Date of Submission
Starbucks has emerged as a pioneer in the coffee house business in several geographical regions through virtually introducing this idea to other countries located in the Asia-Pacific region plus other European nations that the coffee house culture is sophisticated. Starbucks launched its coffee business in China and since then has ensured that it adapts its operations to the local surrounding; thus, boosting its growth in the region (Lemus et al. 2015). Due to the popularity of digital expertise and e-business in the country, the business plans to bring up locally applicable Starbucks 4th place experience that typically blends its store’s familiarity within the digital surrounding. The organization has also started its electronic-flagship center in Alibaba’s Tmall that avails a social gifting alternative to the Chinese Customers. Also, as part of the international strategy, the industry is planning to tap into the developing Indian market due to the emerging opportunity in the increasing middle class with higher disposable income in the nation.
Strategy achievement is the action phase of the strategic supervision as it involves mobilizing the workers and executives to invest in the formulated strategies into the actual action plan. As part of the strategic implementation, the industry has announced to strategically double its China store number to 3,450 by the beginning of 2020 and completing the objective, 45 innovative stores a month must be constructed annually. In 2014, the company added up to 120 new stores in China in the fourth quarter of the fiscal thus reaching a milestone for the total number of stores in a particular Chinese city (Geereddy, 2013). It also incorporated new Taikoo Li store in China which is typically part of the plan for innovation and steady expansion in China. The business is also coming with some premium coffee retailer accompanied with other snacks and sandwiches.
Influence of Governance and Ethics
Starbucks ethics and governance has strategically supported the organization’s mission and values and has assisted in safeguarding the culture and their reputation through encouraging a culture that is committed to ethical leadership and carrying out business with the needed integrity. The market has a lengthy code of ethics that describes the policies and steps that all the workers ought to adhere to including the chief executive officer down to the general board members (Lemus et al. 2015). As part of the ethics and governance, the Starbucks is very much transparent with the communication process existing between its stakeholders. The yearly reports and website of the business show that it indicates both the positive and negative sides of its performance level. Fairness has also been part of the company towards carrying out its services to both the investors and suppliers as it has initiated dividend payout to its workers to date. There is also the training program to the suppliers that ensure they all acquire same chance to perform at best and meet the intended business goals and objectives.
Starbuck’s Social Value
The business’s social responsibility is centered on three pillars including community; ethical sourcing an environment where it has incorporated community stores that strategically work together with the local nonprofits in satisfying the wants of the societies they are situated. The industry has also promised to hire close to 9,500 veteran and military by the end of 2018 together with incorporating diversity and inclusion in the workplace. Regarding the ethical sourcing, the business has planned to ensure that their cocoa, tea, coffee, and artificial products are responsibly and justly manufactured and purchased. As observed by Geereddy, N. (2013), the success of the organization is associated to the success of their producers and suppliers who create the business’s goods. Therefore, they only buy these harvests from farms and producers that follow a given set of ethical consideration. The industry views the world as their most significant business associate and thus takes a detailed a step in lowering their ecological impact through recycling and conserving water and energy.
Starbuck’s Innovation and Diversification
The business is enlarging its evolution brand through incorporating modern snacks bars that are falling under the trademark’s harvest line of goods together with its development fresh that are accessible in close to 8,000 cafes and grocery supplies internationally. These goods have overturned the pepsi’s naked fruit drink and sweet snacks bars that were in the past sold at Starbucks joints within the United States (Holt & Cameron, 2010). It is no secret that the business is trying to diversify its goods and services that incorporates more than just coffee stores to the global level. The industry has acquired Atlanta centered tea business Teavana for close to $625 million and tactics to eventually control these stores in the same manner that it controls its namesake coffee supplies.
Taking part of some areas of Starbuck’s sites, one is required to register for an account which must be a personal account with accurate, efficient, modern and full information together with a regular update of the account. There are also Starbuck’s card terms and conditions that must be adhered to when one wants to acquire the business’s stored value cards plus the rewards programs (Geereddy, 2013). On termination, the business reserves the obligation to end any contract or any order through providing the seller with fifteen full days are written notice; moreover, Starbuck’s is likely to end the conformity or any order at any time if the seller does not obey the rules or obligations outlined within the contract.
Evaluation and Control
Starbucks is strategically applying metrics to some social media platforms and offline initiatives with the aim of offering deals and promotions, compensations, useful goods and services to its consumers. One of the social media metrics that the business uses is geolocation applications that include Facebook and foursquare places to associate with its consumers on the go via check-ins on their phones that strategically activates track-able hyper-local metrics (Holt & Cameron, 2010).
Due to the business’s operations in the restaurant environment, the financial ratios ought to consider some significant aspects as the market tends to depend entirely on operating leases that represents Starbuck’s off-balance sheet obligations. The debt ratio is essential in evaluating the industry’s financial status as it indicates the level of leverage and risk (Fridson & Alvarez, 2011). Operating margin ratio is another essential financial ratio as the company has to generate profit margins and returns that are relatively higher than those of its competitors.
Fridson, M. S., & Alvarez, F. (2011). Financial statement analysis: a practitioner’s guide (Vol. 597). John Wiley & Sons.
Geereddy, N. (2013). Strategic analysis of Starbucks corporation. Harward [Електронний ресурс].–Режим доступу: http://scholar. harvard. edu/files/nithingeereddy/files/starbucks_ case_analysis. pdf.
Holt, D., & Cameron, D. (2010). Cultural strategy: Using innovative ideologies to build breakthrough brands. Oxford University Press.
Lemus, E., von Feigenblatt, O., Orta, M., & Rivero, O. (2015). Starbucks Corporation: Leading Innovation in the 21st Century.