products in this sector and do not hesitate to change brands if a product becomes more expensive than the competition. This is because soft drinks are not an essential need for which consumers are willing to pay any price. (Patrick Lucas, n.d.) Vit-Hits' Internationalization Strategy: In light of my above analysis I concluded that Vit-Hits' internationalization strategy was a well thought out and well executed expansion plan that maximized share acquisition market while minimizing the disadvantages.