The Political, Economic, and Technological Implications for Business
Unit 3 [220: Global Business]
Assignment Details and Rubric
The Political, Economic, and Technological Implications for Business
Working with your Zip-6 Scenario: Foreign Business Environment
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, nor 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 found on the course page.
After researching the historical events in Colombia, write your analysis in an informative essay
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 using
APA formatting.
Web Resources:
Colombia:
1. Go to the C.I.A.’s World Factbook resource and search for information on Colombia
2. Go to the U.S. Department of State website and search for information on Colombia
3. Go to Michigan State University: globalEDGE™ website:
http://globaledge.msu.edu/Countries/Colombia
You may also use information from other sources that are from governmental or educational sites as
well. Do not use Wikipedia!
Unit 3 [220: Global Business]
Checklist:
1. What events (political, economic, and technological) are the most important in recent years
that might have impacted the business culture in Colombia?
2. Do you feel that the Colombian economy today is sufficiently robust to support the growth of
the sports drink industry and Zip-6’s entry within the country and why?
3. Write your original informative essay in Standard American English. Please be sure to include
an Introduction, Body (addressing all the checklist items), and Conclusion.
? Pay special attention to correct grammar, style, and mechanics.
? Respond to the checklist items in a complete manner.
? Ensure that your viewpoint and purpose are clearly stated.
? Demonstrate logical and appropriate transitions from one idea to another.
? Your paper should be highly organized, logical, and focused.
Draft your response addressing these points in a minimum of 500 words or more in APA format and
citation style and submit the file to the Unit 3 Dropbox before the close of the unit.
Name your file: Your FirstName_LastName_Assignment_Unit#.
Unit 3 Assignment Rubric
Category Description Weighting Possible
Points
40
Points
Earned
Content Colombia:
• Go to the C.I.A.’s World Factbook
resource and search for information on
Colombia
• Go to the U.S. Department of State
website and search for information on
Colombia
• Go to Michigan State University:
globalEDGE™ website:
http://globaledge.msu.edu/Countries/C
olombia
Answer provides correct and
complete information demonstrating
critical thinking:
Unit 3 [220: Global Business]
Checklist:
1. What events (political, economic, and
technological) are the most important in
recent years that might have impacted
the business culture in Colombia?
2. Do you feel that the Colombian
economy today is sufficiently robust to
support the growth of the sports drink
industry and Zip-6’s entry within the
country and why?
80%
16
16
Grammar
and
Mechanics
3. Write your original informative essay in
Standard American English. Please be
sure to include an Introduction, Body
(addressing all the checklist items), and
Conclusion.
? Pay special attention to correct
grammar, style, and mechanics.
? Respond to the checklist items in a
complete manner.
? Ensure that your viewpoint and
purpose are clearly stated.
? Demonstrate logical and
appropriate transitions from one
idea to another.
? Your paper should be highly
organized, logical, and focused.
Write a 500-word minimum informative
essay plus a separate title and a
reference page.
20% 8
Total:
100%
[40]
Possible
Points
[ ] Points
Earned
Additional Instructor Comments:
Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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 a global beverage firm 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 2006, 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 of sports drinks. 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
Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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 a global beverage firm 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 2006, 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 of sports drinks. 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
Following graduation in 1993, Ravi went to work at a global beverage firm in Atlanta as a chemist while Keith settled in to his new job with a large accounting firm in 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.Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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 a global beverage firm 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 2006, 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 of sports drinks. 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.
Following graduation in 1993, Ravi went to work at a global beverage firm in Atlanta as a chemist while Keith settled in to his new job with a large accounting firm in 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.
Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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 a global beverage firm 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 2006, 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 of sports drinks. 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.
Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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 a global beverage firm 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 2006, 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 of sports drinks. 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.
Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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 a global beverage firm 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 2006, 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 of sports drinks. 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
Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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 a global beverage firm 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 2006, 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 of sports drinks. 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
Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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.
Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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.
Six was significant in the name as the Persian herb formed the sixth principal ingredient and the basis for their secret formula! So, in 2003, 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 a global beverage firm 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 2006, 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.
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 a global beverage firm 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 2006, 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 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 of sports drinks. 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
