The Fundamental Business Strategy for Gloria Jeans Coffees - Case Study Example

Gloria jeans coffees Introduction: Gloria jeans coffees, Australia has decided to export its products to Thailand for the execution of its business at the global level. The decision will help the company to achieve its mission and to promote the business as on sustainable basis. The company has already executed its business on successful lines in Australia through the adoption of franchised strategy and the top executive has decided to introduce the products in Thailand on the similar lines. Both the governments that is the government of Australia and the government of Thailand have sufficient trade and marketing mechanism for the execution of the proposed business plan (1). The business plan has included the elements of exporting of the Gloria jeans coffees products from Australia to the importing country that is Thailand, licensing of the products of the company in Thailand with the concerned trade organizations and franchising the products through a chain of stores in all the major urban centers of the country for the sale of the products on profitable basis. Moreover, the company has evaluated the concepts like joint ventures and acquisition of the proprietary rights of the products in the importing for the execution of the business plan. However, these concepts will be incorporated in the business plan for the expansion of the business and to secure profits as in favor of the company. All these steps will be implemented for the achievement of the desired objectives that is more revenues, more business and more profits in favor of the business company (2). The business plan will be executed on the fundamental business strategy for the promotion of the cause of the company that is utilization of all the inputs on optimum basis and the sale of the products at the maximum prices for the generation of more profits in favor of the company. Successful execution of the business strategy will provide a business model for its execution at the global level for the introduction of the products at the global levels. Selection of Thailand as the trading country: Gloria jeans coffees, Australia has selected Thailand as the external market for the sale of their products through their business operations. Thailand has a total population of 60.6 million with a total GDP of $ 547.06 billion with a growth rate of 4-5% (2007). Thailand is an expanding economy and is considered as a newly industrialized country in the South Asian region of the world. The country has a geographic proximity with Australia with an ever increasing tourist population of the multinational origin. The economy of Thailand has witnessed encouraging growth patterns and the products of the Gloria jeans coffees will have their wide spread acceptance across the major urban centers of the country through their international standards and flavors. The country has the entire necessary infrastructure that is legal frameworks for the execution of the business through franchise mechanism, legal instruments for the start of business by the Gloria jeans coffees in Thailand and necessary skilled human resources for the promotion of the business on sustainable basis. Execution of the business by the company in Thailand will provide an opportunity for the expansion of the business at the global level for the generation of more revenues and therefore will ensure sustainability of the company on profitable basis (3). Franchising will be major business tool for the execution of the business plan by the company in Thailand as the method will provide a launching pad for the company in the Thailand market. Franchising as business tool has already been adopted in Thailand by a number of international business organizations like McDonald's has executed its businesses on the franchised basis in the country and, therefore, Gloria jeans coffees ,Australia will implement its business plan through franchising mechanisms in Thailand. The Gloria Jean’s coffees- Vision and strategy of the company: The Gloria Jean’s coffees execute its businesses as to achieve the targets of the company as are included in the vision of the company. The vision of the company revolves around the central statement which states the coffee of the company to be the most loved and respected coffee company in the world. The vision of the company provides a guideline and direction for the execution of the business as to honor the commitment as enlisted in the vision of the company (4). The company through its trained manpower is dedicated and committed to serve the customers as the customers are treated as most significant stakeholder by the company and their satisfaction is a signal that the company is moving on the right direction for the achievement of the goals and objectives as in line with the vision of the company. The stores of the company through trained staff are committed to serving the guests with the consistently highest quality of the products including coffee in a vibrant environment to satisfy the customers and to observe the values of the company. The values as are observed by the company include: 1. A commitment to the excellence in services and the products for the retention and expansion of the customers for the company. The customers are the major stakeholders in the whole business cycle as customers satisfaction is an encouraging signal for the company for its existence and continuity on sustainable basis. The existing practice will be replicated by the company in Thailand through a network of franchised stores. 2. The company is committed to build partnerships with all its stakeholders that are based on integrity and trust for the execution of the business strategy in the newly selected country that is Thailand. The concept will help in the establishment of win-win position for all the stakeholders in the coffee business through Gloria Jean’s coffees. The major stakeholders include the top management of the company ,the top decision making body ,and the company will get benefit in the shape of more revenues, diversification of the business in geographic terms, and sustainability of the business on profitable basis, the franchisers in Thailand will get the benefit in the shape of their businesses through the brand name of Gloria Jean’s coffees and more revenues through the delivery of services and goods through the franchised stores and the major beneficiaries will be customers as the group will get the products of the company at affordable prices and of the highest international standards in Thailand. 3. The company beliefs in people and changing their lives through the provision of quality services and products for their satisfaction. The company executes its businesses through a team of committed workers for the implementation of their business plans and the same practice will be executed in Thailand for running the affairs of the company. 4. Fostering a culture of joy through administrative network and passion throughout the company for the implementation of the business strategy of the company. The company has successfully implemented the strategy in Australia and the same would be applied in Thailand for the achievement of the similar results in the newly selected global market for the products of the company. Thailand – Political, legal environment, cultural and demographic issues for the execution of the commodity by the Gloria Jean’s coffees: Thailand has adopted a new constitution in 2007 which has resulted in the democratic elections on the country in the later part of the year 2007. As per the constitution of the country, three major independent authorities are holding the balance of power in the country as the executive, the judiciary and the legislative body. All these components are working in their own respective domain and are contributing for the promotion of peace, prosperity and progress of the country (5). All of these components of the government are discharging their respective assignments as in accordance with the relevant provisions of the constitution for the promotion of the economy of the country as to promote the economic indicators in the country. The King is the symbol of the national identity and unity of the country. The present monarch has a great deal of popular respect and the exercise of the moral authority as per legal provisions of the Law and the constitution (6). The administrative and constitutional measures are all in favor of the foreign investment in the country and it is expected that the current political crises would also be resolved through dialogue and negotiations among all the major players of the issue. The legal system of the country works with the involvement of the King as the Head of the State and bases its judicial and legal systems on the constitution of the country which has recognized working of the four courts. These courts include the constitutional courts, the administrative courts, the courts of the justice and the Military courts. The administrative courts are the real forum for the settlement of administrative disputes between the private sector and the state organs for judicious decisions concerning the issues of abuse of the powers against any party by any other organ including the state organs(7). The legal system of the country provides sufficient protection for the foreign investors for the execution of the businesses as per international practices and in accordance with the national laws of the country. The culture of Thailand is influenced by the neighboring countries like India, China, Cambodia and the rest of the South Asian region. The cultural festivals and traditions have promoted the adoption of international customs and patterns especially for the acceptance of international drinks and allied products. Coffee in different shapes has its acceptance in the national corridors and moreover, more than two million foreign immigrants and the tourists are also the potential customers of the products as to be offered by the Gloria Jean’s coffees through franchised stores in the country(8). The total population of Thailand is 60.6 million with GDP of $ 547.06 billion (2007). In addition, there are about 2.2 million immigrants in the country which are taking part in the national economic mainstream through their skills and intellectual learning for the achievement of the economic targets in the country. The major components of the population are concentrated in the major urban centers of the country. The demographic arrangements are helpful for the introduction of the products of the Gloria Jean’s coffees through the establishment of the franchised stores throughout the country. The acceptance of the services and the products of the company will be evaluated during the first year of the operational strategy and the strategy will be amended as in light of the actual performance of the company in Thailand. Marketing strategy in Thailand: The Gloria Jean’s coffees, Australia has decided to export its products to Thailand for the achievement of their financial targets and to fulfill the mission of the company. The company has examined the cultural, legal, demographic and tax laws of Thailand for the initiation of the business through a global approach. Rapid advancement in technology and communications has facilitated the company to examine the foreign environment for the selection and implementation of the appropriate business strategy for the initiation of business in Thailand. The company has designed its business strategy for the selection of business model, legal formalities and appropriate personals have also been identified (9). The international business management techniques including the financing of the task, production of the goods and services, their distribution through a network of suppliers and the delivery of goods and services at the retail outlets. The company has examined the business strategy through the economic, legal-political and socio-cultural aspects of the business strategy and all these aspects have encouraged the company to start its business in Thailand. The potential of the competitors have also been considered and it has been noted by the top management that company will encourage healthy competition in the field. The company will utilize its resources as input for the execution of the business in Thailand .The business strategy will focus on the utilization of the resources both human and material as on optimum basis, latest technology will be utilized in the production and distribution process for their supply ,the outputs will be supplied to the customers on competitive prices for earning more profits in favor of the company and the staff will be rewarded adequately as the staff in the company is treated as an asset for the company. The company has considered economic development of Thailand as to assess the sale potential of the products of the company along with their acceptance by the customers, the level of the infrastructure including transportation facilities for the delivery of the goods and services at the franchised stores, energy producing facilities, communication networks and exchange rates. Thailand currency has its equivalence with the Australian dollar as 1 AUD = 29.8103 THB (today’s rates) which is an encouraging signal for the company to execute its business in Thailand. All of these parameters have supported for the start of business by the Gloria Jean’s coffees in Thailand. Implementation strategy: The business by the company in Thailand has been envisaged to be executed by the top management through franchised stores in the major urban centers of the country. Applications will be invited from the aspirant business groups who have sufficient experience in the relevant field especially sale of coffee as a drink along with its necessity ingredients (10). These applications will be processed by the regional manager of the company and the legal documents will be executed between the company and the franchisers for the establishment of the retail stores. The products of the company will be introduced among the customers with the assistance of the electronic and print media. The franchise as a business tool for the execution of the business has been selected as the viable strategy as: a) Franchising is a special type of licensing when the franchisee buys a complete set of package of services and materials including the products (relating to the sale of coffee and allied items in the instant case), equipment for the execution of the business, product ingredients for the manufacturing of the product for its sale at the designated points, trademark and trade name rights for the actualization of the sales process, managerial advice for the execution of the business plan to fulfill the demands of the customers, and the adoption of a standardized operating system as per policy of the company, b) The business through franchising mechanism is executed in the name of the parent company to promote the cause of the company for the execution of the business. c) The franchised system of business is different from other such business mechanism in its structure and the mode of operations like in Licensing ,a licensee generally keeps its own specific company name and similarly the operating system, d) The advertisement charges are generally low in case of franchised mode of the business as the campaign of the business is executed in one part of the world has its impacts on the business in parts of the world through rapid mode of communication. e) The franchising mode of business like the licensing offer to the business firms relatively easy access to the international markets at low cost for the supply of inputs for the completion of the business cycle, thus lowering the cost of business but no compromise on the standard and quality of the products within the specified time periods. However, the mechanism has adverse impacts on the development of the independent business entities with full proprietary rights for the execution of the business. The company has selected the franchising as operational mode for the execution of the business as on profitable basis. The company has selected the mechanism while considering other options, too. The alternative options as considered by the company include exporting the products from Australia for their distribution and sale in Thailand at the designated stores, Licensing to a select group of the business entrepreneurs for the execution of the business, Joint Ventures with the other business partners for the start of the business, Acquisition of the business entities as with sole proprietary rights for running the business affairs and the Greenfield Ventures. The franchising has a set of advantages for the foreign investors; therefore, the method has been adopted by the company. The company has applied the mechanism of leading, decision making for the selection of the business sites and the skilled manpower, motivating the workforce for the achievement of the desired results and controlling the whole process as in line with the policies of the company. The company has applied a systematic approach for the consideration and application of the business mechanism as in accordance with the business strategy of the company. These approaches include Legal approach to satisfy the legal requirements for the execution of the business plan especially business laws and regulations, Market approach to respond to customers requirements through the sale of coffee at the franchised stores of the company, Stakeholders approach for addressing the concerns of the stakeholders through the supply of the goods and services at economical prices and a synergetic approach in the collective sense for all the stakeholders. The business of the company is applied in its complete form as to favor all the stakeholders on win-win basis for all the stakeholders. The coffee business at the franchised stores is completed with the application of adequate supply chain management arrangement. The company has applied seven principles of the supply chain management for running the affairs of the company. These principles have ensured the company a reliable supply line for the supply of the products for their sale to the potential customers. These principles revolve around the customers needs through distinct groups and have adapted to the supply chain to serve these segments on profitable basis, customization to the logistic network to the service requirements and the profitability of the customer segments and the differentiation of the products closer to the customer and similarly speed conversion across the supply chain of the products. Conclusion: The globalization has facilitated the company to explore the business opportunities at the global level and the Gloria Jean’s coffees have rightly decided to explore the business in Thailand. The company has selected franchising as mode of the business in the major urban centers of the country. The company has taken the decision while considering all the related aspects of the business including the constitutional, legal, demographic, cultural and political segments of the whole scenario. The company has focused on the adequate supply chain mechanism and the evaluation of the results of the business on regular basis. It is expected that successful completion business strategy will facilitate the company to replicate the same in other parts of the world. References: 1. Kotler, Philip; Gary Armstrong, Veronica Wong, John Saunders (2008). "Marketing defined". Principles of marketing (5th ed.). p. 7. http://books.google.com/books?id=6T2R0_ESU5AC&lpg=PP1&pg=PA7#v=onepage&q=&f=true. Retrieved 2009-10-23.  2. Kotler, Philip; Gary Armstrong, Veronica Wong, John Saunders (2008). "Marketing defined". Principles of marketing (5th ed.). p. 17. http://books.google.com/books?id=6T2R0_ESU5AC&lpg=PP1&pg=PA7#v=onepage&q=&f=true. Retrieved 2009-10-23.  3. David L. Anderson, Frank F. Britt, and Donavon J. Favre -- Supply Chain Management Review, 2007. 4. Anttonen, Noora, Mika Tuunanen, Ilan Alon (2005), “The International Business Environments of Franchising in Russia,” Academy of Marketing Science Review, (5), 1-18. 5. Buzzell, R. and Gale, B. The PIMS Principles: Linking Strategy to Performance, Free Press, New York, 1987. 6. Rehfeld, J.E. Alchemy of a Leader: Combining Western and Japanese Management skills to transform your company, John Whily & Sons, New York, 1994, ISBN 0-471-00836-2. 7. Blaxill, Mark & Eckardt, Ralph, "The Invisible Edge: Taking your Strategy to the Next Level Using Intellectual Property" (Portfolio, March 2009) 8. Hamel, G. & Prahalad, C.K. Competing for the Future, Harvard Business School Press, Boston, 1994. 9. Barney, J. (1991) “Firm Resources and Sustainable Competitive Advantage”, Journal of Management, vol 17, no 1, 1991. 10. Camp, R. Benchmarking: The search for industry best practices that lead to superior performance, American Society for Quality Control, Quality Press, Milwaukee, Wis., 1989. Read More