Possibility of Sustainable Development of Genki Forest and Investment Decision Based on POCD Framework

Abstract

Genki Forest is a trending Chinese beverage company that is focusing on sugar-free drinks such as soda pops and milk tea. Before investing in Genki Forest, a venture capitalist should carefully analyze the company. However, the traditional methods, including the debt-to-equity ratio, the valuation on cash flow, and the cost are not suitable for Genki Forest compared to the POCD Framework, which covers People, Opportunity, Context and Deal, since none of them can fully reflect other aspects besides the financial status. This study contains a detailed examination of the founder of Genki Forest, the opportunity it has in the Chinese beverage market, and the overall social context that might influence Genki Forest’s operation. Although there are some challenges that Genki Forest might face, such as low barriers to entry, and the unavoidable competition with the traditional beverage giants, the overall operating condition is still advantageous due to the rapid expansion of the Chinese beverage market. Therefore, after conducting this study, a venture capitalist should be confident about Genki Forest’s potential, and other beverage enterprises should consider studying or applying the same strategies from Genki Forest.