Technological Viability Analysis
Firm Related Factors
An innovator is a person who develops new ideas and looks for efficient ways of accomplishing a certain task. Innovation is the art of developing new ideas and looking for efficient ways of accomplishing a certain task. This means that an innovator can include people across all the professions that currently exist in the world. An innovator does not necessarily have to be a business person he or she can even be an engineer. Over the years, Starbucks has been investing heavily in order to promote innovation in the organisation. This is because there has been an increase in the number of coffee shops that are setting up in America and other parts of the world.
As a result of this, the organisation needs to ensure that it is displays high levels of innovation so as to be able to remain competitive. Recently McDonalds ventured into the business of making and selling premium coffee. McDonalds is a company that has the capability of giving Starbucks a run for their money. This is because the company boasts of vast experience in the field of food and beverage. The company also has the financial muscle that would enable it to successfully invest in the coffee industry. Recently, McDonald ventured into the business of making and selling premium coffee. The company has managed to open several outlets of their coffee making segment that is known as McCafe. Through their new coffee outlets, the company is able to retail premium coffee at a lower price compared to that of Starbucks. As a result of this, McCafe is continuously increasing its market share in the coffee making industry.
In order to remain competitive, Starbucks needs to develop and implement a policy that encourages innovation in the organisation. This policy will enable Starbucks to be able to develop various ways through which it can differentiate the services and product that it offers, one of the ways through which the management of Starbucks has been able to facilitate the developed of innovation in the organisation is through the IFMA Centre of Innovation and Excellence. It is through the participation of the members of staff in the IFMA Centre of Innovation and Excellence that the employees are able to learn various ways that they can utilize to become innovative while at the work place. When there are a significant number of employees who display high levels of innovation, the organisation is normally able to cut down on the cost of production; as well as the operating costs. This is because the employees will be always looking for more efficient ways of achieving their objectives or carrying out their tasks. The management of Starbucks has also been able to foster a resounding innovation oriented culture through the issuing of rewards to employees who display high levels of innovation. This is a strategy that has managed to motivate most of employees to look for ways through which the organisation can be able to operate at the least possible cost while still attaining maximum outputs and realising maximum profits.
The organisation has also invested heavily in the field of research and development. The main objective of the organisation, with respect to investing heavily in the field of research and development, is to be able to provide customers with differentiated and unique services. The research and development department at Starbucks is tasked with the responsibility of developing new and modern flavours that will attract and retain as many customers as possible. All of the products that are developed by the research and development department at Starbucks should be in line with the rapidly changing customer preferences and tastes. This will serve to ensure that Starbucks is able to remain relevant in the coffee industry. In addition to that, the research and development department is tasked with the responsibility of ensuring that the organisation is able to standardise all the process that are carried out within the organisation. This will serve to ensure that there is negligible disparity in the taste of snacks, coffee and other beverages that are being served in their various Starbucks outlets which are located in almost each and every city across the globe.
Project Related Factors
In order to be able to achieve all the company objectives in the best way possible, Starbucks has put in place a well able management team. The organisation normally offers competitive perks to its employees, and as a result of this, it is normally able to attract some of the highly skilled and multi talented individuals. This has also enabled them to develop a management team that is comprised of people who are well experienced, and they boasts of exemplary academic records. In line with management, the organisation places much emphasis on planning. This is because before any project is initiated in the organisation, the people to take part in the project are usually required to carry out extensive research. This is in order to ensure that the data collect will facilitated the development of accurate reports. This is derived from the fact that the information from this reports will serve to inform the management team when it comes to making decisions that pertain to that specific project. The management team is tasked with the responsibility of strategic management. Strategy is the method through which an organization or an individual will conduct his actions in order to achieve the desired results.
Accordingly, organizations employ unique strategies in order to beat their competitor and also in order to gain competitive advantage. In most cases companies normally keep their strategies as a secret that is known to a few individuals who are responsible for implementing the strategy. Strategies are normally kept as a secret because if an organization’s strategy is known by a competitor, the competitor may commence employing measures to counter the effectiveness of the strategy thus the business may not achieve the desired competitive advantage. It is important to highlight that during the implementation of a strategy the staff of the organization is normally briefed on the implementation process. This would facilitate effective and efficient implementation of the strategies in the organization. The implementation process of a strategy is as vital as the process of formulation of a strategy.
One of the ways through which the management to ensure that the Starbucks is able to gain competitive advantage is through the establishment of the brand. This is because upon the development of a strong brand, most consumers will have a lot of confidence in the products that the company develops and sells. As a result of this, it will be relatively easier for a company that has a strong brand such as Starbucks to be able to introduce new products successfully.
Commercial Viability Analysis
Product Related Factors
The management of Starbucks have managed to display relatively high levels of innovation. As a result of this, there has been a significant rise in the level of marketability of the products being offered by the company. One of the ways through which Starbucks has managed to achieve this is by providing wireless internet connection in their stores. The provision wireless internet connection serves very well to enhance the grip of Starbucks in its target market. This is because the target market of the organisation is the high and middle income earners. In most cases, the company seeks to attract professions who work in various companies that are operating within the major cities that the company has coffee outlets. Another way through which Starbucks has been able to attain and retain a large portion of the market share, in its industry of operation, is through the provision of a wide variety of products. Starbucks refines their menu regularly by introducing new products that are well conversant with the preferences and tastes of the consumers. For instance when it comes to coffee, Starbucks has various brands of coffee. The following are some of the brands of coffee that are offered by Starbucks; black coffee, coffee which is served from non – dairy milk, coffee that has vanilla flavour among others. In order to attract people who do not fancy coffee, the organisation offers other beverages such as tea, milk, fresh juice, espresso, and frappucino among others. The Starbucks coffee outlets also provide biting and food to their customers.
Market Related Factors
Recently, the world experienced the global financial crises as well as the Euro zone crisis. As a result of this, the coffee industry was greatly affected. Most of the people who consume coffee at Starbucks work in the corporate world. During the time when the world was being rocked by these two crises, the employees of these companies were experiencing financial setbacks. This is because the level of interest rates had increased significantly thereby reducing the purchasing power of the dollar. This brought about a situation whereby most of the people were looking for ways of minimising their spending. As a result of this, there were a significant number of people who stopped taking coffee on the go for a while. This period was also characterised by a rise in the prices of coffee, and this was attributable to fluctuations in the foreign exchange market. The fluctuation in the prices of coffee brought about a situation where most of the coffee houses were experiencing a decline in profits.
Future Pathways
Opportunities and Challenges
Over the recent past, there has been a significant increase in the number of coffee shops that are targeting the same target market as Starbucks. As a result of this, there has been as a significant increase in the level of competition that is taking place within this industry. However, the increase in competition has not largely affected the profitability of Starbucks. This is because Starbucks is an organisation that has a strong brand equity. In addition to that, Starbucks has been in existence in its respective industry for a long time. Thus, the management has been able to learn various tactics of operating such a coffee shop profitably irrespective of the level of the prevailing competition.
The management of Starbucks understands and appreciated the people in their target market. As a result of this, the organisation has introduced the use of gold card. The organisation has also introduced the Starbucks card which facilitates the loyal customers of the coffee houses to earn points each and every time they visit. The introduction of those two cards will serve to enhance the number of customers who will be loyal to Starbucks.
References
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