11/4/14

Innovation & Customer Loyalty

As companies tend to create more various, fancier products to fit customers’ needs, how to get innovations meet expectations is a question. Sustaining innovations, charging higher price to most demanding customers by providing more professional services and products, are regarded as a stereotype, though this strategy is not always succeed. For Starbucks, introducing the La Boulange’s coffee chain to offer fancier pastries does not meet its expectation, even question customer loyalty. This is because new pastries, complained to be too pricey and small are not customized. In order to stem the loss of customers, Starbucks now plans to bring back some products from old menu. In this sense, innovation is a paradox, which is necessary for promotion but may be harmful to sales and customer loyalty on the other hand. So before implementing new strategies (or new products & services), companies need to do professional market researches to ensure these innovation and improvement customize customers’ needs. In addition to sustaining innovations, Disruptive innovations aiming of providing more accessible services, is also a choice of these companies seeking to break their market limitation because this strategy opens a new door of bottom market. In general, every strategies should depend on the market and customers’ need.

A Starbucks Corp. Store Ahead Of Earnings Figures

11/4/14

Why Organic Foods

McDonald’s, the world largest restaurant chain, may look to sell organic food to stop the loss of customers. According to McDonald’s Corp. (MCD) posted last month, its sales in fourth straight quarter is consistently falling. Finding a new profit-point has become the most important task to MCD. Providing organic foods is a good approach to boost sales, at least, to stem the falling trend. The target customers of McDonald’s are various, from families who love Happy Meal, to workers grabbing breakfast on-the-go, so that organic foods can offer more choices and satisfy more customers’ needs. Also, McDonald’s can create shared value by offering organic foods, which currently have been coined with the brand of safe, nutrition and better taste. Shared value is a strategy for developing the future market value also strengthening economics, communities and business. In this sense, by re-conceiving products, McDonald’s meets social needs of healthier lifestyle, while better serving existing markets accessing new ones. Therefore, MDC, by providing more various products, can enjoy sustainable competitive advantage and avoid unhealthy competition.

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