...External Factors Introduction To be successful organizations rely on the four functions of management: plan, organize, lead, and control. However, implementing these functions is not easy when other factors come into play. External and internal factors such as, globalization, technology, innovation, diversity and ethics all affect the four functions of management. If an organization wants to be successful they must adapt to these different factors. One company that has been able to do so is Starbucks Corporation. The adaptation and utilization of these many different internal and external factors has helped to make the company very successful. Globalization Globalization is the integration and exchange of worldwide cultures and resources. “Corporations operate worldwide, transcending national borders” (Bateman, & Snell, (2011), pp. 4). Advancement technology has led to advances of transportation and telecommunication, and these advances have led to connections and interactions between people that may not have encountered each other. Globalization has also led to an increase of available resources to companies around the world. When it come to the four functions of management and how globalization affects them, an organization must plan a companies goals and mission according to whether or not they want to globalize, export or import, then they must organize their company and departments to help implement the plan, next they must be able to lead their employees...
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...The Internal and External Factors Affecting Starbucks Decision-Making By Deryl McKnight June 29, 2014 MGT 230 / Prof. Ronald Sprague Globalization’s Effect on Starbucks’ Management Functions In 1987, Starbucks started as a single coffee shop on the corner of Sixth Avenue and Pine Street in Seattle, WA (Business Week, 2002). In the following fifteen years, the company grew to nearly 5,700 outlets in 28 countries. In order for this to happen, many changes needed to take place in both thinking and management strategies. Globalization affects the four functions of management in many ways. When reaching out to a global market, Starbucks needed to make changes to how they planned and organized their strategies; they also needed to take the many different business cultures into account when leading and implementing these new management strategies. When analysts gave Starbucks two years at most before it saturated the U.S. market, they needed to formulate a plan to branch out to international markets. Using the first function of management, planning, Starbucks’ managers came up with plans to expand into other countries by working with local partners in those areas. By hiring managers and workers from the local workforce, Starbucks gave foreign stores a local face for their respective areas and also allowed for each location to be managed by someone who would know that culture and be able to adapt the Starbucks ideology into it. Letting local managers handle the everyday workings...
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...Skyline University Collage Case 1-1 - Starbucks International Marketing class – Dr. Shivakumar Alaeddin Khader Answers to the case study questions: 1. In Its journey to the top of international success in coffee stores, Starbucks has faced a lot of controllable and uncontrollable challenges. Starbucks started in Seattle in the United States where the people there love coffee and have a lot of coffee shops to visit. That was the first uncontrollable challenge facing the company as it started in nearly saturated environment with lots of competition. When operating in international market they need to operate through local partner who will cut from their profit so that they will keep only 20 to 50 percent of the profit. Expansion to international market poses with huge risks. While spreading out they have faced cultural challenges. Below picture shows the protesters against the globalization attaching Starbucks as they see it as a symbol for the free market international company and represents the globalization. For the controllable challenges that Starbucks have faced, the company growth largely in the United States as they have participated themselves of saturating the market of coffee shops as their crowding of so many stores so close to each other has become a national joke. Such as the headline in the Onion (a satirical publication): “A New Starbucks opens in restroom of existing Starbucks”. Opening so many stores near to each other will cut...
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...Introduction When we talk about the largest coffeehouse company, the first thing that comes to your mind is Starbucks. Starbucks Corporation was launched in 1971, it corporation is based in Seattle, Washington and has more than 16,000 outlets all over the world. Starbucks always believe that serving the best coffee is there aim, there coffee beans are grown under highest quality standards and sourced using ethical practices. Starbucks s not only limited to selling coffee but also sells verity of products, viz. coffee (more than 30 blends and single origin premium coffees), handcrafted beverages (Frappuccino, smoothies, Tazo tea, fresh brewed coffee), Merchandise (coffee and tea brewing equipment, mugs and accessories, packaged goods, music, books and gifts), Fresh Food (Baked pastries, sandwiches, salads, oatmeal, yogurt parfaits and fruit cups) and Consumer Products (coffee and tea, ready to drink products and ice-creams). They also carry other brands under their trademark Starbucks Coffee, Seattle’s Best Coffee, Tazo Tea, Evolution Fresh, La Boulange and Torrefazione Italia Coffee (Starbucks, 2012). Impact of Globalization and Technology The corporation I researched was Starbucks. Starbucks is a worldwide corporation that operates in around 62 countries around the world. Just like every other corporation that has sprung up exponentially as a global entity, Starbucks has gone above and beyond to adapt its operations to the needs of the specific countries. Provision of local...
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...November 2, 2014 Assess how globalization and technology changes have impacted the corporation you researched What is Globalization? How does it affect a company? What does it do for a country? What are some major benefits of going global? Who are the recipients of these benefits, if there are any? Let’s get started by answering the first question. “Globalization is the increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowledge across country borders” (Hitt, Ireland, Hoskisson, pg. 9. 2013). Starbucks, an American company headquartered in Seattle, Washington is one of the most global companies I know of with more than 20,000 stores in over 50 countries around the world. I have had the opportunity to enjoy the taste of home in at least 5 different countries, which are almost the same as home but more geared to the host country tastes. As you can see, going global allowed for expansion into different markets around the world, which in return lead to countries who supply products to reach those markets as well. For instance, Starbucks by coffee from places such as Africa, Latin America and Asia by doing so this creates jobs in those areas and increases export of goods. These are major benefits from all parties involved. Coffee drinker benefit the most as they get to experience taste from around the “Perpetual innovation is a term used to describe how rapidly and...
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...Section The Globalization of Starbucks Case Study Question Responses De’kante E. Nah Where did the original idea for the Starbuck’s format come from? What lesson for international business can be drawn from this? Howard Schultz’s visit to Milan, Italy in the 1980’s while he was the marketing director of the company is where he experienced the warm and pleasant atmosphere of Italy’s cozy Italian coffeehouse. Schultz’s positive experience with the personalization and warmth of the coffee house is where his inspiration to create the same atmosphere for the Starbucks Corporation was originated Schultz was able to persuade the owners of the company to implement the process and cultural experience from Italy’s coffeehouses into their store. Howard Schultz’s innovated process came form him having the opportunity to experience a different culture and observing how they do business. Schultz was intrigued and inspired by how the Italian coffee bars were organized, as well as, their unique characteristics of having a relationship with their customers. By learning and studying their practices and processes to the Starbucks stores, which has been instrumental to their success. As stated in our textbook “innovation not only includes the production of new products but entails new processes, new organizations, as well as the implementation of new practices, strategies and procedures.” His decision to re-create the Italian coffee house culture in America, transformed Starbucks into not...
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...Question- Critically analyse the relevance and utility of globalization for the international hospitality industry. In the recent years hospitality industry over the years has expanded their business all around the world. Big hotel chains such as Marriott’s and Accor group are opening their hotels in developing countries such as India, Singapore etc. The process of globalization has played a major role in expanding their profits and laying their business across their own boundaries. Majority countries, around the world have been trying to promote globalization through eliminating barriers and reducing taxes. However, there are various methods through which companies are trying to expand such as licensing, Exporting, joint venture and etc. Globalization has both the positive and negative effects, but over here we will be focusing more on the utility and positive side of the globalization. Globalization in hotel industry helps in giving exposure to various cultures. In the 21st century, with the increase in level of incomes for people in the developing countries, it has been seen that people are visiting the developed countries and they are trying to adopt western culture. The level of tourism has increased and people especially from the Asian counties are visiting developed countries such as US and Australia. They are now becoming more familiar with their culture and their food and are also adapting the same thing in their own country (Lee 2009). People from countries such...
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...encounter regardless of how careful they are. Competition is the most important factor that cannot be avoided. Other factors include economics, technology, legal, political, and social. Companies base their marketing decisions based on these factors. As a company continues to flourish they expand their business beyond international lines. By operating on a global scale the company opens their doors to other markets, gaining sales, and profits. Globalization is an invaluable opportunity for a company’s success. For the purposes of this paper the popular coffee shop Starbucks will be reviewed. Starbucks decisions regarding their influence on global interdependence, and effects of trade practices will be examined. The importance of demographics and physical infrastructure will also be summarized. Because Starbucks is a global company various influences of these environmental factors will be reviewed. A global company is highly reliant on global economic interdependence. Using economic interdependence Starbucks is able to increase revenue. Every Starbucks location uses different materials made in various countries. By purchasing low cost materials they can continue to produce high-quality product and increase market share. Their coffee cups are made from recycled products that are produced at a low cost, and environmentally friendly (Starbucks Corp., 2012). The effects of trade practices and agreements play a significant role regarding the company’s strategies and operations in each...
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...External Analysis of Starbucks 1 RUNNING HEAD: STARBUCKS External Environmental Analysis of Starbucks and the Coffee Industry Harold Brown Strategic Management MGMT 4340 Dr. Nwabueze March 3, 2011 External Analysis of Starbucks 2 Contents 1.0.0. Executive Summary ...................................................................................................................... 5 2.0.0. Company History ................................................................................................................................ 8 2.1.0. Background ....................................................................................................................................... 12 Table 1: Starbucks Revenue Trends 2005-2010 ..................................................................................... 12 2.2.0. Purpose of This Study ....................................................................................................................... 14 3.0.0. External Analysis .............................................................................................................................. 15 Diagram 1: The Components of a Coffee Firm’s Macroenvironment .................................................... 16 3.1.0. General Environmental Analysis ...................................................................................................... 16 3.1.1. Demographic Segment ...................................................................
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...understanding environmental policy which provides for the efficient allocation of resources within the domestic economy. Company Background Starbucks started in 1971 when three academics: English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker, opened a store called Starbucks Coffee, Tea, and Spice in Seattle. These three partners shared a love for fine coffees and exotic teas and believed they could build a clientele in Seattle much like that in the San Francisco. Each invested $1,350 and borrowed $5,000 from a bank to open the Pikes Place store. The company began its first operations by providing coffee to restaurants and espresso bars, by the mid-80s, the director of retail operations and marketing, Howard Schultz introduced the idea of coffee house to the company’s founders. In 1991, Starbucks began to gain ground and by end of the decade, the company had grown significantly. The 1990s was considered to be the company’s turning point toward becoming a giant company. However, it was at the beginning of the millennium that the Starbucks through the introduction of “Starbucks Experience” that its “miracle” occurred. The coffee store grew in leaps since the year 2000. On the first half of this decade, the company expanded in the domestic and international markets (Garza, 2012). Vision The vision of Starbucks is to be known as one of the world’s great companies by leading with courage, passion and integrity. Creating one of the world’s best brands...
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...Starbucks Corporation in China Company overview Starbucks Corporation is one of the most famous coffee retailers in the world. According to Starbucks Corporation (2012), it runs over 55 countries in many regions including North America, Asia Pacific, Latin America and so forth. Starbucks headquarter is located in Seattle, Washington, USA. It has approximately 149,000 employees. According to Starbucks Corporation (2012), its company verified the income of 11,700.4 million dollars during the fiscal year of 2011, which is an increase 9.3% over the fiscal year of 2010. In addition, the net profit of the firm was 1,245.7 million dollars in fiscal year of 2011, which rose 31.7% over the fiscal year of 2010. This Company is considered as a great business, which grows rapidly in past two decades. To illustrate this, in 1987 Howard Shultz and David Olsen bought Starbucks Company, and then five year later, it expanded from 6 shops to 165 retail outlets in Pacific Northwest. In 2001, Starbucks has more than 7,500 retail stores (Harrison et al. 2005). Nowadays, this company operates more than 17,000 stores over 55 countries (Starbucks Corporation, 2012). In the past decades, Starbucks Company has expanded globally comprising open branches in Republic of China. Starbucks Company first opened in China, found in Shenzhen in 2002. It is held by Coffee Concepts, which is a joint venture between Starbucks Company and Maxim group from Hong Kong (Harrison et al. 2005). In order to acquire...
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...1 GLOBALIZATION 2 PART 1 Globalization PART ONE Planet Starbucks T hirty years ago Starbucks was a single store in Seattle’s Pike Place Market selling premium roasted coffee. Today it is a global roaster and retailer of coffee with more than 7,600 retail stores, some 2,000 of which are to be found in 34 countries outside the United States. Starbucks Corporation set out on its current course in the 1980s when the company’s director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company’s owners to experiment with the coffeehouse format—and the Starbucks experience was born. The basic strategy was to sell the company’s own premium roasted coffee, along with freshly brewed espresso-style coffee beverages, a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting. The company also stressed providing superior customer service. Reasoning that motivated employees provide the best customer service, Starbucks executives devoted much attention to employee hiring and training programs and progressive compensation policies that gave even part-time employees stock option grants and medical benefits. The formula met with spectacular success in the United States, where Starbucks went from obscurity to one of the best known brands in the country in a decade. In 1995, with almost 700 stores across the United States...
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...1.0 INTRODUCTION Name : Starbucks Corporation (NASDAQ: SBUX) Headquarters : Seattle, Washington, U.S. Employees : 176,000 in 2008 Revenue for 2008 : US$10.383 billion CEO : Howard Schultz (Founder of Starbucks coffeehouse) Starbucks Corporation is an international coffeehouse chain based in Seattle, Washington, United States. Starbucks is the largest coffeehouse company in the world, with 16,120 stores in 49 countries, including around 11,000 in the United States, followed by nearly 1,000 in Canada and more than 800 in Japan. Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks, and items such as mugs and coffee beans. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of the company's products are seasonal or specific to the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores. Starbucks’ Italian style coffee, espresso beverages, teas, pastries and confections had made Starbucks one of the greatest retailing stories of recent history and world’s biggest specialty coffee chain. In 2003, Starbucks made the fortune 500. 1.1 BACKGROUND OF THE COMPANY 1.1.1 Era before Howard Schultz In 1971, three academics, English Teacher Jerry Baldwin, History Teacher Zel Siegel and writer Gordon Bowker opened Starbucks Coffee, Tea and Spice in Touristy Pikes Place Market in Seattle. The three were inspired...
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...food markets, or has Globalization ultimately made this impossible? Globalization is all about integration, combination and incorporation of economies around the world but, it is also the exchange of ideas, culture, and technology. The effects of this phenomenon have reached every country in the globe, the greatest economies as well as the poorest. This affects especially those local manufacturing companies and food markets in the United States. As every new movement of this magnitude, it has been positive for some economies, negative for others and a combination of both elements for some. After been around for a while, globalization became really important as an economic philosophy in 1947 with the General Agreement on Tariffs and Trade (GATT), later known as World Trade Organization (WTO). In the last ten years since the Second World War, many governments have adopted free market economic systems. Globalization is a current wave that has been driven by policies that have opened economies domestically and internationally. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. The principal driver of Globalization has been technology, all this advances in technology, have dramatically...
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...Globalization Is it possible to reconstitute local manufacturing and local food markets, or has Globalization ultimately made this impossible? Globalization is all about integration, combination and incorporation of economies around the world but, it is also the exchange of ideas, culture, and technology. The effects of this phenomenon have reached every country in the globe, the greatest economies as well as the poorest. This affects especially those local manufacturing companies and food markets in the United States. As every new movement of this magnitude, it has been positive for some economies, negative for others and a combination of both elements for some. After been around for a while, globalization became really important as an economic philosophy in 1947 with the General Agreement on Tariffs and Trade (GATT), later known as World Trade Organization (WTO). In the last ten years since the Second World War, many governments have adopted free market economic systems. Globalization is a current wave that has been driven by policies that have opened economies domestically and internationally. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. The principal driver of...
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