Business Management And Leadership Knowledge: Critical Understanding And Key Aspects

Strategy

The various business organizations create different services and products to offer the best services to their consumers(Strategy, 2008). Strategies will enable a business organization to stand out regardless of the changes experienced within the market environment. This piece will be based on chosen business organization, and for this case, I will be analyzing the Starbuck corporation. This is an American organization established in the year 1971 within Settle for marketing and a retailer of coffee around the globe(Babbie, 2010).

Business strategy is all about being unique and not the best in the market. Trying to Compete to be the best in the business is one of major misconceptions within the market. Many business organization leaders have taken the business in the world of the sports. In a single market, you can find various organizations trying to beat the average each with a different strategy. Therefore, the worst thing one can find in this particular strategy is individuals copying each other(Soetanto & Jack, 2016).

1. Competing for the profits

This second kind of strategy is based on the company that can produce the largest share in the market or developing fast than the other(Wiser, 2013). Its all about making more money than the other. Such things do not occur independently but through the organization’s management. However, growing is not a business strategy but the consequence. Although, that does not prevent the business owners from using the word growth. Growth can be used when referring to some of the key areas to exploit and maximize the profit(Zahay & Griffin, 2010). 

This is one of the simplest word that can be used in defining the strategy. Every business organization needs to make a choice of who they are going to serve and how they are going to serve that particular person(Hwang, 2014). The choice is all about the business organization connecting with the external world, the demand and the supplying side. The choice demands a business owner or a company to target certain portion of the individuals. Thus, the innovation of strategy is the criteria of making a choice(Gravetter & Forzano, 2010).

There are different perspectives which be used in explaining the importance of the Strategies in the business.

1. The fist perspective is the planning. Tracking the how the business is progressing is an essential part for any business organization. The only thing remaining is the link this planning has for the future of the business(Vorhies, Morgan, & Autry, 2009). The current state of the business at the present year and where it should be in the following year or years are all good intentions for the organization. Lacking a clear picture of where the business might be in the future it will look less proactive(Wit & Meyer, 2010).
2. The second perspective is the weaknesses and the strengths of an organization. No one know the business better than the owner(Zott & Amit, 2008). It’s the business management that can only determine the competitive advantages and disadvantages of an organization. Thus, strategy establishes a high level of knowledge and offers the company with information that will make it more successful(Schaltegger & Wagner, 2011).
3. Thirdly, the scanning of the environment. A number of business leaders do not take their time to understand the external surrounding of their organizations that could have negative or positive influence on their performances(Prahalad & Hart, 2010). The big question is how are they able to conduct their analysis? This brings a conclusion that they must comprehend with the changes before they occur. Hence strategy enable the management to be prepared of possible shifts within the market that offer some opportunities to take the right measures before the events happens(Reeves, Love, & Tillmanns, 2012).

Explain the difference between internal and external analysis

The weakness and the strength of business can be monitored by the organization and self-evaluation.The internal analysis of a business focus on the internal aspects that provide the organization with specific disadvantages and advantages in order to meet its target in the market environment(Bouranta, Chitiris, & Paravantis, 2009). Internal analysis therefore, provides an organization focus on the clients because the analysis can only make sense if it assists the company in meeting the need of their consumers. The main issues analyzed are the weaknesses and the strengths examined from the perspectives of the consumers since the clients can perceive the strengths and weaknesses which company cannot see(Kratzer, Meissner, & Roud, 2017). According to (Schot & Geels, 2008) all business organization should tier all their strengths and weaknesses to consumer’s needs. The areas which the company should focuses on while evaluating itself internally are; resources which are constituted by the sales, quality of the products, profitability, employment ability and the product’s portfolio. Secondly the capabilities; which is composed of the goals that are able to examine the strategic weakness, problems, uncertainties, constraints and the strengths(Hagedoorn & Wang, 2012).

Being unique and not the best

On the other hand, external analysis, focuses on the threats and the opportunities that exist within the company’s environment. The threats and the opportunities are both independent from the company(Fulghieri & Sevilir, 2009). Opportunities are the factors that establish a favorable environment and produces rewards to the organization. Any organization that wants to earn from the opportunities must act quickly on them. Threats are those limitations within the business that prevent it from achieving its objectives(Aguinis & Glavas, 2012).

Identify & explain two strategic positioning models/theories

The PESTLE

Being one of the most prominent coffee organization, for example, the Starbucks is continuously leading in the industry of coffee marketing. This success is associated with the ability of the company in addressing the external PESTLE aspects. The PESTLE technique is used in showing the critical impacts on the company concerning macro-environment even though the current management of the Starbucks is obliged to continue in controlling its market environment. Therefore, this approach is useful in examining how the company has been able to satisfy these needs. By addressing the external aspects identified in the PESTLE, it will continue to strive despite the challenges in the market environment. The company’s management is closer in dealing with the external factors within the PESTLE(Minefield, 2012). These factors are the following

The political factors

Economic factors

Social factors

Technological factors

Legal factors and the environmental factors.

The porter’s five forces

The competitive forces in a business organization are the combined effects associated with the external aspects contained in Porter’s five forces. Concerning this analysis, the company factors to consider for it to stand out are; bargaining power, rivalry, and the threats. Although the other remaining forces remain influential as well(Srdjevic, Bajcetic, & Srdjevic, 2012). The following are the five forces surrounding the market environment of the company

1. The rivalry. The company is experiencing competition from the other companies offering food and coffee services.
2. The Starbucks company experiences the moderate forces on the new entry threats. The force is associated with effects from the new competitors in the coffee industry. The factors which contribute to the new entries are; the moderate capital of conducting the business, reasonable cost of supplying cost and the weak cost of moderating the bland.
3. The bargaining power of the consumers.This force has been established on the individual consumers and various groups of the clients on the international market environment.
4. The bargaining power of the suppliers. These forces are like the size of the suppliers which is moderate, the high variety of the supplier is weak, and the massive overall of suppliers is generally weak(FME, 2011)
5. The threats of the substitute products to Starbucks. The danger experienced by the organization, in this case, is the competition of the substituted services and products from other industries.

Evaluate usefulness of models, discussing pros and cons of these

The porter’s five forces technique

The pros

cons

The model can provide a hit of where to find the threats and challenges in an organization through the analysis of substitutes. It’s a good model which can be used when organizing and researching on the market structures. It can act as a guideline when thinking on the positioning, response and the context of the organization Help in strengthening the strategic thinking. The model provides some reasonable guidelines when examining the competition in the market.

Changes of the technologies are taking place and can cause disruptions to the market which cannot be detected by the model. When the structure of the market remains static, the model has to change radically in order to retain its position in the market. The model is not able to offer the best method of taking the preventive cautions. The model might quickly become outdated since it was designed to give a snapshot of a given market. It’s difficult to define the state of the market using the model. It’s mainly used in analyzing the competition ideas. The model can only be used in examining simple structures of the market.

 The PESTLE tool

Pros

Cons

The model can provide a hit of where to find the threats and challenges in an organization through the analysis of substitutes. It’s a good model which can be used when organizing and researching on the market structures. It can act as a guideline when thinking on the positioning, response and the context of the organization Help in strengthening the strategic thinking. The model provides some reasonable guidelines when examining the competition in the market

The quality information from the external user is usually restricted. Organization restricts the researchers due to cost and consideration of time. The users might oversimplify the information collected during decision making.

Introduce your organisation in the context of strategy

The Starbuck company mainly works in the retail of snacks and the coffee store business. This business had faced some challenges which led to it the slowdown in the year 2009 facilitated by the change in consumer’s preferences and the crisis in the economy. The economic crisis resulted in decreases in revenue in the United State by 6.6%. Before the financial crisis, the business had developed at a high rate. The demand for the snacks and the coffee products are facilitated by the number of aspects constituted by the rate of consumption, the state of health, demographics and the prices in the market(Porter, 2010).

Apply the 2 previously discussed tools to your organisation

The PESTLE can be used in showing the significant political aspect is all about acquiring the raw materials. This has been identified with the politicians from the western countries that provide these sources. Due to this, the Starbuck company is forced to stick to the environmental and social norms of the countries where they are operating.

With respect to porter’s five forces, the Starbucks organization has a considerable number of competitors of various sizes. The match is witnessed in cases of the price switching where the customers tend to the advantages of low-cost commodities — for instance, the circumstances in which the minimal number of clients transfer to other organization offering the coffeehouse services(Dobbs, 2014). 

The importance of strategy

Highlight the findings from your analysis

1.Starbuck sell its products at a lower price through the quality will be very poor. This is because the company will be forced to adjust the level of its consumers to include the middle and the lower-class consumers. This is one of the biggest challenge faced by the company.

1. The political aspect is all about acquiring the raw materials. This has been identified with the politicians from the western countries that provide these sources. Due to this, the Starbuck company is forced to stick to the environmental and social norms of the countries where they are operating. Starbucks is will to adhere to all the sourcing strategies and the fair-trade standards.  
2. The emerging of the mobile waves is a big opportunity for the Starbucks in positioning its business. Starbucks has partnered with the Apple in developing a mobile App by proving its customers with discount coupons hence attracting some clients.
3. Many operations within the Starbucks are more concerned with international and activist’s advocacy teams. The customers have also expressed a lot of concerns hence the company must take the various matters seriously for the sake of establishing its trust with the customers. The other environmental characteristics which the organization should take care about are the environmental concerns in the international level, the disasters, and the environmental regulations and policies.
4. The Starbucks organization should make sure it doesn’t interfere or violate the regulations and rules from the countries in which they were getting their raw materials from in their home country. The company must also be aware of the introduction of caffeine extraction and production policies by the health institutions.
5. The competitive forces in a business organization are the combined effects associated with the external aspects contained in Porter’s five forces. Concerning this analysis, the Starbucks company factors to consider for it to stand out are; bargaining power, rivalry, and the threats. Although the other remaining forces remain influential as well. The following are the five forces surrounding the market environment of the company.
6. The Starbucks company experiences the moderate forces on the new entry threats. The force is associated with effects from the new competitors in the coffee industry. The factors which contribute to the new entries are; the moderate capital of conducting the business, reasonable cost of supplying cost and the weak cost of moderating the bland. For instance, the operation cost of the small store is higher when compared to the cost of operating the great coffeehouses. Likewise, the little cafes have minimal supply requirement than the larger cafes.

Analyse and critically evaluate the findings from your analysis

The Starbuck company has established district managers to oversee the regional stores who should report the concern to the higher corporate management. In every store, the store managers act as the chief supervisor to monitor other junior supervisors (shift supervisors) whose role is to perform the store managers when the principal managers are not around. Under the shift, supervisors are the other workers known as the baristas. The company has prioritized its workforce within its organization social responsibility capability. For any stakeholder or employee to work effectively, they require a better working environment, appropriate salaries, and security at the workplace. Thus, Starbucks’ has emphasized more on the attitude of employees’ attitudes towards work. The workers are provided with wages higher than the legally mandated minimum income. In the year 2014, the company increased its corporate social responsibility (CSR) performance for their stakeholder team through offering employees with scholarships. Concerning this, the company pays about 56% of the tuition fees for its senior and junior workers at the University level. The effort of Starbucks in addressing the performance its workforce has established a big room for improvement. In individual states like New Zealand, the company has offered minimum salaries to the juvenile employees. These are the kind of the employees who are usually criticized hence the organization has used this opportunity to increase it CRS (Corporate social responsibility performance)(Dälken, 2014).

The Starbucks organization has highly valued its customers as its senior stakeholders. The vital interest of these stakeholders is the quality of products and services like coffee and other related beverages. The company is on the most known specialty of drinks and coffeehouse chain; the company has been able to address these interests effectively.

The suppliers

The coffee farmers and the wholesalers constitute the company’s suppliers. The primary objective of this team to grow and compensation demands from the company. Coffee farmers’ main aim is to boost the yield of coffee to generate high revenue.

The government

Starbucks has been able to comply with these regulations and rules. Although, the organization has faced different criticism for evading the tax in Europe. 

Recommendations to improve competitive advantage 

The stakeholders	The recommendation
Customers	The company should treat its clients as the key stakeholders by transferring their culture to consumers as its café. For instance, the friendly and warm link has been focused in the company and the method in which employees relate with the clients. Therefore, the company CRS have fully proved their loyalty to their customers. Bargaining power is one of the effects experienced by the company or the consumers at a very high rate. The forces are influenced by switching prices, the substitute products like tea and the size of individual customers. The bargaining power, in this case, is based on the significant forces impacting the company. Therefore, the company can lower the cost to retain the consumers.
The suppliers	Starbucks can meet the needs of these stakeholders via many CRS programs. The program is achieved by ensuring all the suppliers from other parts of the world are incorporated into the supply chain. Farmer’s equity and the company’s coffee programs need to be explicitly clear to make sure farmers are well paid. The company works very hard in ensuring all the interest of these stakeholders is well adhered to. Starbucks is experiencing low bargaining power from its suppliers. Porter consider this kind of force as the impact of suppliers to the company and its market environment. The company should consider increasing the variety of the suppliers.
The environment	The Starbucks Café has highly facilitated to the quality of shade and biodiversity in the certified coffee farms.  About 90 percent of coffee taken to the company is collected from the accredited farms. The recent study conducted recently have indicated that the company has adequately addressed this issue though there is a need for improvement
The government	The company should address the various government authorities provided that its operating globally. The company is known in using a network of locations within the various parts of Europe to exploit the tax opportunities. Thus, the company needs to improve their services for the sake of serving the interest of these particular stakeholders better(Wang & Chang, 2008).

The Starbucks company has employed over 180,000 workers in about 19,767 stores located in different part of the world. The commodity mix overwhelm the handcrafted and roasted high quality coffees, food stuffs, tea among other beverages. Starbuck market tea and coffee products as well and their trademarks are licensed through various channels like grocery. The mission statement for Starbucks is to “inspire and nurture the human spirit- one person, one cup and one neighborhood at a time.”. Various Strategies have enabled the Starbucks organization to outdo its competitors regardless of the changes experienced within the market environment. This report has basically shown it has well used the marketing strategies through various tools like PESTLE and Porter’s Five forces to achieve its mission and goals. The mission that has been developed by the company has incorporated the cultural growth, high performances, innovation, and accountability as one of the values embraced by the company. 

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