Report On Organizational Structure And Growth Of Innocent Drinks

Innocent Drinks Case Study

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Organizational structure of a company defines how allocation of tasks is carried out, and how coordination and supervision in the company are made (Thompson, 1996). Task allocation, coordination, and supervision are based on fulfilling the goals and mission of the enterprise.

Entrepreneurship is a central part of Innocent’s organizational structure and culture (Thompson, 1996). Innocent Drinks Company believes in recruiting smart entrepreneurs. Employees are given the authority to analyze an idea and apply it without permission; this method encourages the act of changing things from the current state to make them better. Innovation is a day-to-day task for all employers at Innocent Drinks (Reynolds, 2012). Change encourages employees to suggest ways to improve the business. These ways could include suggesting new products, new ways of working, suggestive sales, and other brilliant ideas.
Innocent Drinks was started in the year 1999 by three friends; namely, Richard Reed, Adam Balon, and Jon Wright (Reynolds, 2012). The idea came into practice during a music festival. Selling smoothies in these functions motivated the three friends to give up their jobs for the business venture.
Innocent has a broad market across Europe. With almost 240 staff members, 200 of these employees are based in its Headquarter (London). In the year 2012, the revenue budgeted by Innocent was estimated to 200 million pounds. Coca-Cola Company gained interest in the company and requested to buy some shares. Initially, Coca-Cola owned fifty-eight percent of Innocent Drinks, though the three founders have full control over the company’s operations. As of today, Coca-Cola wants to increase its stake to 91%. If the deal goes through, then the three founders will lose complete control over the company’s operational activities (Little, 2014).
The growth of Innocent Drinks is driven by innovation as an everyday behavior for employees. The main reason behind the company’s success is the approach that the employees use to tackle suggested ideas. Employees are allowed to suggest innovative ideas freely. Brilliant ideas are allowed, and the employee involved is fully supported by the organization. The team goes by the slogan ‘find the stars and let them shine.’
With support, courage, and without fear of failure, the employees put brilliant ideas into practice. This employee-led method was proven to play a significant role in the development of Innocent Drinks. An employee named Clare suggested production of a product made from vegetables. Her idea was that Innocent could produce vegetable drinks just like they did to fruits (Little, 2014). The product was named as Veg Pot. With support and resources from Innocent Drinks Company, the product turned out to be a success. The Veg Pot project is now worth 30 million pounds. From this experience, it is evident that the employee-led strategy plays a significant role in the success of Innocent Drinks.
Innocent Drinks produces bottles with a short shelf lives (Fortune System). This idea was brought up by an employee working in production sector. The approach helped to get correct forecasting and planning. The company supported the idea with its resources and finance, and the impact was overwhelming. A study showed that fulfillment before the fortune system was at around 95.5%. After the implementation of the Fortune System, the satisfaction increased to 99.4% (Little, 2014).
The success and gradual development of Innocent Drinks have been due to organizational structure of the company. From the above scenarios, employees’ involvement in the decision-making process has significantly contributed to the growth of Innocent Drinks. Annual reports of the business indicated that wastage of the drinks dropped below one percent after the Fortune System was implemented.

Reasons for Growth of the Company

Innocent Drinks Company has grown to a better level in business industry due to the involvement of staff and company’s owners. Most of the brilliant ideas that have seen the development of Innocent Drinks come from the employees. The employee-led approach to run the organization has played a significant role in the success of Innocent Drinks.

Strategies followed by the organization to its success have included reinforcing engagement. Some of these strategies include:

Transparency and open communication
Innocent Drinks Company holds a company meeting with its outlet monthly. In these meetings, Innocent founders give a monthly financial report and plans for the coming month. Key financial figures and income are shared with the employees. The meeting involves open discussions, and workers are allowed and encouraged to ask questions and express their views on production and management.
The organization believes in transparency and communication with employees. Transparency with employees encourages involvement of workers in the organization at a deeper level than performing assigned roles.

Planning

The founders revealed that the arrangement of staff is random regardless of an employee’s role in the organization. Using this method allows the staff and management get a maximum visibility (Reynolds, 2012). It also creates a platform for interaction between workers of different departments. The management gets a broader understanding of how the organization works and readily identifies problems that need to be fixed.

Visibility

The management keeps an open relationship with employees. Through visibility, employees are free to interact and are aware that they can be approached to give ideas and suggestions. This kind of engagement allows the employees to utilize their creativity and professional skills to maximize production.

Learning from Mistakes

Engaging employees in the decision-making process discourages the fear of failure. Employees and management discuss lessons learned from previous mistakes. Everybody is involved in the outcome of a mistake, meaning that both the management and staff learn from their mistakes.

Follow-up

After every three months, the company conducts a survey across all departments. Motivation is the main objective of this study. Sources term these surveys as pulse checks. The pulse checks provide management with knowledge and understanding of employee’s emotional feeling towards their frustration. Management gets information that will help gauge employees excitement, motivation, and feelings towards the business.

2006-present

In 2007, Innocent expanded their marketing in connection with McDonald. McDonalds engaged in a five-year trial of smoothies in promotion of their Happy Meals project (Little, 2014). Advertisement of Innocent products was the primary marketing strategy from 2006 to present. Their packaging has been attractive and has acted as a way of marketing the products. Innocent was also involved in a partnership with Age UK. Age UK is a company focusing on the activities that involve knitting. The business’ products are packed in a beautiful bottle, and an additional knitted cover is placed on top, making it more attractive.
In March 2014, Innocent produced and distributed a range of smoothies called super smoothies. Positioning and launching of this product increased the company’s revenue. In 2007, Innocent rebranded a product (Water Juicy) which did not perform well compared to other products. Water Juicy was branded and re-launched as an independent product. It gained success and retailed at almost 35 million pounds.
Innocent Drinks sold 18 percent of its shares to Coca-Cola in April 2009 (Tryon, 2009). Selling shares to Coca-Cola was a marketing strategy to beat other competitors in the soft drinks industry. Coca-Cola Company is an established soft drinks company that has gained popularity all over the world. Selling shares to Coca-Cola meant that Innocent products gain recognition all over the world and mostly Europe.
Innocent Drinks have also expanded their production in different states. A company in Llantrisant south of Wales produces Innocent Drinks’ products. Having suppliers in different towns and countries have increased Innocent products consumption, creating more revenue than previous years.
Coca-Cola offered Innocent a deal to buy their shares at over 90%, and the deal went through (Little, 2014). The three founders are left with little authority to control production. The main reason for Coca-Cola to offer such a deal was to expand its investments. Founders of Innocent revealed that the involvement of Coca-Cola has helped in marketing and positioning the company’s products.
Coca-Cola has finally taken control of Innocent Drink Company for business purposes. Coca-Cola plans for buying Innocent Drinks was to double its size and dominate the market in Europe. Coca-Cola has made Innocent the leading smoothie company production in Europe, selling millions of pounds in recent years.

References

Reynolds, J, 2012,’McDonald’s & Innocent Smoothies’, viewed 28 March,
2015 http://www.marketingmagazine.co.uk/article/1145352/mcdonalds-ditches innocent-smoothies>
Masters, J, 1995, ‘The history of action research’, in Action research electronic reader,
Ed. I Hughes, viewed 28 March, 2014,
Available at: <http://portal.ukwon.eu/innocent-smoothie-maker>.
Little,M, 2014,’Eventbrite: Business partner’, vol. 3, no. 3, viewed 28 March, 2014
Available at :< http://www.thirdsector.co.uk/business-partner-innocent-drinksage-uk>
Thompson, D, P, 1996, Management and Staff Communication: Eye on Education, New
York
Tryon, C., 2009, Smoothies operators Innocent tread path to lucrative deals, The
Guardian: London.