BM533 Contemporary Business Economics, Buckinghamshire New

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Contemporary Business Economics

Report applying economic theories to a case study organisation

Learning outcome 1: Critically evaluate the alternative theories of economics and their implications for business, including traditional economic approaches and also more contemporary approaches relating to behavioural economics.

Learning outcome 2: Critically assess concepts and principles underlining business activity.

Learning outcome 3: Apply the appropriate models and techniques for analysing the environment within which business organisations operate

Assignment task: Innocent Drinks was set up in 1998 by three best friends of Richard Reed, Adam Balon and Jon Wright. The company is known for their fruit smoothies and a brand image of being natural.

Innocent Drinks has a reputation of doing things "a little bit differently". For example, the three friends' original market research of whether they should go to a smoothie business or not, was based on bins; when people purchased smoothies in a music festival in London, they were asked to put the empty container to a bin saying "yes" or "no" regarding whether they should get into business selling smoothies. At the end of the festival the "yes" bin was full and the "no" bin was not.

Task 1

Critically evaluate Innocent Drinks non-traditional ways of doing business.

Choose one traditional economics' theory to assess Innocent Drink's product price setting

Choose one of the business decisions Innocent Drink has made, such as donating 10% of their profits to charity. Use at least one behavioural economic theory theory to analyse benefits and drawbacks this decision has been for the Innocent Drinks. Justify your viewpoint.

Task 2
Innocent Drinks sold 18% of the business to Coca-Cola company in 2009. By 2013 Coca-Cola owned over 90% of the Innocent Drinks.
Critically assess did Innocent Drinks make the right decision to sell first part and later most of their business to Coca-Cola? Use at least one economic theory to justify your viewpoint.

Task 3
Use Porter's five dynamic forces model to analyse Innocent Drink's main competitors in 2024. Using PESTLE analysis together with the competitor analysis, recommend the next steps Innocent Drinks should.

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