Page 111 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes These events beg the obvious question. Given such fundamental changes in the macro
environment, should iconic brands like Starbucks stay true to their strategic brand vision
or continually adapt to regain competitive advantage?

Regaining lost glory and recapturing global brand leadership should be a two-pronged
strategy. Iconic brands should strategically manage the dual process of continuous
innovation on the one hand and reinforce their guiding strategic brand vision.

Innovation Drives Strong Brands
Innovation is a fundamental building block of iconic brands. Leading brands create their
corporate strategies with an inherent strategic element encompassing innovation. Such
innovation is not limited to bringing new products to markets, but is expanded to innovation
in communication (with customers and other stakeholders) and innovation in
implementing cost-cutting and efficiency enhancing strategies. Such continuous innovation
serves dual purposes.

First, innovation enables iconic brands to refine and redefine their cores in line with the
changing needs. Second, innovation allows iconic brands to continually adapt to the
changing needs of customers, thereby protecting its competitive advantage.
Innovation should be practiced along with an organisation wide brand vision, which acts
as the strategic blueprint of the brand’s path. Such strategic vision should not only delineate
the boundaries of the brand but also should chart out the possible strategies of the brand
in order to attain and maintain brand leadership. Commitment to such brand vision
allows companies in tough situations to chart out different strategies (such as either cost
cutting or enhancing value proposition) but will ensure that the brand does not deviate
from its strategic charter. As innovation prepares the brand to adapt to changing
circumstances, brand vision can guide the brand not to stray away from the core brand
promises and dilute the core brand identity.
Iconic brands can effectively regain their brand leadership by implementing this dual
strategy. Starbucks has already begun on this path. It is innovating in reaching its customers
and enhancing efficiency but maintaining consistency in its core brand promise of providing
an enjoyable experience.
The changing global economic environment has challenged many global iconic brands.
This dual pronged strategy can not only help these brand protect their brand leadership
but can also create a sustainable path to ensuring long term competitive advantage.
Question:
How did Starbucks use innovation to handle growing competition?

Self Assessment

State True or False:
13. The number of customers in waiting line often affects the quality of service delivery.
14. As a service provider, you should try to engage customers who are in queue in other
things like television or magazines.
15. A service provider should never tell the customers why the waiting time is longer than
normal.

16. A service provider should inform the customers about the time when the waiting time is
usually less.

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