Case analysis for Jamba Juice and the Foam Cup
Yichao Song
02/17/2015

The famous smoothie company, Jamba Juice is facing a significant issue that a student has stated a petition against Jamba’s foam cup because it is not environment friendly and harmful to health. As CEO of Jamba, James White has to come up with a strategic breakthrough to face with the issue. As a CEO of the company, he has to consider the benefits from each group of stakeholders, such as customer, shareholders, and environment activist.

First, there is no doubt that some customers of Jamba Juice prefer using polystyrene foam cups because it is very convenient to them. With polystyrene foam cups, they don't have to bring their own cups and clean them after using. More importantly, compare with other types of disposable cups, polystyrene foam ones are good insulators, which are able to keep warm drinks warm and cold drinks cold. On the other hands, since Jamba is building its name as a green and healthy drink, most of its customer are educated and care about their health. They would prefer using those harmless and environment friendly cups. In that case, I would like to believe that its customer will not fully support polystyrene foam cups.

For the shareholders, most of them will pay more attention in short-term profitability of the company. Especially, when the company is facing net losses in the past few years, they might compromise companies’ reputation to gain short-term interests. Using polystyrene foam cups can significantly decrease the cost of operation, which can directly decease the net losses and even cause profits. However, they might not ignore the negative effects from using polystyrene foam cups. If the petition is constantly drawing people’s attention, there will be an increasing number of green customers choose other drink brands instead of Jamba, the company’s revenue would certainly decline because of that. In that case, I don't think shareholders will completely support polystyrene foam cups.

As environment activist, they would definitely fight against using polystyrene foam cups. They consider them as pollutant to contaminate earth and not sustainable. More than against the use of polystyrene foam cups, they would also encourage the company to use those recycle cups which is expensive but green.

My strategy for this issue is decreasing the use of polystyrene foam cups and use paper ones instead. For those customers who bring their own cups will gain discount on the drinks. Customers are the most important elements to the company. They should never take risk to lose them. Decreasing use of polystyrene foam cups can relieve the public’s concerns and also decrease the cost of the policy implementation. From the mediate outcome, the measurement can strengthen the reputation of the company among the public and decrease the energy and waste use. From the perspective of Intermediate outcome, the strategy increases the cost of the company but also increase the revenue because of customer’s loyalty and new market. The strategy dramatically shapes the company’s image and appeal more people to become its customers.

The Jamba Juice has a bright future and can foster a huge impact in the drink market.