Customer

The interviewee at General Electric told us that customers are central to your business operations because they are the key drivers for revenue. You have to constantly keep them satisfied through efficient before and after sale service. The main role of customer service is to answer all queries and complaints of the customer. It requires patient and active listening skills. You have to be helpful even if there is no direct profit. However, the benefit of customer service is that it ensures future profits through repeat purchase by existing customer.

Moreover the existing customer will talk about your business positively with their friends and family and this will bring new customers. The interviewee told us that word of mouth is very important and powerful marketing tool and it is very useful for durable products provided by General Electric. Since durable products are used for longer period of time therefore potential customers always take advice from their friends and family about which brand to purchase.

The interviewee pointed out the three main issues at GE. The first one, he said, is the issue of time lag between the posting of complaint by the client and the solution provided by the customer service department. He said that in big companies the bureaucratic environment extends the time between client request and company response.

This is annoying for the customer who has to wait in the queue before his problem is solved. The second problem is that customer relation officers are often not engineers so they cannot provide quick and easy tips to the customer of GE’s high tech products. The third problem is little understanding of customer relations purpose by the customer service officers.

The company has implemented sophisticated and efficient telecommunication and computer system to establish customer contact, but behind these efficient systems the officer often lacks the understanding of purpose and importance of customer relation activities. There should be some kind of direct reward for every satisfied customer so that employees are motivated to serve them.

The current business climate is such that many companies have started production operations in China. The China has become an important agent in world trade as it successfully stormed the global financial meltdown and is now an engine of growth for world trade. GE also has operation in China to supply products to emerging markets through factories located in China.

China has recently shown a very stern attitude towards many multinational firms such as Google and Rio Tinto. GE has also faced some harsh treatment from Chinese which led Jeff Immelt, the CEO of GE, to criticize China. On July 2, 2010, he said that they do not want to become colonized by Chinese (Schumpeter, 2010). This attitude affects customer relations negatively through adverse business climate in China. The Chinese business system is not efficient enough for customer satisfaction. There are frequent delays in delivery and product quality problems (Frey, 2008).

Moreover the recent financial and credit crisis has reduced customer spending. Since the product supplied by GE is durable in nature, the people often delay their purchase for the future. This period of reduced customer confidence requires greater effectiveness from customer relation officer. Any inefficiency or mistake by the employee will turn away customer to the competitor. Hence this business environment places greater importance on customer service to retain customer loyalty until time becomes good (Beinhocker, 2010).

Hence the customer service environment in GE is spoiled by rude and selfish behavior of China which is the main source of global supply of products. China is the supplier as well as the major emerging market for GE’s product. Secondly the human resource is not well trained to offer technical understanding and advice to the customer.

The employee has to turn to engineers for resolution of queries (Buttle, 2008). Thirdly the employees are low paid in customer relation department. They are not provided with adequate motivation to devote their full energy to the customer request. Finally there are also some product quality issues which are very irritating for the customer and endanger their future loyalty to the company. Fridge, microwave, oven and dishwasher often do not perform as the customer expects and creates dissatisfaction in times of severe credit crisis (Lucas, 2008).

The customer service can be improved by providing a training session to teach employee the importance of their job so that they are constantly motivated to serve customers. Along with training, financial rewards are very important. Customer service officers should be provided competitive salary packages and bonuses. Then the mechanism of objective feedback should be developed so that employees are aware of their performance and how to improve them (Ward, 2009).

Employees should be provided freedom to take big decisions and encouraged to find creative solution to problems. This is very important in severe business climate when customer spending is low. The creative solutions will also help reduce bureaucratic effect of big firms. Researchers should be hired to anticipate the customer needs which should be fulfilled timely and efficiently. In the end customers are lifeblood of business and extra effort should be put in to satisfy them. Along with efficient communication system, a touch of humanity and courteousness should be added (Tim, 2010).

References

Beinhocker, E. (2010). “The 10 trends you have to watch” Harvard Business Review. Retrieved July 25, 2010, from http://hbr.org/web/extras/insight-center/health-care/10-trends-you-have-to-watch

Buttle, F. (2008). Customer Relationship Management. Butterworth-Heinemann.

Frey, T. (2008). “Fourteen future trends for business in 2009 and beyond” DaVinci Institute. Retrieved July 25, 2010, from http://www.impactlab.com/2008/12/27/fourteen-future-trends-for-business-in-2009-and-beyond/

• A. What is Starbucks’ “product” .Starbucks’ product is a casual experience in a comfortable atmosphere where the customer can enjoy a premium cup of coffee and a newspaper or relaxing conversation with friends.
• B. What is their “core product” and what are the “auxiliary features” and benefits? The core product is a premium cup of coffee. The auxiliary features include the well-educated baristas that can help select the right cup of coffee and help customers learn how to reproduce the experience at home or the office with fresh coffee bean or grounds they can purchase in store.

Along with the coffees available there are also Tazo teas, hand crafted espresso and blended drinks a little something for every taste. To go with the drink of your choice you can also enjoy a fresh pastry or a sandwich while listening to music or utilizing the free Wi-Fi to complete the experience.

• C. What is their “unique selling proposition” and how do consumers view it now? •Starbucks’ unique selling position was offering a high quality coffee for a premium price, while providing a place to relax other than work, home or going to the bar.

With their comfortable seating areas and internet access they branded themselves as your “third place”. Customers bought into it but now that they have started to get more streamlined their stock is falling because they are losing a little bit of that selling position. As the stores get a little less comfortable and become a little more like an assembly line, customers are starting to see it more like a commodity rather than something special.

Are McDonald’s and Starbucks direct competitors? Yes. While they don’t offer the same quality of food or coffee, McDonalds has put a lot of emphasis on the quality of their coffee and have been able to increase their sales and profits. With the introduction of their McCafe line of coffee drinks McDonalds is looking to take a share of the market from Starbucks. B. What advantages does McDonald’s have in competing with Starbucks for coffee sales? McDonald’s coffee has a very good reputation as a good cup of coffee.

While it is not on par with the gourmet coffee and specialties that Starbucks has to offer it is a much cheaper alternative and with the large selection of menu items it can market to a much broader base of customers. For example parents with small children will be drawn to McDonald’s for their coffee because of what they can offer the children that Starbucks can’t. Another advantage is the speed at which McDonald’s can serve customers. Since the coffee and food they serve is less customized they are able to get people in and out at a much faster pace even with the implementation of the drive thru at Starbucks. . A. What changes in society (at the time of the case) helped Starbucks to be successful?

There was a steady increase in the number of coffee drinkers in the US in the mid-90s. That combined with the trend of consumers to drink more and more coffee out of the home has increased sales in the entire market. While a large increase of this coffee consumption was among those that drink coffee at work, the benefit to Starbucks is that they are getting the coffee from somewhere other than the workplace.

Along with the increase in consumption consumers have trended to being more and more environmentally conscious. So the focuses on environmentally friendly ways of doing business have helped to keep them in favor with the customers.

• B. How are these changes related to their target market?

Coffee drinkers ranging from 25-29 increased their out of home coffee consumption from 42% to 66% while in the same year 30-59 years old increased from 33 to 46%.

• What are the “strategic marketing factors” that help to account for Starbucks’ long-term success in developing brand equity?

The environment that they offered was one of the big factors that lead to their ongoing success. While there are more and more cafe styled coffee houses coming into the market at this time the idea was very unique and helped to differentiate them in the market. The high quality product and unique sizing of their products also set them apart. Rather than using the standard small med and large names they used unique identifies that helped make their products stand out in memory.

Before they came around your options for coffee outside the home were very limited and the ability to get such high quality even at a premium price was a welcome feature in the market place. For the longest time they were really the only player in the space and that niche afforded them very rapid growth and early successes that help fuel even more growth as they expanded worldwide.

• What are the advantages of the Starbucks Card to the company?

The most obvious advantage of the card to Starbucks is the guaranteed income.

Once people load money on the card it can only be spent at a Starbucks location. It also makes tracking customer purchasing habits and preferences readily available. Then there is the case of the forgotten or lost cards that never get used that equate to pure profit. One last advantage is that with the card they have also created a secondary market for sales by placing the cards in stores like Giant Eagle where people that wouldn’t come into the stores can buy the cards as a gift. B. What are the advantages of the Starbucks Card to the customers? The consumer can control their spending with the card. By loading the card with the amount they allocate for coffee they can track their spending more effectively than before when just purchasing with cash or a random card. While there is no discount associated with the card it does give the consumer some protection when they register the card online. If the card is ever lost or stolen they can report it and a new card will be issued with the same balance and the existing card voided.

Evaluate Chairman Schultz’ global strategy.

Is it “good” or “bad? ” The global strategy is “good”. You can build a lot of customer loyalty by taking care of your employees. If your employees are happy and well trained they will provide a much better experience for the customer. Starbucks mission and direction has a solid base in the customer experience as much as the quality of the coffee. So making sure the employees are trained well and very knowledgeable about all things coffee enables them to take the experience past just when the customer is in the store.

Educating the customer on how to get the best cup of coffee at home as well will provide you a regular customer for not only their coffee at the office but also the grounds for home. In addition the image they are able to betray as a company that cares about the community and the environment will help build customer loyalty. The fact that they not only work to be environmentally conscious themselves but also work with partners and suppliers to share the information and work together to buy, sell and use environmentally friendly products.

• What recommendations do you have to improve Starbucks’ competitive position domestically?

Starbucks needs to stick to what got them here in the first place. Don’t try to become another fast food establishment. Customers that are coming to one of their stores will respect the time it takes to get a high quality cup of coffee. Take that time to cross sell the customer on coffee beans and other goods for the home. While offering food to the customer is a natural evolution for Starbucks it is important that they put as much time and effort into providing high quality food as they do coffee.

If they keep the high quality of coffee but serve a lesser food the lesser image will be what is remembered. On the same lines make sure that if you are going to provide places for the customer to sit and enjoy their coffee stick with the comfortable seating that invites the customer to relax and stay awhile. You will not only bring them back time and time again you will encourage them to spend more time in the store every time they visit and therefore increase the opportunities to sell more products.

Discuss the strengths and weaknesses of John Deere’s Achieving Excellence Program. Consider and discuss other criteria to include in the analysis. Having examined the criteria used by John Deere in its Achieving Excellence Program, I could say that the formula being used to determine quality rating is the best of all. Determining the rejects over the units of supplied products is a good measure to determine the quality of the products supplied, which tells us that the higher the quality rating, the better the quality of the products being supplied. The delivery rating though, in my point of view, is somewhat problematic. I think it would be best to deduct both the late and over deliveries from the early delivered products. It would also be better if on-time deliveries will be added in the formula because being able to deliver on-time is an indictor that the supplier is able to meet the customer’s expectations. The role of the early deliveries here is to strengthen the result because these exceed customer’s expectations. If the formula will be revised into: x 1,000,000; a more realistic and objective delivery rating will be obtained. Other weaknesses observed are on the ratings used to measure cost management, wavelength and technical support.

These areas are measurable, thus using a five-point scale to measure them is not a very good strategy. This will lead to results that are more subjective and less objective. A good way of measuring cost management, for example, is recording the number of times a supplier failed to employ cost efficiency measures and the like then assign an equivalent rating. By doing this, more biases will be avoided. The forms of recognition given to suppliers, who were able to obtain big scores, are also not very attractive. Rebate system can perhaps be used to recognize the achievement of the suppliers, who were classified as partners. The rebates need not be in large amount though. Since this is in monetary form, it will be more attractive among the suppliers and it will make them strive more to be classified as partners. Changing the performance level cut-offs yearly is not also very advisable. Though continuous improvement is important, changing it every now and then or yearly in the case of Deere will not allow the suppliers being measured to prove its worth and make the necessary improvements. As Deere’s partners in business, the suppliers should also feel that Deer is concerned with their welfare as partners for growth.

Do you think Complex Parts has performed adequately over the past year? Why or why not? Which of the Deere supplier assessment classifications should be assigned to Complex parts? In my opinion, I think Complex Parts has performed adequately over the past year. In terms of quality improvements and technical evaluation results, Complex Parts was able to meet expectations. Their problem though is on the late deliveries and this greatly influenced the ratings they obtained in terms of cost management and wavelength. Their on time deliveries were not also accounted in the formula used to obtain the delivery rating thus, the result is not a very good determinant of their current classification.   I believe that a fair classification for Complex parts, having taken into consideration the above findings, is Approved.

If you were a member of the supplier evaluation team, what alternative courses of action would you consider for Complex parts? What recommendation should the team make to the project manager? If I were a member of the supplier evaluation team, I would recommend that instead of giving this long term supplier’s business to other suppliers, it would be worth it to give them another more year to prove their worth. This is to give credit to the 10 solid years that they have spent working with John Deer. It would also be best that the criteria be reviewed based on the identified weaknesses to obtain a more objective result. To protect Deere’s business though, it would be better if some of the less critical assignments that are currently given to Complex Parts be reassigned to another supplier. This will surely hurt them financially and challenge them to work really harder in order to improve the areas where they scored low. This strategy is also fair enough because they are still given the trust to continue handling the more critical projects. In addition, they should be evaluated quarterly and if unable to cope with the set standards within the next six months, awarding the business to other more capable suppliers would already be a best move and management decision.

What are the short term and long term implications of your recommendations? Short term implication with the above recommendations would be assuming minimal risk to the business in case complex parts will be unable to perform and meet the set standards. Long term results would be building a stronger relationship with Complex Parts in case they are able to meet or exceed the requirement while under probationary period. They will be more customer focused because during the trying times, they were given a second chance to prove their worth. This would mean lasting and more profitable business relationship among the two.

What are all the issues here, from both CJI’s and Caolinn’s perspectives, that need to be researched by Ms. Stanley?

Ms. Stanley needs to research on the track record of Caolinn Pumps as far as quality and capacity to deliver are concerned. She also needs to study the two other suppliers to check on their capability as far as business requirements are concerned. On the other hand, she needs to do a comprehensive inventory of the current competencies of CJI’s production team to be able to determine if they are indeed capable of producing the required bilge pumps.

Should CJI continue to use Caolinn to supply pumps, should it make them in house, should it contact one of the other suppliers, or should it do some combination of these alternatives? Discuss the advantages, disadvantages, and risks of each of these alternatives.

Should CJI continue to use Caolinn to supply pumps?

1. Advantage: Quality of the bilge pumps are 90% to 100% guaranteed since this has been CJI’s supplier since their business began its operations.
2. Disadvantage: There’s a possibility that Caolinn will not be able to meet the foreseen bulk of bilge pump requirements as soon as the contract between CJI & Great Lakes takes effect. They have been used to producing and delivering under normal scenarios but the expected bulk of orders will be a lot higher than the current. There’s also no guarantee that Caolinn will really deliver as required in the absence of the contract. If contract will be put in place and as soon as Caolinn recognizes its critical role in the expected business venture, it may charge higher cost per unit due to anticipated increase in freight cost.

Should it make them in house?

1. Advantage: Being able to deliver on time wouldn’t be an issue since bilge pumps will already be directly produced by CJI.
2. Disadvantage: There’s a big possibility that quality of the said pumps will be not be as good as the expected because they haven’t tried producing it yet. This move will also cause CJI to incur more operating costs in terms of production and labor.
3. Risk: Quality of the bilge pumps might be sacrificed and this might also cause the current production team to burn out if precautions are not taken into consideration ahead of time.

Should it contact one of the other suppliers?

1. Advantage: Getting in touch with one of the other suppliers will help CJI to benchmark on the best practices of both suppliers as far as bilge pump production is concerned. It will also help CJI identify and compare the strengths and weaknesses of both suppliers, thus aiding it in making a sound decision.
2. Disadvantage: There’s a possibility that the new supplier will not be able to meet CJI’s expectation by the time they start working together. There’s a possibility that whatever positive things promised during the agreement will not be carried out as expected.
3. Risk: The track record by means of actual experience in doing business with this supplier was not yet proven by CJI, thus establishing alliance with them in this big project with Great Lakes is a risk.

Should it do some combination of these alternatives?

1. Advantage: Combining the first and third option can be done. In case the bulk of orders will really be too much for Caolinn to handle upon assessment, the new supplier can be a good fallback.
2. Disadvantage: There might be quality issues on the part of the new supplier, which might jeopardize the project.
3.  Risk: Using the new supplier as a fallback will be of lesser risk though as far as quality is concerned.

How can CJI assure continued contract compliance and additional contract business from Great Lakes in the future? CJI can ensure continuous business with great lakes by giving priority to quality products and on time delivery. If the latter is a concern on the side of Caolinn being an alliance, CJI could engage in a written contract with them this time, even if it would mean a slight increase in the current price of bilge pumps. In this way, a win-win solution is obtained. They could also order from time to time from a new supplier and sell it to another client of theirs that is of smaller impact in the business. This way, they could have an actual test on the new supplier’s track record, in case Caolinn will not be able to make it. In the long run, they could manufacture their own bilge pumps once they are ready financially.

Don’t Shoot the Messenger

If you were in Jeff’s position, what would you have done to preserve relationships? If I were Jeff, I would suggest to the General Manager that requesting for an additional 5% reduction immediately after the recent request for 10% reduction would not be a very healthy approach for the time being. The suppliers, who have been working with Billings Equipment, Inc. all these years, will not view this change as a win-win scenario, and this might destroy the currently existing harmonious and collaborative working relationship.

Describe the ethical issues involved. The suppliers, who have been religiously backing Billings Equipment, Inc., in all its business transactions, were not given the chance to be heard. Though what happened was a management decision, consulting and soliciting the suppliers opinion in the matter could have helped a lot in coming up with a win-win solution. Surely, the suppliers know the current difficulties experienced by the company as far as raw material prices are concerned so they would understand if there is a need to reduce the prices. Their inputs could have helped a lot instead of just relaying to them, through the buyers, the bad news. An option to look for a substitute raw material, of a lesser cost, but almost the same quality, could have helped, rather that passing the burden entirely to the suppliers.

What is your assessment of the general manager’s approach to meeting target cost objectives? In my opinion, the approach employed by the general manager in this case was rather drastic and unhealthy. She conveyed a negative message to the suppliers, making them view Billings Equipment, Inc., as selfish. She did not weigh properly the advantages and disadvantages of pushing the suppliers to their limits. She did not even seek the opinion of those who worked directly with the suppliers for a more sound input, the buyers.

Suppose there are 100 potential suppliers, how many suppliers do you think should ideally be integrated in the early skid-steer development process? Why that many or that few?

I think integrating 25 suppliers out of the potential 100 or 25% is a good approach. Trimming it to 10% would even be better provided that this 10 are really the best among the 100 initially identified potentials. The lesser the suppliers involved in the early skid-steer development process, the better and the more manageable. It would be easier to monitor results and progress, as well as to identify improvement areas if you are dealing with a smaller group.

Are there trade-offs in terms of the number of suppliers to integrate? If so, what are the trade offs?  Of course there are trade offs. The suppliers not included would probably be disappointed of the decision, with them not being chosen as part of the pioneering team. There is also added responsibility since the team involved is of a lesser number.

Are there trade-offs to the identified criteria? Can you tell? What do you need to know to better answer this question?  The new product to be developed will surely require a lot of investment as far as marketing is concerned. Since this is a new product, it has to be pushed in the market and this would entail greater effort and money. The challenge of producing a multi function product at less production cost, without sacrificing quality will also be another trade off to look into. The team should be able to research on better alternatives as far as raw materials are concerned to be able to use parts that are cheaper but of equivalent quality, at least. Research on target market needs would also be a good strategy to avoid mismatch.

Would you mandate weekly meetings as an interorganizational policy to structure the interactions? If not, how can you facilitate communication? I will not suggest weekly meetings since this will be a lot costly. Monthly meetings will be better to facilitate needed communications such as progress reports. However, emergency meetings can be done as the need arises.

What role can information technology (IT) play or should it play in structuring these interactions? What concerns do you have with the suggested IT role? Since geographical location is an issue as far as information dissemination is concerned, IT can play an important role to ensure that information needed are transmitted to the designated location accordingly and on a timely manner. Information security though is an issue considering that Nolan’s team will be developing a new product for the market, and this valuable information might be stolen along the process.

If the criteria you developed suggest that you integrate Supplier X into the product development process for the skid-steer loader, what reasons might lead you to choose not to do so or to reduce the convenience of doing so.  I think the supplier’s technical competence and reliability would be my primary reasons.

What do you think might be hurdles to overcome at Deere to integrate suppliers into the early phases of the product development process? I think the hurdles that need to be overcome are management’s willingness to spend or invest on this breakthrough project. This would really entail a lot of cost especially in the R&D stage.

Supplier Development at Deer & Company

Is Deere’s tactic an appropriate one? I think the tactic was appropriate; this would enable Deere to ensure long term profitability in the business. The discount they could get from Excelsior’s current price reduction can help fund the planned technological improvements and this could yield long term profit.

What are the implications of this tactic and the possible consequences, positive or negative? This would mean that for the time being, Deere will not be able to generate the profit it desires but eventually, once the project has been completed, profit will surely soar as customers’ needs are already met without doubt.

If it is not an appropriate tactic, what are some other alternative? For me, this is already an appropriate tactic because looking for other suppliers to provide most of Deere’s needs would require a lot of initial investment.

Is this an ethical approach? I think yes. Business is called such because with it comes trade offs and the need to assume the risk. If a supplier refuses to give in to what will improve the business, then it is just a right decision to look for a better and more profitable option.

What are some of the implications as far as human resource management is concerned? How can the group members better manage the consensus building to present an undivided front to Excelsior? As far as HR management is concerned, it would be easier to get people’s support on major changes that the company will undertake if there is an observed and felt management support and if there is high level of job security. This could foster true support among the organization’s members. I think there would be a better consensus if each member’s opinion was solicited in the meeting so that a more solid tactic will be made and a stronger and more convincing argument will be presented to Excelsior.

Cosmetic products are not placed under warranty conditions as soon as they are purchased by the customer. Brazil adopted the Consumer Protection Law in 1992. All companies must guarantee quality after-sale servicing for all products (6, p. 17). To make the product more competitive, and to improve the overall customer care in Brazilian cosmetic market, we will offer a 7-day product trial for its new customers. Thus, we will be able to evaluate the product, its popularity, customer preferences and complaints. Label and packaging Brazilian regulations require translating labels into Portuguese.

The label should contain product information in English and Portuguese. When the product enters Brazilian market, its promotion strategies should comply with the Customer Protection Code adopted in 1990 (6, p. 67). Cosmetic products require special conditions of transportation, to retain their highest quality, and to promote their external appeal to consumers. Mario Badescu products will have to be adopted for Brazilian market, to combine the high-quality after-sale customer service and high quality appealing packaging with appropriate labeling.

Promotion Aligning brand with customer associations Brazilian market is completely new and untested for the future Mario Badescu products. This is the main aspect of our promotional campaign. This is why building brand awareness and creating strong brand associations is critical for our success. When we build brand awareness among Brazilian consumers, we must take into account the three important aspects. First, we will need to deliver the product message to potential consumers.

In order to fulfill this task, we will use the major informational channels (television, outdoor advertising, e-commerce instruments), to link the visual elements with brand perceptions. Mario Badescu brand logo does not require Portuguese translation, it is easy to remember, and does not need to be adapted to Brazilian market. Second, we will need to target our consumers emotionally. We will need to carefully choose the coloring, the setting, and the lexical meaning of visual advertising.

Using celebrities in TV promotional campaigns will make TV advertising more appealing to the customer. Third, we will need to motivate the buyer. In order to increase consumer motivation, we will offer a system of discounts and a 7-day product trial for those who purchase Mario Badescu products for the first time. We need to ensure that Mario Badescu product is strongly associated with the high quality of cosmetic products, and high quality customer service before and after sale.

Coca-Cola as the leader of beverage production. Coca-Cola Company is the world’s leader in the beverage production. The originally American company has spread its influence on all of the continents of the world. The largest number of consumers of the company’s products lives in the North America, however consumption of Coca-Cola’s products in other continents is also relatively large.

Currently, Coca-Cola Company generates “$22.0 billion in net operating revenues in 2004. The Coca-Cola Company markets four of the world’s top-five soft-drink brands- Coca-Cola, diet Coke, Sprite and Fanta. Our beverage offerings encompass nearly 400 brands, including coffees and teas, juices and juice drinks, sports drinks and waters, as well as carbonated soft drinks.”  The country provides its activities in 2000 countries of the world and offers a full range of services in those countries. Coca-Cola Company’s annual growth rate is high due to the efficient strategy of its managers. Many customers all over the world include Coca-Cola’s products in their shopping basket. For example, in the UK, “the annual table of what goes into the shopping basket of millions of consumers every day revealed famous names still dominate the list. And brands with the biggest and best advertising, like Coca-Cola , Walkers and Nescafe, still dominate”.

Tesco Supermarket in the Global Market

Tesco supermarket operates in a different field from Coca-Cola Company. If Coca-Cola Company produces its products and profits from the difference between the cost of production and sales price, Tesco has a different source of revenue. The supermarket obtains profits through the difference between the wholesale price which it pays for goods and the retail price which it offers in the supermarket for customers. Tesco does not deal with production. Its objectives include purchasing a large variety of products which customers are going to buy in the supermarket all at once rather than look for them in different small stores. Therefore, the power of Tesco can be measured through the number of stores which it has opened, their space and the stores’ profitability. At present, the space which Tesco stores occupy in the UK is 23.3 million square feet (figure 2). Due to the large number of stores, the company is able to profit through the large-scale sales. “In the UK we opened 64 new stores this year adding a further 1.8 million sq ft. The total number of stores in the UK, at the year end is 1,878 which includes 910 T&S stores.”

 Strategic Goals Satisfaction in Coca-Cola and Tesco

Both Coca-Cola and Tesco consider customers’ satisfaction their major business goal. According to the Coca-Cola’s business objective, the company “strives to create value for consumers by meeting their beverage needs with diverse product offerings, and by identifying ways to connect consumers to each other, their communities and our brands.” The company has a peculiar vision of its products benefit for the mankind: “The Coca-Cola Company exists to benefit and refresh everyone it touches.” . Management of the company strives to offer the freshness to the consumers in every single activity of the company.

Tesco has a similar strategic goal: “Creating value for customers, to earn their lifetime loyalty.”. According to the company’s managers, this strategy implementation can be achieved through the following steps: understand customers better than anyone; be energetic, be innovative and be first for customers; use our strengths to deliver unbeatable values to our customers; look after our people so they can look after our customers.

Despite the fact that both companies adapt their goals for the benefit of consumers, there is a difference between their strategies. Coca-Cola Company produces its own products; therefore it increases the variety of products according to its customers’ needs. It also has direct control of quality of beverages it offers. The company’s consumers are thus satisfied with its own efforts. For Tesco, this task gets more complicated to some extent. The supermarket does not participate in the production of the goods which it sells. There is no way for it to contribute to the quality of products which it offers. Tesco can only ensure all of the products it sells come from suppliers whom the company trusts. Tesco needs to provide close investigations of product control in order to ensure its business goals are satisfied. It also needs to analyze the consumers’ needs similar to the way Coca-Cola Company does. However, unlike Coca-Cola Company, Tesco managers need to look for new partners if they see consumers are not satisfied with the variety of products.

The role of management in the increase of Tesco performance. Due to the well-planned activities which management of both companies takes, their performance during the last years has been very high. For example, Tesco has a tendency of its turnover, number of stores and selling space increasing through 2000-2004 .

The major contribution to Tesco performance was done by its management. There are many actions which were taken by the company’s management to increase its performance during the last 4 years. First of all, the management devoted many efforts to building the channels of distribution of the company. In supermarket industry, it is very important to pay enough attention to the distribution channels. The quality of buildings in which the good are being sold, the variety of production and its high quality are building-blocks for the company’s success in the market. Tesco management has ensures logistics specialists employed by the company are very knowledgeable and are able to control the distribution very carefully. The management of the company has also done a very good job in signing contracts with suppliers for the stores. Tesco has contracts with many suppliers who offer the goods of the highest quality. However, the managers need to check the goods arriving even from suppliers with whom the company already has steady relationships. The strategic goal of the company which consists in satisfying the needs of consumers is achieved through quality control on all the stages of the planning process.

The company’s management also devotes very much attention to expanding its activities into different countries in order to obtain a large share of market there. The strategic goal of satisfying the consumers in other countries is more difficult to achieve because people in different countries require different variety of products and oftentimes have different requirements for the quality of products. For example, in those countries where the quality of goods is very high, it is particularly important to monitor the quality of the products. In European countries quality control needs to be much more severe than in Middle East for example. However, the goods offered by the supermarket in the Middle East might be very different from the goods offered in Europe due to different needs of people.

Besides quality control, the company also does its best to provide very efficient pricing strategy in order to attract customers. The pricing strategy which is applied by the company deals with offering the best possible price for the goods which are being offered. The supermarket realizes that by making the prices too high for the customers, they are not going to increase the number of their consumers. Therefore, it is much more efficient to make sales prices just a bit higher than prices which the supermarket had to pay to the supplier. The large-scale sales are going to bring large profits to the company in a long-run. Tesco has applied this pricing strategy many times and it always worked.

The compensation policy which the company offers also serves its business objectives. In order to achieve the best customer satisfaction, it is necessary to ensure the employees of the company offer the highest level of services. It is not easy to achieve a high level of services if the employees do not get adequate compensation. The company has been very efficient in the recent years in giving all kinds of bonuses to its employees. The people who work for the company know that they need to have the highest level of skills. However, they also know that they are always guaranteed adequate compensation for the services which they are offering. The environment in the company is very beneficial for the employees because they are allowed to express their ideas and often even make improvements in their activities according to their own needs. The strategy of empowerment used by the company’s management is very efficient for the performance of the company.

It is possible to conclude that Tesco management has been very efficient in ensuring the strategic goals of the company are met on all levels of the planning process. The management has taken into consideration all of the major highlights which it needed to maintain in order to make the company profitable. The strategic goals of the company are currently implemented to the fullest with the help of activities which the company provides.

 Coca-Cola and Its Major Financial Indicators

Coca-Cola Company had very high performance during the last years. For example, in 2004, its unit case volume reached 19.8 billion is comparison with 17.1 billion in 2000 (Figure 4). This indicator speaks for the high performance of the company.

The Coca-Cola Company has raised the larger part of its income in Europe, Eurasia and Middle East in 2004, according to the data in figure 5. The European market is becoming more and more important for the company in the recent years. The reason why the management has made emphasize on the European market is that the market in North America can hardly be expanded anymore. The problem is that most people in North America who could make a choice for Coca-Cola products have already made it. There is no chance to significantly increase the number of customers. At the same time, the market in Europe and Middle-East Asia is very large. Besides, there is not as much competition in it as it is in the market in North America. It was a very wise decision of Coca Cola management to expand its activities to the Europe, Eurasia and Middle East market. However, it is necessary to note that it is not easy for the company to keep its existing share of the market due to the differences in European and Eastern traditions in comparison with American traditions. In order to keep the share as large as it is now, it is very important to make sure all of the marketing analysis in those countries is done on the highest level.

The major goals of the company are achieved through building Coca-Cola brand as the most unique brand in the market. With the help of this policy, loyalty of customers can be guaranteed. “As we have expanded over the decades, our company has benefited from the various cultural insights and perspectives of the societies in which we do business. Much of our future success will depend on our ability to develop a worldwide team that is rich in its diversity of thinking, perspectives, backgrounds and culture. Coca-Cola is the world’s most inclusive brand, and Coca-Cola must also be the world’s most inclusive company.”

Coca-Cola Company’s management has also developed a very efficient dividend policy for its investors. Due to the efforts of the managers, the value of the company’s stock continues to rise. This attracts many new investors in stock. During the last year, some decline in stock value has occurred but it is a temporary phenomenon .

In order to stop the tendency of stock value decline in the company, management has decided to concentrate on the activities which have always brought the largest revenues to the company Coca-Cola Company offers a large number of products which are different from its original products (for example, Vanilla Coke versus original Coke). However, in order to destroy the declining tendency of stock value, the company has decided to focus on the original products more. Coca-Cola Company has come across this problem many times in the past. It was discovered by the management that concentration on new products was not efficient. They were good to attract some new customers, but in order to keep the company’s existing customers, it was important to keep producing the same original products. Only by focusing on loyal customers, it is possible for the company to maintain its large success in the world market. Focus on new customers is also important but the highest priority is keeping the old customers. The management of the company also states that integrity is particularly important for their success and increase in stock value: “nothing is more important to our success than integrity. This begins with insisting on absolute quality for every one of our products, and acting with a strong sense of accountability in everything we do.”

Coca-Cola Company and its strategic goal implementation. In order to achieve all of the company’s goals, its management has set the following priorities to be followed by all of the company’s employees:

• “We will actively cultivate a diverse, rewarding culture that encourages our people to develop to their fullest potential, assuring enjoyment and satisfaction in the Coca-Cola workplace.
• We will intensely promote innovation as an explicit priority in every aspect of our business, including the structures of our business.
• We will seek genuine, trusting relationships with all our constituents. We will focus especially on the people who buy our brands, appealing not only to their shared values, but also to their differences.
• We will rejuvenate the basic brand-building nature of our company, with focus on brand Coca-Cola.
• At the same time, we will broaden our historical portfolio of brands, products and services.
  We will work with our bottling partners with clear respect for the interdependent nature of our relationship, actively supporting their efforts to evolve business structures that work best for them.
• We will collaborate creatively with those who sell our products in the marketplace, developing relationships built on mutual success, not only from our brands, but also from our services”

The company also achieves its strategic goals through the employment of loyal and skilful employees. They make the company as profitable as it is now. They help it to serve the interests of the consumers. As the company’s management states, “the heart and soul of our enterprise has always been our people. Over the past century, Coca-Cola people have led our success by living and working with a consistent set of ideals. While the world and our business will continue to change rapidly, respecting these ideals will continue to be essential to our long-term success.”  The company has ensured employees working in it received adequate compensation for their work.

It is also made sure by the management that employees of the company have strong connections with employees of all the Coca-Cola’s partners. Besides, warm relations need to be established with consumers. The strategic goal of the company to satisfy the interests of consumers and offer them a refreshing taste in the products in all of their activities can be achieved only through the establishment of firm relationship among employees and consumers. “Coca-Cola people have always known that building and nurturing our relationships with other people and the world around us is an essential part of our work. No matter how big or complex our business becomes, we must always demonstrate complete respect for each other. As the world becomes more interconnected, yet more firmly rooted in local pride, recognition of our interdependence with our stakeholders becomes even more essential.”

Evaluation of Coca-Cola and Tesco Achievement of Their Strategic Goals

It is possible to conclude that Coca-Cola Company’s strategic goal of satisfying the needs of its customers has been implemented with the help of activities which the company provides. The managers of both Tesco and Coca-Cola Company have contributed very much to the development of their companies. The current situation in the companies show that they have increasing sales and profits. This tendency means that the customers of the companies are very satisfied with the products which they obtain. The loyalty of the customers is particularly important for both companies. As it was discovered, the strategic goals of both companies are based on the consumer orientation. Both companies consider consumers’ reaction to their products particularly important for the success of the company. Due to the fact that consumers remain loyal to both Tesco and Coca-Cola Company and annual sales of both companies increase, it is necessary to evaluate the strategic goal implementation as very successful. In order to continue the positive tendency in the future, it is very important for both companies to maintain the quality of products they offer at the highest level. For Coca-Cola Company, it is necessary to combine traditional products with new brands. For Tesco, it is important to maintain the quality of products received from suppliers and distribution channels.

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How well has the Sales Division at Cityside done in its diversity efforts? How well are they doing now? Cityside was purchased by a racially diverse group of investors, and diversity was the mission from the beginning. It was decided that because of the community that Cityside serves, it would be in their best interests to increase diversity at its retail locations across all neighborhoods. In the two decades since it was acquired, Cityside succeeded in reaching its diversity goal in terms of the ethnic/gender makeup of the organization.

However, the diversity of the sales division is not uniform across all departments. External deposits deals more with investment management and has a more white, wealthy client base. While the retail division is made up of mostly black employees who serve a mostly most client base. Retail and ED countered that each side couldn’t do their job as well because of their race. Cityside appears to be using the “access-and-legitimacy” paradigm in an effort to access different segments of society.

Employees with certain cultural and linguistic skills can understand and serve customers better and ultimately gain legitimacy with them, resulting in better business results. Employees at Cityside’s Sale Division are at odds when it comes to who they should be serving. ED staff claim that any non-retail related business in the city should fall under their jurisdiction, and the retail side claims that ED should only concern themselves with their investment products and national client base.

This has caused some clients to feel neglected and leave Cityside for another bank. What explains the problems that Cityside is now encountering? What is the root cause (or causes)? There is a theme of differentiation at Cityside where “their demographic characteristics match those of important constituents and markets (Thomas/Ely)”. This business model has given Cityside limited success but has also brought to the surface problems of perception among black employees in the retail division and territorial disputes with the ED side.

Black employees do not feel that they are taken seriously as decision-makers. As one retail employee pointed out, he feels blacks are just operationally functional to handle a lot of the day-to-day tasks but not to be considered policy/decision-makers. Cityside’s targeting of specific demographics with their investment products backfired when “local” clients were not offered the same services based purely on their branch association. This led to the loss of both wealthy and low-income clientele.

The problems at Cityside are caused by the limitations of its approach to managing diversity. In the company’s pursuit of niche markets, they have neglected to analyze the cultural differences within. The leaders are “too quick to push staff with niche capabilities into differentiated pigeonholes without trying to understand what those capabilities really are and how they could be integrated into the company’s mainstream work” (D. Thomas, R. Ely). Furthermore, the motivation for diversity in Cityside’s case came from a need for access to a key demographic of the market.

Employees placed in niche market segments tend to feel that they are used only for a specific purpose and that opportunities in other divisions of the company are closed to them. As retail operations manager Bernard Thomas stated “If you’re black, and you want to become an officer, you come over to Retail” (Robin Ely – HBS). As there was never been a black officer in the External Deposits division, one served by an all-white staff.

Contrast and Comparison of Cases What approach to diversity might have been more effective in each of these cases? Although the access-and-legitimacy approach to managing diversity appeared to be a successful method of attracting specific customers to their bank, the leaders of Cityside did not analyze the culturally-based methods and practices that were utilized, nor did they consider how they could learn from those practices and how it could benefit the company in the long run. In light of your analysis, what should Richards/Wilkens do to turn things around?

Cityside needs to develop a new approach to diversity, one that takes into account employees’ perspectives into the organization as a whole, not only segments. This change in thinking takes the learning-and-effectiveness approach to managing diversity, and will help Cityside discover diversity’s full potential. Furthermore, an in-depth cross-training program could help ease the rift between Sales divisions and remove barriers that prevent employees from utilizing their full range of competencies.

A government that is based on”A healthier you” strategy – Reporting of organic prices – Safety inspections Services Positive impact Economic factors – Increase of 3. 9% in the third quarter – Real Personal Consumption expenditures (increase of 3% in the third quarter) – Temporary Personal Income (increase of 6. 1% in the third quarter) – European Markets : Weak dollar against Euro, increase in the interest rates. Moderate impact Socio-cultural factors – Increase a more healthy consciousness spirit.

Social pressures regarding the environment and animal welfare. – Trend to cook organic products with Whole Foods market’s cooking initiation. – Greater knowledge of links between health issues and food. Technological factors – New Internet capabilities : On line shopping service – Improved telecommunication facilities (distribution and retailing of goods) – Improved technology for processing of goods. Weak impact Environmental Factors – less than 1% of US farmland certified organic in 2004 – Recycling and Energy consumption – Products without pesticides, chemicals.. Conclusion to PESTLE Analysis

We can conclude that the macro environment of Whole Food Markets has a good impact. The most important point that we have to notice is that the company instructs to its team and its customers a particular intention to the environmental issues and concerns. Strong brand name Good sales and communication : events ( Valentine’s day), customers’ invitation, cooking and massage initiation, customer services, limited advertising but marketing through word of mouth.. Merchandising : how they place their products Control quality processes : Products quality without pesticides, chemicals products.

Products 100% natural. A good place strategy : they try to implement in the big city and center town where they can target a lot of consumers. Large differentiation in their products Good marketing impact : packaging, Strong ethic : missions and visions, employee skills, training and experience Technology and innovation : The company gives tips and ideas about healthy recipes for children in their website (annex) Strong supplier network Niche : educated and wealthy customers who are willing to pay premium products.

Emotional involvement and customers’ experience Technology and innovation-related on line shopping service – The company gives tips and ideas about healthy recipes for children in their website (annex) Manufacturing-related – Large differentiation in their products – They pay small-scale producers a price for their products that more than covered the producer’s costs in order to maintain the growth, creativity and the lifestyle of their producers Purchasing and Distribution-related – The company purchased most of the retailed in the company’s stores from local, regional and national suppliers and vendors in order to have a better position to agitate volume discounts with major vendors and distributors -They have nine regional distribution centers to supply its stores -Strong supplier network -A good place strategy : they try to implement in the big city and center town where they can target a lot of consumers Marketing-related – Most of their marketing budgets on in-store signage and store events such as taste fairs, classes, and product samplings – 0. % of its revenues is spent on advertising – Good sales and communication : events ( Valentine’s day), customers’ invitation, through word of mouth.. – Merchandising : how they place their products Skills-related – Niche : educated and wealthy customers who are willing to pay premium products – Strong ethic : missions and visions, employee skills, training and experience – The company invests in training and education for their workers – The company asks their – Emotional involvement and customers’ experience (Community citizenship and social activism) – They adapt their products to the willing of the customers : customers are looking for their well being and for healthy products Environmental- related -Control quality processes : Products quality without pesticides, chemicals products.

Products 100% natural – use of biodegradable bags Other types – A strong brand name – accessible and helpful employees Whole Foods market Kroger Wall-Mart Critical Success Factor Rating Score Advertising . 11 2 3 . 33 Product Quality 4 . 18 . 27 Price Competitiveness . 16 . 24 Innovation . 07 Management-skills oriented . 28 Purchasing and Distribution Financial position Manufacture . 32 Customer Loyalty Global Expansion . 12 Market Share Environment . 03 Total 2. 98 3. 09 3. 34 Following this weighted scales, we notice that Walter and Kroger are the leader in he American Supermarket chains thanks to its price competitiveness and financial position. 5.

Marketing One main key decision of the company is to invest on its in-store signage and store events such as taste fairs, classes, and product samplings. Also, they invest on training and education for their workers to make them part of the company’s culture and above all, to make them part of the innovation and ideas. The idea is to give a personal attention to the customers and give them the impression to be in a “third place” (after home and office) that is to say to turn shopping into a fun, pleasurable experience. Its target are people who pay intention to their appearance, well being and a public who is willing to pay products at a premium price.

Then, they decide to promote environmentally sound practices such as all-natural-fiber-packaging, bodiless fuel for their distribution fleet vehicles and electricity produced by renewable energy. 6. Fair business with its producers Whole Foods Market decides to pay the small producer a price for their products that more than cover the producer’s cost in order to make sure that they keep in working in good condition and maintain its growth, creativity and well being. This aspect is a point that differentiate them from its competitors because they don’t only pay attention on their workers and customers but also on their suppliers and producers. This is part of the company’s culture and vision.

Marketing and Sales: Personal relationships with valued customer base, as well as creative and innovative marketing to attract new customers. There is now an interactive website for Whole Foods Market to interact with their customers even more by utilizing the Internet to reach out to their customers about education, new recipes, and new articles on the latest in research. Human resource Management : A better hiring and training process for the team in order to make them part of the culture process of the company. Customer service is flawless thanks to its employees who provide a personal attention to its consumers. Pesticides, chemical products from accredited suppliers.

Marketing and sales : They provide a particular relationship to each customer. The innovation from Whole Foods Market is on providing some articles, information, ideas about new recipes based on healthy products for children and also to always provide an updated website.