Chobani ecosystem value assessment: SHEENY framework
- When considering the opportunities that Chobani has in the market and the ecosystem, assessment was conducted by Ulukaya through sampling of existing yoghurts, as well as, competing Greek yoghurts in the market. Through sampling, Ulukaya was able to determine that there was an opportunity for Greek yoghurt to establish a niche market in the yoghurt industry since it offered a different and tastier, as well as, thicker yoghurt compared to most American yoghurt brands.
- The establishment of this niche market also came with the opportunity of expanding to market such as other states in the U.S., Canada and Europe where Chobani could increase sales by supplying unique Greek yoghurt that still lacks or is in a small portion in these markets. The fact that Ulukaya did not accept investments from investors and venture capitalists in the market also proved to be an opportunity for him to stick to his mission, that is, steering Chobani in the right direction to the point where it is now; an achievement that would have not been possible if investors forced Ulukaya to sell the company to an even bigger company.
Chobani ecosystem value assessment: GUIDER framework
- Ulukaya observed that a lot of novel companies normally launch their products at a lower price and tried to raise the price later. Chobani avoided this situation by determining an initial price that made was applicable even in the long-term. However, figuring the right unit selling price to fund future growth was not an easy decision because Ulukaya spent a lot of time calculating ingredient costs, cup costs and labor costs before formulating a simple model to calculate the exact price that would enable Chobani to break even once it hit 20,000 cases per week in sales. Chobani ended up charging less than $1.50 a cup. As it turns out, this unit selling prices based on the assessment by the model was a point of strength to the company rather than a weakness. This is because it was far less than the European style yoghurt that was priced between $3 and $5 in gourmet stores and this enabled the company to not only break-even but also earn profits due its affordability.
- Strategic display was also important to the success of Chobani as the company launched its brand of Greek yoghurt. While deciding to have Chobani stocked in the dairy aisle instead of the gourmet section could have been interpreted as a weakness or wrong decision due to the natural nature of the product, it turned out to be a point of strength since Chobani could be seen alongside other prevailing yoghurt products making it easier for customers to access and purchase it compared to natural food or gourmet aisle where the likelihood of consumers noticing it and purchasing would have been difficult.Chobani ecosystem value assessment
Chobani SWOT matrix
- Ulukaya and his team insisted that Chobani be sold in mainstream stores instead of speciality stores.
- Ulukaya and his team also insisted that Chobani be stocked in the dairy aisle, alongside prevailing yoghurt brands instead of in the natural food or gourmet aisles.
- Chobani yoghurt brands are the best Greek yoghurts in the markets since Greek yoghurt produced by American-based companies.
- Chobani is a sole proprietorship whereby the owner incurs all the losses incurred by the companied.
- Lack of diversification and other stakeholders that can add their input on how to better grow and expand the company.
- Competition from other yoghurt companies in the United States, as well as, Greek affiliated companies supplying Greek yoghurt.
Opportunity-Chobani ecosystem value assessment
- Possibility of Chocabin expanding to other nations such as Canada and the Europe where the consumption of yoghurt is relatively higher than in the United States.
- Rapid increase in the number of customers has also presented Chobani with the opportunity to pursue these markets.
- A new line of credit and many banks willing to offer Chobani loans to meet its capital requirements.
- Possibility of Chobani being sold to a big food company.
- The owner, that is, Ulakaya stands to lose considerable portion of his fortune should Chobani experience financially difficult times.
- Adversity from stakeholders in the industry keen on limiting the growth potential of Chobani so as to prevent the company from rising up any further in business.
Part B-Chobani ecosystem value assessment
- The stakeholders include Chobani who is the owner and sole shareholder of Hamdi Ulukaya given that the company is a sole proprietorship and the customers. As the owner of Chobani, Ulukaya is tasked with the responsibility of delivering the consumer purchase targets. For instance, Chobani produces more than two million cases of yoghurt per week so as to meet the huge demand for their yoghurt brands by consumers.
- Despite the fact that Ulukaya met with various venture capitalists and investors, he was convinced that selling equity would result in a situation whereby he would eventually lack the capability or influence to make certain decisions in the company. For instance, Ulukaya realized that with a portion of the Chobani’s equity sold to investors or venture capitalists, the partners would eventually coarse him to sell the company once it started making considerable profits. Based on this assessment, Ulukaya decided to remain the sole stakeholder so as to steer Chobani into the direction that he wanted by maintaining complete power and control over the company.
- The risks posed by stakeholders on the sustainability of Chobani’s capabilities come in two forms, that is, its self-financing approach and debtors emanating from the syndicate of banks and credit line to meet the company’s capital requirements through the issue of loans. As such, the major risk posed is the occurrence of an operational and financial predicament that ends up affecting the financial performance of Chobani adversely, with debtors only posing a meager risk on the sustainability of Chobani’s capabilities.
- Chobani’s approach to assessing its investment value of technology can be looked from two perspectives, that is, earlier investment in technology when the company began producing its own yogurt and later investment in technology when the company had to grow and expand its reach to other nations. Initially, as the company began to grow in size and production, Chobani found ways to increase the capacity of its factory without making big investments. Since the company was not in a position to afford novel equipment, it acquired used equipment which they set up a system to purchase on installment. Eventually, Chobani retrofitted its filling machine to handle 100,000 cases per week. The company also limited its capital investment in technology by relying on manual labor rather than automation. In the latter stages when the demand for Chobani brand of yoghurts sore high, the company had to not only make considerable adjustments in the form of massive investments in technology but also expand to other locations so as to increase production.
- Chobani could upgrade its capability value of technology by venturing in e-commerce. Currently, a significant portion of Chobani’s yoghurt is sold in supermarkets. However, the company can widen their customer base by offering out-of-supermarket services such as supply of its yoghurt brands to other companies, corporate events and sporting events among others. This is poised to increase their yoghurt sales and set Chobani as a crucial player in the corporate world.
- Something unique regarding Chobani’s approach to rapid technology includes its attention and immaculate consideration of the accompanying costs of rapid technology. This is evident in the company’s purchase of used equipment to improve the production capacity of the factory. This decision prevented the company from overspending or even incurring debt while acquiring the technology they required to scale their production up. Chobani continued to replace technology without incurring huge costs or even debts.
- As a result, Chobani’s effect on its capability value of technology takes the lead by incurring less costs to acquire and utilize technology while maintaining manual labor work places for individuals willing to work since complete automation would result in loss of jobs.Chobani ecosystem value assessment