Strategic Initiative FIN/370 RE March 3, 2014 A successful business must be able to plan and forecast all aspects of operations, including both financial and operational goals, In both the long and short terms. Even though businesses may be temporarily successful If focused only on Immediate decisions, in the long term they will not grow successfully and they stand a much higher chance of failure due too lack of direction. Strategic planning refers too company’s developed long-term operational strategy that will be used to balance both financial and operations decisions over a period of five to ten years.
Financial landing Is d key and Integral part of strategic planning. Companies that create successful financial plans have set benchmarks and goals that define success. They are also able to weigh the cost of modifying or sustaining various parts of their business over the course of the strategic plan, shown below In the case of Struck venture into the golfing realm. Strategic Planning Initiative Struck has launched an initiative to expand into the 2013 top 100 golf course’s located on www. Loveliest. Com. Over the next few months Struck will work with a consulting firm to determine proper space and location in the vicinity of he 9th hole on these courses and will then begin construction. One year after launch to these walk-ups, Struck will assess probability and will evaluate the possibility of further expansion The goal is to increase sales by offering product in a location that is convenient to those playing either nine or 18 holes of golf.
According to Struck (2013), the tooling are a couple to the initiatives listed in their annual report: “Successfully leveraging the Struck brand portfolio outside the company- operated store base, Including an Increased focus on International licensed stores. Including retail tea and achieving customer acceptance of these new products and platforms while maintaining demand for our current offerings” (p. 18).
Effects of Initiative and Associated Risks There are some factors that may affect the initiatives listed, and in turn adversely impact the company’s finances that includes an increase in construction costs related to opening new stores as well as the remodeling of the existing stores; A delay in opening a store for one or more reasons that are out of our control or not being able to locate storefronts in good locations with marketable rates, that would change the established dates for grand openings in the United States and abroad; customers could reject a new product or based on the price increase that is needed to cover the production and input costs.
Additionally, “the degree to which we enter into, maintain, develop and are able to negotiate appropriate terms and conditions of, and enforce, commercial and other agreements; not successfully consummating favorable strategic transactions or integrating acquired businesses; or the deterioration in our credit ratings, which could limit the availability of additional financing and increase he cost of obtaining financing to fund our initiatives” (Struck 2013). Additionally, some factors that will determine how successful the company will be as determined by Europe, Middle East and Africa (MEME) and CAP segments that are not the same as those affecting stores in the United States.
Consumers’ tastes naturally are different in every region, and consumers in some Market Business Units (MBA) may not like the exact same product that is offered in the United States or a different international market. Associated risks from licensees and business partners could negatively impact Struck financial results, especially internationally. To strategically plan for negative results, Struck provides training, support and monitoring of operations for certain business partners, but the quality of their products along with services they provide may be substandard for many reasons that is beyond Struck control, and this can include their finances.
As stated in Struck 2013 annual report, they “believe that their customers expect the same quality of products and service from our licensees and food services providers as they do from a Company store and they trivet to make sure each customer receive the same quality products and service experience no matter where they visit”. Struck food and beverages are purchased from different domestic and international businesses by their supply chain operations, and sometimes they are made directly one of their licensees. Initiative in Financial Planning The initiative to put Struck walk-up’s on golf courses such as Pebble Beach Golf Course in Pebble Beach, California is not only the most superb place in America for golf, it is the most widespread.
The golf course “has nine holes perched immediately above the crashing Pacific surf the fourth through 10th plus the 17th and 18th “Pebble was voted the Most Fun Public Course by our panelists last September, and it’s become one of the most popular major championship venues of all time. ” (Golf Digest, 2013). In 2018, the United States Amateur will be held at the Pebble Beach Golf Course, also in 2019, the golf course will host its sixth United States Open. Developing a partnership with Pebble Beach Golf Course is a great opportunity for industry problems facing management; they will offer advice to designing work flows s a strategic tactic to organizing the business, eventually permitting the company to offer a “Struck-like” client experience.
As a result, the golf course will profit from operational efficiencies, as well as Struck; permitting them to have more time concentrating on generating a repeatable, high value customer service procedure that will result in a lucrative and nourishing business that will be positioned for forthcoming growth. Initiative and Sales The initiative of Struck to have walk-up stations at the 9th hole of the top 100 golf courses would be a great business decision to grow sales. This will give coffee drinkers the opportunity to enjoy their coffee and the sport. This will also give Struck a chance to have a new customer base from people that have never been to a Struck.
The fans at the golf course will be able to spread the word to their friends and family that Struck has partnered with the different golf courses to offer their coffee, energy drinks, and food items to meet the customer’s needs. Aside from their exceptional coffee, Struck is dedicated to having human connections, being involved in the community, and celebrations of different cultures. The customers are to feel the Struck experience by receiving the best customer service and by meeting their needs and preferences. They are committed to connecting with the needs of their customers from all cultures. Struck gives back to the communities by investing in the global communities and local neighborhoods through their strategic partnership and economic development opportunities.
With these commitments to the many different consumers and cultures and bringing products to the consumers will continue to grow sales for the years to come. Risks and Potential Effects Struck has several initiatives that are used within and for the company. They all have different risks and affect the company financially. Successfully leveraging the Struck brand is very important to the organization. The risks associated with this are losing business due to the company not being able to complete this task. Financially this can hurt the company because, of the money they used to try and accomplish this goal as well as the business they did not gain. Focusing on relevant product innovation is important to any business during this day and age.
The risk associated with this is coming up with ideas that may not catch the attention of the audience at that time. This will affect the company negatively in a financial standing. But if relevant product innovation of this company is successful the company can gain more money and business over time. The company has to work with other companies in order to gain supply and transportation of their products. The timely manner of a certain supply chain is very important. The risk of depending on other people is products not getting delivered on the timely manner that is intended. The company loses money because the items are not being sold due, to them not being in the stores.
However, the positive side is if the items are delivered the company can gain money because, their product was delivered and sold in a timely manner. The initiative that is taking place determines the risks and financial risks the company may encounter. As discussed, Struck is constantly working to meet their goals and improve initiatives within their existing financial plan. In the case of their venture into the golfing world, they have clearly balanced the risks of new business against the capabilities of an untapped market. As a larger company that is responsible not Just to its board but to its investors, Struck must continually balance the risks of new financial initiates against the need to continue to grow their sales and their corporation.