Improve Quality Management Production

Question: Discuss about the Improve Quality Management Production. Answer: Introduction This report contains analysis of new marketing strategy of undertaken company. For this report, Starbucks is selected for the analysis of its marketing plan related to new product line. In this report, discussion of new product or new business line that Starbucks will introduce in order to attract new customer base. This report includes analysis of internal and external environment of Starbucks with the use of SWOT analysis (Thomas Bush 2016). On the basis of strength and market opportunities analysis that exists in UK market, new product has been developed and justified for the new customer base has been discussed in this report. Company Background Starbucks has started their business in 1971 and from then they had grown their business to many countries. Starbucks is the leading coffee and has been conducting their business operations in many countries as one of the most preferred coffee makers. Starbucks procure and roast high quality coffee and serve to their customers around the world. Apart from coffee, their product line includes tea, other beverage and some food items that fulfil customers need. Major product line of Starbucks can be divided into four different product line; drinks, foods, nutrition and equipment manufacturing (Starbucks Reports Record Fourth Quarter and Record Fiscal Year 2015 Results 2015). Starbucks main product is drinks i.e. tea and coffee apart from this it has vast chain in food industry that can be served with drink product line. Mission of Starbucks is to inspire the human spirit and spread of togetherness. In 2015, Starbucks had earned revenue of$ 19.163 billion and this is increase of 16.5 % over its previous years revenue (Starbucks Reports Record Fourth Quarter and Record Fiscal Year 2015 Results 2015). Starbucks has been involve in business expansion strategy and has expanded their business operations in United States, China, India, United Kingdome, Australia, etc. SWOT Analysis and Explanation STRENGTH Biggest strength of Starbucks is its financial performance that has made them stronger in financial terms. Starbucks has shown great operating efficiency and grown as leader in market (White et al., 2015). Starbucks has highest brand value among its competitors i.e. value of more than $ 4 billion. Starbucks has been able to capture large market share and is been considered as biggest coffee house in terms of quality and volume of transactions. High range of coffees, customer engagement, key stakeholder engagement, customer relationship management, etc is some operational strength that Starbucks has achieved. WEAKNESS Starbucks has been facing issues related to lack of diversified product line. Starbucks does not have different product line but they largely depends on its main product line i.e. coffee. Another weakness of Starbucks is its pricing strategy i.e. premium pricing strategy. Starbucks are not able to attract middle class customer base because of its high range prices (Thomas Bush 2016). Sales revenue of Starbucks does have shown uneven trend in term of its generation point. OPPORTUNITIES Starbucks has the business opportunity in terms of doing business with more suppliers at same rates if they expand their product line to drinks market. This will not only saves input cost but it also reduced dependencies son coffee products (Dana, 2012). It has been noted that many customers has shifted their requirement toward cold drinks i.e. ready to use and more convenient as compared to coffee. It can analysed that government of Australia has recently made some changes in their legal policies which has resulted in more liberal entrance of business organisation into different product line and set off business losses with other business income. THREATS Starbucks has faced issue of increase in prises of coffee beans and dilution in quality of same (Helms, 2013). New entrance of many business organisation in competition with Starbucks has made them trouble. Some competitors of Starbucks are Costa Coffee, McDonalds, Nestle, etc. Economic factors that impact financial market where Starbucks operates its business. Inflation rate and interest rate in UK market has been increased and this has increased more investment in financial resources. Recommendation For the purpose of new product development i.e. cold drink target strategy of Starbucks suggests segment of market that will be targeted for the new product. From the demographic point of view, target market strategy shall be focus on age group of 10 years to 25 years of population. Both males and females will be targeted; more focus for cold drink will be on high income group of people, population having higher social status will be targeted (Van, 2013). Target strategy includes analysis of buying pattern of cold drinks of target population. In this case, population of 15 to 22 years buys more cold drinks so they will be more targeted. Cold drinks are mostly purchased for parties and social get - togethers and not for overcome thrust. There shall be many buying points for cold drinks i.e. at Starbucks outlets; cold drinks will be available at general stores, malls and at self service cold drink machines. New product will be focused on Australian market and in urban area only as price of cold drinks will at higher side as premium price (Rebentisch et al., 2016). In this target strategy, climate or seasonal change plays important role as demand of cold drinks declines in winter season and increase in summer or rainy season. Nature of relationship with customers will be both face to face and by using electronic sources for interaction. Mainly customers will get interacted or contacted at outlets of Starbucks and at malls where promotional activities for the new product line i.e. cold drink will be undertaken. Customer database as developed by Starbucks of their existing customers, will be used as the promotion tool as target strategy. For the purpose of implementing promotional activities or product promotion, target population will be attracted with the target strategy (Rodrigues and Cussler, 2016). In this case, differentiated marketing or target marketing strategy will be used under which population will be identified and then product promotion strategy of Starbucks will be implemented. New product description In case of Starbucks they will introduce their new product (cold drink)in two phases. Each phase will be based on flavours of scold drink i.e. under first phase two flavours will be introduced and in second phase other two flavours of cold drink will be introduced. Starbucks will introduce four flavours of cold drink and they are; cola flavour, orange tang flavour, lemon lime flavour and lemon tang flavour in market (David Jones 2012). Cola flavour and lemon flavour will be available in diet segment also so as attract more customers who wants to drink. Apart from these flavours Starbucks will also introduce coffee or caffeine flavour cold drink under both normal and diet segment. This cold drink flavour will be attraction point among all other flavours and will attract more customers (Veiga and Weyl, 2016). Therefore total five flavours will be introduced as new product line by Starbucks. Coffee or caffeine flavour cold drink will be manufactured from high quality coffee inputs and will contain zero sugar and higher coffee input. Packing of new product will be undertaken in house and more emphasis will be provided on it. Innovative packing material or design will be used that shall be convenient and easy to use for customers (Hestad, 2013). Bottles of cold drink will be available in different sizes so that customer can buy it as per their convenience. 500 ml bottle, 1000 ml bottle and can, 1 litter/ 1.25 litters / 2 litters / 2.25 litters plastic bottle will be available in these sizes. Customer Value Under this section, how customer needs and wants will be satisfied with the new product i.e. cold drink that will be introduced by Starbucks will be discussed. There are many verities and brands that target population can choose from. But customers get attracted or prefer that particular brand that fulfils their need from such product (cold drink). There are many options sin terms of flavour or nature of cold drink like diet cold drink or soda loaded cold drinks or full flavoured cold drinks (Ginsburg et al., 2014). But customers or target population will be selecting their favourite brand that satisfies them. Therefore on the basis of satisfaction level from the use or consumption of product, customers decide their favourite product. From the research, it has been analysed that on an average half of the population of Australia drinks one can or one bottle of cold drink in a day (Aziri, 2011). Cold drinks are used for self satisfaction by customers and this requires many thinks together like availability of product, price of product or cold drinks, satisfaction level of customers from consumption of cold drink and many other attributes (Zhang et al., 2016).In case of Starbucks, while assessing customer value from new product of Starbucks, customer lifestyle and their attitude towards new product will play key role (Evolving Consumer Need, 2014). Most of the customers or target population get influenced in terms of satisfaction from the price of product. Therefore price of cold drinks that will be introduced by Starbucks will be kept at economic level (Chan and Ip, 2011). Justification of Product From the analysis of SWOT analysis conducted earlier, Starbucks need to diversify its product line so that more new customers can join. In order to boost sales revenue and increase market share new product line needs to be introduced by Starbucks. It can be analysed from SWOT analysis that financial background or Starbucks is financially strong because of its operating profits (Vlerick and Broadbent, 2015). Management need not to obtain outside funds and will be able to introduce new product line. From the opportunities section of SWOT analysis, it can be analysed that Starbucks has already developed or vast supply chain that will be help them to market their new product i.e. cold drink (Kench et al., 2012). Starbucks needs to expand their business operations or product line as they are losing their sight in the market. Cold drink as their new product will help them in maintaining same supply chain management; same outlets can be used to sell new product and many more advantages. Most of the population in Australia and in other countries find cold drink as most desirable drink to satisfy their needs (Wesfarmers Limited 2013). During summer season, sales of cold drink will be get doubles or thrice as compared to winter season. By introducing cold drink, Starbucks will become complete package in terms of beverage providers and can increase their market share in food and beverage industry (Li and Liu, 2013). Industry report suggests that revenue from customers has been received from beverages as product as compared to food as product. Therefore management of Starbucks shall focus more on beverage or cold drink as new product. Strategy Management of Starbucks shall use some strategy to use their strength as identified during SOWT analysis. In order to use strength in terms of operational efficiency and financial strength management has developed strategy on the basis of M porter generic strategy. According to M porter generic strategy, business organisation has to select one marketing strategy or generic strategy. Under M porter generic strategies, there are three different strength that business organisation can develop and implement. Cost leadership, differentiation and focus are three major strategies that Starbucks can develop (Dipali, 2011). In case of Starbucks, cost leadership strategy and differentiation strategy will be used to market their new product i.e. soft drinks. In this case, management in consultation with production tea and management accountant has developed new production structure and new equipments needs to be arranged. This new production structure will be based on total quality management so that fewer expenses will be incurred with premium quality. In this strategy broader market can be covered so that more population can be attracted (Dipali, 2011). On the other hand, under differentiation strategy management will develop different taste in soft drinks i.e. new product o be developed. In this strategy, management of Starbucks will include some unique feature or ingredient to the soft drink. Unique feature can be added in new product in terms of packing and branding also, on the basis of market analysis report. In this case, Starbucks will require strong sales steam that can communicate unique featur e of new product in the population that shows strength of product. Conclusion From the above report it can be concluded that Starbucks is one of the leading brand in food and beverage industry with coffee as its core business product. From coffee business itself, Starbucks has been generating most of their sales revenues and profits and this situation has made them more dependent on coffee sales. Starbucks are financially strong as they are available with funds for business expansion. SWOT analysis of Starbucks suggested that, management need to diversify their product line so as to overcome from dependence on coffee business. Cold drink will be used by Starbucks as their new product line on the basis of SWOT analysis. Target market strategy is formulated under which on the basis of different sections or areas differential target strategy has been selected. There will be five flavours of cold drink and will be introduced in two phases. Coffee flavour of soft drink will be USP of this new product line. References Aziri, B. 2011.Customer Satisfaction: A Literature Review. Management Research and Practice. Chan, S.L. Ip, W.H. 2011, "A dynamic decision support system to predict the value of customer for new product development", Decision Support Systems, vol. 52, no. 1, pp. 178. Dana, B.G. 2012, "SWOT Analysis to Improve Quality Management Production", Procedia - Social and Behavioural Sciences, vol. 62, pp. 319-324. David Jones 2012, The Story of David Jones, viewed 4 February 2013, http;//www.davidjones.com.au/About-David-Jones/The-Story-of-David-Jones. Dipali 2011, Porter's Generic Strategies with examples. Viewed November 16, 2016, https://www.slideshare.net/dipalij07/porters-generic-strategies-with-examples Ginsburg, P.B. Pawlson, L.G. 2014, "Seeking lower prices where providers are consolidated: an examination of market and policy strategies", Health affairs (Project Hope), vol. 33, no. 6, pp. 1067-1075. Helms, M. 2013, SWOT Analysis Framework. Hestad, M. 2013;2016, Branding and Product Design : An Integrated Perspective, Gower, Farnham. Kench, B.T., Knox, T.M. Wallace, H.S. 2012, "Dynamic transaction costs and firm boundaries in the soft drink industry", Journal of Economics and Economic Education Research, vol. 13, no. 1, pp. 33. Li, J. Liu, W. 2013, "Selecting a target segment: market structure and new venture entry strategies: 1", Management Decision, vol. 51, no. 7, pp. 1402. Opportunities - Soft and Hot Drink Markets: Evolving Consumer Need 2014, , Normans Media Ltd, Coventry. Rebentisch, E., Schuh, G., Riesener, M., Gerlach, M. Zeller, P. 2016, "Determination of a Customer Value-oriented Product Portfolio", Procedia CIRP, vol. 50, pp. 82-87. Rodrigues, A. Cussler, E.L. 2016, "Teaching chemical product design", Education for Chemical Engineers, vol. 14, pp. 43-48. Starbucks Reports Record Fourth Quarter and Record Fiscal Year 2015 Results 2015, Business Wire, Inc, New York. Thomas Bush 2016, SWOT Analysis of Starbucks, the Worlds Leading Coffeehouse Chain. Viewed November 16, 2016, https://pestleanalysis.com/swot-analysis-of-starbucks/ Van Arnum, P. 2013, "Sizing up Big Pharma's manufacturing investment strategies: the pharmaceutical majors target biologics and emerging markets in their manufacturing expansion activities", Pharmaceutical Technology Europe, vol. 25, no. 8, pp. 20. Veiga, A. Weyl, E.G. 2016, "Product design in selection markets", Quarterly Journal of Economics, vol. 131, no. 2, pp. 1007. Vlerick, M. Broadbent, A. 2015, "Evolution and Epistemic Justification", Dialectica, vol. 69, no. 2, pp. 185-203. Wesfarmers Limited 2013, Corporate Governance, Wesfarmers Limited, viewed 4 February 2013, http;//www.wesfarmers.com.au/about-us/corporate-governence.html. White, T.H., de Melo Barros, Y., Develey, P.F., Llerandi-Romn, I.C., Monsegur-Rivera, O.A. Trujillo-Pinto, A.M. 2015, "Improving reintroduction planning and implementation through quantitative SWOT analysis", Journal for Nature Conservation, vol. 28, pp. 149-159. Zhang, H., Liang, X. Wang, S. 2016, "Customer value anticipation, product innovativeness, and customer lifetime value: The moderating role of advertising strategy", Journal of Business Research, vol. 69, no. 9, pp. 3725-3730.