Snapple Case

Snapple Case

1. Did Quaker made an error in buying Snapple or did they managed it badly?

 Ans – Quaker acquired Snapple from Thomas H. Lee at a whopping price of $1.7 billion in cash. Snapple was a very successful brand and was running with a sales at $674 million and had shown tremendous growth. The main aim behind Quaker acquiring Snapple was to become a very large beverage company and it was rightly so as Snapple had 30-40% market share and with Gatorade already in their kitty with a sales of $1.1 billion they felt they would do wonders in the beverage business. And they had ample reasons to believe they could do so with Snapple as well. So we can’t say there was any error on the part of Quaker in buying Snapple.

As far as the management part goes Yes they did not managed it properly. That’s pretty much evident from the following:-

1. Snapple was a successful brand and Quaker acquired it when it was at the height of its popularity. But it made a series of changes after acquiring Snapple, dissatisfying Snapple’s most loyal customers and tarnishing the brand’s image which resulted into decline of revenue.
2. Another element of Quaker’s Snapple strategy came straight out of the Gatorade playbook. Just as it had done with Gatorade, Quaker introduced Snapple in larger, more profitable sizes: in 32- and 64-ounce bottles. But consumers simply didn’t want them. The larger bottles were suitable for Gatorade because people tended to drink it during or after team practice or other exercise, when they were especially thirsty and needed to be rehydrated. But Snapple was a lunchtime beverage—people weren’t looking for anything larger than a 16-ounce bottle they could polish off in one sitting.
3. Quaker’s worst move was to dump Limbaugh and Stern. Done to avoid controversy, the terminations inflamed it instead. Stern took his revenge by subjecting Quaker to months of on-air diatribes that urged listeners to stay away from “Crapple.”

This becomes pretty much evident from these facts that the management was not proper by Quaker and there was no fault in the decision which was taken to buy Snapple.

1. Assume yourself to be in Mike Weinstein’s position, what would be your three priority areas to start with, on brand Snapple?

Ans – Being in Mike Weinstein’s position first of all I would like to do a complete SWOT analysis of Snapple which would help me understand their strengths, weaknesses, what are the various opportunities, what are the various weaknesses. This would give me a clear picture as to where Snapple as a brand stands in the market. My three priority areas to start with or to work upon would be: