(Mother) SWOT Analysis

(Mother) SWOT Analysis

4. SWOT Analysis

In this section, the internal strengths and weaknesses of Mother energy drink and several opportunities and threats will be discuss. Internal analysis is one of an analysis strategy to provide important information to a company to well understand its skills and resources as well as the performance of the company while opportunities and threat can help the company to have better ideas on targeting into another country (Bohlander and Snell 2009).

4.1 Strength

Mother energy drink has been extremely successful in Australia with its worth value of 500ml compare to Redbull which is a lot cheaper. Mother has also altered to variety of flavor such as mother launch in 2009, an orange flavored variation with 5% juice and in 2010 they release lemon flavor (Convenience & Impulse Retailing 2010). Those flavorings taste where usually other brands like Redbull or V energy drink don’t offer. For now, the company is a big player among the larger manufactures of energy drinks in Australia. They have great understanding of their target market and people taste which have developed tools to get their attention.
Besides, Mother is also a subsidiary company of coca-cola hence it is expected that they have wide experience in operating their business and strong capital to develop their brand. For example, with the strong capital Mother energy drink has made extensively researched with consumer on change of new taste, change to a larger 500ml can, and change of packaging color from aluminum to black and red along with 3 million AUD marketing campaign (The Sydney Morning Herald 2007). In this short period of time since they first appear on 2006 has already made so much improving on their products, which believe that it could enable them to find new customers and create new buying situations.

4.2 Weakness

Mother energy drink is consider a very new brand where establish during year 2006 and it is only sell in Australia and New Zealand so it will likely to faced low brand awareness and low brand value.  Besides, Mother Energy Drink is only widely operating their energy drink in Australia and New Zealand so it could face several difficulty when first target into Singapore because the consumer behavior pattern will be very much different in term of taste. At the moment, Monster energy drink have yet to produce with a sugar free version energy drink while red bull have the sugar free version because Asian country has a very high rate of people suffering of diabetes so Mother could lose their market share (Yoon et al. 2006, 1681)

4.3 Opportunities

To begin with, strong economic growth is one of opportunity for MOTHER to invest in Singapore. Singapore GDP increase 14.5% in 2010 (Department of Statistics Singapore 2011). In first quarter of 2011, Singapore economy expanded by 8.5%.In addition, Senior Minister Goh Chok Tong forecast that by 2020, per capita GDP will reach around US$55,000, from US$43,900 in 2011 and making Singapore one of top 10 richest countries (U-Wen 2011). Increase in the real GDP in the future will lead to household increase their aggregate demand for firm products. Therefore, if MOTHER invests in Singapore, it will more likely experience sales and revenue increase. Overall, this becomes an opportunity for MOTHER to invest in Singapore.

Singapore is often cited as the leading example of countries that continues to reduce corporate income tax rates and introduce various tax incentives to attract and keep global investments. Singapore’s headline corporate tax rate is a flat 17% (Singapore Corporate Tax Guide n.d.) which is relatively low compare to Australia Corporate tax, 30% (Tax rates 2009-10 n.d.). Low corporate tax will lead to more profit after sales for MOTHER, so more capital funds for MOTHER to expand their business. Also, reducing the production will cause less profit generated as higher corporate tax. Overall, this is one of the opportunities for MOTHER to invest in Singapore.

Like most of Southeast Asia, Singapore is generally hot and humid. It's warm and humid year round, with the temperature almost never dropping below 20°C (68°F).This creates strong demand from the Singaporean for the cold energy beverages to beat hot weather (Mumbai 2011).Therefore, this is known as one of the opportunities.

4.4 Threats

First of all, MOTHER Energy Drink will face stiff competition if they want to invest in Singapore, this include both direct and indirect competitors. Direct competitions are known as energy drink companies that are sold in Singapore like red-bull, H-TWO-O, and 100plus (energy drinks 118 Products n.d.). Indirect competitors are considered as other non-energy beverage companies such as Pepsi and Starbuck coffee. Since stiff competition could adversely affect the company's revenues and profitability, thus it becomes a threat to MOTHER Energy Drink.

Moreover, Singapore population is relatively low compare to Australia. There are almost 22 million of people live in Australia (Australia Population 2011) while population in Singapore is just estimate 5 million people Singapore (Singapore population n.d.). Population in a country is important to business. Even though Singapore living standard is high, but because of their population are low compare to Australia, this will limit the overall revenue earned by company. For example, if MOTHER Energy Drink sells at $2 in Australia, 22 million of population will help MOTHER to generate $44 million. In contrast, if MOTHER sells its energy drink in Singapore at $2, there will be only $10 million revenue will generate to OCK. Therefore, it is a threat for MOTHER to invest in Singapore.