Executive summary
This report highlights various strategic planning for developing a particular product of Costa Company. This strategic planning helps this company for developing its market value and position properly. This report shows all the risk factors for making any product, and also shows all the external and internal strategies. This report evaluates all the strengths, weaknesses, opportunities and threats of this Costa Company. This report also comprises the current development strategy of that particular product. A new product development strategy is discussed here regarding the different flavours of iced drinks.
Introduction
A marketing strategy for a company is a game plan to reach people and connect with them and turn them into customers. The marketing strategy of a company mainly holds the value proposition of this Costa Company. The marketing strategy of a company should have a longer lifespan than any other marketing plan and the marketing strategy where the company’s key elements and also the value proposition brand inside. Leadership is very much important for a company to guide all the employees properly in doing their job. A leader can build an inspiring vision, they can set direction and create something new. An effective leader sometimes possesses some characteristics such as strong communication, self-confidence and management skill. A marketing plan is a comprehensive document that helps to develop the business advertising and also the marketing efforts for the coming year. This report mainly highlights the strategic capability for Costa Company, comparison with the current strategy and main objectives to develop the marketing plan properly.
Background Market position of Costa
Costa is one of the largest food and beverage companies in the UK. Costa has a unique market position. Costa Company’s drink and food product portfolio is mainly offered under the business segment of Costa food solutions which include different types of coffee and caffeine products.
The revenue of the company (in million) from 2010/11 to 2016/17:
.Objectives of the report
Main objective of this report is:
| Specific | Increase the selling of their product and develop turnover to 100 billion Euros. |
| Measurable | This can be measured by the rising number of warehouses present in the locality. |
| Attainable | This objective is attainable because Costa has a penetrable client base in the market and can easily achieve market penetration. In order to ensure better market positioning, they have the capability to improve products using their product development programme. |
| Realistic | This objective is realistic as many competitors such as Unilever have done this before |
| Timebound | This objective will be fulfilled within a period of 6months. |
Strategic Capability
Strengths:
As a heart of Costa’s strategy, it is a resources concentration on areas where this Costa Company leads their category and brand positions. Main strength of this Costa Company is the product quality and the proper cooperation with the employees. In 2016, the Costa company management group had global revenue. Costa believes that profitable growth should be responsible growth. The total number of location it has opened its outlet is 3,401. The total revenue is 1.167 billion Euro and net income was is153 million Euro in 2016. In order to improve the strategic plan, this Costa Company needs to make their business simple for their customers and needs to develop a research and development plan.
Market Position
Costa is a multinational consumer goods company. The Costa Company has a great market position in London only for selling best coffee beverages. Customer’s feedback also helped this company for developing their market position in a better way (Costa.com, 2018).
Size and Value of Costa
The size and the value of Costa in the market are very high. They have a wide range of products segment and from their customers can easily hangout at their place. (Costa.com, 2018).
Figure 2: Market growth of Costa
(Source: Thompson and McLarney, 2017, p.234)
Resource Capability
The main keys of this resource capability for Costa Company are understanding the resource properly, capabilities, and the competence. Resource capability mainly helps for developing the market share and make product quality better. Costa can obtain cheaper raw material which can reduce cost of goods manufactured. It is opined by Thompson and McLarney (2017, p.234) Costa company can increases their resource capability by using its art facilities state and technology. Resource capability when developed properly the quality of products can better from their previous products.
KSFs for Costa
In the previous year this Costa Company launched their USLP or Sustainable Living Plan. This is one of the most ambitious strategies that a global company like Costa has embarked on. The Costa Company pledged to double in size for pioneering a bold new business model.
The Key Success Factors for Costa are
Ask the right question
Costa has not just asked how can them sustainable. According to Wu et al. (2017, p.1198), critically in drawing up the USLP they have another major question that how could a business give towards a sustainable future.
Long term thinking
It is perfectly possible, today, for commercially successful and short time thinking. Long term thinking can give a better development for a company. Costa company management team also thinks long term just produce a better quality product and develop their market position.
System change
At last Costa understood that it can only so far its own before reaching the constraints of the unsustainable system in which it can operate. Just making the perfect product for their customers this Costa Company needs to change some systems. So they can grow their business and they can easily develop their market value and position.
Construction of the SWOT matrix
Strengths
[Refer to appendix]
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Weaknesses
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Opportunities
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Threats
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Table 1: Construction of the SWOT matrix of Costa
Smart strategic objectives
Objective 1: To satisfy the customer’s demand on varieties of products.
| Specific | In order to develop the market share properly Costa food and beverage management team at first need to specify the main reason from which customers can buy varieties products such as different flavours of iced drinks and taste it. |
| Measurable | Customer’s feedback is the very important part to properly measure any product’s market value that the product is liked by the customers or not. |
| Attainable | This Costa food and beverage industry needs to check environment properly before setting up this objective. This marketing environment for this various flavour of coffee products is macro environment, micro environment or internal environment they need to check. |
| Reliable | This objective is an important one as availability of different products help a company to avail more customers under their belt. |
| Time Bound | The timescale for this particular objective is 16 months. |
Table 2: To satisfy the customer’s demand on varieties of products
Objective 2: To gain a competitive advantage over other players through introducing more unique products
| Specific | In order to develop this Costa’s market strategy they need to make their iced drinks quality better and they need to check that customers are buying their various flavoured iced drinks and then they can easily grow up their competitive advantages from others company. |
| Measurable | Customers feedback is one of the biggest part for gaining competitive advantages over others players because one and only a customer can differentiate a product quality from the
Product of the other company. |
| Attainable | This Costa company need to focus on their product quality that they are making iced drinks in a proper way to satisfy their customers and not and also they need to focus that their product quality is high from the other company’s products (Costa.com, 2018). |
| Reliable | According to the market demand of this iced drinks Costa company needs to make some special flavoured iced drinks which can liked by the customers and this company can create a good position in the market from the other companies. |
| Time Taken | The timescale for this particular objective is 22 months. |
Table 3: To gain a competitive advantage over other players through introducing more unique products
Competitive Position
Porter’s Generic Strategies
Evaluation of the contemporary market condition of Costa indicates that the company need to follow the product differentiation strategy rather than cost leadership strategy in order to avail competitive advantages over other companies. It is opined by Trott and Simms (2017, p.611) it is essentially important for the company to acquire the strategy of differentiation through which the company can launch new unique food and beverage products under their name and quality of the products would not be compromised if this process is properly followed.
Differentiation
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Overall Cost Leadership |
| Focus | |
According to Hurwitz et al. (2017, p.368), cost Leadership is the least favourable strategy under the contemporary circumstances of launching different noodle flavours as it can compromise the quality of new products in the market. Therefore, it would be highly risky for the company to be aligned with this strategy. On the other hand, the product in the line is iced drinks which are one of the largest saleable products in food market. Therefore, new diversified products must be presented based on their quality and flavour. The company also can use their brand presence while presenting products.
Ansoff Matrix
Product Development Strategy
Costa’s product development strategy is based on product quality, customer feedback, and raw materials for making any product. Costa is one of the largest consumers goods companies and they produce various kinds of products such as iced drinks, coffee and sandwiches. This Costa Company has a huge range of flavoured iced drinks. They make various coffee products for their customers and also compete with other companies. As they have a very good market position in UK so all the time this Costa company tries to make good and hygienic products for their customers.
The strategy for developing the flavours of iced drinks of this Costa Company should be simple and environment friendly. The artificial colour or flavour which they are using for making iced drinks is needed to be high quality. There are lots of customers who are very health conscious. This Costa Company need to develop also different iced drinks for this kind of health-conscious customer. Better product quality helps to compete with other companies in this UK market. Good product quality gives them good feedback and by the same process, this Costa Company can easily develop their market position (Costa.com, 2018).
Diversification strategy:
In this diversification strategy Costa Company need to understand that there are lots of customers and they have also individual needs for buying any product. So this company need to make various iced drinks for their customers and also less fat for their health conscious customers. This Costa Company also introduced gingerbread cream and latte for their customers. Customers can easily buy the variety range of coffee and sandwiches thereby the Costa Company can easily grow their market position strong.
SAFe
| suitability | Through the evaluation of the SWOT analysis of Costa company, it can be seen that this company has many strong brands. This strength enables the company for penetrating markets. From this SWOT analysis, it can be said that company has the capability for accepting the strength and all the internal and external factors for strength analysing.
The broad product mix is one of the strengths for developing their business properly. This global market presence strength helps this Costa company for making their food properly and develop their business strategy. |
| Acceptability | Through the evaluation of the company’s contemporary condition in the market, it can be seen that there is a large diversity among consumers of the company. This diverse consumer has huge demand for new flavours and food items from the company. Therefore, introduction of different flavoured iced drinks to acquire the food market is an acceptable and valid one. |
| Feasibility | This Costa company has great market value and a good market position. According to Stead and Stead (2016, p.92), through the evaluation of SWOT analysis it can be confirmed that Costa company has economic of scale supports product efficiency. Costa has lots of human resources, and they have many opportunities for diversifying by entering business outside. Customers surely accept all those products which are produced by them. They can give their customers variety range of products. Product imitation is a very major threat for Costa company. As they have lots of competitors in the market so some other retailer inflicts a threat by selling their own product. Customers feedback is a major part for their product purpose whether customers are satisfy to get these products or not. |
Comparison with the current strategy
Costa is a multinational consumer goods company. They have a varied range of products. From this current strategy, it can be said that this company produces many flavoured iced drinks for their precious and valuable customers. According to Lockrey (2015, p.11), through this current strategy this company can get the opportunity to develop their product quality in a better way. The company’s previous strategies were mainly based on existing products which is a futile strategy in this highly competitive market condition. In this current strategy, this Costa Company try to develop their market value and position to sell the best products to their customers. The current strategy highlights different iced drinks to capture the attention of the global customers.
Recommendation
- Must introduce more range of products
- They need to make themselves a “brand” to compete with the likes of Starbucks
- Celebrity endorsement is significant
- Need to focus on burgers and donuts to go with their exotic coffee
Conclusions
From this report it can be concluded that this project highlighted all the strategic capabilities of Costa Company. SWOT-analysis helps to know all the strengths, weaknesses, opportunities and threats of the company. Key Success Factors helps to gain knowledge regarding how they can develop their business in UK market. Porter’s generic strategies helped them apply this strategy regarding product diversification. Product development strategy is how much suitable for customers they need to focus on it. Customers are really accepting this development strategy or not and how customers give feedback about their products the Costa company product development team need to check. Developing the product in a proper way this company need to focus that what kind of risk can occur.
Reference list
Book
Stead, J.G. and Stead, W.E., 2016. Spiritual Capabilities: Keys to Successful Sustainable Strategic Management. In Spirituality and Sustainability. Berlin: Springer, Cham.
Journals
Hurwitz, L.B., Montague, H. and Wartella, E., 2017. Food marketing to children online: A content analysis of food company websites. Health communication, 32(3), pp.366-371.
Kraak, V.I., Vandevijvere, S., Sacks, G., Brinsden, H., Hawkes, C., Barquera, S., Lobstein, T. and Swinburn, B.A., 2016. Progress achieved in restricting the marketing of high-fat, sugary and salty food and beverage products to children. Bulletin of the World Health Organization, 94(7), p.540.
Liu, Y., Zhu, Q. and Seuring, S., 2017. Linking capabilities to green operations strategies: The moderating role of corporate environmental proactivity. International Journal of Production Economics, 187, pp.182-195.
Lockrey, S. (2015). A review of life cycle based ecological marketing strategy for new product development in the organizational environment. Journal of Cleaner Production, 95, 1-15.
Marcos-Cuevas, J., Nätti, S., Palo, T. and Baumann, J., 2016. Value co-creation practices and capabilities: Sustained purposeful engagement across B2B systems. Industrial Marketing Management, 56, pp.97-107.
Sacks, G., Mialon, M., Vandevijvere, S., Trevena, H., Snowdon, W., Crino, M. and Swinburn, B., 2015.Comparison of food industry policies and commitments on marketing to children and product (re) formulation in Australia, New Zealand and Fiji. Critical Public Health, 25(3), pp.299-319.
Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by next Plc have on themselves and their competition in the UK Clothing Retail Market?. Journal of Commerce and Management Thought, 8(2), p.234.
Trott, P. and Simms, C., 2017. An examination of product innovation in low-and medium-technology industries: Cases from the UK packaged food sector. Research Policy, 46(3), pp.605-623.
Wu, J.Z., Santoso, C.H. and Roan, J., 2017. Key factors for truly sustainable supply chain management: An investigation of the coal industry in Indonesia. The International Journal of Logistics Management, 28(4), pp.1196-1217.
Website
Costa.com (2018) Costa available at <https://www.costa.co.uk/ /> [accessed 22/02/2018]
Appendix
Growth of Costa
