Nantucket Nectars Case

Nantucket Nectars

In order to know if Tom Scott and Tom First should keep the company or sell it, we need to analyze several aspects. First of all, this company has been experiencing very rapid growth, ranging from 60-750% in just 5 years. For a company that started as a hobby, it can be seen as an impressive number. This number also shows that the company has the potential to keep growing, so buyers could be more attracted because of these statistics. Another important aspect to consider are the costs. As a new company with great quality products, their costs are really dependent on their suppliers, also they don’t have such a big productions capacity. By selling the company, this new owner could have more bargaining power in the suppliers so they could lower the costs. By doing these, they could decide either to lower the price of their products or have a bigger profit margin.

From all the sales that Nantucket Nectar has, only 1% is to the supermarkets, which I consider is the best point of sale for this kind of business. If some of the big companies would acquire Nantucket Nectars, they could already have the channel to improve their market share in those places and become a more popular brand.

Because it is a growing company, they haven’t been able to experience international markets. Their quality products have the potential to attract customer from all around the globe. The strategic sale would give them all the knowledge they need to export their brand.

The main concern that the founders may have, is selling the company and loosing their current vision and culture. What the might do, is to state in the contract that things should stay the same in that aspect and that they would be responsible of personnel training. Also by having a voice in the managerial aspect, would help them to keep their workers instead of loosing everyone.

After analyzing the case of Nantucket Nectar, I have