Strategic and Marketing Management at Seattles Best - Research Paper Example

Seattle’s Best Organizational Direction Seattle’s Best looks forward to be the leading company in the coffee industry. This will be achieved through expansion to many other parts of the world and aims to offer high quality coffee to the satisfaction of customers. Relative Industry Position The Seattle’s Best added new packaged coffee products with revamped bag designs as it focused on increasing sales in grocery stores. The company is involved in the retail and wholesale side of the business. Seattle’s Best now sells breakfast and house blends of packaged coffees. The company replaced levels one and two varieties. The change happened after a number ranking system, and lighter roasts did not resonate well with many customers (Seattle’s Best Coffee, 2014). The Seattle’s Best company business entails food-service sales and grocery. It made up about 9.5% of its $14.9 billion revenue as at September 2013. Starbucks purchased Seattle’s Best in 2003. The shares of Starbucks reached 46% in 2013. Starbucks has about 18,000 stores around the world, about 255 are in New York and 13,000 are in North America (Seattle’s Best, 2013). The position enables the company try new ideas on a continuous basis. One main initiative is the opening of a tea store in Seattle’s University Village. The company acquired Teavana Holdings, which will support the expansion of the store concept (Patton, 2014). Strengths and weaknesses of Seattle’s Best The company’s strengths have allowed it to operate more effectively than its competitors. One of the strengths of Seattle’s Best is the loyalty it has among its customers. The company has been operating for many years now. It has managed to attract many customers who have liked the company’s products. The company’s quality products have ensured that it maintains its market share. The company has a good financial record that can easily allow it to diversify into other products. A strong financial base also allows the company to motivate its workers by paying them well (Burks, 2009). The company boasts of well-trained employees who have always ensured that the company remains at the top. The well qualified staff of receives motivation in the form of trips and money. This practice has ensured that the employees feel part of the company. Seattle’s Best has managed to guarantee that its employees remain loyal. Loyalty to the company is critical for employees will not bother to seek for jobs elsewhere (Zacks, 2014). The main weakness of the company has been its reliance solely on coffee products. It implies that if the product is not doing so well in the market, there will be no alternatives to offer. Many companies in the beverage industry ensure that they diversify their products. It is important to diversify in production in order to ensure that if one product fails in the market, the other products can help the company to continue generating revenue. Opportunities and Threats of Seattle’s Best Seattle’s Best has several opportunities. The main opportunity is the availability of the internet to market its products. The internet has increasingly been an important platform to market products all over the world. This company can easily utilize this resource to reach new customers. Many people are increasingly using coffee products around the globe. Settle’s Best Company can use this opportunity to increase its sales thus increasing revenue. The improvement in technology can be used to boost the quality of its products and at the same time allow for proper packaging of coffee (Dobkin, 2008). There are some threats that this coffee company face. Many companies are joining the coffee business industry. It has resulted in stiff competition in the industry. When competition increases, there is a high possibility that Seattle’s Best market share will reduce. Strategies for Seattle’s Best Due to increased competition in the sector, the company has to devise strategies that will ensure it thrives. Good strategies will ensure that the company plans for short, mid and long-term goals that will allow it to remain strong in the business. Seattle’s Best has devised the following strategies: Cost leadership, product differentiation, corporate diversification, among other strategies (Barney & Hesterly, 2012). Cost leadership means the lowest cost of operating in the industry. Cost leadership driving factors are size, efficiency, scope, scale and cumulative experience (Rogers, 2001). The strategy aims to use a scale of production, scope and other economies (such as a good purchasing approach), production of standardized products, and using high technology. While Seattle’s Best may use the cost leadership strategy successful, it may be hard to employ. Cost leadership involves Seattle’s Best marketing itself as the cheapest company for coffee products. It means that the company needs to reduce its costs and pass the savings made by the company to customers (Hill & Jones, 2013). Product differentiation is a strategy that companies or businesses use to differentiate a product from the same offering on the market (Beath & Katsoulacos, 1991). A product differentiation marketing strategy can provide an advantage to a company or business in a market dominated by other companies. The strategy targets a segment of the market. The strategy delivers the message that the product has many advantages compared to similar products in the market. Seattle’s Best employs this strategy to convince the market that it produces the best quality of coffee in the industry and customers need to buy its products. The process of a company or business expanding into various areas such as product lines and industries is called corporate diversification. Companies do diversification in order to make the business grow bigger and generate increased revenue. Diversification may involve revitalizing, expanding or saving a company. The company can decide to diversify into other areas such as tea production. Tea is an alternative beverage to coffee, when the coffee business is not doing well; tea can easily substitute it. Best strategy for Seattle’s Best The company needs the corporate diversification strategy. The company has already employed product differentiation and cost leadership strategies, but competition is still stiff. Corporate diversification will ensure that the company engages in other areas of production (Barney & Hesterly, 2012). When a company introduces another product, the number of customers will increase. The company will also grow and reach out to many new customers across the globe. References Barney, J. & Hesterly, W. (2012). Strategic management and competitive advantage: concepts and cases. Boston: Pearson. Beath, J. & Katsoulacos, Y. (1991). The economic theory of product differentiation. Cambridge England: Cambridge University Press. Burks, M. (2009). Starbucks. Santa Barbara, Calif: Greenwood Press. Dobkin, J. (2008). Direct marketing strategies. Merion Station, PA: Danielle Adams Pub. Hill, C. & Jones, G. (2013). Strategic management: an integrated approach. Mason, OH: South- Western, Cengage Learning. Ireland, R., Hoskisson, R. & Hitt, M. (2012). Understanding business strategy: concepts plus. Mason, OH: South-Western Cengage Learning. Patton, L. (2014). Starbucks Pushes Further into Grocery with Seattle’s Best. Retrieved on 3rd March 2014 from http://www.bloomberg.com/news/2014-01-15/starbucks-pushes- further-into-grocery-with-seattle-s-best.html Rogers, S. (2001). Marketing strategies, tactics, and techniques : a handbook for practitioners. Westport, Conn: Quorum Books Seattle’s Best. (2013). Premium Coffee for everyone. Retrieved on 3rd March 2014 from http://news.starbucks.com/news/seattles-best-coffee-gains-steam-down-the-coffee-aisle- with-three-new-coffe Seattle’s Best Coffee. (2014). About Us. Retrieved on 3rd March 2014 from http://www.seattlesbest.com/about-us Starbucks. (2014). Seattle’s Best Coffee Gains Steam Down the Coffee Aisle with New Coffee Products. Retrieved on 3rd March 2014 from http://starbucksocs.com/coffee/seattlesbest Zacks. (2014). Starbucks New Seattles Best Coffee Products. Retrieved on 3rd March 2014 from http://www.zacks.com/stock/news/119912/Starbucks-New-Seattles-Best-Coffee- Products Read More