Operation Management And Strategies Starbucks And Cocacola Marketing Essay

Operation Management And St positiongies Starbucks And coca plantcola Marketing EssayIn this interpret document we are going to analyze several aspects of effect care and strategies considering two companies One from the expediency industry, Starbucks and maven for the manufacture industry, coca locoweed. We get out study their affix chemical orbit and measure its impact on two companies success and pro tantrumability. Then we ordain analyze their operating theatreal dodging to root in which measure it contri al one and only(a)es to their belligerentness and we will strive to provide slip mode in which argufys of the distinguishable companies could be overcome so that they canister intone their own competitory returns. last we will establish a repair analysis in clip to identify the best place for the companies to fol broken in out a youthful operation.The supply compass refers to the appearance that materials flow by means of several(predicate) organizations, starting with basic raw materials and ending with finished products delivered (Gaither Frazier, 2002). This composite many activities and in that locationfore we reserve to think about the best way to manage it in ramble for a company to be thriving and pro conkable. We can then define the supply chain heed as a fasten of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that mathematical product is produced and distributed at the obligation quantities, to the right locations and the right time, in order to play down system wide personifys while satisfying serve up sound requirement. (Simchi-Levi, Kaminski, Simchi-Levi, 2003)The Starbucks supply chain is made of the by-line activities which are either outdoor(a) or internal to Starbucks organization Coffee producing, importing, manufacturing and roasting, distribution to sell shop, grocerying, delivering to the consumer. summate Chain StarbucksActivit ies involved from the hot chocolate production to the roasting are external to the company. They can involve many counter recrudesces such(prenominal)(prenominal) as the small coffee producer, the processor, the exporter, the broker and the importer. To optimize these activities Starbucks manage them in many ways express its commitment to ethical coffee sourcing and fair- switch and planetary responsibility. Starbucks establishes singingship with growers and distributors and corporation directly with farmers. It offers high prices to checker that poor coffee growers go through enough bullion to cover their production costs and their family inescapably. It uses make uped prices purchase commitments to narrow its film to price fluctuations and purchase future contract to provide price protection. Moreover, to strewing companys risk linked to the weather and the political and economical issues, Starbucks sources bean from doubled geographic areas. Starbucks commitment t o ethical sourcing (it introduced the C.A.F.E architectural plan Coffee And Farmer law in 2004) allows having a better tone of product, a greater visibility in the supply chain and better relationship with farmers which contribute to contact success and profitability, that is to say to while away its objectives and generate wealth.Activities involved from the roasting to the sales pitch to the consumer are part of internal elements to the supply chain. They involve many activities such as the manufacturing, the planning, the inventory, the transportation and distribution. The key to r individually success and profitability for Starbucks is to set an integrated supply chain operating system based on managing the flows. They manage the materials flows through DRP (Distribution Resource Planning) and TRP (Transportation Requirement Planning). They likewise put the accent on the information flows management to share the pertinent information and to recover the supply chain op portunities at disparate level.The management of the food marketing plays also an important role in development the awareness of the fair trade initiative that helps justify Starbucks tribute prices.The coca plant boob supply chain involves many activities namely, the supplies of raw materials and packaging, the manufacture and production of beverage concentrate, the sales to the bottlers and distributors, the query and Development and the spoken communication to guest and ultimate consumer.Supply Chain coca ColaThe internal activities of the companies are limited to the manufacture of the concentrated syrup, the exchange to the bottlers, the owning of the brands and the consumer branding initiatives. so the companies can focus on its core competencies such as the production of syrup and the brand development to achieve its objectives and r for each one success. The fact that the bottling is outsourced allows the company to focus on its core competences and on that point fore interpret certain profitability.The others activities are part of the external supply chain but coca plant Cola strives to integrate all the supply chain activities developing a substantive fusion with its bottling teammates. They are in charge of manufacturing the nett product, packaging, distribution and merchandising the beverage to the guest and vending partners who then swap the product to the ultimate consumer.The supplies of raw materials are mostly linked to limited nutritive and non nutritive sweeteners which are available either within the join States or outside. There are numerous sources of raw materials and they are much subject of prices fluctuations. So coca Cola has a wide quality of raw materials suppliers so that it can spread the prices fluctuation among them and thereof suppress its supply chain. The procural suppliers and bottler partners take aim to meet certain standard to deal with Coca Cola Company and have to commit to guide principles a nd hold sustainability. Consequently Coca Cola can achieve its objective of quality and correspond.The Coca Cola supply chain organization allows to enhance customer service and to optimize cost and investment.How does each companys operational strategy advance its engagement? check to the Competitive Advantage Model of Porter, a agonistic advantage refers to the adoption of offensive or defensive action to execute defendable position in an industry in order to allot with competitors and generate a superior return on investment. The basis of in a higher place average performance within an industry is sustainable competitive advantage which can be either cost drawership or differentiation. twain of the companies we are analyzing have adopted the differentiation strategy. Further more(prenominal) the operation strategy is aimed at providing competitive advantage through its performance at the 5 competitive objectives namely, the quality, the speed, the dependability, the fl exibility and the cost.Starbucks operational strategy reforms its competitiveness through different ways. archetypical of all Starbucks has understood that developing successful federation would be a strength to develop competitive advantage early to ensure quality of product and succorly by adopting fair trade and ethical sourcing of coffee. so Starbucks used to develop relationship with the countries it exports the coffee beans from. For warning it col cut intoated with a small town of Pasto where they set up a special operation to grow the particular Narino Supremo bean and Starbucks committed to buy the entire tax return which allow to be the exclusive Narino Supremo , one of the best coffees in the introduction and therefore to build a competitive advantage. The ethical commitment is a strong part of the operational strategy to develop specific fusion with small farmers and strengthen competitiveness. Starbucks has developed a shared planet program where it establishes environmental, hearty, economic and coffee quality principles to comply with C.A.F.E (Coffee And Farmers Equity) principles guidelines. This program enables Starbucks to differentiate from its competitors.second Starbucks operational strategy consorts to dramatize its market through a procedure of channels such as licensing stores but also with hospitals, bank, office buildings, supermarkets, obtain centers, hotel and airlines. The strategic operation model of Starbucks is to blanket an area completely regular(a) if one store cannibalizes another one because the Starbucks e very(prenominal)-where approach cuts down delivery costs and increase the foot traffic in the area (Mr. Coffee, 2003). It develops partnership using topical anaesthetic partner licensee who have experience in retail and restaurant in order to provide a good service to customer and fit the bodily kitchen-gardening of the company. Starbucks strives to develop good relation with the partner licensee to he lp it recruiting geniused employee and put the emphasis on the customer service to build sustainable competitive advantage. The key to successful partnership for Starbucks is to share relevant information and communicate on supply chain opportunities to optimize processes. Added to this Starbucks operational strategy focuses on developing a strong corporal stopping point which enable to strengthen its competitiveness. Starbucks strategy is to empower employee culture through benefits program, employee stock ownership plan and staff and management training. The management staff is trained to understand how every activities of the supply chain fit together so it can be more effective and competitive.lastly Starbucks operational strategy aims at putting the emphasis on the marketing business trading trading operations in order to differentiate the format. hence Starbucks marketing actions have to develop a given image of a small get over and high quality roaster in ethnic cultu re enclaves who sells not all quality coffee but also an atmosphere, a personality, an escape, the self applaud and therefore an interpersonal relation. This image reflects Starbucks personality and consequently enables the differentiation.Coca Colas operational strategy is aimed at building its competitiveness in many ways.First its operational strategy is customer focused striving to take into invoice customer needs and providing a response to it in a right way and in a right time. The company sustains its success and competitive advantage by creating impudently-made ways to deliver value through insertion responding to customer and consumer needs in a fast way. For example Coca Zero refers to a new consumer need.Secondly Coca Cola put the emphasis on the differentiation to strengthen its competitiveness by building global brand. It invests in marketing campaign to develop a strong image, improve its fame and impose its brand in a global basis. therefore consumers have deve loped a loyalty to the brand and Coca Cola owns several brands that consumers are willing to pay a premium price for it. More over it has developed so much economies of home base through global networks that the emphasis on marketing and advertising fix important barriers to entry for electromotive force competitors.Coca Cola also improves its competitiveness by adopting a collaborative approach to work with their suppliers to grand their supply chain. It invests in new technologies and innovation to help their suppliers who do not have the ability to do so, for example in investing in new technologies vending machines which are better for the environment. Therefore it gains competitive benefits not still because of the energy savings but also from a corporate social responsibility point of view.Coca Cola has understood that integrate its suppliers would lead to supply chain excellence and therefore to sustain a competitive advantage. Consequently the Company has created Coca Co la Supply which invites all the bottlers partner to participate. The purpose is to provide a system wide leadership to control supply chain through integrated planning, joint initiatives and best practices processes. According to Coca Cola Supply, they are transforming the supply chain from a series of discrete, inconsistent activities to a single, harmonious and sustainable system (Coca-Cola Supply Created to depend upon Supply Chain Innovation, 2009).Polar diagrams performance objective of Starbucks and Coca ColaWhat challenges do the operational strategies present and suggest ways in which they can be overcome.Operations strategy is the decisions which shape the long term capabilities of the companys operations and their contribution to overall strategy through the on-going reconciliation of market requirements and operations resources.Regarding Starbucks operational strategy many challenges could be addressed according different issues in order to be more profitable and to sus tain a competitive advantage.The first thing is to always meet the customer needs for value and quality in identifying the best ways of quality processes. This implies that Starbucks has to happen upon more suppliers quality and stability by developing partnership with different coffee farmers in order not to be dependant of just now few suppliers. The quality implies also to control more and more of autonomous vendors, partners and licensees. Indeed the quality is one of the core value of Starbucks and come to it allows first the differentiation and secondly the conformance with customer expectations and avoid customer complaints. Starbucks has to lay aside developing ethical sourcing which benefits to the companys quality and image.Starbucks should assess the risk of its supply chain especially in raw materials procurement in the different countries and asses the political, geographical, natural, infrastructural risk of each region. Indeed if an incident happen in one of the procurement place Starbucks must not be dependant of few suppliers and should contradict quickly. It is therefore in truth important to develop the partnership with different countries in order to prevent late delivery and save costs.One of the challenge Starbucks will have to face is a potential saturation of the US market. Consequently a globe expansion in key market is an operational strategy Starbucks has to develop. The international expansion of the concept involves prospecting efficiently new markets and assessing the potential of success in each market. The key is to find local partner to grow the number of licensed store and impose Starbucks as a global brand. The partner have to share the same set as Starbucks and the company have to help them finding the best talent and train them in order to strengthen more and more the corporate culture.Developing new product is also an important challenge for Starbucks. Indeed the concept is mostly based on a few products which do not allow very much flexibility. Reaching flexibility will enable Starbucks to be more reactive in instance of potential change from the market. Consequently the company has to develop innovative product and service while keeping its strong value of quality. For example it should be evoke to develop co-branding with other brand which presents the same value as Starbucks in order to launch new product like the company did in 2004 with Hewlett Packard when they create a CD service burning in a store in California.Coca Cola is one of the biggest brands in the arena but even if its renown and profitability is well established there remain important challenges that the company has to cope with.First of all Coca Cola Company possess many brand but one of them generates around 50% of the total revenue. Therefore the company is in way dependent of one brand which can be a limit to its flexibility even if the customer loyalty to the brand is well established. Indeed Coca Cola needs more f lexibility in case of market change and especially in case of consumer behavior changes. as well as we can notice a new trend where quite a little die more and more health consciousness and look for nutritive drinks without calories. Therefore a threat of substitutes appears. In order to cope with the potential market change Coca Cola has to put the emphasis on innovation with new brands, products and packaging more adapted to consumers needs and demand.Secondly Coca Cola have to develop ways to be always more and more profitable and efficient. The key is to pore the cost in order to increase the margin. The areas where the company could reduce these cost is the transportation and the production. Consequently Coca Cola has to identify the best places to buy, make and distribute the product. It has to monitor each region and each country comparing different parameters which will allude the supply chain such as the weather, the port and transportation, the fuel prices, the labor rates and the internal regulations of each country which can provide opportunities.Finally Coca Cola Company has to continue the effort put on green and environmental development. Indeed the company has often benefited from a contradict image of a multinational company which tries to reach profit to the wrong of the planet well being. Therefore it has to keep investing in green technologies and bide sustainable development with the suppliers in order not sole(prenominal) to save energy costs but to benefit from a corporate social responsible company.Each of your company is considering locating a new operation in one of Japan, Thailand and capital of Singapore. Source information on each of these three countries and based on the information found and using the relevant location analysis tools select which country to locate in and support your choice. You need to define why they wish to locate an operation there i.e. what market are they servicing. You should include demographic, infrastructure, cultural, geographic information, etc.Starbucks wants to locate a new operation in Japan, Thailand or Singapore. Indeed the company wants to expand its market on a global basis to cope with a potential saturation of the United States market. Therefore Starbucks wants to develop licensed stores operation in one of these countries. The key factors in such operations are the demographics, the branding and the potential revenue that each country could offer to the company.Therefore the main factors in the decision factors are the followingQuality of animation issues in the community indeed Starbucks targets a relatively high life-time standard consumer.Worker education and skills the emphasis of the quality of the staff is really important to strengthen Starbucks Corporate Culture.Site costs The rent is part of the profitability of the stores.Cultural abilities to modern changes Starbucks is an American company, and its values have to fit with those of the country choo se.Labor availability It is important for Starbucks to find available talent.Coca Cola Company would like to improve its competitiveness and reduce the cost of transportation and production. Consequently the company would like to set up a new manufacture of syrup in Japan, Thailand or Singapore to reach this objective. Therefore Coca Cola has to monitor each country to assess the potential opportunities it could offer. The main factors in the choice of the location are the followingProximity to raw materials and suppliers As a manufacture of syrup, it is important to be closed to the suppliers to reduce costs and improve efficiency.Labor costs The cheaper is the workforce the greater is the margin.Transportation availability The products have to be imported to the different bottlers and it is therefore important to optimize the transportation cost.Site costs The firm cost linked to the rent should be the least in order to increase profitability.Government fiscal policies all incen tives or taxes impact on the cost.In order to compare each country we will set up a brief overview of each countrys characteristics.Japan has a commonwealth of 128 million of inhabitant and is one of the most densely populated countries in the world. With a nominal GDP of about $4,9 trillion in 2008, it is the second richest country in the world. Moreover, with an HDI (Human Development Indicator) of 0.96 it is the tenth highest standard living country. The disposal is a parliamentary democracy and put the emphasis on the environmental and sustainable development. The infrastructures are well developed and Japan is open in the world. According to the Big Mac Index Japanese people have the highest salary per hour in the world and the unemployment is low with a rate of 4%. Education is quite competitive and 75% of high nurture graduates attend a university. The culture has seen deep change from a very traditional to contemporary one. It influences by Europe and North America. Japan ese people are quite open to modern changes.Thailand has a population of 64 million of inhabitants and a nominal GDP in 2008 of about $273 jillion and a medium HDI of 0.783. Thailand has been ranked by the Global Competitiveness wrap up of 2008 34 out of 125. The quality of education is medium but tends to improve through the private education. The cost of labor remains quite low and unskilled. The government has seen many changes since the last few years but tend today to be stable. It supports today through the National Science and engine room Development Agency the research in science and technology and gain foreign private investment in this field. Thailand remains a very traditional country where tradition is strongly established.Concerning Singapore, with a population of 5 million of inhabitants and a nominal GDP of 182 billion in 2008 it presents a high standard of living with a HDI of 0.944. It is the least corrupt country in Asia and is a highly market based economy (on e of the tetrad Asian Tiger). Singapore has developed free trade agreement with the States in 2003. The unemployment is low and is about 5% and we can notice a shortage of skilled workers. Manufacturing constituted 26% of Singapores GDP in 2005. Singapore has one of the busiest ports in the world and is the worlds fourth largest foreign exchange trading center. Singapore is a major international transportation in Asia. Singapores culture is still very traditional society.In order to choose in which country we will operate we are going to use the doer rating method which is useful for service and industrial location and which is one of the most widely used location technique.(C1= Japan, C2=Thailand, C3=Singapore)STARBUCKS portion RATING orderFactorsWeightRate C1RateC2RateC3ScoreC1ScoreC2ScoreC3Quality of life issues in the community30906075270018002250Worker education and skills20805065160010001300Site costs156070659001050975Cultural abilities to modern changes2580506020001250150 0Labor availability10856070850600700 sum805057006725According to the Factor rating Method, Starbucks should hold its new operations in Japan in order to be successful, profitable and therefore achieve its objective of expanding in new markets.COCA COLA FACTOR RATING METHODFactorsWeightRate C1RateC2RateC3ScoreC1ScoreC2ScoreC3Proximity to raw materials suppliers25605565150013751625Labor costs20558070110016001400Transportation availability25705585175013752125Site costs20607065120014001300Government fiscal policies10606070600600700Total615063507150According to the Rating Factor Method Coca Cola should implement its new manufacture in Singapore in order to reduce its costs of production and transportation. Indeed that is the country which offers the most opportunities to do so in term of proximity to suppliers, transportation costs and labor costs.