**ESSAYSGURU ONLY** Strategy selection and organization

  

Use the work you completed for Parts, I, II, and III with your CLC group to inform your analysis for this assignment.

Write a 500-750-word summary of how the reports for Parts I, II, and III of the CLC assignment were influenced by the analysis prepared in previous assignments your CLC group has completed in the course.

Without prematurely determining and formalizing strategic goals and objectives, begin thinking about possible strategies to capitalize and add value to the organization based on the analysis of this information.

Be sure to cite three to five relevant and credible sources in support of your content. 

An abstract is not required.

Use the work you completed for Parts, I, II, and III with your CLC group to inform your analysis for this assignment.

Write a 500-750-word summary of how the reports for Parts I, II, and III of the CLC assignment were influenced by the analysis prepared in previous assignments your CLC group has completed in the course.

Without prematurely determining and formalizing strategic goals and objectives, begin thinking about possible strategies to capitalize and add value to the organization based on the analysis of this information.

Be sure to cite three to five relevant and credible sources in support of your content.

An abstract is not required.

Part I: Marketing Expenses vs Rival Firms

Starbucks

Starbucks holds such weight in the marketplace that they do not need to spend as much in marketing and advertising as their competitors

McDonald’s

and Dunkin Donuts. In fact, over the last three years Starbucks has spent significantly less in advertising each year. In 2017 their advertising expenses total $282.6 million, in 2018 it totaled $260.3 million, and in 2019 it totaled $245.7 million (Starbuck Corporation, 2019). This shows that within 3 years, Starbucks continued to stay number one in the marketplace and was able to spend $20.3 million less in advertising. Another key takeaway from the 10k report has shown that all advertising costs are expensed as they are incurred with the exception of production costs. These are expensed the first time the advertising takes place (Starbucks Corporation, 2019).

In 2019, Starbucks reported a global revenue of 26.5 billion dollars with most of that revenue coming from the Americas (Guttman, 2020). Media advertising has proven to be affective in the Americas as Starbucks has lowered the amount of spending in media advertising by $5 million since 2018. Considering that only 10 percent of their total revenue has come from non-America regions, it would be advantageous to invest additional money in marketing and advertising in non-America regions (Guttman, 2020).

McDonald’s

Just like Starbucks, McDonald’s has spent less each year in advertising. Their advertising expenses went from $476.8 million in 2018 to $447.3 million in 2019 (Lock, 2020). Even with the annual decrease in advertising expenses, they still spend significantly more in advertising compared to other quick service restaurants such as Dominos and Jack in the Box. The investment in advertisement has proven to be affective as McDonald’s continues to be a global household name.

Dunkin’ Donuts

Unlike Starbucks and McDonalds, Dunkin’ Donuts has increased its spending in marketing and advertising. From 2018 to 2019, Dunkin’ had spent an additional $8.7 million in advertising, which was due to nationwide sales growth (Dunkin Brands, 2019).

A major differentiator between Dunkin’ and its competitors is how they receive funds to put towards advertising and marketing. Each of their franchisers in the United States is required to pay at least 5% of their weekly gross sales to put towards Dunkin’s advertising fees (Dunkin Brands, 2019). In 2019 alone, franchisees contributed roughly $473.6 million towards Dunkin’s advertising fund that goes towards national and local advertising and marketing (Dunkin Brands, 2019). This method has proven to be effective, as Dunkin’s revenue has steadily increased over the 8 last years (Lock, 2020).

Part II: Perceptual Map Analysis

The results

 

show that Starbucks dominates the market with its shop and kiosk presence. It proved that its early expansion had a positive impact to their business recognition, and they were able to build customer loyalty early on and attract a lot of customers as quickly as possible. From the recent earning reports, other than actual geographic, Starbucks also increased its presence digitally by reporting a 75% sales volume arising from the drive-thru and mobile orders and an increase of 10% year over year for its Starbucks Reward Membership (Starbucks, 2020). As McDonalds being so close with Starbucks and allowing to be the option to go for a cheaper coffee and Starbuck’s challenge to keep up with is high priced coffee. The company has not shown that their pricing disappoints the quality of their product. As a result, they are in an ideal position and offer their consumers not only higher quality products but also a great rewards program that helps ease the high prices. 

Starbucks known to be everywhere and strategist showed concerns that the company might suffer from saturating its market, for some reason people have always seemed to appreciate the opening of a new Starbucks store in their neighborhood, rather than some competitors. The increasing number of Starbucks stores had positive effects on employees, coffee growers and, most importantly, investors. Compared to their competitors Starbucks creates an atmosphere that no other competitor can offer which allows their customers to feel more welcomed. Perceptual mapping is a method used to learn how to better position the company to meet its consumer needs and wants by comparing Starbucks to its competition (David et al., 2020). As a result, the perceptual map shows that the company put the emphasis of convenience of making sure they are there on each needs for a high quality coffee products which results to a high price and satisfaction to its customer by providing an environment and atmosphere their competitors can’t provide. 

 

Reference: 

David, F. R., David, F. R., & David, M. E. (2020). Strategic Management Concepts and Cases (17th ed.). Pearson.   

Key takeaways from Starbucks Q4 FY20 earnings results. (2020, October 29).  Starbucks.https://stories.starbucks.com/stories/2020/key-takeaways-from-starbucks-q4-fy20earnings-results/.   

Part III: Existing and Proposed Organization Chart

Existing:

Proposed (Chart is different but titles match with numbers from above. Ie: 1 = howard schutlz: