Introduction to Background Research
Standardization is a concept in marketing and also a strategy where any firm gets a chance to standardize all areas of a product experience. There is also a chance to standardize a component of any product (Global Marketing Standardization, 2013). Hence, the process of Standardization is all about whole product experience in terms of uniformity, service to consumers, product support as well as areas related to marketing, pricing and distribution. In present scenario the organizations of hospitality industry which are operating at national and international level, it is very essential for them to use some different strategies (Moriarty, Jones and Rowley, 2008). Using of the standard strategies in business of hospitality industry facilitates the company to gain the competitive advantage in the market. In the UK the business of Hospitality industry is so vast that there are numerous of national and international brands have their business. To achieve a high level of profit and brand image in the industry it is essential that some standardize strategies of marketing are to be used (Lancaster and Massingham, 2010). Standardization strategy is an approach that is used by firms for implementing technical standards. These strategies are used by the organizations for maximizing compatibility, interoperability, safety, quality and repeatability (Karandikar and Nidamarthi, 2007). With the help of standardization strategies, commoditization can be brought about by the firms of the formerly custom processes. They reduce the installation and start-up costs. Also, the need to maintain large inventories is not felt by utilizing these strategies. These enable interchangeability of components (Viswanathan and Dickson, 2007). As such, a company can use relatively standard brands, packaging, formulation, positioning and distribution in global markets. &nb
In this respect, the given research proposal has tried to find out in what ways Costa coffee can use standardization strategies so as to help in achieve competitive advantages in the UK hospitality industry. In this regard, there has been a discussion of research rationale, aim and objectives of the study and potential significance of this research. Further in the literature review part it is highlighted with the previous studies and researches which are performed in the field of standardization strategies. In research methodology part all the tools and techniques of the research are detailed which will be used in the dissertation to attain the aims and objectives of the report in efficient manner. In the last part of the research proposal a time table is shown that how each and every task of the research will be carried in specific span of time period.
Costa coffee is a multinational coffee house company that is headquartered in Dunstable which is a part of United Kingdom. It is a wholly owned subsidiary of another firm named Whitbread PLC. Costa coffee is considered as 2nd largest coffeehouse chain in world and largest in UK (Costa coffee, 2013). The firm was acquired by Whitbread and since then it has achieved growth to over 1,700 stores that are spread across 35 countries. The business has got nearly 1,375 restaurants in UK. Along with this, there is also a presence of around 2,500 vending facilities named as Costa Express and 800 outlets in overseas nations. Coffee shops of the company are one of the country’s favorite coffee destinations and the coffee which are served with full passion and art. They pull their greatest efforts to deliver the unbeatable coffee experience to their worldwide customers.
Rationale of Research
The rationale behind conducting the research is to find out what is the manner in which usage of standardization strategies can be beneficial for Costa coffee in terms of achievement of competitive advantage. This is required as the firm has got an increased presence in international market. Moreover, the market of hospitality industry is also filled with many companies. Hence it is essential for Costa coffee to formulate strategies that can aid in achievement of competitive advantages.
Aims, Objectives and Questions
The major aim of the research is to find out the way in which standardization strategies can help Costa coffee to achieve competitive advantages in the UK hospitality industry. In this regard, there is also a formulation of varied research objectives so as to guide the researcher towards achievement of aim. These are as follows.
- To evaluate the concept of standardization strategies.
- To identify use of standardization strategy for achieving competitive advantages.
- To provide recommendations on strategies.he research questions are as follows;
This present research report from assignment desk has lot of significance in today’s competitive market of IK hospitality industry. This report will assist the Costa Coffee to recognize that how the usage of standardization strategies will help the company to gain competitive advantage in the market. This research also facilitates the people who belong to field of marketing as they came to know about the importance of standardization strategies. It will help them to know that how these strategies are beneficial to them in their hospitality business. In the similar way the research has lot of significance in the area of academic research. It will also helpful in future research to understand the scope and importance of standardization strategies in hospital industry.
Literature review section of the study will highlights about the viewpoints and findings of the different authors and researches. There study will help to acknowledge with their previous studies towards the concept of standardization strategies that how it helps in achieving competitive advantages in the market.
Marketing is a manner by which any company interacts with the consumers so as to create relations that are useful for both the parties. The businesses utilize marketing strategies so as to identify the audience before carrying out advertising for them (Lewis, Pun and Lalla, 2004). In present times, the area of marketing plays a critical role towards deciding the success of firm and also formulating strategies.
Whenever a big company like Costa coffee operates at an international level, then it has to decide over what kind of strategy is to be adopted by it. In this regard, any multinational company has a choice to adapt its marketing activities to suit the local preference or to standardize its set of activities (Global Marketing Standardization, 2013). Hence, standardization strategy can be defined as offering of identical range of product lines at similar prices by use of distribution systems that are identical in nature (Standardization Marketing Strategy, 2013). This is further supported by use of same kind of promotional programs in diverse nations. In this regard, the standardization strategy is suitable if a global firm like Costa coffee that is spread over a large number of nations. The firms that are following or wish to adhere with Global Standardization theory are considering that the world is a one entity and is not a collection of national markets (Chowdhary and Prakash, 2007). The standardization of processes is thus concerned with the manner in which decisions related to marketing mix are required to be arrived at. As per many authors, standardization involves for reutilization of activities as well as solving of issues in a homogenous way by a standardized behavior. A major part about standardization as a marketing strategy is to allow firms for choosing standardization in all areas of product experience (Morris, 2006). On the other hand, the firms that criticize global standardization have a belief that every firm should utilize a customized format of marketing strategies. This is a must as an average product requires for 4 - 5 adaptations of the given marketing elements.
Advantages of standardization
There can be many benefits of standardization for a huge company like Costa coffee. These are inclusive of areas which are as follows;
Cost savings– The coffee company can save significant amount of cost by focusing on the aspect of standardization. The saving can be in terms of less exposure on the area f market research. This is as there will be no need for the company to adapt its product and service offering to be as per needs of consumers (Chowdhary and Prakash, 2007). It will further aid the company in developing economies of scale. The savings can then be applied to business margins, providing low process to consumers and for activities related to research and development in the area of developing new and improved variants of coffee.
Consistency with consumers and processes– It is only by usage of this strategy, an international firm like Costa coffee can attain consistency. It is also required sensing the increased globalization of the world. Hence, it has made many firms to realize the benefits of providing a consistent as well as uniform product and marketing system that is present all over the world (Kotler and Armstrong, 2005). It is a known fact that the firms are required to produce same kinds of products followed by reusing the marketing and distribution systems.
Improve form of management and design– Improvement can be achieved in this area with little need of customization (Global Marketing Standardization, 2013). This will further enable a thorough interchanging and also lead to provision of practical application for the purpose of bringing an enhancement in operability and improving overall business performance.
The overriding benefits of a standardized marketing strategy are consistency throughout the world and cost savings. Increased globalization of world businesses contributes to more similarities among international marketplaces (Chowdhary and Prakash, 2007). This has led some companies to realize the benefits of providing a consistent, and uniform product and marketing system around the world. Because these organizations are producing same products and reusing established marketing and distribution systems, they also get economies of scales benefits in production and buying.
Development of commoditized transactional regime- As per the views of Ryans, Griffith and White, standardization and commodity exchanges are the two pillars on which a transactional regime is based (Ryans Griffith and White, 2003). Standardization is a pre condition for commodity exchanges. With the help of transactional regime, companies such as Costa Coffee will be able to focus on measurable, etic and objective properties of the transaction. Viswanathan and Dickson were of the view that with the transactional regime, the transaction costs of international transactions are lowered (Viswanathan, and Dickson, 2007). As such, it is the pillar of the growth and resilience of coffee business.
Competitive advantage- Standardization has various strategic benefits. According to the views of Kustin, standardization helps business organizations gain competitive advantage (Kustin, 2010). Costa coffee can gain competitive advantage as it will have influence in the content of a standard of coffee. By participating in standardization, it will have an edge over the non participating companies.
Positive effect on the supplier/client relationship- As per the views of Omar and Porter, standardization can have a positive effect on the supplier client relationship (Omar and Porter, 2011). With it, the buying power of the companies such as Costa coffee will be positively impacted. With the standards, the dependence of Costa coffee on a single supplier will be avoided. This is because the availability of the standards opens up the market for the business. As such, the company will have a broader choice regarding the suppliers. The result will be broader choice for the business. It will increase the competition among the suppliers. According to Karandikar and Nidamarthi, the suppliers who standards will result in the companies having greater confidence in them (Karandikar and Nidamarthi, 2007). As such, Costa coffee will have greater confidence in its supplier regarding the quality and reliability. By standardization, Costa coffee will be able to exert market pressure on the companies that lie below it in the value chain. Thus it will help Costa coffee to broaden its potential markets.
Innovation- Standardizations encourages innovation. According to Arnold, organizations that participate in the development of standards get exposed to the expertise and research of other organizations within the same industry or sector (Arnold, 2004). Costa coffee, with the help of standardization will be able to have knowledge about the expertise and research of other coffee businesses. With this increase in the knowledge transfer and networking, new ideas of working will emerge that could be employed by Costa coffee. There can be development of standard processes of working which could then be used by the companies for saving time and costs. This will lead to the overall development of Costa coffee. Standards not only support innovation but also promote the adoption of new technologies. As such, companies such as Costa coffee will be able to identify and use new technology for processing of coffee beans. As per Erakovic and Wilson, the information that is codified in standards can be used by the company for generating new ideas (Erakovic and Wilson, 2006). Standardization strategies provide interoperability between the new and the existing products, services and processes. It forms the basis for introduction of new technologies and innovations. By ensuring the compatibility and interoperability in different markets, standardization will help Costa coffee in facilitating international trade.&nb