CHAPTER 4: INTERACTIVE SESSION : ORGANIZATION

Burton Snowboards Speed Ahead with Nimble Business Process

11.    Analyse Burton using the value chain and competitive forces models.

                                

Traditional customers

-          At its peak, burton controlled over 40% of the U.S snowboarding market and its            remains the market leader despite growing competition.

-          One way Burtons has stayed market leaders is being adaptable anddynamic which is        competitive necessity.

-          Burton take feedback from its customers very seriously and will move quickly to meet    their needs. An example, of this is if a rider test a jacket and recommends repositioning  a zipper. Burtons production line mustr be able to make this adjustment quickly and  easily.

·         New market entrants

-          Burtons design manufactures and markets snowboarding equipment, one way they have  taken steps to ensure that they don’t lose customers to new market entrants is by  strengthening customers and supplier intimacy.

-          The available to promise process was taking hours to complete. (Available to promise,    in response to customer order to enquires, reports on available quantities of a requested product and delivery due dates). Burtons wanted to speed up this process so that its dealers and retail customers would have more precise information about the availability of items not in stock. Strengthening customers and supplier intimacy in this way from strong ties with them, which reduces the likely hood of new market entrants taking customers from them.

·         Substitute products and services

-          Burtons decided that it would explore basic functionalities of SAP enterprise resources planning (ERP) software and adding new layers of complexity to its IT infrastructure and maintenance costs of their equipment. This is because Burtons want attracts more customers and strengthen the loyalth of customer.

·         Customers

-          Burtons always takes feedback from its customers and always measures the customers needs. For example, Burton found that the process of reporting inventory was inefficient and both suppliers and customers could not easily determine up-to-date information on which items were in stock at which warehouse. SAP AND Burton worked together to improve communication between warehouse and supply chain efficiency.

·         Suppliers

-          Burton has different suppliers to provide different equipment. For example, Burton has implemented and currently maintains SAP enterprise software an oracle database, a SUSE LINUX enterprise server and commodity hardware.

CHAPTER 3: STARBUCKS

1.       VALUE CHAIN :

     Value chain analysis allows the firms to understand the parts of its operations that create value and those that do not. Understanding these issues is important because the firm earns above-average returns only when the value it creates is greater than the costs incurred to create the value.

   

    As it is seen from the figure above in value-chain analysis the business activities are divided into two categories: primary activities and support activities. The primary activities directly deal with the creation of products or services, whereas, support activities can be used to obtain or increase competitive edge in the marketplace.

COMPETTTIVE FORCE :

      The nature of the relationships among these forces is best presented in the following figure.

      Source: Downturn Strategist (online)

     Rivalry among existing competitors is high within the industry Starbucks operates in with major competitors like Costa, McDonald’s, Caribou Coffee, and Dunkin Donuts and thousands of small local coffee shops and cafes.

     Starbucks customers possess large amount of bargaining power because there is no and minimal switching cost for customers, and there is an abundance of offers available for them.

    The threat of substitute products and services for Starbucks is substantial. Specifically, substitutes for Starbucks Coffee include tea, juices, soft drinks, water and energy drinks, whereas pubs and bars can be highlighted as substitute places for customers to meet someone and spend their times outside of home and work environments.

      Starbucks suppliers have high bargaining power due to the fact that the demand for coffee is high in global level and coffee beans can be produced only in certain geographical areas. Moreover, the issues associated with African coffee producers being treated unfairly by multinational companies are being resolved with the efforts of various non-government organisations, and this is contributing to the increasing bargaining power of suppliers.

However, the threat of new entrants to the industry to compete with Starbucks is low, because the market is highly saturated and substantial amount of financial resources associated with buildings and properties are required in order to enter into the industry.

2.      What is starbucks business strategy? Assess the role played by technology in this business strategy.

Starbucks business strategy was to revamped its in store technology and sought to integrate its business processes with wireless technology ang the mobile digital platform such as implementing a technology that allows customers to pay using a smartphone app which is integrated with the starbucks card system which allows regular customers to pay with a pre-paid and rechargeable card at any starbucks branch. Next, rather than copying the practices of competitors, starbucks continue serving high end specialty coffee and improve the customer service, so that consumers didn’t feel like they were visiting a local fast food chain. Other than that, starbucks also focused on becoming “lean”, like many of its competitors, eliminating inefficiency wherever possible. Starbucks also launched its “starbucks digital network”, a portal designed specifically for mobile devices as opposed to traditional web browser.