Strategy Formulation

timer Asked: Mar 1st, 2018
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Question description

Week 4 and I have attached week 3 for your reference.

Purpose of Assignment

The Week 4 individual assignment is the second part of a three part strategic management plan for the company selected by the student in Week 3. The purpose of the assignment is for students to establish long-term goals and objectives; indicate, specify and discuss strategies; and investigate, consider and describe specific business strategies including vertical integration and strategic alliances, to achieve competitive advantage in the industry. The student also generates an appropriate organizational chart in alignment with the stated strategies.

Weeks 3, 4, and 5 Individual Assignments are integrated to generate a Strategic Management Plan. This is Part 2 of the three part Strategic Management Plan.

Assignment Steps

Write a 1,050-word report on the company you selected in Week 3, following up on the Individual Assignment of Week 3 (Environmental Scanning), and address the following:

  • Establish Long-term Goals and Objectives
    • Strategy Formulation.
    • Indicate the markets that the company will pursue.
    • Specify the unique value the company will offer in the selected markets.
    • Discuss the resources and capabilities that are required.
    • Analyze how the company will capture value and sustain competitive advantage over time.
  • Business Management Strategy
    • Consider Cost and Differentiation Advantages.
    • Describe the Corporate Strategy.
    • Investigate Vertical Integration.
    • Describe Strategic Alliances.
    • Detail the Company Competitive Advantage.
    • Generate an Organizational Chart of the company you selected.

Cite at least 3 scholarly references.

Format your paper consistent with APA guidelines.

Running head: SIGNATURE ASSIGNMENT Environmental Scanning Stacy Northcutt MGT/498 Strategic Management March 1, 2018 Alfredo Rodriguez 1 SIGNATURE ASSIGNMENT 2 Environmental scanning is the process of evaluation, dissemination, and monitoring of information from the internal and external environment to major stakeholders within the business entity. A company uses the tool of environmental scanning to ensure its long-term health by avoiding strategic surprises (Drew, 2009). The organization should scan both its internal environment to determine possible weaknesses and strengths as well as its external environment to identify potential threats and opportunities before a firm can begin its strategy formulation. The following research describes the external and internal environments of Starbuck Company applying the environmental scan model. The competitive edges which the company possesses and the strategies it is using shall be identified. As per the Starbuck, the company mission is to nurture, motivate, and inspire the human spirit in form of “one person, one cup, and one neighborhood all at a time”. Starbucks must scan both its external and internal environments to stay profitable and competitive and to create any required changes to attract more clients. Starbucks has a pleasant internal environment (Han, and Zhang, 2009). It is a nice restaurant where the clients can visit to acquire many blended drinks such as a superb cup of coffee. The restaurant also provides light types of foods, an array of pastries as well as other healthy snacks. The location and inside atmosphere of the company are pleasant and quiet. Many customers select the restaurant as a place of meeting to get some quiet atmosphere away from the busy world and chit-chat with friends. The locations of Starbucks provide flawless customer services and complimentary Wi-Fi access. Externally, the company is popular for offering quality services and products and it has taken advantage of this good public image and reputation to attract and appeal to the potential customers of its products and services (Hausman, 2008). The company could invent new ideas and concepts to sustain and maintain its SIGNATURE ASSIGNMENT 3 share of the market even though the firm is always faced with the stiff competition with companies that offer similar services such as McDonald. Starbucks offers “third place experience. Its stores are strategically located as a “third place” away from work, and home, where different customers of the company can spend their time to feel comfortable and relax (Drew, 2009). Clients are even welcomed so that their duties can be completed in the stores of the company. The locations of Starbucks provide flawless customer services and complimentary Wi-Fi access. The restaurant offers coffee of the highest quality and this business strategy can be categorized as product differentiation. The coffee chain giant pays more attention to its products quality that it allows its clients to pay a premium price to acquire such high-quality services and products. The excellent services to the customers as one of Starbucks competitive edge solid sources increase the attractiveness of the restaurant in the hotel industry. On a long-term perspective, global market expansion with the emphasis on emerging markets is one of the critical Starbucks business strategy elements (Hausman, 2008). The business entity has also integrated technology in different processes of the business. When it says that the new technology purpose is not just to quicken its process of payments or to improve its website, Starbucks is adamant (Han and Zhang, 2009). The chain of coffee accomplishes value addition that is technology-associated through the integration of technology into a broad range of business procedures and processes like the development of new products, the marketing message communication, sales completion, and monitoring the customer satisfaction level. Recognition of brand is a critical aspect in the growth of business entity where clients readily pay the premium prices for quality goods, services, and brands (Drew, 2009). When consuming a brand which attracts a strong loyalty to them, the customers feel satisfied. Brand SIGNATURE ASSIGNMENT 4 yields expression for internal as well as external environment stakeholders. Staff feels safe to work to their full potential for the prosperity of the organization and they consider the achievements of the company as their own accomplishments that improve the efficiency of the firm. As high-quality customer experience brand, the Starbucks has positioned its brand. At premium prices, the firm has been able to sell its high-quality services and products. The excellent customer experiences and the high quality of the products are the major differentiators of Starbucks' brand from other coffee brands in the hotel industry. The company ensures that its clients feel at home by offering them home like experiences. The firm gives the initial priority to client satisfaction to be able to create customer loyalty base for its brands (Han and Zhang, 2009). It prioritizes the management of customer relationship by integration of communication with the clients. The brand marketing is crucial in promoting the brand products in the target market. The Starbucks utilizes word of mouth marketing to promote its brands in the market. The clients appreciate the coffee shops environment of Starbucks as well as the taste of coffee. The restaurant has used virtual art, messages on coffee cups, soft background playing music, and elegant and comfortable furniture in its coffee shops (Hausman, 2008). The Starbucks is the name of enjoyment, smartness, satisfaction, fascination, and comfortableness of life. The company is identified as a cultural brand as it connects with the countries and regions cultures. The brand of Starbucks cultural nature is the reason for the firm choice for review sake of strategies of marketing of the company as well as its efficiency. The guidelines of measurement should be created against previous outcomes in determining whether a strategy is operating as required. Creating clear checkpoints and SIGNATURE ASSIGNMENT 5 objectives is important in deciding whether the strategy formulated should be altered to accomplish the desired outcomes (Drew, 2009). Starbucks utilizes metrics from customer satisfaction, annual customers, revenue, and growth percentages as the measurement guidelines. Starbucks has to break up its evaluation into regions to localize the outcomes since the company is extremely large. The guidelines applied by Starbucks allow the company to effectively determine the outcomes of its formulated strategies and plans. For the last few years, the company has experienced results improvement and it is continuously growing forward with its competitive strategies (Drew, 2009). However, there have been some setbacks for Starbucks along the way of implementation of competitive strategies. The company has however been in the position to make appropriate changes due to detection of the problems via the control and evaluation metrics. Therefore, Starbucks has been increasing its revenue and expanding globally. Conclusion Organizations should be in a position to analyze and scan their internal and external business environments to ensure that they develop competitive strategies that can take advantage of available opportunities to gain competitive advantages. Starbucks successfully developed and designed competitive strategies that have ensured that it remains extremely successful within the coffee market. Despite the stiff competition, the coffee giant has found its own niche and has efficiently exploited its competitive edges through successful implementation of the strategy and regular evaluation and monitoring. SIGNATURE ASSIGNMENT 6 References Drew, S. (2009). Building knowledge management into strategy: making sense of a new perspective. Long range planning, 32(1), 130-136. Han, G. K., & Zhang, A. (2009). Starbucks is forbidden in the Forbidden City: Blog, the circuit of culture and informal public relations campaign in China. Public Relations Review, 35(4), 395-401. Hausman, A. (2008). Innovativeness among small businesses: Theory and propositions for future research. Industrial Marketing Management, 34(8), 773-782.

Tutor Answer

School: UIUC



Strategy Formulation








Establish Long-term Goals and Objectives
Strategy formulation

Formulation of the strategy involves the decision-making and planning that leads to the
development of the goals of the firm and the establishment of a strategic plan (David, 2011).
Strategy formulation involves the identification of external threats and opportunities into their
long-term goals and hence, generating, evaluating and selecting the strategies which best match
strategically for the organization.

Starbucks is a firm which is in the food industry and for this reason; all of its plans need
to be geared towards accomplishing the goals of the company that should be offering healthy and
quality foodstuff to its clients. The managers of Starbucks should evaluate the current situation
of their business entity (Ergazakis, Metaxiotis, Psarras, and Askounis, 2007). They must
understand where they are the moment of the formulation of strategy through the application of
SWOT analysis. All the strengths, weaknesses, opportunities and threats of the firm need to be
identified to enable the management to easily establish the current scenario of the company.

Indicate the markets that the company will pursue.

Starbucks has designed a globalization strategy to enable the firm to establish franchises
and stores in the nations across the world. Starbucks is employing market research as the core of
its market entry strategies. The market research has strengthened Starbucks pursue and entry into
the new Chinese markets (Grant, 2016). The entry into the developed as well as emerging
markets by Starbucks is informed by the market research. The company conducts market



research to enable the managers to deeply comprehend how capitalism works in the People’s
Republic of China (PRC) and the Chinese markets in general.

The unique value the company will offer in the selected markets.

The experience of Starbucks provides statues which are highly attractive an...

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