WEEK 17

1.Can you think of an organisation that has implemented a ‘high risk strategy’ that has resulted in success (why was it high risk at the time and why was it a success – was it good luck or good judgment)?

 According to me, Starbucks Corporation has implemented a ‘high-risk strategy that resulted in success.

Starbucks is an American global coffee company. It is one of the largest coffeehouse companies in the world. It has established one of most successful and admired brands in the world.

Starbucks innovative marketing strategies lead to its success. They employed unconventional strategies that are unique and seldom tried, but most perfectly matched with concept that the company wanted to portray. The most important concept it created was it brought space rather than a product. It was successful in fulfilling the psychological need of the customer that other companies failed to do.

Some of their best strategies would be:

Product quality- The Company has always put emphasis on its product quality from the very beginning. The price of the coffee is slightly expensive than the expected but has been successful in satisfying the customer with its rich delicious taste and aroma.

Third Place- The coffee house plays the third place in our lives- home being the first and works the second. It is focused on creating unique atmosphere for the customers where they can relax, meet others and surf the Internet. This has been the strongest concept attached to the company to attract the customers.

Customer satisfaction- Starbucks gives more priority to customer satisfaction from their coffee to the feel of uniqueness in the atmosphere while enjoying the coffee. Their main part of their superior customer service is their focus on customization.

Smart partnership- the main reason for their success and growth is because of strategic partnership with other businesses and Non-profit organizations.

Innovation- Through the years, the Starbucks Coffee Company has been known to think up creative and innovative ideas to add to their products or services. They’ve added different flavors to their coffee, more food on their menu, and even became one of the firsts to offer Internet capability in their stores. (voteforus.com, 2013)

Advertising – Starbucks has always focused on “word of mouth” marketing and let their customer know their high valued quality products and also it has always stayed away from promoting itself through adds in billboards or newspapers.

2.Now, do the same for an organisation who embarked on a high-risk strategy that resulted in some sort of failure (why was it high risk and why did it fail – bad luck or poor judgment?)

I would consider Kingfisher Airlines as an organization who embarked on high-risk strategy that resulted in failure.

A Kingfisher Airline Limited was an airline group based in India. The company has been facing financial issues for many years. Until December 2011, Kingfisher Airlines had the second largest share in India's domestic air travel market. However due to a severe financial crisis faced by the airline at the beginning of 2012, it has the lowest market share since April 2012. Every since the company acquired Air Decan, it has been reporting loss.

The main reasons for the failure of the company would be its strategy of low cost model that changed the whole image and brand of premium business class airline.

Some of the major factor for the failure is:

• Increase in the debt by acquiring Air Decan
• Lack of long-term strategies such as absence of CEO
• Frequent change of focus from full service carrier to low cost and again back
• Lack of understanding of customer’s requirements
• High operational and maintenance cost – increase in fuel price and depreciation in Indian Rupees

Reference:

Starbucks Marketing Strategy Unconventionally Effective [Online] Available at: http://www.voteforus.com/starbucksmarketingstrategy.html, [Accessed on 25^th Nov, 2013]

Forbes. Starbuck's Power over US is bigger than coffee [Online] Available at: http://www.forbes.com/sites/alicegwalton/2012/05/29/starbucks-hold-on-us-is-bigger-

than-coffee-its-psychology/ [Accessed on 25^th Nov, 2013]

Reasons behind Kingfisher Airline failure [Online] available at: http://www.jimsedu.com/wp-content/uploads/2013/07/Reason-behind-Kingfisher-Airlines-Failure.pdf, [Accessed on 25^th Nov, 2013]

The real reason behind Kingfisher's fall [Online] Available at: http://www.sify.com/finance/the-real-reasons-behind-kingfisher-s-fall-imagegallery-2-airlines-llsne4cgief.html , [Accessed on 25^th Nov, 2013]