Sure Powell was given input by his retail managers, employees and customers, but he wasn’t given any advice from people that new the company inside and out. All the people that offered him advice had no knowledge regarding the financials or other intricate facets of the company. If he had a board of directors he might be able to make more informed decisions that better serve the company as a whole. It is clear he also didn’t have a clear process for managers to go through to implement changes and or suggestions. The chain of command was vague and rarely used except by going directly to or through him.
His attitude of “let it rip” is great because it gives employees freedom to thing outside the box and make them feel like they are a major part of the company but does not give any structure to them. His marketing background is most likely a key contributor to the company’s success in implementing new products and keeping customers coming back but with no real experience in running a company before this he lacked the human resource skills necessary for a company to thrive which is clear in his passive leadership role. External Environmental Analysis
Some of the key external forces with company were in the beginning not really having any competition which let the company grow and lock down a loyal customer base. Also with the Alaskan environment suiting coffee drinkers because of the mild to colder weather. Staying confined in one city also helped the brand name grow through word of mouth and helped lock down business opportunities. Having a roaster facility in the city also cut down on expenses and helped keep the coffee fresh which was one of their staple trademarks to serve the freshest coffee possible.
Internal Environmental Analysis Some of the key internal forces for ACC were the fact that the company was built on loyal workers who stayed in the company due to chances for promotion and growth. Along with that and Powell’s leadership style it let employees act somewhat freely and have input into a company that strived to stay away from a corporate feel. The quality of the products that they offered also helped them since they were considered to have the top of the line products some of which were considered to be the best in the world.
Having a small chain of command is also beneficial to the employees because it allows them to get things done relatively quickly without having to wait for it to go through many different levels of management. With most customers saying that the coffee was addicting and the atmosphere was very pleasant it leads to a happy environment for customers and workers alike allowing for the business to strive. Another problem of the external environment is that the shops were not strategically located.
The areas that they were placed in were researched to some extent but not fully like a major company like Starbucks would do to make sure they can get the most out of the market. Not only that but they didn’t own all the building or locations that they were in having leased some of the spaces with only year contracts. SWOT Analysis The opportunities to grow for the ACC seemed to be limitless since they had already successfully competed with local competition and it did not affect their bottom line to a level of concern for them until, world conglomerate Starbucks entered the scene.
Once they came on scene it became clear that competition would become a threat and opportunities could and would shrink. This was and is the biggest threat to ACC since Starbucks is already a well known product that strives to give customers the “Starbucks Experience”. This is where the customer can feel comfortable getting the same service and products at any store in the world compared to ACC’s differently styled shops and styles of running the stores.
This is probably of the greatest concern since most of their stores have different layouts and feels you can’t go to one ACC store and then go to another and feel like it is just like the one you already visited. One strength that ACC has is that it is a local company built on staying small and having a non corporate feel. They also strive to employee young workers in a state that is economically stricken and worried about their young adults leaving the state to live elsewhere.
One weakness I believe that they have is that their merchandise can be over priced and even though started to compete with lower priced items there were no real studies done on how well the products would do. One of their major weaknesses is their human resources department and their lack of technical support. They switched to new major software with no one that could fix a problem if one occurred. Business-Level Strategy Their strategy was to find a way to keep their customers loyal while offering the best possible choices in specialty coffees and to help contribute to the great state of Alaska’s economy.
Their potential for success I believe is still quite good. As long as Powell can overhaul is leadership strategy and his chain of command, I think they could become even more profitable than they already are. He needs to make a lot of changes but he has the right idea and now he just needs to build on it. Even though it may not be the Alaskan way of doing things he needs to come up with written ways and policies to go about key things in his business. The communication chain also must be improved for the business to continue to be successful.
Cooperative Strategy ACC has some key alliances in place already with major retailers already selling their products in wholesale as well as, disturbing them as needed. Having an alliance with an already established local produce market has obviously been key to their early success and I would guess that those are the stores that continue to post the most profits. Since they do not have a written agreement in place I would recommend that he do so because if he were to lose those locations to say Starbucks, it could be detrimental to his business.
Even though some of the major retailers already offer Starbucks products to the public, it is important that ACC stays on good terms with them so as not to lose their business since they are solely confined to Alaska any lose of a major retailer could have vastly negative effects. It is also key that stay in good relationships with the companies that they do their major business with for the same reasons as above. Options and Recommendation In order for ACC to stay in the specialty coffee market, they will need to do some drastic overhauling.
Starting with Powell, he needs to establish a direct chain of command and follow through with it. He already gives managers leeway with projects but he has to help them make more informed decision so that he will not have to cancel projects. He also needs to bring in a financial analyst to help teach his managers how to budget and be more open with the financials of the business. After that he needs to revamp his human resource department and definitely bring in an IT specialist to help deal with any software issues.
While he also needs to bring in people to train all the essential employees on how to use the software adequately enough that they will be able to teach new employees. I would say he then needs to have a clear line of vision of where he wants the company to go and how he wants it to get there. In order to do that I believe he needs a committee or a board of directors to help weigh in on decisions and help spark new ways and ideas of innovating and implementing strategies. It is also apparent that he needs to upgrade his facilities so that they can operate at full capacity which will also help get rid of some of the overhead he has.
Then he needs to establish one way that all stores will look and future stores will be laid out. The one thing that he may not want to do because it may seem like they are going corporate but there are too many uncertainties from one store to the next. They do not have to be identical but the way things are done internally and as far as customer service goes that should be. Overall I think ACC can last and be the main Specialty Coffee supplier in Alaska he just needs to do a little overhauling.