Business Strategy and Phases of Strategy Execution - Essay Example

?Running Head: STARBUCKS Introduction The expression Business Strategy, as Kourdi puts it in his book, is the choices, plans as well as decisions applied in the guiding of a company to higher levels of success and profitability. A well thought about and precisely considered business strategy gives guidance to a firm’s commercial success, but on the other hand, one that has not be fully understood and weak strategy is likely to result into a company’s demise or fall. (Kourdi, 2009 p3) A business should always have the right resources and the capability to be in the best position to exploit opportunities and to respond to the threats in a business environment. The important part of the business strategy is to ensure that the resources and the competencies are evaluated and much more understood. The process is known as strategic audit of a business strategy (Government Commerce Office Great Britain, 2004) An example of strategy is like a situation where a business decides to start operating beyond the borders of its home country. Literature Review Phases of Strategy Execution Before embarking on the study, it is important to know what a business strategy entails and the steps of forming and implementing a business strategy. The prime steps in executing a strategy include, the formation and analysis, development, implementation and review of strategy as per the international marketing strategy book by Doole and Lowe say in their book. Basically, formation and analysis of strategy is the introduction of international operations of business in an international environment of trading. Considerations have to be considered with regards to cultural and social environments of international marketing. Development of strategy focuses on the fact whether a business is medium or small sized. The world strategies of a business are considered and the entry to a given market alike. There is also the part of the international commodity management. While implementing a business strategy, there are functions involved with the likes of international way of contacting other businesses and basically the communication part of it. There is also the management of the international logistics and distribution. The prices are also set that suit the international market. Enabling technologies are put in place as well. Reviewing of a strategy as the last step is the reviewing of the implemented strategy to asses its performance. This involves evaluating performance and initiating adjustments meant for correcting long term direction, condition changes, new ideas and emerging opportunities. It aims at deciding on the continuity of the company’s vision, the objectives or the implementation methods of the strategy. (Doole and Lowe, 2008) This study is for the purpose of expounding on the issue of strategy and in terms of a specific case of Starbucks Company and it is going to consider the company in all fronts of a business strategy. That is, in terms of the four major steps of coming up with a business strategy; forming, developing, implementing, and reviewing of a strategy for an organization. One of the business strategies Starbucks has had in the recent past is the internationalization strategy. This strategy was done in the four steps aforementioned. These are going to be explained in the following write-out. Basically, Starbucks Company buys whole bean coffees and roasts them. It also makes offers of fine pastries, premium Tazo teas and other delicacies. It provides an entertainment environment as well for the visitors of their shops. (starbucks, 2011) Starbucks is a renown brands of those brands of coffee sold globally. It is now established in around 43 nations with about 15,000 franchises of coffee shops around the globe. This company was first set up in year 1971 as a small coffee retailer specialty and it was in Seattle. (Daft, Murphy and Willmott, 2010 p49) Starbucks has since 1971 had a change of direction by entering new markets such as Japan, Hawaii, Singapore, and since year 2008, it has 5113 international stores and 11567 stores in USA. The mission of Starbucks is to ‘inspire and nurture the human spirit-one person, one cup, and one neighborhood at a time’ it is to establish Starbucks as the world finest coffee while still maintaining the uncompromising principle while growing (starbucks.com, 2011) The trend of most markets is doing business internationally and therefore, managers should keep up with the changing times. Mostly, the reason for doing business internationally is sustainable development and growth. International operations are complex as well as diverse and thus, international marketing should be approached by aptitudes, skills, and the reasonable knowledge essential for competing in the international arena. Formation of Strategy The reason for Starbuck’s international strategy is to make sure that the requirements and needs of the market are satisfied, while at the same time pursuing the respect of its traditions and cultures. In the present times Starbuck Company utilizes three varying strategies. These are in the forms of licenses, venture and fully-owned subsidiaries. Developing a Strategy Prior to entering a country, Starbucks Company develops its strategy through carrying out quantitative studies of the market. It also comes up with extensive focus interviews of groups so as to have a glimpse of the idea of the potential and the market place. It has as well shown that despite how big a company is, it sometimes requires aid to reach its goals. It realizes that to satisfy a market, it needs other companies since it cannot totally satisfy the market needs by itself. Thus, Starbucks has always worked with other companies so as to divide financial risks among themselves. The partners to Starbucks have given a hand to Starbucks to enhance its entrance into new markets as well as get the commodities available in the market in a rapid manner. Implementing strategy In implementing strategies, these partner companies have helped Starbucks in keeping up with technological innovations. Therefore, through this approach Starbucks has been able to attain its objectives in entering foreign markets and maintaining alliances with reputable companies. In choosing partners, Starbucks uses specific consideration criteria of what they call international partners. The major aim is to ensure that their local partners are able to have a stake in Starbucks’ value as well as the commitment to taking Starbucks’ experience to clients globally. The selection criteria applied are with the inclusion of; that partner who has a strategic fit to that of the business of Starbucks, the partner who has similar corporate culture and values, a small-box’s seasoned operator, retail stores that are multi-uni, a partner who has a strong track record, a leader in local business, a partner who has a good reputation when it comes to brand new ventures, and also a partner who has a huge experience in the management of premium brands and licensed brands as well as concepts and lastly, that partner who has experience in beverage and food. To operate internationally, Starbucks picks the local partners who happen to be the business leaders locally. Afterwards, Starbucks- with its partner- attempts to adapt the business traditions that it has to those of the local new environment. Instances to illustrate this are those of Japan and Spain, where in Japan there more seats in coffee shops than other nations’ and in Spain they have ample outside terraces. This company’s participation in the process of internationalization differs in the degree levels since it is continuously in contact with operators so as to ensure updated knowledge of the marketplace. Review of strategy The international strategy is going to be reviewed in terms of how it has performed in the regions where Starbucks has implemented the international strategy, the first one being United Kingdom. In UK there is Starbucks’ fully-owned subsidiary by the name Starbucks Coffee Company Ltd. This is the biggest global retailer as well as roaster of the specialist coffee brand. It also happens to be the leading coffee shop in the market of UK’s coffee shops. 1998 marks the year when Starbucks made the grand entry by way of acquiring the Company stores of 65 Seattle Coffee. This acquisition was done by exchanging 1,800,000 shares of ordinary shares of Starbucks of a value of 800,000 pounds. The rebranding was done in the following year after the buy out. In addition, Starbucks’ primary company let the Coffee managers of Seattle, Ally and Scott to carry on with the management of the pioneer UK business operations. (Santamaria and Ni, 2008) The other case for review is the New Zealand entry, which happened in year 1998, where Starbucks opened its retail store in Auckland. It was owned and run by Restaurant Brands New Zealand Limited- which was publicly listed in the immediate previous year. Besides this, there also happened to be Pizza Hut and KFC brands that made an annual turnover of NZD216,800,000 in year 1997. Recommendation and Conclusion The company needs to keep on expanding both domestic and internal market despite going international. Starbucks can take advantage of market trends through its expansion and also through acquisition in order to get the largest market share. Starbucks can also expand into tea beverages especially in international locations where there is no tradition of drinking tea. Also Starbucks can focus on white-collar workers who eat in specific cafeterias and offer meals in lunch time in order to market its product. In conclusion Starbucks should engage in fair trade coffee because it is helping the developing countries and also affecting the spread of globalization. The problem of Over-expansion is the problem that is facing Starbucks in today’s operation. It should consider a balance of expansion and growth while it also aims at achieving greater success in the international markets. References: Kourdi, Jeremy. (2009). Business Strategy: A Guide to Taking Your Business Forward. Edition 2, illustrated. Bloomberg Press. p3. Doole Isobel and Lowe Robin. (2008). International marketing strategy: analysis, development and implementing. Retrieved 24TH May 2011 http://docs.google.com/viewer?a=v&q=cache:UhLLW1SeFFgJ:estore.bized.co.u/ freecontent/300081F9.pdf+steps+of+Starbucks+forming+strategy,+developing+st rategy,+implementing+strategy+and+reviewing+strategy.&hl=en&gl=ke&pid=bl &srcid=ADGEESg43PuKMidLB3qIw1lOEW6NOcXgTk5w8mwad0S5JjsIfnH4a efNBAy7hUmRk55iU9pXZBLjQEIb7F81CWaROIL8rjo48X2g6rMR5Z8CKvN9 21drgAbvCAGTvFTulO8RY9Jo8&sig=AHIEtbTy4GuvuZbBA4kHhS4WtZaRS 9scNQ Government Commerce Office Great Britain (2004)Business perspective: the IS view on delivering services to the business. 2 Edition, illustrated. The Stationery Office. Murphy, Daft, J and Willmott, H. (2010). Organization theory and design. Edition10, illustrated. Cengage Learning EMEA. p49. Santamaria, Beatriz and Ni Shuang. (2008). Entry Modes of Starbucks. Retrieved 24TH May 2011http://docs.google.com/viewer?a=v&q=cache:HUghNGRtOyQJ:mdh.divapo rtal.org/smash/get/diva2:121498/FULLTEXT01+starbucks+internationalisation+s trategy&hl=en &gl=ke&pid=bl&srcid=ADGEESgzx0TVXhA0l4FuLZnD- FyHDHqIo7Jbt3Jjt_11J2cPgpKNWFmH92crcR57lhr6JqkbJzjbO9hT3_2TmNB0 6IyS0lRgiE9rBuz4bfkH01z6uzlB24jwEqcFkVmz3qInCiEaH&sig=AHIEtbROJ MZfOsVzrPgZVhV7skbhJltpWg starbucks.com. (2011). Our Company. Retrieved 24TH May 2011 http://www.starbucks.com/about-us/company-information Strarbucks.com (2011). Responsibility. Retrieved 13th May, 2011 www.starbucks.com Read More