Unit 2 Assignment: Continue using your Zip-6 Scenario (Graded A+) - use as a guide only - 28157

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Direction to 2 to 3 page assignment Unit 2: (Chapters 3 and 4): After Reading Religious and Ethical Systems on pages 103-113, discuss how each one of these major religions listed might impact a firm’s operations within a particular country heavily influenced by that religion.

Unit 2 Assignment: Continue using your Zip-6 Scenario

Nils, the partner of Ravi and Keith at Zip-6, approached them with an interesting possibility. A fellow venture capitalist friend revealed to him that he and his partners were acquiring a large family-owned group of businesses in the South American country of Colombia. Most of these family-owned businesses are diversified manufacturing businesses in the capital of Bogota, but there is one soft drink bottling operation in the acquisition that does not fit within their venture business plan and thus they would like to divest (sell) this particular operation. Nils’ friend knew that Nils, Ravi, and Keith had extensive presence in neighboring Brazil and thought that this business in Colombia might offer Zip-6 an additional expansion opportunity in the region. Neither Nils, Ravi, or Keith have any knowledge of this nation.

Your job in this Assignment is to conduct some basic research into the country of Colombia (a neighboring country to Brazil) and examine the most important historical events (political, economic, and technological) that might impact the country of Colombia’s business climate for the future of this investment by Zip-6. Revi Unit 2 Assignment: Continue using your Zip-6 Scenario

Nils, the partner of Ravi and Keith at Zip-6, approached them with an interesting possibility. A fellow venture capitalist friend revealed to him that he and his partners were acquiring a large family-owned group of businesses in the South American country of Colombia. Most of these family-owned businesses are diversified manufacturing businesses in the capital of Bogota, but there is one soft drink bottling operation in the acquisition that does not fit within their venture business plan and thus they would like to divest (sell) this particular operation. Nils’ friend knew that Nils, Ravi, and Keith had extensive presence in neighboring Brazil and thought that this business in Colombia might offer Zip-6 an additional expansion opportunity in the region. Neither Nils, Ravi, or Keith have any knowledge of this nation.

Your job in this Assignment is to conduct some basic research into the country of Colombia (a neighboring country to Brazil) and examine the most important historical events (political, economic, and technological) that might impact the country of Colombia’s business climate for the future of this investment by Zip-6. Review the full Zip-6 Scenario.

After researching the historical events in Colombia, write your brief analysis in a minimum 250 words double spaced synopsis in 12 point Times New Roman font, addressing all the checklist items and advising Ravi and Keith on a recommended course of action and your justification for such an approach. Be sure to reference any sources used in your work.

 

Following graduation in 1993, Ravi went to work at Coca Cola Enterprises in Atlanta as a chemist while Keith settled in to his new job with Price Waterhouse Coopers, a leading accounting firm at its Atlanta offices. The two stayed in close contact over the next few years and made it a practice to spend one evening each week visiting a favorite sports bar and talking about sports and their futures. On one such visit, Ravi excitedly confided to Keith that he had discovered a formula for a sports drink that provided exceptional hydration and energy but contained one ingredient that had been banned by the FDA as potentially harmful. While visiting his father in Dearborn for the Holidays, he discussed this with him since Ravi’s father had been a college chemistry professor in his native Iran. Ravi’s father quickly noted that an ancient Persian herb could provide the same chemical properties as the problematic ingredient without any of the potentially unwanted side effects.   Ravi discussed with his friend the possibilities of offering this formula to his employer but indicated he would rather like to develop it himself but lacked the skills to do so. Over the next several weeks, Ravi and Keith discussed this over a series of bar visits and finally decided to launch Zip-6 as a startup venture brand.

 

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      Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 1995, Ravi and Keith formed the Zip-6 Corporation with each controlling an equal number of the firm’s shares and Ravi as CEO and Keith as COO.

      Initial growth was slow the first year as the new firm lacked adequate capitalization to allow it to manufacture and bottle the product, depending instead on other established bottlers to produce and bottle it for Zip-6. Nevertheless, the nascent business was able to generate $512,000 in first year revenues. More importantly, a number college football, basketball, and soccer endorsements were secured throughout the South.

      The year 1996 was a watershed for the firm with the entry of Nils Young, a wealthy venture capitalist into the firm. Young was impressed with Ravi, Keith, and Zip-6 and agreed to purchase one-third of the firm for $4.5 million, leaving Ravi and Keith in charge. This allowed the firm to purchase an existing manufacturing and bottling facility that had been previously used by a brand that had been purchased by Coca Cola and merged into their existing manufacturing facilities. This finally gave Zip-6 a home of its own. The infusion of cash also allowed Zip-6 to mount its first serious national marketing effort. By the close of 1996, annual revenues were $2.3 million and were growing at an annual rate of 26%.

      By 2000, Zip-6 was a well-established fixture on most U.S. sports drink shelves. Annual revenues stood at $5.7 million.  Ravi, Keith, and Nils all felt that spending some of the firm’s retained earnings to purchase some prime-time advertising spots on the Super Bowl game that year would be a good investment and so $1.2 million was used to mount the firm’s first “big time” advertising campaign. The results were immediate and dramatic! Demand nearly doubled and two shifts were implemented in producing and bottling the product.

      By second quarter 2002, annual revenues were at $8.5 million on strong demand. There was however, one particularly troubling situation that had been building, and reached a peak in that year. The deteriorating political climate within Iran had all but stopped shipments of the Persian herb to Zip-6’s British importers of the product. Ravi and his father had earlier anticipated this problem and had attempted to cultivate this herb in the United States unsuccessfully.  Their attention focused on the tiny island of Socotra in the Indian Ocean. This remote island, claimed by the nation of Yemen in the Indian Ocean was found to grow a native species of the Zip-6 secret herb, nearly identical to the rare Persian herb and fully suitable for use in the sports drink.  A Yemeni herb trader was contracted to supply Zip-6 through the port of Aden.  

      Ravi and Keith, while pleased with the upward growth of Zip-6, were nevertheless candid about the product’s market position within the U.S. where the market was dominated by several brands such as giants Gatorade and PowerAde.  In that same year, a new breed of drinks was also beginning to rise in sales – energy drinks. Zip-6 occupied a somewhat interesting position in this market as it is a sports drink with some of the attributes of an energy drink. They hired a market consultant who advised them that market potential existed for Zip-6 outside of the United States.  Several potential foreign markets were identified. These were Mexico, Brazil, and Korea. Zip-6 thus began a multi- year journey from U.S. domestic sports drink manufacturer to Zip-6 Inc. a global sports drink manufacturer and bottler.

   

 

   Today, ten years later, Zip-6 is a global sports drink manufacturer with active global markets in Brazil, Korea, the United States, and Mexico.  The firm operates bottling and distribution facilities in the U.S., Brazil, and Mexico. It operates within Korea through a licensing agreement with LotteChilsung, a leading Korean soft drink manufacturer and bottler. It is pursuing exploratory research into additional South American and Asian markets.

 

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