CARDIFF METROPOLITAN

DIVERSIFY THE NORTH FACE PRODUCT PORTFOLIO WITH AN OFFER THAT ADJUSTS TO THE
BRAND. ISOTONIC DRINK.

SITUATIONAL ANALYSIS

MACRO ANALYSIS

Following that, a macro-environmental analysis will be conducted to determine the major

external elements that potentially impact The North Face.

POLITICAL

A projected future rise in tax pressure on the food and beverage sector is one of the primary
political issues that The North Face might face in Spain (Fiab, 2020). This would result from the
Ministry of Consumption's strategy to promoting the decrease of unhealthy diets (Fiab, 2020).

Furthermore, the Spanish political environment is through a period of stress generated by the
country's many political parties, which creates uncertainty about the country's future political
landscape (Coface, 2021).

ECONOMICAL

In terms of finances, we should add that VF Corporation is a huge corporation with a market
capitalization of $29.7 million dollars, therefore The North Face is well-funded (Yahoo, 2022).
Furthermore, in recent years, The North Face has outperformed expectations in terms of
turnover (2playbook, 2021).

In the context of Spain, we must discuss, among other things, the new tax on isotonic
beverages (Ecolex, 2009).

SOCIAL

People have been seeking more environmentally friendly items in recent years (Felman, 2019),
as well as healthier products, which may have an impact on our company's future (El Pas,
2017).

In Spain, the average per capita intake of isotonic drinks is 2.8L. (Spanish Government, 2019).

TECHNOLOGICAL

We must speak of a quickly changing environment in the technology section, because many
new technologies are generated year after year (Bhardi, 2021). The North Face will also have
to consider the relevance of social networks as a firm (Mojica, 2021), as well as keeping up
with the latest among them.

LEGAL

We return to the legal section with the new tax on sugary drinks (Vázquez, 2021), which is one
of the future tax modifications on this type of product that the new Spanish minister of
consumption (Mara, 2021) has prepared.

The North Face will also have to consider the new requirements on the labelling of its new
items in this sector (Maldita, 2021).
ENVIROMENTAL

To close the macro analysis of the environment, we are ready to talk about environmental
issues. In the first place, the new product that The North Face plans to launch may be affected
by accessibility to water, which worsens over the years (Wars on want, 2007). It will also be
necessary to take into account the problem of plastics, with which the Spanish population is
aware (Procarton, 2020); Hand in hand with this, it must also be taken into account that the
Spanish government is considering banning single-use plastics (García, 2020).

Political Economic Social Technological Legal Enviromental

Future New tax People are Rapid New 21% Products
increase in created in changes in Tax on affected by
becoming
fiscal 2009 on technology sugary water
pressure on isotonic more health (Bhadri, drinks accessibility
the food and drinks 2021) (Vázquez, (War on
and
beverage among 2020) want, 2007)
sector (Fiab, others environmental
2020) (Ecolex, Conscious
2009)
(Felman,
2019)

VF 2,8L per Use of new New The Spanish

Political Corporation capita social regulations government
tension in have 29,7$ consumption networks regarding plans to ban
the country billion worth (Spanish (Mojica, labelling single-use
(Coface, of equity government, 2021) (Maldita, plastics
2021) (Yahoo, 2019) 2021) (García,
2022) 2020)
Approach of The north People are Development Many future Growing
the face brand is becoming of new legal, misperception
government creating more healthy technology regulatory of plastics by
and the more than with their (Bhadri, and tax society
ministry of expected in consumption 2021) changes (Procarton,
consumption terms of habits (El from the 2020)
for the company Pais, 2017) new
Ministry of
reduction of turnover.
Consumer
unhealthy (2playbook,
Affairs
diets (Fiab, 2021) (María,
2020) 2021)

MICRO ANALISIS

MARKET

To begin the micro analysis of the environment, we must first discuss the size of the soft drink
market in Spain, which had a total value of 3,610 million euros in 2019 (Statista, 2019). In
terms of market share, we'll discuss the soft drinks industry (in which sports drinks are
included). The Coca-Cola Company of Spain is the market leader, with 60.5 percent of the
market share; Pepsico Iberia drinks has 10.5 percent, Schweppes has 11.24 percent, and Font
Salem SL has 7.84 percent of the market share (Statista, 2020). In light of these findings, it's
worth noting that Gatorade, a Pepsico brand with a market value of $4,196 million (the sixth
best-valued soft drink brand), is the best-valued brand of isotonic beverages on the market
(Statista, 2021).

Other information available on the market includes the consumption of 2.78 kg per capita in
Spain (Statista, 2019) and the expenditure of €3.29 per person (Statista, 2019). In 2019, the
volume eaten in Spanish households was 129.51 thousand kilos, up 3.09 kilogrammes over
previous years. Since 2011, consumption has been constant, with a high of 132.56 kg
consumed in 2012. (Statista, 2021). Despite the fact that consumption has remained stable,
sports have given these beverages a boost, and moderate increase is predicted between 2021
and 2026.

One trend to consider is the recent emergence of sportsmen, such as tennis star Rafael Nadal,
who consume saltwater (in the form of an isotonic drink) as a substitute for isotonic drinks
(CinoDas, 2017), which might provide insight into how the market may alter in the future
(MensHealth, 2019).

COMPETITORS

In terms of competitors, the first thing to note is that we have chosen the most important
ones, as there are now a big number of brands available globally owing to the internet and the
popularity of sports supplement companies. The axes picked in second place were the
product's quality for sporting activities and the naturalness of its contents. Because not all of
these brands have the same forms, we chose not to differentiate the prices (Powerade in a
bottle and Biotech in capsules for example).
INDUSTRY STRUCTURE (5 Porters Forces)

The most important of the five Porters pressures on the business is that it is a competitive
industry, with established competitors such as Coca-Cola and Pepsico's brands (Statista, 2021),
as well as numerous others in more "niche" areas. Another significant factor is that, due to
their vast client base, major Spanish retailers have significant control over brands.
Furthermore, there are little obstacles to entry into the sector, and there are no expenses
associated with switching goods.
CUSTOMERS

With the help of Mosaic Global Segment, we developed our customer persona based on
research on isotonic drink consumers. To begin with, the primary users of this sort of beverage
are athletes who engage in extensive training (Tucanaldesalud, 2018). In contrast, athletes in
Spain are typically males under 55 years old with a higher degree in general (Spanish
government, 2021), thus this will be one of the characteristics of our target audience. We also
took into account the fact that males require more hydration than women when participating
in sports (DePaulo, 2011). Other data that aided us in selecting our target included the fact
that in Spain, the higher the income level, the more sports are practised, that communities
such as Madrid, the Balearic Islands, or Navarra are where more sports are practised
(Sportraining, 2015), and that Spanish singles exercise more than those with a partner
(DePaulo, 2011). All of this information enabled us to narrow down the "Mosaic Global
Segment" to smart singles and therefore complete our consumer profile.
STAKEHOLDERS
INTERNAL ANALYSIS