Strategic Analysis and Recommendations for Luckin Coffee

This article provides a strategic analysis of Luckin Coffee using the VIRO model and offers recommendations for the organization. It also discusses the importance of strategic management and success factors for strategy. The article is relevant for students studying Strategic Organization ULMS871 or anyone interested in understanding the strategic analysis of a company.

STRATEGIC ORGANIZATION ULMS871

Table of Contents
Part A...............................................................................................................................................3
Strategic analysis for the organization ........................................................................................3
Recommendation ........................................................................................................................5
VIRO Limitation ........................................................................................................................5
Alternative solution .....................................................................................................................6
PART B............................................................................................................................................7
Presenting the what matter in strategic success...........................................................................7
REFERENCES................................................................................................................................1

Part A
Strategic analysis for the organization
Viro model is the internal analysis which deliver assistance in determine the competitive
advantages of the organization in effective as well as efficient manner. It considered the leading
constituent which are renowned as valuable, immutability and organization (Bonaccorsi and
et.al., 2020). The organization utilized the framework to determine the core benefits the
association is having to operate the commercial enterprise in the successive manner.
Strategic advantages Value Rare Imitable Organization
Financial resources ✓ ✓
Distributional network ✓ ✓ ✓ ✓
Quality of coffee beans ✓ ✓ ✓
Plans of action of Luckin coffee ✓ ✓
Technology ✓ ✓ ✓
Production capability of organization ✓ ✓
Human resources ✓ ✓ ✓
From the analysation of the VIRO model in context to the Luckin coffee organization. It is
determined that the organization has the potential to deliver the competitive advantages in the
various marketplace. The Luckin coffee deliver the quality and standard product and services to
the potential patrons of association with the aim of enhancing higher profitability from various
marketplace. The financial services of the association is valuable for the company as it bring
stability with the organization and the investor are the significant assets of the organization. The
financial services of the organization is rare as due to that the organisation is able to develop
various plans of action in effective as well as efficient manner (Cloutier and Ravasi, 2021). It is
the competitive advantages of the association as every leading company didn't have potential to
deliver the financial resources to the shareholders or investor in adequate way. Apart from that

the organisation is able to enhance the scale of growth with the assistance of availability of
financial resources within the company. Along with that the distributional networks are effective
for the growth of association as it satisfy the need of the patrons strongly. On the other hand it is
rare as the distributional network is quite unique in domestic as well as international marketplace
which is easily adopted by the competitors for the supply of commodity. Due to strong
distributional network the association is expending the business all over the globe and generating
higher profit (Erlangga, 2022).
The Luckin coffee organisation offer valuable and qualitative coffee to its potential patrons due
to that the association obtain the honour in international coffee experimentation contest in 3
successive years. The quality of coffee beans are rare to obtain form different market segment as
the association utilized the mixture of Arabic and regional coffee beans blend together for the
delicious recipe which is not easily obtain by the competitors for offering competitive
advantages in the marketplace. Due to that the association continuously obtaining positive
results.
The Luckin coffee adopted the unique plans of action for the welfare of the association. Due to
that the Luckin coffee is gaining continuous profitability or revenue from the marketplace. The
strategy of the association is not easily cooped by the competitors but the opposite association as
the potential to deliver the alternative solution in order to attract the customer toward different
brands. basically the competitive advantages of forming effective decision for the welfare of the
organization allow the company to expend the business and network in different areas in
adequate manner (Gond, Cabantous and Krikorian, 2018). The association provides the facility
of pick up stores which is rare but not imitable. For increasing the brand value the organisation
is utilizing the innovative technology and have opportunity to generate the revenue from
various market segment. It is consider as the valuable for the organization as in the modern era
the large numbers of patrons utilized the technology in the process of forming decision before
purchasing the commodity from the different marketplace as per their taste and preferences. In
general the technology is in the market trend so it can be occupied by the other brands for
increasing their presences in the marketplace. With the assistance of that the organization is
accelerating the sales of the company and improving the image of the brand in different
marketplace that also deliver impression on the minds of the customers. Apart from that the

company stay connected with the consumer for the long period of time (Jarzabkowski and et.al.,
2019).
Recommendation
After the analysation of the viro model of the Luckin coffee company it is recommand that the
company has the potential to obtain more advantages from the different marketplace. For the
welfare of the organization the company should adopt the financial resources which are unique
from the other brand's and allow the investor to form the effective decision which is not imitable
by the other brands. On the other hand for increasing the brand value the association has the
capability to attract the customer toward the association and improve the marketing positioning
of the company (jarzabkowski, Dowell and Berchicci, 2021). Along with that for delivering the
competitive advantages the company need to improve the customer experience and follow the
market trends in adequate manner. In context to that it is suggested to the organization to use
the digitalisation media as the plans of action as it is in the trends. Due to the digitalisation the
organization is able to determine the preferences of the consumer in an appropriate manner.
Apart from that the organization can develop the organizational loyalty app for delivering the
information which is associated with the product and services of the company. Further the
company is able to build trust of the employees. Apart from that the human resources
management should focus on the skills and knowledge of the employees which satisfy the large
numbers of the customer in effectiveness well as efficient manner. In context to that the human
resources management of the association should deliver the training and development
programme for improving the performance of the employees that will also deliver support in
employability. Furthermore for increasing the productivity of the association the organization
offer reward, bonuses and feedbacks to the workers of the association. The fed backs delivered
by the manger can be in positive as well as negative (Khan and et.al., 2021).
VIRO Limitation
It is hard for new and small business to apply for VRIO framework if the company has not
fully developed their resources or capabilities in order to sustain in competitive advantage. Along
with this, it is very time consuming in nature as all resources need to be analysis and to compare
it with other competitors (Bowen, Appiah and Okafor, 2020). Moreover, the another limitation
is that it relies on subjective judgement and it is hard for the company to analysis about
external factor and the performance in the market area.

Thus, it focusses on internal analysis so it cannot be made to use for developing
competitive strategy. So this framework is not broad in nature and due to that it cannot be used
anytime as it focused on micro factor. Along with this, the main purpose of value chain analysis
is to identify company operations and increase efficiency through segment by segment.
Moreover, it is not even good in linking the each activity in the chain together due to that it is
hard to make appropriate strategy for firm. Thus, it lose sight of how activates broadly
interrelate as well as it has limitation that VRIO overlooks significance of the wider
environment .
Alternative solution
The another alternative solution for the company is that for increasing the value of the company
the organization scan boost the production of the association in effective as well as efficient
manner. In context to that the organization can introduce more product to the customer that also
enhance the experience of the patrons with the association. Apart from coffee the association has
the opportunity to deliver food items and different beverages in the minimum prices to the
customers (Jarzabkowski, Langley and Nigam, 2021). Along with that for boosting the
profitability and productivity of the association the organization can enter the new market with
the assistance different marketing strategies that include export and import of coffee bean, joint
venture, franchise of the organization. The introduction of the coffee is higher as the association
import the Arabic coffee from the international marketplace so the company should deliver the
seeds of coffee beans to the local or the regional farmers for the local production. Furthermore
the company should adopt the cost cutting plans of action for entering the new marketplace.
Along with that for attracting the customer toward the production of the brand the company can
offer wide rand of the product and services of the organization (Koll, 2020). Moreover the
company can collect then feedback from the customers in order to improve the value of the
company and increasing the brand value of the organization in effective as well as efficient
manner.

PART B
Presenting the what matter in strategic success
Strategic management is defining as ongoing process which include planning, analysis of
project as well as necessities of the company needs to be meet in order to increase the success of
firm. Along with this, change in business has been common now days so it is important for
companies to analyses external environment so that it can identify factor related to threat or
opportunity available in the market area. Moreover, this analysis helps the organization in order
to set strategic objectives which contributes in success of firm in addition to this, for setting the
strategy companies can make use of strategic tools like SWOT, PESTLE and Porter five force
in order to known about the factor which may affect company growth (Rahman and Rahman,
2020). Thus, strategic management is important part of the company as it helps in knowing the
present performance of the company as well as to known about future outcomes. In addition to
this, there are some benefits of strategic management such as financial and non-financial. It is
mainly process that allow leader to plan for future through mitigating the risk that result in
setting the road map for the company and its employees.
The strategy is related to strategic planning, monitor and test and organization activities
that result in greater operational efficiency such as increase in market share as well as improve
profitability. The strategy is based on mission and vision of the company as well as values that
guide its actions. Although the process requires proper strategic planning and business
management which involves an organization short and long term goals.
However, both external and internal factor contributes in success of business and it is
important for consideration otherwise the objective of strategy will not be able to meet. Although
when company knowns about the external factor like political or economy and their impact on
performance then it will be easy to make the strategy. The success factor of strategy depends on
how well it is aligning with company goal and how it contributes in achieving them. The top
management is only responsible for setting the stagey as major decision are taken by them and it
is responsible for running the company (Porch, 2021). For example: Tesco is a famous British
company which deal in retail sector and it face huge competition in the market area so in order to
deal with it conduct their external and internal analysis through SWOT and PESTLE tools
which helps in finding the impact of factor and appropriate solution to deal with it. Although

the main of the company is to increase the loyalty of their customer so for that it has made use of
customer centric approach and all there marketing strategy is also related in finding ways to
serve their consumer quality services. In addition to this, it also aims at reducing the price of
their product in order to bit their competition in the market area.
Furthermore, firm also contribute in success factor of strategy as it helps in knowing internal
factor which are present in the company (Mbulwa and Kinyua, 2020). Along with this, it has
been found that organization can make use of SWOT tool which is stands for strength, weakness,
opportunity and threat. Although these factor allows in knowing what company is best at and
what changes it need to make in strategy so that it can success in the market area. Although if
firm internal factors are strong and good then it will help in meeting the strategic goal easily as
company set their objectives after analysing internal factor. Moreover, if the internal factor is
poor then company will take more time to accomplish their desired goal in limited set of time.
However, it is important for organization to have strategy as it allow business to predict
future and meet the changing demand of the current market through analysing and reviewing
customer expectations and needs. It also contributes in identifying new market trends and adapt
their strategy according to their needs. In addition to this, a proper strategic plan provides
management with roadmap to align the company functional activities to set goals (Gavrilova and
et.al., 2018). Thus, strategy act as guide that helps in making appropriate decisions and
determine the resources and budget which helps in accomplish set objectives that result in
increasing operational efficiency. Although if resources of company are appropriate then it will
help in meeting the strategic objective easily as it can take appropriate use of the objectives in
effective manner. However, firm helps in attain the success of strategy by giving the details
regarding the strength and weakness of the company. When the top management knowns about
the weakness then it will be easy for them to make appropriate strategy by taking the key points
of weakness as the main motive of strategy is to deal with them and threats. However, the threat
of the organization need to be consider while making the strategy by firm so that relevant
solution can be find out in order to reduce their impact on the growth of firm.
Moreover, Tesco analysis their company strength and make use of them in their strategy
such as it has good brand image which helps in developing customer centric strategies for
marketing as well as for expanding it has adopted for growth strategy. However, for grabbing the
opportunity of growing their business it has made use of their strong financial position in order to

implement product strategy. Such as it makes use of innovative technology for attracting
customer and to collect insight about the market condition. Furthermore, for grabbing the
opportunity Tesco has made use of digital marketing as it is current trend going on in business
which helps in increasing the sales as well as to improve the performance of company. Thus, it
can be said that firm helps in attaining the success of strategy.
Industry exist in market to provide products to particular markets as well as for
generating profit. The strategic management produce detailed knowledge about the market in
which company sell their product. Along with this, it consists of market size, growth,
competition and industrial profitability are the key factors in determine strategy. The industry
strategic management process helps in identifying the external factors present in the market area
which helps group of firms to make appropriate strategy. However, if company ha ideas about
market area then it will contribute in finding strategy which will contribute in dealing with those
external factor as well as to reduce their impact (Nwachukwu, Chládková and Fadeyi, 2018).
Although it is important for the organization to conduct industrial analysis as it helps company to
know their market position as compare to competition that produce similar products or service.
However, it is crucial for understanding the forces present in overall industry. It has been found
that when company knows about their external forces then it will set objectives accordingly and
opt for right strategy. Thus, it will contribute in success of firm. Although the role of industry
analysis helps in determining the opportunities and threats that exist for firm within a
competitive environment. However, for conducting industry analysis it is important for company
to have overview of the industry such as product and services provided through them.
Along with this, it need to review trend and growth pattern that have existed within
industry as it will contribute in finding accurate strategy. It also need to identify factor that
influence the industry as it will contribute in finding tactic that will be useful for firm in order to
deal with it (Mortlock, 2020). In addition to this, for proper industry analysis it is important for
organization to gather information through research so that industry growth can be identifying.
Moreover, Tesco makes use of Porter five force as it is best method for analysing the industry
and it helps in creating a strategy to complete within it. Although this method consists of all five
forces that influence all markets and industries. However, the first stage is known as ease of
entry which tells organization about the entry of competition or any kind of barriers like

regulation of government that can create barrier in business strategy. In addition to this, power
held by suppliers need to be consider while developing strategy as products and services affects
the company ability to compete. Thus, it helps in developing the strategy which helps in betting
the overall competition of the business (Choudhury and et.al., 2022). In addition to this, another
factor that Tesco focus on power of buyers such as strong customer have high chance of
bargaining power so this details helps in making the strategy in order to reduce the impact of
their power on sales. Mainly it helps in finding the competition in the market area which
contribute in developing the strategy that helps in reducing the impact. Furthermore, porter
believed that this analysis of five forces exist in every industry that helps in forecasting company
ability to compete and remain profitability.

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