STARBUCKS COFFEE

COMPANY

STRATEGIC PLAN 2
BUSINESS ORGANIZATION ASSIGNMENT
TEOH MING FANG

Submitted by:

HOO SUE YUEN

DBS16005

Table of Content
3.1 Possible Alternative Strategies Relating to Market Entry2
3.2 Justification for the Advertising Strategy Proposed.3
4.1 Roles and Responsibilities of Personnel in Different Department..
4.2
4.3
Bibliography

Possible Alternative Strategies Relating to Market Entry

A firm contemplating foreign expansion must make four decisions:
-

Which markets to enter?

When to enter these markets?
What is the scale of entry?
Which is the best mode of entry?

Which market?
A market entry strategy is a method of delivering and distributing products and services to a
new targeted market. Before entering a new market, a company should define the market by
choosing the right country or region and also identify whether there is strong demand and
wide supply chain. Starbucks needs to determine the long-run profit potential for the firm
such as the size of the market, the purchasing power of consumers, and the future wealth.
Starbucks is focusing on market entry strategy to expand its business in China market as the
company plans to open 500 stores in China every year
for the next five years. Starbucks targets China as the
new market because the coffee culture has exploded in
China in recent years; especially in cities where
customers will pay $5 for a cup. According to data
from

Euromonitor

International,

the

potential

untapped market remains huge as consumption in

China is currently at 4.5 billion cups a year compared
to 133.9 billion cups a year drunk by North
Americans. Euromonitor forecasts Chinese coffee
consumption rising 18% annually to 2019, outpacing
U.S. growth of 0.9% due to better living standards
shifting peoples focus from satisfying basic needs to
pursuing a higher quality of life, creating significant
opportunities in the coffee retail market due to the
increasing of consumers purchasing power.
Expanding into new market requires efforts in performing market analysis to develop an indepth market research in addition to target customers. Starbucks needs to determine the
market growth rates, forecasted demand,competitors, and potential barriers to entry. These
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factors are important for Starbucks before entering the undefined market. Besides, to ensure
stability and continuity of the business expansion in China market, Starbucks needs to
priortize and select potential markets for expansion. Target market are groups of individuals
that are separated by distinguishable and noticeable market segmentation. For Starbucks,
demographic or socioeconomic segmentation is relatively important which includes gender,
age, income and occupation.

Starbucks primary target market is men and women aged 25 to 40 (adults), accounted almost
half (49 percent) of its total business. This group of customers tend to be urbanities with
relatively high income and professional careers. This target audience grows at a rate of 3
percent annually. On the other hand, young adults aged 18 to 24, total 40 percent of
Starbucks revenues. The young adult audience grows 4.6 percent each year. Starbucks serves
as the third space for both categories as customers can do their work, study, hang out and
meet people at Starbucks. Those in the middle age around 40 and above are also a large part
of Starbucks target audience, which account for 10 percent of Starbucks sales.

Timing of entry
Starbucks uses early entry mode by entering the foreign market before other foreign firms in
the similar industry. By being the first mover, Starbucks gains the ability to pre-empt rivals
and capture demand by establishing strong brand name. Starbucks also can build sales
volume and ride down the experience curve with a cost advantage.

Scale of Entry
Choosing large entry scale requires commitment of significant resources and implies rapid
entry. Starbucks strategic commitment has long term impact and is difficult to reverse
through entering market on large scale. It can change the competitive playing field by causing
rivals to rethink market entry.

Foreign Market Entry Mode

Once Starbucks has selected an attractive market, the company needs to develop foreign
market entry modes. When entering a new market, with limited core assets to leverage,
Starbucks will consider a joint venture or licensing mode to collaborate with different
partners for its operations in China.

Licensing is used by Starbucks to enter Beijing market in China through partnering with
Mei Da Coffee Corporation. Licensing is defined as the method of foreign operation whereby
a firm in one country agrees to permit a company in another country to use the
manufacturing, processing, trademarks, know-how or some other skills provided by the
licensor. An international licensing agreement allows foreign firms to manufacture Starbucks
product for a fixed term in a specific market. Starbucks in Seattle, Washington makes limited
rights or resources including patents, trademarks, managerial skills, technology, and others
available to the licensee in Beijing, China. Licensee can manufacture the similar products to
the one of licensor without requiring Starbucks to open new operation overseas. Licensing is
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a good way to start in foreign operations because business can quickly expand without much
risk or large capital investment. It can also pave the way for future investments in the market.

Joint venture mode is a very common strategy of entering the new market in China used
by Starbucks. Starbucks signed a joint venture agreement with Maxims Caterers Ltd. that
will give Starbucks 100 percent equity in more than half of its retail stores in the Chinese
provinces of Guangdong, Hainan, Sichuan, Shaanxi and Hubei. Joint ventures can be defined
as an enterprise in which two or more investors share ownership and control over property
rights and operation. The five common objectives in a joint venture are market entry, risk or
reward sharing, technology sharing and joint production development, and conforming to
government regulations.
After having targeted market, Starbucks needs to assemble plan to generate demand in the
new market. The real battle in the new markets is rather against the customer inertia. The
imperative is to jumpstart demand for a new offering. In the quest to convert wavering
prospects into buyers, Starbucks needs to carry out advertising strategy to reach target
markets and to educate customers and get their attention, and also to reduce the perceived
risks of customers making new kind of purchases. This is when advertising strategy comes
in. The idea is to broadcast a message that will reach the target market by using television or
the Internet (information technology or social media) as the medium to reach the audience.
Advertising permeates the Internet, network television and roadside billboards. Products,
services and ideas are sold through advertising, enabling Starbucks to attract customers in the
new market and to increase Starbucks brand recognition and awareness among consumers.
Brand identity is communicated to the public via advertising. Consumers build emotional
relationships with certain brands with which they become increasingly familiar through the
years, thanks to advertising. Hence, advertising strategy is recommended for Starbucks to
broadcast information on products, services and ideas to consumers before entering the new
market to gain reputation and build brand loyalty of consumers. Research has shown that
racial similarity, role congruence, labelling intensity of ethnic identification, shared
knowledge and ethnic salience all promote positive effects on the target market.
Advertisements should be made based on consumer inferences of similarities in the aspects of
source pictured, language used, lifestyle represented and the characteristics of the consumer,
for example the reality or desire of having the represented style. This approach can persuade

consumers to make purchases at Starbucks, directly stabilize the company position in the new
market.

Justification for the Advertising Strategy Proposed

Being in a thrilling, fast-paced world driven by creativity and innovation, advertising is
definitely a must for Starbucks to promote their products, services and ideas to a wider
audience. Advertising is all about the art of persuasion. From television to the Internet,
advertisements bridge the gap between brands and consumers to boost sales and build brand
identity among consumers. Advertising is the best way to communicate to the customers.
Advertising is for everybody including kids, young and old. Below are the reasons why I
strongly recommend advertising strategy for Starbucks:

Information Advertising supplies information to consumers so that they know what is

available and where to purchase it. The company can broadcast information on the
characteristics of their products and how they differentiate from its competitors. Advertising
helps consumers to know about the presence of Starbucks and their specialty coffee
especially in the new market. This is a huge opportunity for Starbucks because the company
can increase brand exposure to boost higher popularity among consumers, vanquishing its
competitors.

Promotion - The primary objective of advertising is to tell the world that you have
something great and exciting to offer. It can be anything from an upcoming event that
Starbucks is promoting, a new product line that the company is selling or the expansion of an
existing platform of services. Whether the promotion takes the form of print ads,
commercials, billboards or handbills, advertising provides an effective way to inform the
market about limited-time product sale events.

Awareness - Advertising helps Starbucks to raise their target demographic awareness of

issues with which they may be unfamiliar and also educate them on the specialties of
Starbucks products or services. Advertising helps to make consumers aware of Starbucks
products and aims to build preference for the brand over its competitors. Thus, consumers
will choose the advertised product when they make their next purchase. However, building
awareness and preference through the advertising is a cumulative process because a single

campaign only raises awareness for a short period. It is important for Starbucks to allocate the
budget for advertising over a period of time to sustain high levels of awareness.

Retention - An ongoing advertising campaign is important in reminding Starbucks

customers to continue purchasing from Starbucks. Customers tend to forget easily about the
presence of brands without constant reminders. Each day a customer does not hear about your
company is one more day they start hearing about your competitor. Economy nowadays has
so many shops, restaurants and companies are maintaining a strong presence through regular
ads, commercials, events and a dynamic website which is invaluable for long-term
relationships with their customers. This also serves to attract new customers who may not
have purchased Starbucks products before.

Customer loyalty Advertisements can be used for more than just promoting and
drawing in new leads, they can also be used to create customer loyalty and promote repeat
business. Advertising aims to create customer loyalty and make it even harder for new
competitors to come into the market. One of the effective ways that brands can build loyal
customers is with endorsements and reputation-building ads. When a celebrity endorses
Starbucks products, it provides the social proof that consumers need to feel more confident
about their purchases. This advertising strategy can convince new customers to give
Starbucks coffee a try and also build brand loyalty too.

Sales increment - Advertising helps to introduce Starbucks products and services in the
market. Boosting sales and performance via advertising can be effective because advertising
enables quick publicity in the market. The demand for the product will keep on coming with
the increasing popularity among consumers with the help of advertising, generating higher
sales and profit. Advertising assists to increase the sale of existing products by entering into
new markets and attracting new customers.

Public image Starbucks needs to be active in social media presence through TV

commercials to interact with the community. TV commercials which are educational and
relevant to the value of Starbucks can build up good public image as well as build trust with
the community. Advertising is a platform for Starbucks to change peoples attitudes and
perception of Starbucks and develop a distinctive brand of the company to help Starbucks
stand out from its competitors. It builds up the reputation of Starbucks, enabling Starbucks to

communicate its achievements and its efforts to satisfy customers needs to the public. This
increases the goodwill and reputation of the company.

Previewing new trend Advertising also can motivate consumers to purchase from
Starbucks by previewing the virtues of new products and ideas because they do not want to
be left out from the trend. Starbucks can release new commercials about their new products
and ideas to recruit new customers and induce existing customers to try new things.
Advertisers preview new commercials in order to appeal to consumer sense of wanting to
know about the leading edge trends. This will provoke consumers desire to keep up with the
trend by owning the latest products or services.

Demand One of the powerful functions of advertising is to generate consumer demand

for specific products or services through the campaign that target the specific audiences that
are most likely to buy them. Products and services are sold in volume based on the consumer
demand. Advertising helps in generating steady demand of the products. For instance,
Starbucks can promote different types of special edition beverages during different
celebration such as Valentines Day, Christmas celebration and Halloween.

Targeting in online advertising is when advertisers use a series of methods in order to

showcase a particular advertisement to a specific group of people.[4] Advertisers use these
techniques in order to find distinct individuals that would be most interested in their product
or service. With the social media practices of today, advertising has become a very profitable
industry.[4] People are constantly exposed to advertisements and their content, which is key
to its success. In the past, advertisers had tried to build brand names with television and
magazines; however, advertisers have been using audience targeting as a new form of
medium.[5] The rise of internet users and its wide availability has made this possible for
advertisers.[4] Targeting specific audiences has allowed for advertisers to constantly change
the content of the advertisements to fit the needs and interests of the individual viewer. The
content of different advertisements are presented to each consumer to fit their individual
needs.[6]

The first forms of online advertising targeting came with the implementation of the personal
email message [7] The implementation of the internet in the 1990s had created a new
advertising medium;[8] until marketers realized that the internet was a multibillion-dollar
industry, most advertising was limited or illicit [9]

Many argue that the largest disadvantage to this new age of advertising is lack of privacy and
the lack of transparency between the consumer and the marketers.[10] Much of the
information collected is used without the knowledge of the consumer or their consent [10]
Those who oppose online targeting are worried that personal information will be leaked
online such as their personal finances, health records, and personal identification information.
[10]

Advertisers use three basic steps in order to target a specific audience: data collection, data
analysis, and implementation.[4] They use these steps to accurately gather information from
different internet users. The data they collect includes information such as the internet user's
age, gender, race, and many other contributing factors.[6] Advertisers need to use different
methods in order to capture this information to target audiences. Many new methods have
been implemented in internet advertising in order to gather this information. These methods
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include demographic targeting, behavioral targeting, retargeting, and location-based targeting.

[4]

Much of the information gathered is collected as the consumers are browsing the web. Many
internet users are unaware of the amount of information being taken from them as they
browse the internet. They don't know how it is being collected and what it is being used for.
Cookies are used, along with other online tracking systems, in order to monitor the internet
behaviors of consumers.[11]

Many of these implemented methods have proven to be extremely profitable.[12] This has
been beneficial for all three parties involved: the advertiser, the producer of the good or
service, and the consumer.[4] Those who are opposed of targeting in online advertising are
still doubtful of its productivity, often arguing the lack of privacy given to internet users.[13]
Many regulations have been in place to combat this issue throughout the United States.

Starbucks Enters China

In its bid to enter China, Starbucks needed to be as inoffensive as possible to the Chinese
culture. Through research it was established that the usual advertising methods may come
across as a direct attack on the tea culture that prevails. Instead, stores were opened in busy
areas with high traffic and visibility to promote brand recognition. In addition, products were
introduced that included tea based ingredients, helping bring together the tea and coffee
drinking cultures.

Negative views towards elements of capitalism were also a key consideration. Starbucks
carefully researched this aspect and discovered that the middle class in China accepts Western
brands and luxury items as a means to pursuing a certain lifestyle of quality. The no longer
consider these to be signs of over indulgence or decadence and neither do they see it as

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contrary to nationalism. Major cities in China now rank high in sales of luxury goods and
availability of luxury stores.

Through market research, the company was also prepared for the fact that China is not one
similar market. Instead, different strategies were created for different areas. Northern Chinese
culture differed substantially from eastern China. Spending power was considerably lower
inland as compared to more prosperous coastal cities. This complexity was catered for by
establishing partnerships with local companies to ensure successful expansion. This strategy
helped Starbucks customize its offering according to regional tastes. Starbucks also
understood that western brands are perceived to higher quality than Chinese brands and are
therefore seen as premium brands. Through trained Baristas that act as brand ambassadors,
the company ensured consistently high service and product quality.

Fearing illegal copies of its business model and brand, Starbucks anticipated the need for
copyright protection. Within four years of opening its first caf, all major trademarks had
been registered in China. Any effort to build a copycat enterprise have therefore been
unsuccessful.

Through an extensive study of a potential new market, Starbucks has perfected the art of
localizing a globally recognized brand. A global brand does not have to mean uniform
products. Instead, by catering to many different local tastes and preferences, the brand is
strengthened and manages to gain a strong, long term foothold in each new market it
approaches.
CHIEVING SUCCESS IN CHINA: STARBUCKS STARBUCKS ASSIGNMENT, CASE
STUDY
Starbucks in China
CASE STUDY ASSIGNMENT ON STARBUCKS
ENTRY MODE STRATEGIES

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Starbucks is the worlds leading retailer, roaster and brand of specialty coffee. It opened its
new store in China in 1999 and despite initial hesitation and criticism of a coffee brand in a
traditionally tea drinking nation, the Starbucks brand was very well received in China and has
ever since established their presence there. As of 2005, the company has 185 owned &
operated stores in the mainland, with plans to maintain the growth of its operations in China
and in order to maintain a positive trajectory for its finances. The goal that Starbucks has set
for itself is to build hip hangouts that tap into a new taste for Chinas emerging middle class
with a logo, to see and be seen.
Following this ideology, Starbucks opened retail outlets at high visibility locations. The
primary promotion for these stores was word-of-mouth, from the several hundreds who had
begun to frequent the locations, instead of mass marketing and advertising campaigns. The
success of the concept resulted in most competitors following suit and revamping their
locations to fit the needs of the modern consumer. Customers in China have embraced the
high-quality coffee, personalized handcrafted beverages and the unique Starbucks Experience
offered in all of the Starbucks stores. Coffee represents a change in a new western lifestyle
and its becoming more popular for the young people in the country. The level of success that
the company will achieve cannot be determined at this stage.
Even though Starbucks was confident about its growth in China, it initially had to face up to a
large number of challenges. Following its opening in 1999, a large number of imitations of
the Starbucks brand popped up. They tried to imitate and replicate all the features of the
Starbucks stores. These imitating stores affected the business of the real brand and also
resulted in a loss of market share for the American coffee chain. Additionally, a number of
international competitors had begun to assess the Chinese market and were planning to
expand their presence in the country, resulting in a perceived increase to the level of
competition that would be present. Another problem faced by Starbucks was the outcome of
the entry mode used by the organization, which had relied on partnerships and licensing as a
means to expand quickly. However, this meant that the revenues that were now being
generated were not enough to ensure a profitable business.
For Starbucks to enter China, it had to face one of the biggest challenges on any consumerbased retailer; to make the local consumers accustomed to drinking and appreciating coffee.
This task was more difficult in the Chinese market because the local people are a traditionally
tea-drinking nation, with an almost 5000 year old tea drinking history.
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The introduction of specialty coffee in China by Starbucks made it the trend-setter and
market leader, allowing it to enjoy the popularity that normally associates with initiating
entities. In a tough market that had numerous tea houses to cater to the tastes and needs of the
local consumers, Starbucks took an aggressive stance by entering one region after another
and had moved China up to the No. 1 priority and proclaimed it to be the second largest
future market after the US.
The task of popularizing coffee, primarily a western concept, in a traditionally tea drinking
country, was gigantic and troublesome. The Chinese who looked at coffee as foul tasting and
bitter were not easily encouraged to change. But after the entry of China in the WTO the
consumption of coffee was on the rise. The Chinese already preferred instant coffee as the
availability of fresh coffee was limited and also because it was more appealing to the younger
generation who with busy life styles could not spend much time in the preparation of fresh
coffee.
Starbucks main entry strategy initially was to distribute coffee to all the major restaurants and
hotels in Beijing. Using this method Starbucks was able to test its coffee among the Chinese
consumers. Once Starbucks received a favorable response from the market, especially the
younger generation, it opened its first caf in 1999 at the China world trade center in Beijing.
Hence, this allowed Starbucks to test the waters without the outlay of significant capital or
investment, and understand the dynamics of the consumer in the Chinese economy.
The Chinese push may be the decisive test of the brands lifestyle-oriented marketing
approach. Starbucks China did not plan on any sort of advertising, promotions, or other
marketing strategies, other than just sponsoring an on-line coffee club and the rare officetower coffee tasting. Instead, Starbucks relied on selecting high-visibility, high-traffic caf
locations which they planned on marketing themselves. Even though Starbucks was well
received in the Chinese market initially it was faced with wide spread criticism when it
opened an outlet in the Forbidden City, the worlds largest imperial palace. Both the Chinese
people and foreigners opposed the opening of the caf claiming it to be damaging to the
Chinese cultural heritage and its atmosphere.
Starbucks also capitalized on the tea-drinking culture of the local community by innovating
and introducing new variants of its products that took into production the use of popular
ingredients. In terms of acceptability, the trendy caf culture that many from the younger
generation were accustomed to watch on televisions was now being provided to them at their
13

doorstep, and the concept of the caf as a hangout was warmly received. To set itself apart
from the competition, Starbucks used the concept of product differentiation, ensuring that
each offer was theirs came with the genuine feel and taste of the brand. This was the key
safeguard to maintaining a competitive advantage over the rest of the coffee industry.
The global coffee industry has required companies to change with the demands of the
consumer, and Starbucks has led from the front. Apart from offering vast range of coffee
drinks and bagged coffee beans, it has expanded into catering food items, fruit drinks, and
even music. Having such a broad range of items allows Starbucks to modify their products to
meet the consumers demands. Along with their beverages, they have also created bottled
coffee drinks and ice creams that have added to the Starbucks brand recognition and product
portfolio and because of this strong brand name recognition, Starbucks has been able to build
a strong customer loyalty base in China.
A key strength that encompasses Starbucks business model is offering its customers a unique
atmosphere to sit and hang out, complete with relaxed lounge chairs, great music, newspapers
and magazines, as well as the facility of wireless internet at most of its locations.
Starbucks has also diversified into other products other than just coffee and confections by
creating Hear Music with Concord Music Group, and has sold their products in their stores,
creating an additional source of revenue for the company.
However, Starbucks relies heavily on the suppliers for its products resulting in rare
occurrences of shortages or low-quality, as well as issues with ethical consumerism. The most
important of the products is the coffee beans and the location where they are sourced. While
Starbucks has spent a large number of years building up strong relationships with its coffee
bean suppliers from different foreign nations all around the world, any type of disruption
within its supply chain could hurt their end product. These disruptions can include but are not
limited to bad crops, social factors, economic factors and political upheaval within the
supplier countries. Other than this high fuel costs and disruptions on their shipping operations
are all potential weaknesses for the Starbucks brand, which they have to capitalize on.
CHOICE OF STRATEGY: GLOBAL OR LOCAL?
The local strategy adopted by Starbucks in China lead them to become well established brand
of coffee in the traditionally tea drinking market. The company avoided commercial
advertisements and promotion in China, instead focusing on the consumers to spread the
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goodwill through the word of mouth. Starbucks tried to market the Starbucks Experience in
terms of its store ambience, the quality of their products, their customer service and their
employee relationship.
After meeting with initial success of the brand, Starbucks sought out to add new stores to its
Chinese operations. The focus of the strategy was the new generation of Chinese with
growing spending power and a hunger for high-status brands that would congregate to its
stores because Starbucks embodies Chinas new sophistication. A complete setup within all
commercial localities of the Chinese market remains the core function of the strategy, in a bid
to capture and retain the dominance of the coffee industry domestically.
For such an expansion, Starbucks teamed up with three different regional partners in Eastern
China, Southern China and Northern China. As part of the overall corporate policy, it
abstained from using the franchise path to store operations that has become the norm for it in
the Western nations. According to the company, the key disadvantages to franchising would
have resulted in a loss of control over the products and the quality control mechanisms that it
wanted to embody, especially in relation to the environment that was part of the Starbucks
Experience. Even the stringent rules and regulations which Starbucks would have
hypothetically placed for a franchisee, each store would have ended up being run slightly
differently as compared to what they had originally planned.
If Starbucks franchised, there would be a risk of different stores deleting some of the menu to
its international standards, and resort to picking and choosing what products to make
available for the local consumers. By keeping all stores corporately owned Starbucks has
been able to control and monitor all locations operations and ensure a high level of employee
and consumer relations through consistent management and store operation. Starbucks saw
franchises as middlemen who would stand in between the Starbucks brand and their
customers, thus making them loose the common culture which makes the brand and the
corporation strong. Instead, by entering into joint ventures or partnerships, the organization
was able to ensure a greater degree of oversight on the uniformity of its brand. Utilizing an
extensive relationship mapping plan, Starbucks has found a way to take a lead by example
and transparently in a complex business system that is highly competitive and price-driven.
Starbucks bases its overall marketing strategy on providing their customers with an
exceptional experience. The Starbucks management found through research that its customers
come in not only for the coffee but also for the atmosphere that the establishments provide for
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them to enjoy time with friends and acquaintances. Thus Starbucks focuses on the image that
it projects to the public. It wants each store to be comfortable and unique yet still feel like a
traditional coffee shop; a place where customers enjoy their time and are relaxed to stay for
long periods.
Starbucks main target market is people who are educated and tend to read more than average.
However, recently, Starbucks has begun unintentionally appealing to a younger demographic.
This younger demographic includes students who are in junior high and high school. Some
people think that the company is targeting children in an attempt convert them into potential
customers when they are young. This would give Starbucks a secure future because as this
generation continues to grow older, they will continue to do business with Starbucks.

The local strategy adopted by Starbucks meant their establishing partnerships with local
companies. The Beijing Mei Da coffee company was the first joint venture by Starbucks in
the country, and given the responsibility of handling the operations in Northern China as well
as actively promoting the coffee culture through media, seminar and other activities. In
Eastern China, Starbucks partnered with the Taiwan-based Uni-President. The group, in order
to overcome the initial consumer resistance to coffee and the Starbucks brand in general,
launched educational activities focused on potential customers. They trained more that 300 of
their staff to aggressively go out into the open market and introduce the general public to the
intricacies of coffee, which ended up being a highly successful campaign. This success
prompted Starbucks to increase its stake in the Eastern Chinese market with an addition of
approximately $21.3 million to take their total stake to 50%, making them equal partners with
the Uni-President group in the joint venture.
Over the years, Starbucks has made tireless efforts to maintain their product as an uplifting
part of daily lives of people. Starbucks strategy for expanding its specialty operations has
been to reach customers where they work, travel, shop, and dine by establishing relationships
with prominent third parties who share their values and their commitment to quality.
Starbucks has carried out this strategy by moving distribution into grocery stores,
convenience stores, department stores, movie theatres, businesses, airports, schools, and
homes. Starbucks has also limited its use of traditional advertising and instead relied majorly
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on its image as the ideal medium for promoting the business, its products and the value that it
encompasses as a coffee chain, as well as a business establishment.
In southern China, Starbucks entered into a joint venture with Hong Kong-based Maxims
Caterers, a restaurant part owned by Dairy Farm International Limited. This step in its
strategy allowed Starbucks to gain valuable insight into the local tastes and preferences of the
Chinese consumers. In this regard, Maxim caterers also acted as advisors to the Starbucks
management, and worked on having traditional Chinese items, such as festival moon cakes,
curry puffs, and sausage rolls, added to the chains standard menu.
The Starbucks image on a whole is one of the key elements to the success of the company
and the brand. It has realized that people do not only come in for the coffee but they come in
for the atmosphere they provide. People tend to socialize, read, study, or just enjoy the music
while drinking their coffee. Keeping this in mind, coffee shops have tried to make their stores
unique in some way or another which will create an appealing atmosphere for the customers.
Starbucks has less of a distinct setting for their locations but instead, they focus on having
plenty of comfortable seating so that people feel welcome to stay longer than they might have
initially planned.
Starbucks also positions each store individually according to the specific location it is in. This
flexibility has attributed to the great success of the Starbucks Company in the past decade.
Another important part of Starbucks positioning is that they are environmentally friendly.
While other retailers position themselves in similar ways, no one focuses to the extent that
Starbucks has. Consumers seem to respond to environmentally friendly companies who seem
to truly care about the future of the world and the environment.
The advertising strategies which have been used by Starbucks have also been a key success
factor to their operations in China. Starbucks has found more success advertising on a local
level rather than to the nation as a whole. Starbucks has advertised a lot through print
mediums, as Starbucks target market tends to be the middle class, who do more reading than
the average person in China. So even though this model of market expansion was successful,
the local partners of Starbucks were only able to operate in their own regions and they were
not able to develop the Starbucks brand nationally. This model in turn also did not give much
profit to Starbucks. Thus to overcome this problem and become more profitable in the
Chinese market, Starbucks decided to open wholly company operated stores in cities where

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its three partners did not operate. They also planned on increasing the stakes in the
partnerships and joint ventures.
FUTURE STRATEGIES
The increasing competition and rising economical conditions requires Starbucks to
continually work on its strategies, especially in order to achieve an affiliation among the
mindset of the local population. Starbucks positions their products based on its quality and its
image. By creating the coffee shop revolution all over the world, Starbucks have proven to
possess the ability to be the public educators on espresso coffee.
The Starbucks brand is a member of the coming centurys top 25 brands. It is significant that
Starbucks position their brand for what the brand stands for: an innovative industry leader
which manufactures high quality products. Their brand image, as already shown, is a goal
that all the future functional strategies will work to achieve.
Starbucks should first differentiate their products based on image and then on the
classification of the product itself. Considering that international markets such as Italy are
renowned for high quality coffees, it altogether would be difficult for Starbucks to
differentiate their products on just quality alone. Combined with its research and
development emphasis on product development and being the first ones to move into a
market, Starbucks should differentiate its new products to give it a unique advantage, while
backed by the image and brand credentials of the coffee giant. The concept of establishing an
image in the mind of the consumer of the Starbucks experience is what will attract new
customers to visit their locations and hence, further create customer loyalty. For businesses,
the first impression is vital in ensuring a customer can be turned into the new breed of
clientele.
Starbucks needs to be able to battle with the threats of the bargaining power of buyers,
substitute products and competitive forces by continuing to market its brand based on the
highly differentiated products and their distinctive image of value and quality.
Starbucks coffee shops are characteristically clustered in high traffic, high visibility locations.
They should vary their store sizes according to various settings, such as in airports, in grocery
stores, in office buildings, and on street corners. Starbucks has traditionally taken great care
in picking the right locations for their stores. In some cities, Starbucks should try and draw on
the much smaller population bases, flooding the market and reducing the threat of smaller
18

competition. Starbucks aim in flooding new markets should not be to drive out threats of
smaller competition but instead to become the main distributors of coffee in the area. If
cannibalization occurs, and Starbucks is forced to close some of its operations, this could
seriously damage their name. The Starbucks image is too important an asset in the companys
international expansion efforts to let such a reputation tarnish it.
Starbucks should and can also start new varieties of coffee to cater to the needs of the
Chinese market. They can introduce new specials every month. They should also introduce a
special service with the music they offer at the stores. Consumers should be able to pick and
play any track they want to listen to, be it Chinese or English or even directly off the internet.
Further down the track, the Starbucks brand should also start franchising operations in China.
The key reasoning for this will be the shift in financial risk from the company itself to the
entity that wishes to undertake the responsibility of managing the brand and its quality image.
This would be an advantage to Starbucks as it would allow for the quicker expansion of the
company in China, with minimal risk but an increase to the overall revenue. In addition to
this Starbucks would have to spend less on its research and development costs because the
franchisee would have greater knowledge of the local market and the consumers in terms of
demographics, psychographics, geographic, and local/state/country regulations.
Starbucks should also focus on trying to bring down the price of the average cup of coffee.
This decrease in price will in turn bring in more consumers from all walks of life and will
make Starbucks truly global. Starbucks focus should also be on their employees. The
employees of Starbucks are the ones who are making the experience truly great for the base
consumers at their stores. By aiming to ensure a healthy and productive work environment,
the company can achieve a higher level of employee satisfaction that will raise the Starbucks
reputation.
Starbucks should also continue to position their operations and stores in high traffic areas and
high visibility areas. The Starbucks Company should continue to take excellent care in
picking locations. It is extremely important that the Starbucks international stores reflect
individuality in their locations and their layout. Having stores in a variety of locations will
ensure greater market coverage.
Starbucks is currently ranked as the number 1 coffee store and as the most innovative
company in the food services industry. Starbucks needs to further differentiate its product
19

lines to include a variety of different teas, sodas, ice creams, foods, etc specifically to cater to
the needs of the Chinese market. The Starbucks organizational culture is one of innovation
and creativity. The company has made the first move into the market with products such as
the Starbucks Card and the Double Shot espresso. They need to cash in on its innovative
ability and further their products development.
Starbucks Research and Development team should emphasize on furthering its product
development. Product differentiation has proven an excellent defense to threats such as
bargaining power of buyers and will further help in resolving the issue. Developing and
introducing new products will also compensate potential risks for the company. For example,
if the prices of coffee beans were to rise significantly, Starbucks will then be able to use the
sales from a diverse array of products to soften the blow of reduced coffee sales. The
Starbucks Research and Development should lay emphasis on its product development and it
should be often synonymous with the companys growth, and the companys growth should
continue to be a major corporate strategy of the Starbucks Cooperation as a whole.
Starbucks should also continue to be first ones to move into markets with new products and
ideas. An advantage of being the first ones to move into a market gives them a reputation for
being innovative and an industry leader. This image will be very important to Starbucks
international marketing strategies. The Starbucks image will be crucial if the company does
not want to become just a commodity. Being the first ones to move in with new products into
new international markets will be an excellent way for Starbucks to build customer loyalty
and uphold its image as an innovative company.
A considerable amount of market share could be gained by the company if it entered into
markets with less population and prosperity. In addition to this, Starbucks should try to
further expand its products portfolio. In this regard the company should cooperate and make
alliances with other companies to develop and distribute new products. This would result in
Starbucks transitioning from a coffee bean roaster and retailer to a multinational coffee and
coffeehouse chain.
Starbucks has undoubtedly revolutionized the coffee business. Their main marketing strategy
should be to represent the Starbucks brand as a third place between work and home.
Starbucks has an important reputation throughout the whole world, and the brand image
seems to remain its most important asset in the expansion arsenal. With a strong reputation,
and the history of ethical business transactions, it is imperative that Starbucks retain these
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characteristics to remain dominant in the Chinese market, as well as experience the growth
that could make the market larger than its home one.

Roles and Responsibilities of Personnel in Different Departments

The success of strategy implementation is strongly pivots on the strong managerial
leadership.
The success of strategy implementation in the new business environment strongly pivots on
strong managerial leadership .Strategic leadership requires that the Chief Executive Officer
holds and implement change. In so doing, the leader must do the following i.e. he/she should
explain strategic intent. Strategic intent mention to the future objective of an organisation.
With this regards, the leader should set out a clear vision. Organisational leaders should be
conscious of the shareholder's expectations while clarifying the strategic intention.

Team cohesion is, "the resultant of all the forces acting on members to remain in the group"
(Pittsburgh, 2012), and it provides the friendships that hold a team together. The advantages
are: the acquaintance of team members, effective communication, shared values and group
allegiance. There are some disadvantages of team cohesion such as decrease productivity,
lack of creativeness, lack of innovation and over efficiency.

Some organisations use responsibility charting to make sure that employees are clear about
their responsibilities. Responsibility charting will help them to explain any confusion and
misunderstandings. Also it can identify variety of issues, including gaps in responsibility and
areas where too many staffs are given responsibility for the same thing. One of the keys to
successful strategy implementation is that of communication throughout the organisation.
There are four types of communications, see (Appendix 2).
The advantages of having a range of roles with their own responsibilities in an organisation
are many; from ensuring the business stays moral to encouraging strong communication. By
having particular roles and responsibilities in an organisation is necessary in upholding
appropriate records. One of the biggest advantages of having clear roles and responsibilities
in an organisation is that it helps to preserve moral standards. It is the responsibility of
business holders and managers, to fully understand the organisation's standards, procedures
21

and expectations. See the comparison of role and responsibly between two competitors
Orange Company and Vodafone in (Appendix 3).

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3. Approaches to strategy evaluation and selection

An organization should expand its business whenever possible. Various ways and
methods can be used to expand an organization. In this section of the
assignment, possible methods for expansion of TNT are taken into discussion.
Further, an appropriate future strategy for TNT is proposed.
3.1 Alternative strategies relating to substantive growth, limited growth or
retrenchment
As Thompson (2010) describes, the substantive growth strategies are
implemented through two main factors. Those are merger and acquisition.
Merger is the combination of two previously separate organizations, typically as
more or less equal partners (Johnson et al, 2011). The TNT has more potential to
implement merger as a substantive growth strategy because of its market
strength. The acquisition involves one firm taking over the ownership of another
(Johnson et al, 2011). This substantive strategy also can be implemented by TNT
since it has more market power in the industry.
Thompson (2010) introduces joint venture as limited growth. At the joint venture,
two or more organizations are shared the ownership. In the joint venture, usually
the competitive advantage is narrow. Since TNT has more market share in the
industry, it is not advisable for limited growth strategy.
Retrenchment is always a remedial action. These remedial actions are taken at
the stage of the inefficiency, economic recession, or strong competition. In case
of inefficiency, the organisation has to take three retrenchment strategies
namely assets reduction strategy, cost reduction strategy and revenue
generation strategy.
3.2 Appropriate future strategy for the TNT
The human resource of the TNT is one of the critical resources, which pave the
way for achieving competitive advantage. However, TNT has identified that there
23

is a need for further developing of needs of its employees to compete in the

turbulent market place. These skill developments of employees will lead for
quality service and finally it will hold to gain the competitive advantage thorough
available resources (Wilson and Gilligan, 2005). The aim of the TNT is to make
superior profit and performance. TNT has identified those areas as strategy gaps
of the organisation.
Considering the above strategic situation, interactive strategies for the TNT is
recommended. These interactive strategies will be the future strategic directions
of the TNT. The rationale behind the interactive strategies is gaining the
competitive advantage by looking at the competitors strategies. In this
connection, the TNT will have to pay their attention to interactive price and
quality strategies, cooperative strategy, interactive strategies in hypercompetition, and game theory. According to the interactive price and quality,
strategies the TNT will have to provide best price and quality for their customers.
The interactive strategies in hyperactive- competition will say how TNT can face
to the hyper-completion and gain competitive advantage. Collaboration between
some organizations in the same market will lead to achieve competitive
advantage. Cooperative strategies will help this collaboration for TNT. Finally,
game theory also involve with competitor movements. Particularly game theory
is responses for the competitor movements of the market place.
Thus, TNT should follow interactive strategies as it future strategies.
4. Implementing a chosen strategy
Whatever the strategy that is planned, implementation of it is the most critical
stage. Proper ways and methods should be exploited in order to match the plan
and also the successful implementation of the plan. In this section of the
assignment, the focus is the same. Thus, roles and responsibilities for strategy
implementation is compared, resources requirements and also targets and
timescales for achieving them is discussed.
4.1 Roles and responsibilities for strategy implementation
Sadler (2003) introduces three main roles of strategy implementation. Those
roles are envisioning future strategy, aligning the organisation to deliver that
strategy and embodying change.
The first role is envisioning future strategy. This role involve with clear
communicating the strategy to internal and external party. The internal party
includes the organisation and the external party is includes all stakeholders. The
next role is aligning the organisation to deliver the strategy. Under this role, it is
expected that all people in the organisation be committed to the strategy. These
people should be motivated to follow the strategy and should be empowered to
deliver the change. The final role is embodying change. The strategic
implementation is highly involved with the organisational change. Thus, strategic
leader has a major role of following strategic change process.

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According to Sadler (2003) the responsibility of strategy implementation should

be taken by two main parties. Thos two parties can be identified as middle
managers and outsiders. Middle managers have been identified as the
implementers of top managements strategic plan. The responsibilities of the
top-management have three main areas. Those main areas can be identified as
sense making of strategy, reinterpretation and adjustment of strategic
responses, and advisers to more senior management. Outsiders have more
responsibilities for strategy implementation. Especially as outsiders, consultants
and other stakeholders have more responsibilities. Consultant always helps to
formulate the strategic for the change process. Stakeholders have responsibility
as strategy implementation agents in the organisation.

4.2 Resource requirements to implement a new strategy

At the implementation of the strategy, the resources allocation is vital. These
resources requirements can be differed from one organisation to another and one
strategy to another. It is clear that the organisational environment and nature of
resources determines the resources requirements (Coulter, 2001).
As discussed above the TNT should implement interactive strategies to face to
the future competition of the industry. Thus, TNT needs three main resources for
implementing these strategies. Those are physical resources, people resources,
and initial start-up cost.
The physical resources are consisted with production resources, finance
resources and marketing resources which need for implementing interactive
strategies at TNT. Since, these interactive strategies mainly focus on the quality
improvements of the TNT product, it is advisable to allocate more physical
resource for the quality improvement. People resources also a major requirement
for strategy implementation. TNT should develop their human resources by
implementing more learning and development activities. Finally these all these
strategy implementation processes are involved with initial start-up cost and TNT
should allocate appropriate finance for these implementation activities.
4.3 monitoring strategies
Johnson et al (2011) introduces three main criteria and techniques which can be
used to monitor a strategy namely suitability, acceptability and feasibility.
Suitability is that assess whether proposed strategies address the key issues.
Acceptability measures whether proposed strategies meet the expectations of
stakeholders. Also feasibility is measured whether strategy could work with in
practice.
As discussed above TNTs future strategies will be interactive strategies. These
interactive strategies can be monitored by the suitability criteria. Under this
criterion it can be monitored that whether TNTs interactive strategies address
the key opportunities and constraints in the organisation face. Acceptability
criterion can be used to monitor whether implemented strategy meet the
25

expectations of stakeholders. Under this criterion the risk and return also
monitored. Feasibility measures whether strategy work in practice. Further,
feasibility can be used as to check the targets of the implemented strategies. For
an instance, it can be used to measure the finical targets of TNT by
implementing interactive strategies.

Marketing and Sales Manager Job Description Sample

Marketing and Sales Manager Job Description Sample

This marketing and sales manager sample job description can assist in your
creating a job application that will attract job candidates who are qualified for the
job. Feel free to revise this job description to meet your specific job duties and
job requirements.

Marketing and Sales Manager Job Responsibilities:

Accomplishes business development activities by researching and developing

marketing opportunities and plans; implementing sales plans; managing staff.

Marketing and Sales Manager Job Duties:

Accomplishes marketing and sales human resource objectives by recruiting,

selecting, orienting, training, assigning, scheduling, coaching, counseling, and
disciplining employees; communicating job expectations; planning, monitoring,
appraising, and reviewing job contributions; planning and reviewing
compensation actions; enforcing policies and procedures.
Achieves marketing and sales operational objectives by contributing marketing
and sales information and recommendations to strategic plans and reviews;
preparing and completing action plans; implementing production, productivity,
quality, and customer-service standards; resolving problems; completing audits;
identifying trends; determining system improvements; implementing change.
Meets marketing and sales financial objectives by forecasting requirements;
preparing an annual budget; scheduling expenditures; analyzing variances;
initiating corrective actions.
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Determines annual and gross-profit plans by forecasting and developing annual

sales quotas for regions; projecting expected sales volume and profit for existing
and new products; analyzing trends and results; establishing pricing strategies;
recommending selling prices; monitoring costs, competition, supply, and
demand.
Accomplishes marketing and sales objectives by planning, developing,
implementing, and evaluating advertising, merchandising, and trade promotion
programs; developing field sales action plans.
Identifies marketing opportunities by identifying consumer requirements;
defining market, competitor's share, and competitor's strengths and weaknesses;
forecasting projected business; establishing targeted market share.

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Improves product marketability and profitability by researching, identifying, and

capitalizing on market opportunities; improving product packaging; coordinating
new product development.
Sustains rapport with key accounts by making periodic visits; exploring specific
needs; anticipating new opportunities.
Provides information by collecting, analyzing, and summarizing data and trends.
Protects organization's value by keeping information confidential.
Updates job knowledge by participating in educational opportunities; reading
professional publications; maintaining personal networks; participating in
professional organizations.
Accomplishes marketing and organization mission by completing related results
as needed.
Marketing and Sales Manager Skills and Qualifications:

Financial Planning and Strategy, Marketing Concepts, Positioning, People

Management, Territory Management, Sales Planning, Competitive Analysis,

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Understanding the Customer, Product Development, Client Relationships,

Creative Services

Marketing executives are involved in developing marketing campaigns to

promote a product, service or idea. It is a varied role that includes:

planning;
advertising;
public relations;
event organisation;
product development;
distribution;
sponsorship;
research.
The work is often challenging and fast-paced.

Many organisations have marketing departments, meaning that marketing

executives can be found in both the private and public sectors, ranging from the
financial, retailing and media industries to voluntary and public sector
organisations.

The responsibilities of marketing executives vary depending on the size of the

organisation and sector and whether the focus is on selling a product or service,
or on raising awareness of an issue that affects the public.

Marketing executives may also be known as marketing officers or coordinators.

Responsibilities
Marketing executives contribute to and develop integrated marketing campaigns.
Tasks can involve:

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liaising and networking with a range of stakeholders including customers,

colleagues, suppliers and partner organisations;
communicating with target audiences and managing customer relationships;
sourcing advertising opportunities and placing adverts in the press or on the
radio;
managing the production of marketing materials, including leaflets, posters,
flyers, newsletters, e-newsletters and DVDs;
writing and proofreading copy;
liaising with designers and printers;
organising photo shoots;
arranging the effective distribution of marketing materials;
maintaining and updating customer databases;
organising and attending events such as conferences, seminars, receptions and
exhibitions;
sourcing and securing sponsorship;
conducting market research, for example using customer questionnaires and
focus groups;
contributing to, and developing, marketing plans and strategies;
managing budgets;
evaluating marketing campaigns;
monitoring competitor activity;
supporting the marketing manager and other colleagues.

A Human Resources generalist, manager, or director plays a wide variety of roles

in organizations. Depending on the size of the organization, these HR jobs may
have overlapping responsibilities. In larger organizations, the HR generalist,
manager, and director have clearly defined, separated roles in HR management.

These roles bring progressively more authority and responsibility in the hands of
the manager, then the director, and ultimately, the Vice President who may lead
several departments including administration.

29

HR directors, and occasionally HR managers, may head up several different

departments that are each led by functional or specialized HR staff such as the
training manager, the compensation manager, or the recruiting manager.

Human Resources staff members are advocates for both the company and the
people who work in the company.

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Consequently, a good HR professional performs a constant balancing act to meet

both needs successfully.

The Changing Human Resources Role

The role of the HR professional is changing to fit the needs of today's modern,
fast changing organizations. In the past, because the original HR personnel
functions were often provided by accounting, the HR role was focused on
administrative tasks such as paying employees, administering benefits, and
keeping track of sick and personal days off.

But, a more comprehensive approach to the management of people in the

organization was needed. Programs and processes that systematically hired
employees, retained employees, and dealt with all aspects of talent
management evolved in the best organizations.

Then, the role evolved again. Still responsible for the administrative tasks and
the programs and processes related to people, the best HR professionals are now
leading the charge.

They are developing systems and processes within the organization that address
the strategic needs of the business. So, what was once the task of hiring
employees is now the process of team-based hiring of the best possible talented

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employees who are recruited via methods that range from employee referrals to
social media sourcing.

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These employees are also congruent with the company's culture. This is quite a
different journey, one that continues to evolve.

New HR Role

The role of the HR manager must parallel the needs of this developing, changing
organization. Successful organizations are becoming more adaptable, resilient,
quick to change direction, and customer-centered. They recognize that
organizations will vie for talent in coming years.

This recognition brings about the need for employee oriented workplaces and
programs that meet the needs of employees for meaningful work, growth,
challenge, communication, and effective leadership.

Within this environment, the HR professional, who is respected by line managers

and consequently, whose talents are utilized by managers, is responsible for new
roles. In Human Resource Champions, Dave Ulrich, one of the more popular
speakers and writers in the HR field , and a professor at the University of
Michigan, recommends three additional roles for the HR manager.

a strategic partner,
an employee sponsor or advocate and
a change mentor.

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At the same time, especially the HR Generalist, still has responsibility for the dayto-day employee problems and complaints, employee benefits administration,
often payroll, and employee paperwork, especially in the absence of an HR
Assistant.

Responsibilities of the HR Professional

Depending on the size of the organization, the HR manager has responsibility for
all of the functions that deal with the needs and activities of the organization's
people including these areas of responsibility.

Recruiting
Hiring
Training
Organization Development
Communication
Performance Management
Coaching
Policy Recommendation
Salary and Benefits
Team Building
Employee Relations
Leadership
When you ask the question, what does the HR manager, generalist or director
do, as you can see, the answer is a lot. The role bears responsibility for all of the
processes and systems related to people in an organization. The role must
support the work of managers who supervise and lead the work of these people.

The HR professionals must develop the skills of their managers and their
organization to do these activities well. The job of the HR professional is a
constant challenge as HR staff balance many roles and activities in support of
their organizations.

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Want even more detailed information about the job descriptions and
responsibilities of HR professionals? Take a look at these job descriptions.

Human Resources Job Descriptions

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