Aveneu Park, Starling, Australia

Business customers to buy repeatedly and feels they

Business Strategies of
Two Companies

Virgin Group

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Business Strategy

Company first resource
available to them is their chairman Sir Richard Branson who bought the company
to top position. His style and fascinating way brought people towards the
Virgin group. Secondly the people of the virgin group are the key success of
the company and it has unique brand recognition in other business that is
difficult copy by others. Virgin has many number of business under one brand
name. Management of the virgin group has freedom to provide their idea about
ongoing business and make innovation for the development of the company.
Management of the company is heavily depend on the market analysis and customer
requirements as they understand their needs and serve them perfectly. They have
very creative staff to fulfill the requirements of their clients as well as the
company.

Sir Branson adopted
policy with his managers and allow his managers think freely, encourage for
innovative ideas so managers feel they are responsible and owners of the
company. Managers try to make changes in their strategy and taking company
towards success to earn more profit.

Brand strategy

Virgin has used their
brand name for every new products they launched because already there is market
value for the brand. In United Kingdom virgin has high brand value and products
that manufactured are sold out under their brand. Branding under one name allow
customers to buy repeatedly and feels they are loyal supplier.

Selling products under
one brand name does not need unnecessary advertisement that is because brand
name already exist and people are aware about the value of the brand. This
strategy can be affect negatively also because if one product fails in the
market then that can be adversely affect the brand name too.

Corporate structure

Main strategy of the
company to work with different sector of business under one brand name. They
have decentralize structure and allow managers to understand the business
tricks and take decision by own. Also virgin has a centralize unit to handle
the business strategy and to control all companies under one place. A common
web site to the company allow people to access the products and services and
they have internet business strategy which allow to coordinate with all the
companies and control as per the strategies coming from head office.

Starbucks-Business
Strategy

Expansion of Business:

Starbucks is more
concentrated on expanding their business points, while changing their store
combination. Instead of introducing more dine in outlets, they are more
targeting on opening of drive-thrus centers in mainly urban and semi urban
places. I addition to this they were opening mini express outlets in New York,
Boston and Seattle and expected 5% growth in their sales.

Total
Stores

2013

2014

2015

2016

No.
Franchised stores

9,943

10,025

11,205

11,872

No.
Company operated stores

10,241

11,853

12,366

13,064

Total

20,184

21,878

23,571

24,936

 

 Uplifting experience of coffee

Since coffee market is
keep growing in future years, company was putting their all effort to become
most preferred coffee in globally. Starbucks was expanding their business
outlets and giving customized experience to their clients. As per the bellow
mention pyramid, Roastaries are targeted to their premium clients who are upper
rich and coffee enthusiasts.

Second in the pyramid
was reserve stores, which is double square feet of normal outlets. Company is
looking to open 500 more stores targeting the middle income level people
offering quality roastery at lower price. Through the new store portfolio, they
expecting to address the completion and offering high quality service.

 

Offering new customer
experience

Lunch hour is the
fastest business hours for the Starbucks in number of years. That is because
improved food, sandwiches and quality of their coffee. Further company is
aiming to introduce over 500 nitro cold brew to attract more clients to their
stores , offering new and innovative food experience.

Ansoff Matrix

Ansoff matrix was
introduce by Igor Ansoff in 1957. It allow to identity the available options to
an organization to expand their business via existing and new product in
existing and new market. There are four areas of product and market combinations
which help the organization to take decisions in a given time. Market Penetration,
Product Development, Market Development and Diversification are the possible strategies
available.

 

Virgin Group-Ansoff
Matrix

Market Penetration

Virgin
record is the first company to start in virgin group and when time goes it was
gradually expanded. With the expansion of their record business able to capture
more and more client tail towards them. Virgin record is selling their existing
product to existing market and attacking new customers to use their product by
way of advertising and discount promotions. During Market penetration virgin
record was trying to enhance their market share, change the competitive
strategy and to become market leader.

Eg-Virgin
Record

Market
Development

Option
available in this market is to sell existing product in new market. Various
stratergies available in this area, where existing product can be move into new
geographical area, product size can be change, distribution can be done through
a new channel and trying different pricing model. Virgin EMI was merged with
mercury records in the year of 2013 and able to spread the business across the
United Kingdom. Not only had that virgin group moved to over 25 countries to
sell their existing product to new markets.

Eg-Virgin
EMI

Diversification

Diversification
is the fourth possible strategy in Ansoff Matrix which virgin group had
successfully adopted. Diversification involve company enter into new area of
business which do not have previous experience. In this case virgin group had
successfully shifted to unrelated diversification to maximize their profits.
Virgin record had started in 1970s and start as record mail company and record
store, given fast growth in nature of music industry. It is sure company is not
exist if they have not diversified them self.

And
also enter into credit card industry and virgin money was providing financial
services at lower cost. They diversified into hotel, travel and providing
holiday packages to holiday goers. Virgin group also moved to mobile phones and
fitness industry by opening of fitness centres. Virgin group successfully
adopted the diversification and able to achieved constant increase their market
share across different segment of people.

Starbucks-Ansoff
Matrix

Ansoff
Matrix shows four ways that company can increase their revenue.

Market
Penetration

Increasing
its revenue by increasing their sales from existing products in existing
market. For an example: Starbucks were writing customers name on the coffee was
attracted more customer segments to their outlets.

Product
Development

Expecting
to increase the sales by introducing new product to the existing market
segment. For an example: starbucks was introducing premium coffee made out of
occasional and high-class beans.

Market
Development

Increasing
sales by introducing existing product to new market segment. Starbucks had
achieve higher revenue from introducing existing product to new markets in all
over world.

Diversification

Introducing
new product to new market with the intension of achieving high profits by
increasing the sales by significant amount. Starbucks planning to introduce a
new food range to their company as a diversification strategy. They are trying
to introduce new product to attract new market.

Values
and sustainability strategy

Virgin
Group

They
believe on six values to be followed by their each businesses. Such as fun,
value for money, quality, Innovation, Competitive challenge, Brilliant customer
service.

Fun

Employees
have given the freedom to work and they were treated well from the management
of the virgin group. They were working without any stress, as a result
productivity was so high and employees were feel happy. This type of freedom is
very important to take best out their employees.

Value
for Money

Lower
price doesn’t mean the value for money, its include productivity and usefulness
of the purchase. Virgin group always try product good quality products at a
reasonable price.

Quality

Secret
of the success of the virgin group was providing high quality products for
their client tail. Virgin group always try to keep their trust among the
clients, while providing quality product and services.

Innovation

Employees
of the virgin group have given freedom to think innovatively and come up with
different ideas compared to their competitors. Flat hierarchy of structure is
maintain at the virgin group allow to operate flexibly and support value.

Competitive
Challenge

Virgin
group had diversified into areas, where they do not have any experience before.
They have diversified over 300 industries, knowing high competition is
important to be live on the business.

Customer
Service

Virgin
group always try to understand the customer needs and take necessary action to
fulfill their needs. This was one reason for their success.

Sustainability
of Virgin Group

Business
should do good things to generate a better future. Sustainability is one of the
main things virgin group will keep their mind. While keeping their sustainable
practices with their business helping the planet and every person to feel it.
Virgin group had taken many initiatives to promote sustainability, one of them
is keep battleship away from plastic bottles and use virgin pure instead. It
was one of the great effort to keep headquarters to endorse sustainability.

In
2013 virgin group headquarters had been moved to new rented building to slim
down operations of the company to reduce the carbon footprint.

Battleship
with smart heating, lighting control and triple window sealing reduce the
electricity consumption by 61% and electricity consumption of staff computers
had cut down from 80%. The toilets also equipped with taps that save water from
75% and also hand dryers that save over 225000 paper towels per annum.

Every
person at office given with a personalized mug, and able cut down 80000 paper
cups for a year. Virgin pure suggested to keep away from using plastic bottles
and staff to refill their red water bottles. VML won the SKL award for recognition
for building sustainability.

Even
their employees act differently. Nobody has wastage bins under their tables,
instead they are using centralized wastage recycling place and canteen menu
include local and healthy food only.

Employees
are encourage to work flexible hours and some of people save their footprint by
working at home. If employees are comfortable at their work and atmosphere,
then work will be easier and interested.

Business
should take the initiative to promote sustainability.

Starbucks-
Values and sustainability

Values
plays a vital role in achieving business goals. Here are the core values of
Starbucks.

Creating a culture of warmth and belonging, where
everyone is welcome.
Acting with courage, challenging the status quo and
finding new ways to grow our company and each other.
Being present, connecting with transparency, dignity
and respect.
Delivering our very best in all we do, ourselves
accountable for results.

There are
three things that focused on core values. They are the partners of raw
material, coffee and customers. Company that built their culture of empowerment
and teamwork, able to enhance their workers’ productivity. Starbucks had create
a culture, where everybody feels they are welcome and appreciated. Most
important thing is innovation and nobody has challenged the status quo. Transparency,
dignity and respect are related to ethics and responsibility which are
important focus area for Starbucks.

Sustainability
strategy

Here are
the sustainability initiatives taken by Starbucks Company.

·      
Recycling and waste Reduction:

In many Starbucks outlet engage in recycling process of
their wastages, such as cardboard cups and other wastages. In 2009 Starbucks
had begun recycling in front of houses in key areas in United States of America
and also taken to minimize the environmental impact on disposable cups.

·      
Water Conservation:

Water is highly used by the Starbucks outlets for brew
coffee and other beverages. As well as back of the kitchen to clean their equipment’s
and keep area clean. Starbucks need to cut down their water consumption by 25%
by the year of 2015. Currently they are able to minimize the wastage by 22% at
the end of 2010.

·      
Green Building:

Starbucks always looking to design, build and operate their
outlets as reduce environmental impact. They are using responsible quality material,
energy efficient technologies to build their stores. Their stores are design
with recyclable floor tiles, energy saving lighting system, wall paint with low
VOC.

·      
Energy conservation:

Starbucks stores create 80% of the carbon footprint,
therefore every step should be taken to save energy and enhance the efficiency to
reduce the contribution to climate change.

·      
Climate change:

It’s a important thing for Starbucks, since 2004 they were
planning on saving energy, renewable energy as well as encouragement and teamwork.

·      
Supporting farmers and community

Statbucks had understand their success is with

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