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.
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.
Improvements in the quality of product and service- Standardization strategies help companies to improve as well as monitor the quality of their products and services (Giancarlo, 2005). This in turn helps in increasing customer satisfaction. Also, it aids in repeating business and attracting new customers. As per the views of Forman and Hunt, with standardization, the companies are able to clearly demonstrate the quality of their products and services (Forman and Hunt, 2005). This not only helps in retaining the existing customers but also facilitates attracting new customers. Hence, standardization strategies will provide the benefits of quality control to Costa coffee. In this way, it will be able to meet the expectations of the customers in terms of quality of products as well as services.
Usage of Standardization Strategy
The approach of standardization can be utilized in varied areas of business for achievement of competitive advantage. The areas can be related to production activities undertaken by Costa coffee in varied nations. The coffee sector is one of the most competitive due to increased presence of competitors (Lewis, Pun and Lalla, 2004). In this regard, there is often a need to focus on producing products that are of high quality and are low in cost. In this regard, standardization can be used to attain competitive advantage in this area of business. It will further facilitate towards achievement of economies of scale in area of production. Hence, Costa coffee can pursue standardization in the area of production so as to attain advantage over other competitors. As per the views of Ryans, Griffith and White, standardizations strategies play an important role in supporting competitiveness of business in global markets (Ryans, Griffith and White, 2003). This is because it helps the organizations to improve the products and services that they provide. By enabling access to the foreign markets and businesses, standardization approaches will help Costa coffee in gaining advantage over its competitors. Standardization can enable Costa coffee to market its products and services internationally because of its improved image. With standards and associated certification marks, Costa coffee will be widely recognized. The company will be respected for its commitment to quality (Erakovic and Wilson, 2006). This will prove to be a beneficial addition to the image of the company and its marketing activities.
Slater and Olson are of the view that standardization strategies provide competitive advantage to the firms by providing reassurance to their customers that their products and services live up to the state of the art (Slater and Olson, 2002). They add credibility to the business. As such, the customers of Costa coffee will have greater confidence because the firm will demonstrate a commitment to quality, safety and reliability. Reassurance is provided by the standards. As such, the company is viewed more favorably by the customers as compared to those who do not follow standards (Karandikar and Nidamarthi, 2007).
Limitations of Standardization Strategy
Standardization strategy if applied to a global firm like Costa coffee is likely to bear several kinds of limitations that are as follows.
Loss of Uniqueness – Standardization strategy is likely to lose its meaning if the company has build up a consumer base which gives value to niche products or if there is a serving of specialized markets (Zhou, 2004). There are chances that consumers who prefer variety of coffee variants may move to other competitors that provide for more variety.
Loss of Responsiveness – Costa coffee is expanding in global markets, hence there is a chance that this approach may work against the firm (Wit and Meyer, 2010). The efforts of standardization may lead to slower response from the consumers and there is a chance that the firm may end up in losing huge bucks.
Not apt for some aspects of business – The concept of standardization is likely to give many benefits to cost a coffee in the area of production but there is a presence of certain aspects that are required to be tailored as per customers' needs (Culliton, 2008). These are related to segments of business like Customer service, advertising strategies, distribution and pricing of product (Winer, 2007). This requires for driving the market by use of local conditions in order to attain success which is not possible.
Stifles Creativity and Response Time – The standardization in some business area can be harmful for Costa coffee. These are related to areas where consumer dealing is crucial. Hence, it may not give a room for making changes even if changes are desirable for the welfare of company (Wit and Meyer, 2010).
In this regard, it is essential to make clear that the company that wishes to standardize may not achieve this in full certainty on account of global restrictions (Chowdhary and Prakash, 2007). The same concept applies to Costa coffee as well. There is a presence of a large number of Trade barriers as well as tariffs that force the firms to adapt them as per local market needs (Chumpitaz and Paparoidamis, 2004). Moreover, the consumes also have a varying level of expectations. Hence all business processes of Costa coffee my not benefit from standardized approach. The requirement is that every organization gives a careful weighing to its offering so that it can standardize the products as well as adapt it as per business results (Watson, 2006).
Various research tools and techniques can be utilized for conducting the research. These thus form a crucial part of research methodology and assist in providing a flow to research followed by achievement of aims and objectives. On the basis of using the different tools and techniques of the research the findings will be made and it will help to conclude the entire study in appropriate manner.
Research type of two different nature one is qualitative and other is quantitative. Qualitative type of the research is that research in which some theories, reasons or the data which is analyzed in qualitative form (Saunders, et. al., 2006). This data cannot be measurable or comparable with other data. In contrary to this quantitative type of data is based on some measurable terms and it can be comparable with other data (Creswell, 2013). There can be a usage of qualitative research so as to find out the ways in which standardization strategies can be used for getting competitive advantages. Using of the qualitative research in the report will help to understand the standardization strategies in more detail way.
The design of the research depicts about understanding the information in more logical and coherent way. The basic aim of using the research philosophy in the research is to understand the reasons and facts behind the particular subject matter. There will be a use of exploratory research design to assess the nature of standardization strategies (Lewis, Pun and Lalla, 2004). It will help to explore the strategy of the standardization in depth manner that how they are used as competitive advantage in the hospitality industry.
There are two different approaches of the research, one is inductive approach and other deductive approach. Inductive approach is based on analyzing the data from specific observation to some broader form of generalizations (Goddard and Melville, 2004). On contrary to this deductive approach helps to move from general to specific. In the current report deductive approach of research is used as it will help to analyses that how standardization strategies help to achieve competitive advantages in the hospitality industry of UK.
There will be usage of Interpretivism philosophies of research to gain knowledge about standardization strategies. This report is based on the qualitative type of the research and using of the Interpretivism helps to assess the strategies of the standardization in depth manner (Saunders, et. al., 2006). They play key role in achieving the competitive advantage in the market so using of this philosophy makes the report more appropriate.
There are two different methods of data collection and primary method of data collection and secondary method of data collection. In primary method the data which is collected is first hand data or the there is collection of fresh data (Collis and Hussey 2009). On contrary to this secondary data defines about the collection of data from the secondary sources or it is second hand data which is collected by someone else (Creswell, 2013). In the present report both the method of data collection are used. Primary data will be accessed from the marketing managers of the company. On the other hand secondary data collection will be done by use of secondary methods like use journals, websites articles, books as well as primary method for collection (Morris, 2006).
In the current report the data which is collected from the primary and secondary method of data collection will be analyzed in qualitative manner. For analyzing the data in qualitative manner, the technique of thematic analysis will be used (Collis and Hussey, 2009). With the help of this technique the data will be analyzed in different themes and patterns. The analysis of data will involve for using thematic approach and it will further represented by use of themes and visual aids like bar graphs and pie charts.
In consideration to research ethics of this report the data which will be gathered from the primary and secondary sources will be collected in ethical manner. Collection of the required data will also be in reliable and valid manner as consent of participants will be taken before accessing information from them. All the findings and conclusion of the report will be without any biasness and valid conclusion and findings for the study will be made.
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- Chumpitaz, R., and Paparoidamis, N. G., 2004. Service quality and marketing performance in business-to-business markets: exploring the mediating role of client satisfaction. Managing Service Quality.
- Collis, J. and Hussey, R. 2009. Business Research, A Practical Guide for Undergraduate and Post Graduate Students, London: Palgrave.
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