Strategy Implementation, Evaluation and Control

Strategy Formulation

Trisha Shetler

Mgt/ 498

Eligah King

August 5, 2017

Strategy Formulation

Strategy Formulation involves the process by which organizations develop adept strategies following an environmental scan of ascertaining its internal and external environments. It pertains the manner in which an organization selects the most reserve mode of action towards achieving its set goals. Strategy Formulation is all important towards an organization’s failure or success as it caters for a theoretical account of actions that extend to the expected organizational results (Hill & Jones, 2008).

As its strategies, Starbucks aims at initiating sustainable environmental solutions. The company alongside Conservation International among other leaders within the industry announced a bid towards making coffee among the first sustainable agricultural product sourced all over the world. The launch of the Sustainable Coffee Challenge that was done recently at the United Nations (U.N) climate discussions in Paris on climate change and the launch facilitated the need to combat climate change (Gilbert, 2008).
As per now, close to half of the world’s coffee is produced allowing to the sustainability standards. However, the figure does not give a report on the number recent substantial investments that were attained by the coffee sector in supporting farmers of their modulation towards sustainable exercises. Therefore, there was a demand for mutual resolutions pertaining sustainability within the coffee sector. This resolution required dedications by roasters towards supporting the heightened call for sustainability. Besides dedication, the sector requires an improved measurement of the range of sustainability within the sector and the direction it tends to aim at respectively.

Starbucks inclines towards gaining the monopolistic competition market system. Monopolistic competition, in this case, is the subdivision of market system that combines the principles of a perfect competition and monopoly market systems. There are large numbers competitors in this structure as for the perfectly competitive market system. The only difference is that distinct competitors are distinguished from the other structures to a sufficient degree that the players within the system can buck greater prices as compared to a perfectly competitive firm.

Through its environment scanning, Starbucks sought through the implementation of an espresso coffee maker and quality beans towards brilliant taste. But then again for the flourishing part, the company needs an inclination towards a unique component of the market which is the monopolistic state. Through the company’s unique splendor of quality beans, its barista training, as well as its store designs, compete for the market structure with success. Consequently, before confronting monopolistic competition within large urban centers such as Chicago and like New York City, Starbucks needs a physical store on every block among these cities.

Within the monopolistic competition market system, the company attains unique values operating in this system. The system is particularly valuable as there are no substantial barriers that that impedes free movement towards entry within the market hence making the markets comparatively challengeable. Through differentiation within the market, monopolistic competition creates choice, utility, and diversity as individuals might incline towards opting a variety of restaurants to pick from.

Therefore, the market structure allows the company to make independent decisions concerning output and price based on the product, the market, as well as the costs of production. But then again, knowledge monopolistic competition type of market system is widely dispersed amongst the participants involved. But most importantly, the system allows Starbuck diversify its market and target audience towards attaining its goals.

On the other hand, Starbucks will capture value and attain competitive advantage through inbound logistics. The company has proven worthy of capturing value. This refers to Starbucks’ selection the finest degree of coffee beans through the company’s charged coffee vendees from the coffee producers within Africa, Asia, and Latin America.

In this case, the unroasted or green beans are secured from the farms directly by the Starbucks vendees. They are then transported to storage sites where the beans are selectively roasted and packaged. They are sent to respective dispersion centers where few of these beans are owned by the company while others are controlled by distinct logistic companies.

Marketing and Sales also base as Starbucks strategies towards capturing value and attaining competitive advantage respectively. The company highly ensues in higher-ranking quality products as well as high customer service levels as compared to aggressive marketing. This ensures value at the highest level besides driving the company to an adept competitive advantage.

Concerning cost and differentiation, Starbucks utilizes the broad differentiation strategy. The strategy is centered on a broader section of the total market. The company serves a market solely determined by the coffee lovers. Starbucks, therefore, has enabled its entity well-known for the broader broad needs of its customers as well as the preparation of orders to meet the wishes of its intended customers. Besides cost and differentiation, Starbucks corporate strategy involves a five-year percept. The company perceives a growth of close to 30 billion US$ in revenue each year with up to 30,000 stores within the global scale. The company’s partners, who are the employees, coffee as well as corporate reputation, involving trust within the company, therefore, drives a long-term customer detainment and brand loyalty

Vertical integration generally is the compounding of two or more levels of production in one company commonly operated by different companies. Starbucks is somewhat vertically integrated incorporated solely for the purpose of maintaining an everlasting quality across its value-chain. In this case, the company is in a position to ascertain an invariable coffee beans supply at a lower price with the farms it obtained hence is not dependent on distribution channels for its products be available for consumers (Pham-Gia, 2009).

To provide a detailed competitive advantage, Starbucks strives towards technological advancement pertaining the industry’s changing strategies. The company is well known for the exercise of technology for its processes related to coffee as well as connecting through to its customers. A variety of customers takes the opportunity that Starbucks has in availing free WI FI and use it to better advantages as meeting places as well as conducting business by large.

In 2008, the company established “mystarbucksidea.force.com” a platform for asking questions, give suggestions and expressing opinions and experiences by customers. Among these few rational motives, Starbucks strives towards employing technology to good use so as to ensure customer detainment and consumer satisfaction conclusively. For the most part, strategy formulation builds and enhances viable proficiencies in order for businesses to surpass and excel in its strategies.

References

Hill, C. W. L., & Jones, G. R. (2008). Strategic management: An integrated approach. Boston: Houghton Mifflin.

Gilbert, S. (2008). The story of Starbucks. Mankato, MN: Creative Education.

Pham-Gia, K. (2009). The marketing strategy of 'Starbucks Coffe.' München: GRIN Verlag GmbH.