Starbucks Operations in the USA and the UK - Essay Example

Starbucks Globalization has led to the rise of many international organizations that have subsidiaries across the world. One of the popular international organizations in the world is the Starbucks Coffee Company. Starbucks is an international organization that has subsidiaries across the world. Indeed, the company operates in over 60 countries including United States of America and United Kingdom (“Starbucks Corporation” 1). Starbucks Coffee Company is the largest and most popular coffee retailer, roaster, and brand of specialty coffee across the globe (“Starbucks Corporation” 1). Seattle, USA is the headquarters of Starbucks Coffee Company. The company operates in more than 60 countries where it has more than 18,000 stores and recording immense growth (“Starbucks Corporation” 1). The company has a corporate mission “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (Bruhn-Hansen 19). Starbucks Coffee Company offers various products and services, which include coffee, warm, and cold beverages, premium and sell salads, books, gifts among other accessories (“Starbucks Corporation” 1). The company enjoys a huge competitive advantage and positive going concern because it has a wide market network, provides a wide range of products, and abhors quality in its operations. More so, Starbucks Coffee Company is a significant player and has a wide customer base in the coffee other blend- drinks industry. The company appreciates corporate social responsibility through its strategy and practices (Bruhn-Hansen 19). In addition, since the company operates in various countries, it is prone to cultural influence and affects the lives of many people across the globe. Starbucks Coffee Company operates in the global business environment where it specializes in the coffee other blend- drinks industry. The company has a marketing mix that include the pricing strategy where USA and UK charge the highest prices while other countries charge lower prices for the same coffee products. The company offers high quality and fine products as well as a satisfying customer service in its stores. The company has a marketing strategy that abhors online advertising, local advertising, mouth-to-mouth advertising, high quality coffee, and corporate social responsibility (“Starbucks Corporation” 1). Indeed, Starbucks Coffee Company has a corporate social responsibility that seeks to attain sustainability and enhance the lives of its immediate society. For instance, the Starbucks Foundation promotes literacy levels among children by building schools for the Starbuck’s community (“Starbucks” 1). Furthermore, the company has an environmental strategy that seeks to conserve the environment that holds the operations of the company (Bruhn-Hansen 42). In the global business environment, Starbucks adopts market segmentation where it prefers to compete on comfort rather than on convenience in the upper-scale of the coffee market (Mourdoukoutas, 2013, p. 1). The company has various stakeholders, which fall into three categories that include primary stakeholders, secondary stakeholders, and public stakeholders (Bruhn-Hansen, 2012, p. 19). Specifically, the stakeholders are the shareholders, governments, and government agencies in host countries, customers, suppliers, employees, franchisees, and non-governmental organizations. The stakeholders define the company’s operations in the global business environment. Nevertheless, Starbucks Coffee Company faces many challenges in the global market just like other international organizations. Starbucks suffers and is yet to recover the huge losses accrued from the recent financial crisis in Europe (Cameron 1). Moreover, the company has been facing the challenge of closing various stores in 2008 where it estimated the closure of 600 stores in the United States (Cameron 1). This affected the goodwill and operations of the company. Most of all, Starbucks Coffee Company faces the challenge of significant competition in the global business environment especially in the coffee industry. Indeed, the company has significant competitors in specialty coffee shops, doughnut shops, and quick service restaurants. Mickey D’s that is a burger chain is the most dominant competitor of Starbucks at it offers lower-priced coffee drinks and coffee stands (“The Seattle Times Company” 1). Another competitor is Caribou Coffee that has 415 stores in USA and deals with specialty coffee. Java Centrale and Second Cup are other significant competitors of Starbucks. McDonald, the world’s largest fast-food chain restaurant that offers low –priced coffee products is another fundamental competitor (Mourdoukoutas 1). Nestle S.A, which is the world’s biggest food company in terms of revenues challenges Starbucks market share. Other worthy competitors include Darden Restaurants, Inc., Beverage Company, and Dunkin Donuts that offers doughnuts and coffee in US (Mourdoukoutas 1). Ideally, the competitors are within the industry and demean Starbucks’ market share in the global business environment. Presidents of distinct regions lead the organizational structure of Starbucks Coffee Company. The structure of Starbucks retail business include Starbucks U.S. and Starbucks Coffee International (SCI) with 54 markets outside the United States (“Seattle” 1). Additionally, the company moved to a new three-region organizational structure that entails Americas, EMEA (Europe, U.K., Middle East, Russia and Africa), and China and Asia Pacific markets (“Seattle” 1). In this structure, the president of each regions works closely with the business partners in each market to oversee the operations of the company (“Seattle” 1). Moreover, the presidents work with Starbucks Global Consumer Products and Foodservice team to develop Starbucks brands and channels in each region (“Seattle” 1). Subject to operating in different countries, Starbucks is prone to cultural influence. Indeed, western culture adoration on coffee consumption affects the operations, perception, and success of the company (Su et al 177). Furthermore, the impact of local brands on Starbucks coffee affects the consumer preferences and hence the marketability of Starbucks products in different countries. Notably, western adoration influenced the customer’s decisions and preferences in coffee consumption and influenced the consumers’ perceived value of Starbucks coffee (Su et al 186). Ultimately, we can confirm that company has been facing key management issues. Indeed, the CEO of Starbucks, Howard Schultz has been facing heavy criticism as Starbucks cafes became the home of protests for both pro-gun and anti-gun activists (McGregor 1). At the same time, the company has been facing management issues where the federal government accused Starbuck’s management of tax issues that denied the federal government huge income tax (Pfanner 1). The management bears the responsibility for the tax issues that dented the image of the company. Moreover, there have been management issues relating to leadership and labor relations. Works Cited “Seattle.” Starbucks Announces New Leadership Structure to Accelerate Global Growth. 11 July 2011. Web. 8 December 2013. < http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=4337:HK&sid=anMwwrOYvTw0> “Starbucks Corporation.” Being a Responsible Company. 2013. Web. 8 December 2013. < http://www.starbucks.com/responsibility> “Starbucks.” CSR Fiscal 2001 Report. 2001. Web. 8 December 2013. < http://www.starbucks.com/assets/6ee14301a2364729abe59867fb913520.pdf> “The Seattle Times Company.” Starbucks shifts to meet challenges. 12 June 2010. Web. 8 December 2013. < http://seattletimes.com/html/businesstechnology/2012074002_starbucks13.html> Bruhn-Hansen, Sanne. Corporate Social Responsibility. 2012. Web. 8 December 2013. Cameron, Lindsay. Top Challenges Facing Starbucks. Web. 8 December 2013. < http://lindsayecameron.wordpress.com/2008/12/01/top-challenges-facing-starbucks/> McGregor, Jena. Starbucks treads lightly on gun issue in its coffee shops. 18 September 2013. Web. 8 December 2013. < http://www.washingtonpost.com/blogs/on-leadership/wp/2013/09/18/starbucks-treads-lightly-on-gun-issue-in-its-coffee-shops/> Mourdoukoutas, Panos. Starbucks and McDonald's Winning Strategy. 2013. Web. 8 December 2013. Pfanner , Eric. Starbucks Offers to Pay More British Tax Than Required. 6 December 2012. Web. 8 December 2013. < http://www.nytimes.com/2012/12/07/business/global/07iht-uktax07.html?_r=0> Su, Allan Y, Wen-Bin Chiou, and Ming-Hsu Chang. “The Impact of Western Culture Adoration on the Coffee Consumption of Taiwan: A Case Study of Starbucks Asia Paci?c.” Journal of Tourism Research 11.2 (2006): 177-187. Print. Read More