Power
Root is one of the major beverage producer originating from Malaysia
itself. With products such as coffee and energy drink, it is targeting
the growing market within Malaysia as well as markets in the Middle East
where demand for energy booster is rising high up. In terms of
branding, Power Root formulates its marketing plan in ways such as lucky
draw, sponsorship and events organizing. With all these promotional
activities, Power Root has established a very strong goodwill
foundation. It's remarkable marketing milestone also include Ah Huat
white coffee blending in the diversification of Malaysia's cultures
which capture its audience easily. For an energy drink manufacturer, the
company might as well retain its drink formula and generates strong
cash from it without reinvesting much of their cash into research and
development. As Power Roots focus much on Islamic consumer with their
packaging which includes "Tongkat Ali" and "Kacip Fatimah", it can
successfully capture the unique market shares compared to other energy
drinks such as Red Bull. As the asset gaps is relatively huge, no
comparison can be done but the advantageous position owned by Power Root
is undeniable. Power Root has also done a very good job in terms of
distribution network where their products can be seen not only on major
retailers, but also restaurant and rural area outlets which is
exceptional.
However,
competition is levelled at an extremely competitive bound. In terms of
pricing, even an ordinary Red Bull is able to match RM2.5 set by power
root where their economics of scale is far more superb than Power Root.
As for their Middle East market, some countries have started to restrict
the sale of energy drinks which might damage the revenue growth for
Power Root in the future. Also, as for my own observation (no offense),
Power Root products are less desirable when it comes to consumer's
preference. This is further supported by my long study of power root's
shelves spaces where it has been reduced by over 30% in the past one
year. When it comes to a fundamental of business, you can have the best
packaging, networking and marketing in the whole world but without the
co-existence of sound products, the business itself hardly come to a
success.
Since the fundamental is not sound enough, Power Root might just be filtered out from my list.
Stock: PWROOT Code: 7237
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