Showing posts with label Unit 3: Business Environment Organization Purposes. Show all posts

Sunday, July 29, 2018

UKCBC unit 4 marketing principles 3

10-04-17 Maddox Smith 0 comment

UKCBC unit 4 marketing principles 3

Task 1

1: Start your report by explaining two elements of Marketing Concepts Assignment based on the example of Starbucks. You are to prepare a SWOT analysis of the effective organization and explain the importance of using SWOT analysis as a marketing tool. Next present and evaluate the marketing objectives of Starbucks and explain how defining marketing objectives can help a business to develop marketing strategies.

Introduction

This section will discuss the SWOT analysis and the business decision marketing objectives of Starbucks. The SWOT analysis is a very popular and systematic approach and it is also very appropriate analysis which helps the company to devise a strategy on the basis of the factors like the strength and weakness of the company and also recognizing opportunity and threat of the company (Amin et al, 2011). Analyses of the market can effectively be done by recognizing the strength and weakness of the company in the market and it will also help in identifying the poten
tial opportunities for the company where the company can expand and also the potential threat for which company can prepare itself (Yangdong et al, 2010). Apart from this, this section will also discuss the marketing objectives of the Starbucks. Marketing objectives is an essential part of any organisation as it gives direction to the people and the motive to achieve those objectives. This section of report will also discuss how marketing objectives helps any organisation in devising the perfect marketing strategies and principles for the organisation: –

SWOT Analysis of Starbucks

Strengths 1. Sound financial records 2. Emerge as a number one brand in coffee house segment 3. The experience of Starbucks 4. Largest chain in the world 5. Effective employee management	Weaknesses 1. Major profit comes from coffee bean price and business 2. High product pricing 3. Negative publicity
Opportunity 1. Large amount of supplier range 2. Uplift of many developing countries and economies 3. Diversified and large product range 4. Expansion of retail operations	Threats 1. Expensive coffee and other dairy products 2. Saturated market 3. Fierce competition 4. Trademark breach 5. Supply disturbance

Finding of SWOT analysis

· Strengths

Sound financial records: the profitability of the company has been rising from past few years. The company saw a slowdown in 2008 but with proper strategies and planning the company revived from those losses (Civi, 2013). It is one of the most profitable businesses in the market.
Emerge as a number one brand in coffee house segment: the brand value of this coffee house is very strong. People perceive it as number one coffee house and the quality of the coffee served is of very high quality and they also have a strong customer service. This brand is the most valued brand in the business decision making(Civi, 2013).
The experience of Starbucks: people value the strong experience which they have while having a Starbucks coffee and the ambience of the coffeehouse which is cordial and with friendly staff the warm atmosphere cannot be compared with any other coffee house.
Largest chain in the world: the company has its existence all over the world with twenty thousand coffeehouses in almost sixty countries (till 2013) (Civi, 2013). This makes it largest coffeehouse in the world.
Effective employee management: the company also make sure that the employees are treated well in term of a range of benefits and higher pay in comparison to the competitors.

· Weakness

Major profit comes from high coffee bean price and business: the major chunk of profitability come from the price of the coffee beans which is not in the control of the company and coffee prices are highly dependent on the coffee beans.
High product pricing: the coffee offered by the company is great and is of very high quality also the customer experience is what stand the company apart from the competitors but the high price of the coffee is the main roadblock which comes in between the success of the company as the other competitors premium coffee price is lower than the Starbucks normal coffee (Civi, 2013).
Negative publicity: there is always a debate about the company’s corporate social responsibility and many environmentalists complain about the lack of efforts by the company towards greenery and issues related to it.

· Opportunity

A large amount of supplier ranges: the company doesn’t produce coffee beans but they get it from suppliers which are mainly located in South America, Arabia and Africa. The company must increase it supplier network so that they can also import coffee from Asia.
Uplift of many developing countries and economies: countries like China and India can be a major market for the company as coffee consumption is quite higher and there is less number of players in the form of competitors in the market (Ferrell, & Hartline, 2012).
Diversified and large product range: the company must diversify in their coffee offering with the introduction of new products in the coffee business.
Expansion of retail operations: the company also sell its products to various retailers apart from coffeehouse and franchise business (Civi, 2013). The company must explore this area even further with making the partnership with more retailers.

· Threats

Expensive coffee and other dairy products: the biggest threat is that the company has no control on prices of coffee beans and the dairy product which are the determining factor of prices of coffee.
Saturated market: the market of the company is quite saturated in the developed countries. The competition is fierce and because of this the company is facing an intense competition in the market especially in developed markets. The growth of the company can face adverse effects due to this reason.
Fierce competition: competition is also there from local café which offers great coffee at lower prices and the options which these coffee houses offer are to the customers is more suited to customers taste and Starbucks has to face intense competition from these coffee houses also as they target market share of this coffee house (Ferrell, & Hartline, 2012).
Trademark breach: the company has to face many legal cases against them as they have too many people has complained against them for illegal use of a trademark which is detrimental to the image of Starbucks and also the company has to bear the cost of such cases (Ferrell, & Hartline, 2012).
Supply disturbance: as the company export its coffee bean from various countries, the company has the threat to face political, economic and weather condition which can be a threat to the company.

2: Next present and evaluate the marketing principles of Starbucks and explain how defining marketing objectives can help a business to develop marketing strategies.

The mission of the company is inspiring people with the taste of the coffee they offer and it clearly says one person, one cup and one neighbourhood at a time (Ferrell, & Hartline, 2012). The company is in the business from more than twenty years now and it has reached its mature stage. So the company is now focussing on spreading its wings in international business activities and strengthening the international partnership because it is giving enormous opportunities to the company.

The objective to grow in an international market has helped the company various marketing strategies. The company appointed multilingual and multinational managers to work towards the worldwide expansion in an effective and planned manner (Slater et al 2010). The motive of these people are developing new business for the company, looking after financing and also planning new stores all over the world, these people are held responsible for operations managementand logistics of the business and in the last the main motive of this group was promoting and training new managers internationally for managing business in various countries (Ferrell, & Hartline, 2012).

Marketing objectives is an essential part of any organisation and setting an objective is the core of the success and failure of the business. It is also important to understand that objective plays a very crucial part in setting marketing strategies. It is a part of corporate business objectives and it should be kept in mind while forming a strategy. Following are the various benefits of the marketing objectives: –

Marketing objective provides a motive to the organisation and also ensure that all the functions and efforts of the organisations are targeted towards attaining those set targets (Slater et al 2010).
Marketing objective also provides a direction of the employees.
Marketing objectives is also a source of motivation for the leaders and employees (Slater et al 2010).
Marketing objectives also provide proofs and support to the organisations when the success or failure of the project is evaluated.

Conclusion

SWOT analysis and marketing objective both are very crucial for formulating marketing strategies (Amin et al, 2011). In the case, Starbucks is going through major changes and they need to formulate a strategy which is effective and at the same time give support to the slow growth of the business. For which the task one has analysed the business from two angles. First a SWAT analysis is conducted which defined how the company can make use of opportunities and analyse the threats and weaknesses and take corrective measures in order to overcome the weakness and be careful from the weaknesses. The next section of the task discussed the advantages of marketing objectives and how marketing objective can help the organisation to devise some effective marketing strategies (Slater et al 2010).Order Now

Unit 3: Business Environment Organization Purposes

11-04-17 Maddox Smith 0 comment

Unit 3: Business Environment Organization Purposes

Q 3.1 Illustrate how market forces shape organisational responses using at least two organisations as examples and at least 5 market forces.

Two organisations used for this task are British Airways and P&G.

Market Force: market forces can be defined as those forces of demand and supply which represents the cumulative influence of self-interested buyers and sellers on price and quantity of variety of goods and services offered in a particular market. In simple words, excess demand results into price increase and quantity of supply to rise whereas excess of supply results into price crash.

5 market forces identified in UK are as follows ( Porter, 2011):

Threat of new entrants
Bargaining power of customers
Bargaining power of suppliers
Intensity of competition rivalry
Threat of substitute products and services

One example of a market force in demand is ‘Threat of new entrants’ this force especially in UK’s retail sector has created huge impact, companies like TESCO, Sainsbury’s, M&S are ramping up their operation because of the new retail players in the market. New entrants in retail segment has resulted in price-war in the retail segment. With customer seeking more economical prices for the products, bigger retail players are trying to adjust their competition strategy.

Five Examples:

Threat of new entrants: Due to threat of Low Cost Carriers (LCC) British Airways was forced to improve its operational efficiency and ultimately it got privatized.

Bargaining power of customer: Aviation sector is a price sensitive sector, thus when various LCC came into market, there was stress on the pricing strategy of BA. Unlike when it used to charge hefty margin on each ticket, customer now started looking for cheaper flying options, which eventually created demand for LCC.

Bargaining power of suppliers: P&G-FMCG major in United Kingdom has been negotiating hard with their suppliers on the wholesale price of the items. However with some major suppliers not supporting P&G’s pricing strategy they decided to move out of P&G product stable. This resulted into change in the P&G procures product from its supplier now and it offers them price at par with its competitor i.e. Unilever.

Intensity of competition Rivalry: Unilever and FMCG has been fighting hard to gain leadership position of UK’s FMCG market. In this rivalry if one company launches a product then the competitor launches the similar product in the market at relatively lesser price point. This has given consumer an option to explore multiple products at different price points.

Threat of substitute products and services: With threat in form of similar products and services FMCG major Unilever and P&G has been rapid in innovation of new products. They always try to beat each other in terms of introducing a new product in the market.

Q 3.2 In the last 100 years, the UK has drastically changed. Consequently, businesses operating in the UK have had to adapt their marketing mix offerings to capitalise on these demographic and cultural changes.

Assuming you work as a Business Executive for a supermarket chain operating in the UK, write a report to the Directors, explaining how the business and cultural environment in the UK can shape the behaviour of this organisation.

Organisation chosen for this task is hypothetical in nature and has been named as HYPO food retail.

Introduction

Food retail has been an important aspect of entire retail segment. With evolution of time there has been significant changes in the way food retail has shaped up. Being a Business Executive of HYPO food retail, I will be sharing my insights on how business and cultural environment in UK has resulted in change of behaviour of HYPO food retail.

Hypo Food Retail’s growth

Over a period of time since last one decade, UK has been witnessing retail revolution food segment. Because of this revolution HYPO has also seen a significant growth as a company. HYPO’s focus has always been on offering food products which are economic in natureand have the best quality in the market. With this mantra HYPO has been able to capture a significant share of the market within a short span of time. Today HYPO has X% of market share of UK total food retail market.

Cultural Change

Surge in fortune of HYPO can also be attributed to cultural and behavioural shift of people towards food segment. With a hectic life, people today have no time to search variety of foods in different shops. They seek a one stop shop where they can fulfil their food related shopping at an economic price point. HYPO has tapped this cultural change and has established its chain of stores in various part of UK. Quality of food be it processed or raw has been maintained to the top most level ensuring consumer gets the best quality product. This focus on quality has resulted into creation of loyal base of customer for HYPO food retail.

Business Environment

Political Factor: This factor has played an important role. With people stressing for liberalisation in food retail government has been forced to open up this sector. HYPO was created when government started opening up the food retail sector. Hence positive government policy towards food retail has been helpful for HYPO

Economic Factor: Due to economic recession since 2008, there has been huge impact on HYPO’s overall sale. People reduced their bulk purchase and now focus on small purchases. Thus accordingly HYPO has also changed its packaging strategy to accommodate more ‘Economy Pack’ or ‘Super Saver’ pack in its retail chain.

Social Factor: Change in food habits of UK citizens have also helped HYPO to expand its base. People today seek quick food purchase option. They want all the food related item under one roof, be it non-vegetarian items or vegetables etc.

Legal Factor: This factor as such does not have impacted HYPO yet, but food being a sensitive item, it is important to maintain its quality, since in numerous cases of McD and KFC people have sued the company due to poor quality of the food or some other issue. That is why HYPO has been focussing on quality aspect of its food product rigorously.

Conclusion

Thus based on above mentioned factors and discussion it can be assessed that HYPO has still a long way to go in order to consolidate its market position. In order to be a leader in food retail, HYPO should adapt its business activities in response to cultural factors. For example with people seeking one stop for all their food related requirement, HYPO can come with in-store mini restaurants. This will help HYPO to capture those customers as well who might be feeling hungry after shopping products in the store. Also HYPO should start its online portal for e-commerce. With increasing internet usage HYPO can book orders of customer through its mobile apps, or websites and before the customer arrives it can ready his order for delivery. Hence with such strategies HYPO can offer more convenience to its customer.

LO4: Be Able to Assess the Significance of the Global Factors that Shape National Business Activities

Q 4.1 You have been selected by the trustees of your local youth group to make a presentation to young entrepreneurs in the area on the importance of international trade to the local economy. Key to this is a discussion on the significance of international trade to UK business organizations.

Prepare this presentation using a format of your choice (if you use power point slides, take a screen shot of them and paste into your answer)

International Trade: International trade can be defined as a process of exchange of capital, goods, and variety of services across international borders and territories. International trade in several countries represents a significant portion of its Gross Domestic Product (GDP). International trade has been present since hundreds of years, but its political, social and economic significance got highlighted only after globalisation started (Johnson, 2013).

Significance of international trade is huge for an organisation such as Admiral Group. This particular organisation has its operation in 8 countries. For example Admiral Group’s company Rastreator.com is company’s Spanish comparison site for car insurance products, this particular site has helped Admiral group to capture significant share of car insurance market in Spain. Thus international trade today has become important for companies to expand their business in new geographies and ultimately increase their revenue and profit. Also international trade has helped Admiral Group to reduce its dependency from UK market. With products such as Balumba.es and ConTe.it, Admiral group has been expanding rapidly in European continent. Thus international trade helps a company to reduce its risk factor by diversifying its business in different geographies. International trader has also been significant in terms of increasing brand value for companies. With known across globe, its value increases which company can capitalise on.

International trade has several negative and positive impact on local business. For example with launch of car insurance price comparison web portal in Spain, Admiral group has affected the local websites which did not have scale which Admiral had. Thus at times due to availability of resources and finances, international brands cannibalise the market for local players with their scale of economies and pricing strategy. However it does have positive impact as well. Once a local market witnesses an international company’s entry the level of services and its quality increases significantly. With a proper regulatory framework international trade can be used strategically for growth of local economy.Order Now