Write a Business Project Management Starbucks Corporation.
Starbucks Corporation is an American company founded in 1971 in Seattle, WA. They are widely known for their premier roaster, marketer and retailer of special coffee. Currently they has more than 182,000 employee in 27, 339 operated & licensed stores (Gereffi and Sturgeon 2013). The Seattle-based coffee chain Starbucks has been expanded to over 62 countries. They almost doubled their business in recent years after gaining the brand image in the beverage industry. Among 27, 339 stores in all over the world, they have 106 stores in the Singapore. In the recent years they were successful to become leading beverage supplier excluding Coca-Cola and Pepsi for overseas demand of their roasted and handcrafted high quality premium coffees, tea and other beverage. They also provide various type of tea and coffee products. They are still growing their business in all over the world through other channels such as grocery and licensed stores and national foodservice accounts. They are also frequently combine with other brands to extend their business. They are expanding their business by collapsing with other brand names including Tazo, Seattle’s best coffee, Starbucks VIA, Evolution fresh, Starbucks refreshers and La Boulange. Their main profits comes from the retail coffee and snack stores. The company had a major showdown in 2009 due to several economic crisis (Gereffi and Sturgeon 2013). The revenue of the Starbucks declined in US6.6% to $25.9 billion. Before 2009 the company was continuously overgrowing as their revenue was constantly uprising. Again they experienced their overwhelming growth from 2013. Starbucks experienced many downfall and uprising throughout their forty five year of business. They are also able to change their product and services as customer desired throughout the long time. They were able to understand and produce consumer’s desire. Their operation strategies were effective as they were able to expand their business over 72 countries (Gereffi and Sturgeon 2013). They targeted most developed countries to expand their business. The brand name helped them to operate effectively abroad. They also conduct several publicity approach to expand their brand name. They also alter their beverage types in order to attract peoples in specific country. They were able to understand the people desires and take the opportunities to expand their business in all over the world. In the recent years they were successful to become leading beverage supplier excluding Coca-Cola and Pepsi for overseas demand of their roasted and handcrafted high quality premium coffees, tea and other beverage (Moran et al. 2015). They also provide various type of tea and coffee products (Gereffi and Sturgeon 2013). They are still growing their business in all over the world through other channels such as grocery and licensed stores and national foodservice accounts. They are also frequently combine with other brands to extend their business.
In the last years, Starbucks expand their business over 72 countries in the east Africa and Southeast Asia. They have almost 22,000 stores outside US. Though Seoul is the most Starbucks-filled country. They are also heavily popular in the Canada, china and japan as this countries are second, third and fourth in term of the star buck shop count. More than 30% of their revenue comes from the aboard. However, they did not stop the expansion yet. They are currently reaching the developing countries to gain more revenue from the abroad. There are several aspects needs to be consider before developing the business in a new region.
Fig 1: Countries where Starbucks is currently operating their business
Source: (Gereffi and Sturgeon 2013)
They followed a particular supply chain to produce the rich beverage for their customers. They grow their trees in their small scale farms. They also have large farms which produces vast amount of raw material. However, Starbucks have many small scale farms which are easy to manage and produces huge amount raw material as well. Star buck’s has about 60,000 total mills for 70,000 farms. The import process takes place between processor and Roaster as shown in the Fig 2. This farms produces estimated 600 million pound represented 3% of the world coffee produced in 2013 (Dall’O, Bruni and Panza 2013).
Fig 2: Coffee Supply Chain
Source: (Gereffi and Sturgeon 2013)
Most of the coffee comes from Central America, South America, East Africa and Southeast Asia. Ninety percent of their coffee’s raw material comes from those areas. The mountainous regions of developing countries are suitable for generate the rich coffee. They also import from 14 of 15 Arabic exporters excluding India. Starbucks, in a way, trades to obtain these various intermediate inputs.
Before expanding business across border there are certain aspects to be consider as opportunities, rules and regulation. The Doing Business is a World Bank Group flagship report covers such areas. It illustrate all the logistical process of importing and exporting. It also describe the aspects which are mandatory to consider in order to establish an effective business across border. According to the report there are several risk and opportunity factors needs to be analyzed before establishing a project.
Leverage all available resources: Total thirty seven percent of the exporters thinks they does not have sufficient knowledge of international market. However, successful companies always recognize the opportunities and seek it out. The internet plays a vital part to gather partner and market research at fingertips. The most important factor is knowledge of the market to develop effective business across border. Travelling to the market under consideration, which is one of the crucial part of vetting strategic plans, finding complementary in-market partners and gaining insights into cultural and regional operating procedures (Gereffi and Sturgeon 2013). They also needs to consider other factors such as resource availability and communication factors. Resource availability is one of the major factor that can impact the business outside. Starbucks collects their raw material from different key areas. The distance between the resources and retail shop must not be far. The ratio of transportation cost and revenue must be compared before expand the business to new region.
Leverage all available resources
Fig 3: Revenue details
Source: (Hochschild 2015)
For expanding business to other regions the next consideration is the preferred language of payments, AKA Currency (Moran et al. 2013). The Starbucks needs to consider the currency of different regions in order to gain profit. The needs to adjust their checkout process to default to correct currency based on geographical location or generate currency converters that provide details of the total cost. For different regions the currency value also differ.
Fig 3: price variance
Source: (Deresky 2013)
The above figure shows the price variation on different regions. Before develop the business in regions the price rate needs to be adjusted. The price for the same beverage differ according to the resource availability, tax rate and production cost. There are also factors that directly impact the cost of a particular beverage or snacks such as employee availability and the wages needed to provide (Covey 2013). Starbucks usually popular for their handcrafted rich coffee. For creating the particular rich coffee the employee needs to be go through training as well. Company needs to be sure they paid the employee while maintain the profit.
Proper Region selection: For establishing an effective business across border the locations needs to be selected wisely. There are certain aspects to consider before choosing the exact location. The location of retailer shop directly impact the business (Clarke et al. 2015). The retailer shops must be situated in a popular crowded area. There are also other factors to consider such as convenience, specialty, accessibility, visibility and traffic. Convenience goods needs easy access that will allow consumers to quickly purchase the beverage. A mall could be a suitable position for Starbucks as lot of people gathered there for refreshment (Buguin 20113). Before choosing a city or state the area needs to be researched and analyzed. The locations information can be obtained from the local library, chamber of commerce or the census Bureau. From this sources the population, income and age details can be obtained. After analyzing this factors the final location can be determined as well. There are also other factors such as signage, zoning and planning (Charter 2017). Before signing a lease the company needs to be sure that the policies and procedures are relevant and appropriate. The next major factor is location cost besides the rent.
Appropriate Time: The secret to massive adoption is right timing. Even though Starbucks products has high demand and advanced to other competitors then success rate depends on the innovation in the market. The market must ready for the product. Starbucks needs to be sure that they does not enter a saturated market. Analyzing an identifying competition in the potential market can provide tremendous insights. This insights can be useful to expand the business (Acemoglu and Robinson 2013). It will also be useful to gather information related with local culture and its sales implications as well as on the availability and ability of the local talent. The environment in different region is also differ from the US.
Starbucks is a globally positioned company. It is recognized as an ethical based company, which is recognized all over the world. They wish to prove it to their customers on a daily basis about the quality of their products (Chua and Banerjee 2013).
There are a few aspects, which should be needed to be considered in order to create an impact on the society.
Leading the Green Retail Path
Starbucks has focused on the effectivity of their stores. They have installed more than 1200 LEED (Leadership in Energy and Environmental Design) certified based stores in more than 20 countries (Dall’O, Bruni and Panza 2013). The company is the biggest producer of green based stores in their sector and within their stores. Starbucks has also deepened their level of commitment to retails that are extremely environmental friendly. They have decided to achieve a goal in order to achieve 10,000 green retail stores by the year 2025. This would incorporate the newer and the existing stores with the help of evaluating and thus developing the standards of building (Balasescu 2013)
The company has also made a substantial amount of progress to provide environment friendly cups and thus recognize the progress of the business (Zikmund et al. 2013). Starbucks is one of the first company that had offered a discount to their customers who would be able to bring a reusable cup (Dooley 2014). Though they were able to produce reusable cups, they would try to continue to support the local based governments and their various shareholders in order to increase the current process of recycling within their markets that are owned by the company. Starbucks has set some level of goals that are meant to be achieved by the year 2022 (Lee 2015). These goals are designed in order to speed up the level of progress in order to accomplish a greener cup. Some of the goals are:
Since the year of 2005, the company has majorly invested within the renewable energy and they have recently achieved their expected milestone.
Creating Newer Form of Opportunities
Starbucks is majorly dedicated towards delivering quality service to their customers. They are embracing and thus employing millions of youth in order to achieve their dream and for the future of the company (Crane and Matten 2016). Starbucks is the major leader for the purpose of hiring greater form of talents. They try to create several opportunities for their customers and business partners in the communities that are served by them (Epstein and Buhovac 2014). They have committed themselves to hire 100,000 opportunities for the youth by the year 2020. The Starbucks group would also share new practices of human based resources and recruiting that would be dedicated towards hiring individuals, retaining them and thus advancing the opportunities for the youth (Wetherly 2014).
Starbucks is also opening several stores within the communities of low to medium income, which would be fortified with the training centers within the United States. The company also works with non-profitable organizations in order to provide training related to the skills of job for the young people within the industry (Yoon 2014). They also offer support and training to the young people in several ways, which would be relevant to the various needs and opportunities (Wilson and Post 2013).
Starbucks is also dedicated towards hiring military spouses and veterans (Campbell and Helleloid 2016). They believe that the company would be able to benefit from the facts of leadership, sense of service and the level of experience. They are also establishing several places for the veteran and the communities of the military families in order to establish a connection with each other. They also plan to create opportunities for the volunteers and thus leveraging the unique quality of leadership based experiences in order to shape the company and the world in a positive way (Sutton 2014).
The refugees in any country represent the major area of the population of any country. They always seek for a chance in order to reshape the lives and thus have a fresh life altogether despite facing several challenging circumstances (Barrington and Shakespeare-Finch 2013). Starbucks is responsible in order to lead a global based effort in the recent five years for welcoming and thus employing many such refugees. Their talent, resilience and the level of experience would be helpful in enriching the communities of refugees who are served by them from all over the world (Oetzel and Miklian 2017). In the United States, Starbucks has majorly focused on the personnel, interpreters and the families of the refugees who have served alongside with the American armed forces
Strengthening the Communities
Each and every Starbucks store is a basic part of a huge community. They are majorly committed in order to strengthen the neighborhood communities wherever they would establish their business (Jaffee 2014). In order to provide the donation of the food within the United States, the company is providing a considerable amount of support to the food banks for the purpose of investing in the infrastructure of the program. This would include the use of refrigerated vehicles that would help in safely transporting the rescued food.
The Foodshare program helps in donating free meal service. It also connects their partners with the locally based banks in order to donate their valuable time through project based service (Block 2016). With the help of the food donation program, community service, efforts of advocacy and financial based investment, the Foodshare based program helps the poor in feeding them and ending up their hunger to some extent.
Community Based Service
Starbucks has always believed within themselves and within their community. They believe that their service should have a genuine positive impact on the society. The service to the community would be reflected within their set values and mission. It also signifies the impact of the community within the society (Martinez-Torres et al. 2015).
Inclusion and Diversity
The success of the business of Starbucks would depend on the several forms of innovation within the business (Morais et al. 2014). This could be brought together with the help of diverse experiences, various backgrounds and different kind of perspectives. Their vision also includes the creation of various form of opportunities for the population within their hiring and the expanding chain of supply. The company also focuses on the equity of pay within the service and it also ensures that their partners are paid on a fair basis (Noormohamed and Warrington 2016).
Inclusive Workplace
There is no such higher level of competition for their business than to attract partners, develop better products for the customers and retain their partners and their valuable customers. This could be made possible by treating their customers with a high level of dignity and respect. They would also need to establish a culture, which would mean that everyone would be allowed to enter within their store (Gavin 2013).
Starbucks also offers the opportunity to build a career within their company and thus support the personal goals of their partners. Based on the outreach of the community, partnering with the non-profitable civic leaders and the diverse based professional associations located at the local as well as national level, the company is working hard in order to ensure that a vast pool of talent of the youth should have the basic accessibility to the various opportunities that are offered.
Starbucks is continually striving to perform more in order to increase their level of diversity. This is the primary reason that Starbucks is establishing goals for the purpose of increasing the number of minorities and women at the senior levels of the organization. This would be also be needed to ensure a good workplace environment that would help in the escalating the progress of their success (Jang and Jung 2013).
Diverse Chain of Supply
The Starbucks Supplier Diversity Program (SSDP) helps the company in strengthening the chain of supply and thus this would help in serving as a major component of their level of commitment in order to source their product in an ethical manner. The particular program focusses on establishing a newer form business based relationships with several companies. Through the process of delivering high quality of products, innovative services and products across all the channels of business, they help in the process of delivering high value products and economic development (Fayet and Vermeulen 2014).
The comprehensive based approach for the purpose of the diversity of the suppliers would be helpful in ensuring the motive of their program and goals. These are the part of the foundation of the process of strategic based sourcing. Besides setting targets for the supply chain goals, the outsourcing team would fully support in the varied development of suppliers. Starbucks also help in coaching and developing suppliers in order to meet the diversity based standards beyond the fact of identifying strong candidates.
Based on the above discussion on the mentioned topics, it can be said that Starbucks has to consider some aspects for the purpose of enhancing the business processes. The company should be able to exploit the opportunities for the global based expansion. This would help in gaining advantage over several other firms who are also trying to expand their business globally (Fayet and Vermeulen 2014). In order to deal with the competition within the market with the lower prices of coffee products, the company could shift their focus on the quality and the individuality of the products for the purposing of differentiating between them. The company can also increase their level of efforts for the purpose of trademark and the protection of intellectual property in order to reduce the imitation based threat.
Some of the basic aspects would include:
1) There should be a company-wide commitment. Each and every member within the business should be considered as an important member of their international team. This would include the members from the executive suite to the service of the customers through the fields of engineering, production, purchasing and the shipping aspect (Chang 2014).
2) The plan of the business should be properly defined for accessing the globally based markets. The international plan for the business is primarily important for defining the present status of the company, the commitment and the internal goals of the company. It is also essential in order to measure the results of the gains of the business.
3) The amount of money, which should be invested for the purpose of the efforts of international based expansion.
4) There should be a minimum plan to decide the time that could be taken in order to plan for the company to penetrate within the global market. It would take a substantial amount of patience and time in order to develop a great and durable enterprise.
5) A proper website should be built and the internationally developed plan should be implemented in a sensible manner. There are many companies who are able to offer many affordable packages in order to plan and develop a website. Hence it would be the best decision to develop a site slowly that would communicate in a sensible manner.
6) The company should focus on specific products or services in order to advertise their products on the overseas platform.
7) A deep analysis of the research within the market would be helpful in identifying the major targets within the market. The company should have to make a prediction about the places in which the products of the company would be in greatest demand. The research within the market is an extremely important tool for the purpose of exploring and recognizing the fastest growing and the most penetrable area of market for the product of the company (Chang 2014).
8) The data, which would be needed to be researched upon should be searched first. The specific geographic location for the purpose of selling the product should be researched upon. This would help them in deciding the kind of customers who would buy their products.
9) The product of the company should be always prepared for exportation to the outside market. The company should be able to make their product ready to be made for sale within the domestic markets. The part of packaging can play a major role for the purpose of enabling the international based connections. It should be ensured that the packaged product should be the best in the world such that it could be sold everywhere.
10) It is extremely essential to find such customers who would be able to buy their products in the overseas market. This would be beneficial for the processes of the business.
11) The pricing of the products should be decided and the costs of the landing should be determined. The price for the customer should be determined. The reaction of the customers based on the prices should be noted and then the negotiation could be done based on the reactions of the customers (Adhikari, Basu and Raj 2013).
12) The company should set up the other financing options and the basic terms and conditions of the product. The terms of payment provided by the company should be set on an advance basis.
13) The company should also implement an extraordinary after sales plan of service. The greater relationship between the company and the overseas based customer should not end whenever a process of sales would be made. There should be a long and strong relationship between the customer and the company. The proper care for the customer would ensure that the customer would be retained and they would purchase the products again (Mason, Cole and Goza 2017).
14) The personal contact with newer customers and targets who are armed with information based on specific culture and courtesies, consistency and professionalism. The primary goal of the company should be set in order to enter into a different form of culture, adapt to the respective changes and thus own them.
15) The investigation of the internationally based business trips of the company should be done on an urgent basis. The practical based aspects of the international business could be helpful for the company to succeed in their trip. Hence the plan should be made accordingly.
16) The partnerships and alliances made by the company based on cross-border should be explored. The joining forces with another company should be taken into consideration and the international presence of the company should be made to be felt.
Conclusion
In the end, it can be concluded that the comparative analysis of the world wide successful organization of Starbucks, a leading organization brewing cafes around the world, has various frameworks working for the success of the organization from a worldwide perspective. Being a multinational company, Starbucks have been essentially selective with their business process structure, to retain their position in the market, as well as be strategically ahead of their competitors. Among 27, 339 stores in all over the world, they have 106 stores in the Singapore. In the recent years they were successful to become leading beverage supplier excluding Coca-Cola and Pepsi for overseas demand of their roasted and handcrafted high quality premium coffees, tea and other beverage. They also provide various types of tea and coffee products. Analyzing an identifying competition in the potential market can provide tremendous insights. These insights can be useful to expand the business. It will also be useful to gather information related with local culture and its sales implications as well as on the availability and ability of the local talent. The environment in different region is also differing from the US. They are still growing their business in all over the world through other channels such as grocery and licensed stores and national foodservice accounts. They are also frequently combined with other brands to extend their business. They are expanding their business by collapsing with other brand names including Tazo, Seattle’s best coffee, Starbucks VIA, Evolution fresh, Starbucks refreshers and La Boulange. Their main profits come from the retail coffee and snack stores. The company had a major showdown in 2009 due to several economic crises. The revenue of the Starbucks declined in US by 6.6 percent to 25.9 billion USD. Before 2009 the company was continuously overgrowing as their revenue was constantly uprising. Again they experienced their overwhelming growth from 2013. Starbucks experienced many downfall and uprising throughout their forty five year of business. The report about Starbucks included the comparative analysis of the entire organization’s structure with respect to the competitive market position of the organization comprising of various markets it has spread to. The widespread organization has been reviewed to find out that in the last years, Starbucks expand their business over 72 countries in the east Africa and Southeast Asia. They have almost 22,000 stores outside US. Although, Seoul is the country that has the most number of Starbucks outlets. They are also heavily popular in the Canada, China and Japan as this countries are second, third and fourth in term of the star buck shop count. More than 30 percent of their revenue comes from the aboard. There is no stopping for Starbucks here as well since the organization is still enhancing support into implementing more and more outlets. The recent development has also lead into expanding the market in India, since even now, India is considered to be the most lucrative market in the business era. The report also focuses on what the organization has been strategizing to expand its market over the entire world. Since, trading across borders depends on various factors; legal, ethical, business-related and strategic as well, it analyzes how Starbucks makes the most of it for accessing worldwide spread and maintains the same to remain ahead of its competitors in the market. There are various reasons behind Starbuck’s success over all these years and that too globally. The next phase of the report focuses on the strategies that the company had utilized to implement social influences in the organization. In today’s world, digitizing the organization is what creates the biggest impact on reaching a huge range of customer base. Reaching a huge range of people within a short amount of time and with limited sum of budget spent is only possible with social impact. Additionally, the critical analysis and evaluation of the literary sources that provide information about all of the contexts mentioned above have been incorporated in the report as well. This helps to focus the areas that Starbucks chose especially to consider in order to enhance the business, reach a global recognition and be ahead of their competitors. Thus, Starbucks’ analysis of business strategies is essentially described within this report.
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