Starbacks Coffee Company (Term Paper Sample)

Starbucks Coffee Company
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Table of ContentsOperation Strategy3Business Strategy3Customer Value4Process Design and Control7Strategy map7Process Improvement…………………………………………………………………….........7Lean Sigma Strategy…………………………………………………………………...............9Benchmarking………………………………………………………………………………....11Supply Chain Strategy………………………………………………………………………...12Information Technology……………………………………………………………………....13Conclusion…………………………………………………………………………………….16References…………………………………………………………………………………......17Appendix 1………………………………………………………………………………….....20Appendix 2……………………………………………………………………………..….…. 22Appendix 3………………………………………………………………………………….....24Appendix 4…………………………………………………………………………………....26
Starbucks Coffee Company
1. Operations Strategy
1.1. Business Strategy
A business strategy is a long-term business plan that shows the means by which the objectives and goals will be achieved. An ordinary strategy may take three to five years or even more. In the 2014 press release, the global chief strategy officer of Starbucks gave some business strategies. The strategies included growing the store portfolio, building healthy relationships with expertise investors, enhancing mobile commerce, and focusing on the brands to increase profitability among other strategies (Geereddy, 2012). The business strategies are aimed at increasing profitability, identifying changes in the industry and vital external trends. These strategies determine the survival of an enterprise because they measure the capability of a company to achieve its objectives and goals. These strategies also create a pro-active organization and secure common commitment and understanding of the management. For practical implementation of Starbucks’ business strategy, the organization structure needs to support the strategies entirely. Support of the company strategies is accompanied by commitments from the top level management on the implementation plan. The management approves investment projects in any organization. Some of these projects are strategies that require approval and support by the directorate (Gilbert & Veloutsou, 2006). Starbucks must also come up with a plan that allocates resources to the implementation process. Any project or strategy requires resource allocation for it to be successful. This process is assigned to members who communicate to the management on the implementation progress. Finally, the company must monitor the implementation process via a documented plan. The company must also be willing to change some of the strategies that default. Starbucks employs product differentiation strategy in marketing its product. Product differentiation distinguishes the products of the company from its competitors and other products (Larson, 2009). Through the implementation of the strategy, the company has achieved success and competitive advantage. Besides having a good marketing strategy, a business can form alliances with other firms for sustainability. For example, Starbucks has formed many alliances in the past that enhance profitability. In February 2012, the company partnered with Ai Ni Group which is an established agricultural company and a coffee operator (Appendix 4). 1.2. Customer Value Customer value is a measure of the willingness of customers to maintain a healthy relationship with an organization. The relationship is determined by the quality of products and services and the pricing of goods and services. The benefits or utility that a customer derives from a product or service determines the buying decisions made by a customer. The most significant benefit of customer value is creating a competitive advantage for an organization (Singh & Saleja, 2013). Through customer value, Starbucks will become the most preferred company in the industry among its competitors. Every form of business organization is obliged to focus on customer value for progress and profitability. Other benefits include an increase in customers and customer loyalty. Starbucks need to deliver customer value by offering high-quality products and services and setting fair prices for goods and services (Appendix 3). The other vital way of achieving customer value is by maintaining few and reliable suppliers who attribute to the quality of products and services. Suppliers are major stakeholders in any business who determine its continuity. Improving customer value begins by understanding the value drivers in customers (Brizek, 2014). The relevant products and services by customers are determined in this case. The next important issue is noting the firm’s value proposition that is equal to the benefits of a service or product. The customer’s devotion time to the product or service is measured here. A company has to identify the market segments where it can optimize value created to customers (Pawar, 2014). The fourth step is to regulate the pricing of commodities and services. Prices must be set in a manner that creates value for customers and generates profits. Finally, a company must put its focus on the customers that are deemed to be the most valuable. 1.2.1. Innovativeness Innovativeness is the process of introducing new ideas into an organization’s processes, products or services. In most cases, innovations are facilitated by the use of technology (Amine, Chakor & Alaoui, 2012). The main purpose of adopting innovative ideas is to increase efficiency. Efficiency is characterized by cost reduction, increased profitability, growth and expansion among other factors. Starbucks applies innovativeness by the use of an Android app through which customers can order products, pay and later pick them. This innovative idea reduces waiting time in queues as well as making the company assessable through the convenience of the application. Another innovative idea is expanding the product mix of Starbucks. In this case, the company has an idea of offering fresh juice products and tea that is a way of expanding the...