Introduction
The survival of a company in the business environment depends on factors that are found within the environment of business. The ecology of the business world has both internal factors and external factors which have effects on the manner in which businesses carry out their operations. As a result, it is mandatory for companies to have mechanisms that they can use to adapt to certain perceptions, issues, chances and the available resources. The businesses must pay attention to the applicable changes. These changes are bound to occur in the environment. In addition, the business entity must use its existing policies to make variations that suit the current environment. Flexibility enables the company to successfully overcome the challenges in an environment which is constantly shifting. Variations occur as a result of uncertainties that cannot be accurately predicted.
Starbucks
Value Creation and Sustaining Competitive Advantage
Starbucks was first opened in 1971. The company employed its first marketing officer (Howard Schultz) in 1982. He began working in the store immediately. In the course of duty, Schultz took a business trip to Italy where he was immediately impressed by the popularity and the overall culture. He realized that the store he worked needed to sell more than ground coffee beans. The whole idea was to later culminate into a big business company.
The first manner in which Starbucks creates value and sustains competitive advantage is by making business personal (Bard, McClintock, Scott, Carson, & Pogue, 2014, p. 3). Schultz advanced the company based on cultural traits and what he found to be popular in another market. He was a market leader who implemented a good strategy to grow the business. The secret was the provision of a service that people had no idea about its necessity. Starbucks created value by fulfilling a psychological need that clients had. This made the customers to be endeared to the company.
Secondly, the company has comprehensive knowledge of the products that it serves to the clients. The employees understand the kind of beverages that the clients prefer. For instance, the employees know the difference between latte, mocha and cappuccino. The details are clear to them. As a result, high quality products are served to the company’s customers. The services enhance customer satisfaction. In fact, the employees must prepare a perfect cup of cappuccino before they are certified for full employment and service provision and to the clients.
Verifying Strategic Effectiveness
Starbucks has been successful when it comes to strategy implementation. The success is evident within the company’s marketing mix which relates to its products, price, place, promotion people and company delivery processes. The price charged is premium such that the clients can access and consume quality products at pocket friendly rates that they can afford.
The company believes in the differentiation of its brands. As much as the products may be of a similar nature, the company ensures that the customers can easily identify with the different brands. Consequently, customers tend to develop favorites among the different products which lead to the development of customer loyalty. Loyalty also comes from the premium pricing and the friendly environments at the Starbucks coffee houses.
Starbucks has also ensured strategic success using its location strategy. The company has over 17000 stores in approximately 55 countries all over the world. In addition, the company exists virtually on the internet through its website. The virtual world is also an important manner in which the company is effectively marketing itself (Benzaken, Jackson, Barahona, & Pazderka, 0, p. 4).
How the Measurement Guidelines are Effective
The measurement guidelines used by Starbucks are effective. The effectiveness results from the fact that the company looks at the areas which tend to be challenging in the business world and eventually illustrates how it has effectively dealt with those challenging sectors. The current business environment is very competitive such that it is not easy to achieve customer satisfaction.
The problem of customer dissatisfaction results from variations in the quality of products offered by the company. It is especially difficult for a company to make different products which have good quality and lead to the satisfaction of the customers. However, Starbucks has successfully advanced different products into the market which has readily accepted the products. This is why the guidelines they use for strategy evaluation are effective.
Need for Additional Funding
In the context of additional funding, Starbucks does not require additional funding. It is true that the company always seeks to expand and explore new markets. However, this is done through a good investment portfolio where the revenue generated is retained to a certain extent and used to expand the company.
Coca Cola
Value Creation and Sustaining Competitive Advantage
Coca Cola is a multi-national bottling company with various partners, subsidiaries and joint ventures across the world. It is among the largest bottling companies in the world. As a result, the company enjoys a large market share across the world (Cinarli & Sancar, 2012, p. 5).
The company creates value by working with other market players. The joint efforts make other players to benefit from the efforts and the success that has been achieved by Coca Cola. Working with Coca Cola lays down a platform on which business models are developed. The platform enables other companies to continue with the exploration and diversification into the market. Additionally, Coca Cola participates in developing new beverages and also extends the existing products. The extension is achieved through efficient marketing and aggressive advertising.
The company emphasizes the commitment and teamwork within the organization. This creates an environment within which the employees can work together. As a result, it is easy for the company’s management to deal with the internal conflicts that affect the organization from within. Coca Cola has broadened its geographical jurisdiction in order to capitalize on markets that have not yet been explored by other beverage makers.
The company’s competitive advantage lies within its market leadership. The largest franchise of the company is FEMSA. The franchise is a trademark of the company with most of its operations confined in the South American region. Some of the countries within which the franchise operates include Mexico, Nicaragua, Costa Rica, Colombia, Venezuela, Argentina and Brazil among a few others.
Verifying Strategic Effectiveness
The strategic effectiveness of Coca Cola Company can be assessed based on its business partnerships and a strong portfolio that marks the Coca Cola brand. The FEMSA franchise works in conjunction with the company by sharing business incentives (Hartogh, 2007, p. 6). The incentives have played a crucial role in capturing the larger share of the Latin American market. The partnership has been essential for the company’s fast growth which in the region. The region was marked by prior under-developed and non-carbonated drinks which could not be compared to the standards currently set by the Coca Cola Company.
Coca Cola offers a variety of brand portfolio to its world wide clientele. The company continuously examines promising categories of the beverage industry. The continuous analyses are aimed at capturing growth in a variety of markets so that the customers do not familiarize with particular products only. They may end up concluding that the company has run out of innovations. The most recent developments by the carbonated drinks company is the development of sugar free drinks. Such innovation is meant to target a small population of those people with diabetic conditions. The invention also covers people who are conscious in the sense that they are keen to lead healthy life styles.
How the Measurement Guidelines are Effective
Coca Cola has based its strategy on growth and sustainable enterprise development. Most importantly, the company has ensured that its products have high quality. The quality points to the fact that there is good management of client value. As mush as the company is big, almost to an unmanageable level, it can be concluded that Coca Cola has maintained the confidence of its clientele through efficient distribution models.
Need for Additional Funding
The measurement guideline is effective as it shows that Coca-Cola does not require additional funding whenever there is a viable project to be undertaken. The company generates adequate annual income for the payment of dividends and into viable projects. It does not require additional funding.
How Riordan Compares with Starbucks and Coca Cola in terms of Competitive Advantage
Competitive advantage refers the advantages enjoyed by a firm over the other firms in the industry. Riordan Virtual Organization has certain competitive advantages over both Starbucks and Coca Cola. First of all, it is easy to ascertain the risk and goodwill of venturing into business in the virtual world. In spite of all the financial innovations, models and formulas available to analyze the business world, it is not possible for Starbucks and Coca cola to ascertain the monetary value of the goodwill of their companies. This is because their branches are located in several geographical locations across the world. On the other hand, Riordan has a virtual existence consolidated on the internet. Valuation is easy since there are no distant branches.
Starbucks and Coca Cola may have physical locations but Riordan still enjoys more of the competitive advantages competitive advantages. There are some branches of both Starbucks and Coca Cola which are located in very remote areas. Riordan is consolidated in one virtual location. The location affects the marketing strategies of all the three companies. For Riordan it is easier and less costly since advertisements are posted on the internet. The customers can access them easily. A virtual existence guarantees that Riordan has a large customer base which is dependent on the internet. On the contrary, Coca Cola and Starbucks rely heavily on a supply chain that does not work as fast Riordan’s supply chain. it depends on the sufficiency of certain factors like road networks.
Riordan enjoys popularity and market domination due to less competition compared to that of Coca Cola. Its popularity within the field has resulted into a monopolized market where the Riordan can boast of significant clientele loyalty. There are customers who are very accustomed to using the products provided by the company. The loyalty results from long term use. Coca Cola faces stiff competition from other manufacturers of carbonated drinks. Starbucks also faces competition from other major industry players like The Hilton.
References
Bard, J., McClintock, R., Scott, S., Carson, R. J., & Pogue, K. R. (0). Black & Veatch. 2000. Northwest Power Enterprises Starbuck Power Project Columbia County, Washington: NPDES Black & Veatch for storm water discharges associated with construction and operation.
Benzaken, T. S., Jackson, R., Barahona, W., & Pazderka, C. (0). STARBUCKS' RESPONSIBLE SOURCING: SOCIAL GUIDELINES FROM THE FARM TO THE COFFEESHOP.
Cinarli, I., & Sancar, G. A. (2012). Environmental Sustainability and Strategic Stakeholder Management: The Coca-Cola Company in Turkey and Water Management.
Hartogh, M. (2007). The real thing: a profile of the coca cola company.
