Strategy
NVIDIA business strategy is based on a platform strategy, bringing together hardware and systems, software, algorithms and libraries, and services to create unique value for the markets it serves. The company specializes in markets in which its computing platforms can provide great acceleration for applications. These platforms include processors, interconnects, software, algorithms, systems, and services to deliver unique value. Nvidia business strategy consists of the following three main elements: 1. Benefiting from the first mover advantage. The multinational technology company has benefited from the first mover advantage numerous times to solidify its position in the market. For example, it popularized the term GPU (graphics processing unit), developed Computer Unified Device Architecture (CUDA) and invented deep learning hardware accelerators, such as the Tesla V100 and T4 GPUs. Benefiting from the fist mover advantage is the core of Nvidia business strategy. 2. Prioritizing performance of products over their costs. Nvidia follows product differentiation business strategy and accordingly focuses on superior performance of its products and services over their costs. In other words, the company’s GPUs, data centre and gaming solutions, Drive and Jetson platforms and professional graphics solutions have the most advanced functions and capabilities, but these come at an additional cost for customers. 3. Vertical integration. The company designs and manufactures its own GPUs and other hardware components through fabless manufacturing, and it develops its own software solutions to optimize performance and enable new applications. Nvidia Corporation Report contains the above analysis of Nvidia business strategy. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Nvidia. Moreover, the report contains analyses of Nvidia leadership, organizational structure and organizational culture. The report also comprises discussions of Nvidia marketing strategy, ecosystem…
Co-founder and former CEO Adam Neumann had a compelling vision for WeWork ecosystem. It has been noted that “Neumann has even expressed a desire to one day have entire WeWork communities, where everything from your apartment to the school your children attend is brought to you by WeWork”[1] The main components of the ecosystem as envisioned by Neumann include the following: WeGrow private school. The curriculum featuring ‘conscious entrepreneurship’, the school was actually the brand child of Adam Neumann’s wife Rebecah. WeGrow school closed only a year later after enrolling around 100 children in 2018 for the tuition cost of up to USD 42k.[2] WeMrkt physical store. Opened in 2010, WeMrkt physical store offered products such as Icelandic yogurt and chickpea snacks sourced from WeWork member companies. Powered by We. A range of services that transform data to design. These services include helping clients find the right physical space, construction, custom office decor, software to manage building operations, back-end data on the efficiency of the office space, and even WeWork employees physically on-site to help with community programs.[3] HQ by WeWork. Private and personalized headquarters for medium sized businesses. WeWork Labs. An initiative to assist early-stage start-ups with growth through education, mentorship, and an agile workspace. The program was shut down in 2022. Rise by We. A premium fitness concept presented as an ultimate wellness club. WeLive. Furnished, community-oriented shared living apartment suite rentals, offering amenities in select US metropolitan areas. Almost all of the initiatives listed above that were planned as important components as WeWork ecosystem have failed. However, it is important to note that in most cases the failure may not be an indication of flaw of respective ideas. Rather, the failure of these initiatives can be attributed to the following main two reasons: 1. Poor leadership. It is now…
WeWork marketing strategy is based on the following principles: 1. Effective use of social media marketing. The global flexible workspace provider efficiently uses social media marketing through viral marketing, localized Facebook ads appealing to the needs and wants of the local customer segment. Furthermore, there are many YouTube videos with positive customer testimonials for using WeWork co-working spaces with positive implications on the brand image. 2. Celebrity endorsement. Although the leadership style of the co-founder and former CEO Adam Neumann had proved to be devastating for the company, he was able to engage in celebrity endorsement in cost-effective manner. Celebrities such as Drake, Ashton Kutcher and Hugh Jackman were spotted in WeWork headquarters with positive implications to the brand image. The co-working giant continued with celebrity endorsement even after the departure of Neumann. 3. Focus on the product and place. Within the framework of 7Ps of marketing WeWork focuses on product and place elements of the marketing mix to a greater extend compared to other elements. The global flexible workspace provider offers workspace as a service – creatively designed, furnished, flexible and without long-term commitments. This is the unique selling proposition for WeWork. The co-working giant has a network of 756 locations worldwide, including 277 locations in the US as of December 2021. 4. Effective market segmentation and positioning. The co-working giant uses functional and multi-segment positioning techniques and targets customers mainly in urban areas in 38 countries worldwide. In terms of occupational segmentation criteria WeWork targets self-employed individuals, professionals, senior managers, executives and business owners. 5. Integrated use of marketing communication mix. The co-working and office space operator uses several marketing communication channels such as print and media advertising, sales promotions, events and experiences and public relations in integrated way to communicate marketing message to the target customer segment.…
WeWork business strategy is based on the following two pillars: 1. Digitalizing real estate business. Co-founder and former CEO Adam Neumann attempted to position WeWork as a tech company and this fact is one of the main reasons the company has been able to attract billions of dollars from investors. Tech startups offer potential to generate massive return on investment due to innovative nature of their customer value proposition and scalability of the business with little additional cost. The workspace provider, on the other hand, does not have the same level of scalability, because in order to create each new workspace the company has to lease new office space from property owners. Realisation of this fact by stakeholders along with fundamental leadership mistakes by Adam Neumann caused the planned IPO to fail in 2019. The current CEO Sandeep Mathrani accepts that WeWork is a real estate company, but it also has advanced tech capabilities. The co-working giant has developed WeWork Workplace a software that allows employers manage their workers by booking conference rooms, coordinating desk usage and tracking which work spaces are used most often. Judging by the direction the global flexible workspace provider is moving we can say that WeWork pursues a business strategy of digitalizing the real estate business. 2. Offering space as a service. For centuries workspace was a product, where companies needed to purchase or lease an office. The concept space as a service developed about two decades ago changed the status quo. Space as a service offers users flexibility in terms of sizes of workspace and duration of service. Space as a service refers to living spaces as well, an area dominated by AirBnb. WeWork is a pioneer in space as a service for workspace and focusing on this concept as the core…
A company is not just a member of a single industry but it is a part of an ecosystem that crosses a wide range of industries. Despite the coffee chain being in the business for more than five decades, Starbucks ecosystem is still in the early stages of its development. When a company has an advanced ecosystem its products and services are highly compatible with each other and customers will miss out on a wide range of benefits and functionalities if they want to break out of the ecosystem. Think Apple or Microsoft. Starbucks has not been able to develop an effective business ecosystem until now partially due to the nature of products and services the company offers. In other words, the global coffeehouse chain offers limited range of products and services it has not been successful in creating compatibility and dependence between products and services. Recognising the importance of having an ecosystem, Starbucks came up with the idea for digital ecosystem in 2020 as part of measures to deal with COVID-19 crisis. Specifically, Seattle-based international coffee chain is attempting to create digital third place, shifting its third place – a place away from home and work value offering to a digital environment.[1] Development of an effective ecosystem comprises the following four stages – pioneering, expansion, authority, renewal or death. [2] These stages relate to Starbucks ecosystem in the following manner: 1. Pioneering stage. The initial stage is associated with the formation of ecosystem. Starbucks ecosystem at this early stage involves initiating global digital community – a community defined by collaboration, experiences, and shared ownership – all centred around Starbucks coffee. 2. Expansion stage. At this stage ecosystem extends to achieve maximum market coverage and critical mass. The world’s largest coffeehouse chain can extend its relevance to integrate art,…
Starbucks McKinsey 7S model is used to highlight the ways in which seven elements of businesses can be aligned to increase effectiveness. According to this model, strategy, structure and systems represent hard elements. At the same time, shared values, skills, style and staff are soft elements. McKinsey 7S model stresses the presence of strong links between elements. Specifically, a change in one element causes changes in other elements. As it is illustrated in figure below, shared values are positioned at the core of Starbucks McKinsey 7S model, since shared values guide employee behaviour with implications in their performance. McKinsey 7S model Hard Elements in McKinsey 7S Model Strategy Starbucks business strategy is based on product differentiation with the focus on the quality of products and services. Moreover, the coffee chain giant effectively positions Starbucks stores as a ‘third place’ away from home and work, where customers can meet friends, relatives or spent time alone. Currently Seattle-based international coffee chain is positioning itself as a digital third place as well. Technological innovations and intensive integration of technology into various business processes in general and ordering process in particular represent another important aspect of Starbucks business strategy. The launch of Mobile Order & Pay feature, which allows customers to buy without getting in line, the launch of voice ordering app and “sending text message notifications to customers in the Seattle area when their mobile orders are ready”[1] can be mentioned to illustrate this point. Structure Starbucks Corporation has a hybrid organizational structure which combines geographic, brand-based and functional hierarchy structures. Operations are divided into North America (USA and Canada) and International (China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America and Caribbean) divisions. Brand-based divisions, on the other hand, consist of Starbucks, Teavana®, La Boulange®,, Evolution Fresh™, Seattle’s…
Howard Schultz has been at the helm of Starbucks leadership for more than two decades in total. He is rightly credited for making the business the world’s largest coffee retailer with 17133 company-operated stores and 16700 licensed stores in 84 markets employing 254,000 people.[1] On June 2000 Howard Schultz stepped down and assumed a new position as chief global strategist to focus on international expansion in general and expansion in China in particular. New internally promoted CEO Orin Smith oversaw store count to increase to 10000 locations with more than USD 5 billion annual sales. However, at the same time Starbucks market share at US decreased due to increased competition from McDonald’s, Dunkin’ Donuts and other competitors. Schultz returned at the helm of Starbucks leadership as CEO on January 2008 in the middle of global financial crisis to replace Jim Donald, who had succeeded Orin Smith in 2005. After a series of massive changes such as closing many underperforming stores, re-training employee and enforcing fair trade in coffee supply-chain, Schultz stepped down as CEO for the second time and became executive chairman. Kevin Johnson was appointed as a new Starbucks CEO effective from April 2017. Kevin Johnson admitted having ‘venti-sized shoes to fill” referring to successful leadership by Howard Schultz. At the same time, the new CEO stated “I’m not going to fall into the trap of trying to be Howard. I’m going to be authentic to who I am as a person and who I am as a leader”[2]. Howard Schultz returned for his third stint as CEO on April 4, 2022. This time the role was interim CEO until more suitable person is found. The main reason for his latest return was to actively block attempts by baristas to form unions. In September 2022, former CEO of Reckitt Benckiser…
Starbucks business strategy is based on the following four pillars: 1. Offering ‘third-place’ experience. Starbucks stores are effectively positioned as a ‘third place’ away from home and work, where people can spend time in a relaxed and comfortable environment with their friends or alone. Customers are even welcome to get their work done in a Starbucks store. All company-owned stores in the US and most company-owned stores abroad offer free wi-fi. “Starbucks stores are meticulously designed to make customers stay longer, buy more, and return for another visit.”[1] After returning as CEO for the third time in April 2022, Howard Schultz announced his plans for the company. Plans include building drive-through in 90% of new locations and machinery that will allow baristas to handle increasingly complex customer orders more quickly. Some analysts note that while drive through may increase profit martin, at the same time they may compromise the essence of third place experience for customers. Furthermore, according to Starbucks Chief Marketing Officer Mr. Brady Brewer the Seattle-based coffee chain is also creating digital third place. Mr. Brewer shares his vision the global coffeehouse chain creating a new global digital community on the basis of Web3 in general and NFTs (non-fungible tokens) in particular.[2] 2. Selling coffee of the highest quality. Starbucks business strategy can be classified as product differentiation. Accordingly, the coffee chain giant focuses on the quality of its products and customers pay premium prices for high quality. Excellent customer services as one of the solid sources of Starbucks competitive advantage further increases the attractiveness of the coffee retailer. The multinational chain of coffeehouses duly recognizes the paramount role of its employees in customer-facing positions to sustain high level of customer service. Accordingly, the company refers to its employees as partners and offers them a wide…
Starbucks organizational culture is based on values and principles of its former long-term CEO Howard Schultz. It has been noted that “Starbucks’ culture is powerful because it is tightly linked to the company’s distinctive capabilities[1].” Starbucks organizational culture integrates the following four key elements: 1. Valuing employees and their contribution. At Starbucks employees are referred to as partners and they are taken care of by the company via competitive compensation packages. For example, the coffee chain offers stock options and health insurance even to part-time employees in the US. Moreover, “at the height of the global financial crisis, when other companies were cutting HR costs wherever they could, Starbucks invested in staff training, including coffee tastings and courses that ultimately qualified for credit at higher education institutions”[2] 2. Presence of close bonds among employees. The company firmly believes in relationship-driven approach to the business and encourages the formation of close bonds between employees in its stores. One can easily witness the presence of close bonds among employees by simply observing their interaction in any store belonging to the Seattle-based international coffee chain. This contributes to the formation of relaxing and comfortable environment in Starbucks store, effectively strengthening its role as ‘third place’ away from work and home, where customers can spend good time alone or with their friends. 3. Culture of inclusion and diversity. Embracing inclusion and diversity is placed at the core of Starbucks corporate culture. The world’s largest coffee retailer runs 12 diverse Partner Networks, representing the broad spectrum of employee backgrounds. These include Armed Forces Network, Black Partner Network, Disability Advocacy Network and others. The multinational chain of coffeehouses received 100% score on the Disability Equality Index. The principles of inclusion and diversity prevail not only among the workforce, but also have reflections on customer…
Starbucks corporate structure sustains international scope of its business operations that encompasses more than 34000 stores in 84 markets. Starbucks organizational structure is hybrid and integrates geographic, brand-based and functional hierarchy structures. Organizational structure of Starbucks can be divided into the following divisions: 1. Geographic divisions. Starbucks operations are divided into the following geographic divisions or segments: a) North America division. This division consists of USA and Canada b) International division consisting of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America and Caribbean 2. Brand-based divisions. Each brand within Starbucks Corporation portfolio represents a separate division led by the head of division. The world’s largest coffeehouse chain has brand-based divisions as illustrated in table below: Brand Founded Products Starbucks 1971 Coffee, non-alcoholic beverages, food Teavana® 1997 Variety of teas La Boulange® 1999 French pastries and breads Evolution Fresh™ 1992 Nourishment juices and foods Seattle’s Best Coffee 1991 Coffee, non-alcoholic beverages, food Tazo Tea 1994 Teas, herbs, roots and spices Brand-based divisions within Starbucks organizational structure Starbucks corporate structure is functional hierarchy and accordingly, groups are formed according to business functions on Executive Vice President (EVP) and Senior Vice President (SVP) levels. Specifically, as illustrated in figure below organizational structure of Starbucks includes 11 Executive Vice Presidents each leading a separate function below: Chief Financial Officer Chief Marketing Officer Chief Strategy & Transformation Officer Global Coffee, Tea and Cocoa Global Supply Chain Chief Technology Officer Public Affairs Chief Partner Officer Global Channel Development Starbucks North America General Counsel Starbucks Organizational Structure Similarly, there are 24 functions headed by 26 executives at Senior Vice Presidents level: Store Development Ethics and Compliance officer Chief Procurement Officer, Global Sourcing Product Experience Global Chief Inclusion and Diversity Officer Starbucks Canada Americas Finance Latin America & Caribbean Partner…