Globalization and Technology Changes in Starbucks Company - Research Paper Example

Globalization and Technology Changes in Starbucks Company Globalization and technological changes has been mentioned as the major driving force in today’s business. Starbucks Company has not been spared the impacts of these changes as its growth continually depicts a side by side alignment with the changes. Talking about globalization, Starbucks Company has seen a growth in the diversity of its products, thanks to expansion of its operation to international levels. The popular “Innovative concepts” has been used as a tool to ensure Sustainable growth while preserving the integrity of the company’s core business. Here the company has carefully expanded its products and expertise to reflect new channels, products, and markets. Today Starbucks Company proudly offers its newly acquired customers assorted iconic beverages as well as new menu choices that reflect their community preferences. Technological advancement has in the recent days proven as offering certain companies a competitive edge over other similar companies. Changes in technology have equally been associated with growth in the competitiveness. Starbuck Company takes this idea seriously and has been in the fore front initiating new technological operations. Using this technologies Starbuck has realized benefits ranging from administrative functions, management of our supply chain, online business, point-of-sale processing and payment at the stores and online, Starbucks Cards. There is no doubt that technology has boosted Starbucks operations and profitability, thanks to its inherent effectiveness and efficiency elements. Globalization and technological changes have seen the Starbuck grow its market outside America to include the China and Asia Pacific segment and the Europe, the Middle East and Africa (EMEA) segment. The former segment at one point became the fastest growing market delivering about 27% of the total growth in 2013. Ideally, Globalization and technological changes allowed the company to increase its market and thus increase its Net Revenues from $9.8 billion in 2009 to $14.9 in 2013(STARBUCKS CORPORATION Fiscal 2013 Annual Report, 2014). Apply the industrial organization model and the resource-based model to determine how your corporation could earn above-average returns Starbuck success is no secret and no one can doubt its standing among its equals; however there is still much room for better performance. May be one of the ways this company can ensure its returns go above –average is by keeping up the search for more distribution channels in its US market and offer a wide range of food to complement its beverage business. Such is the case that this move will increase the average customer check. Continual Innovation when it comes to the drinks will also serve well. Here, the company should keep up its commitment to always deliver new product lines that will prove its commitment to better brands. On the side of purchase, convenience should me made the top priority as it will serve as a driver for the customers to decide where to drink coffee. Other than the points identified above, Starbuck needs to focus more on the new promising markets away from US. Here, it should focus on emerging markets such as China, Brazil, India and Russia that are gradually gaining importance due to the large volume of customers. It is also important to mention the need to boost the company adaptation to new cultures especially when operating in international markets. Adaptation has been viewed as an important to help achieve a successful penetration in the new markets overseas. Additionally, Starbucks should highly decentralize its operation when handling these new markets to allow people with good knowledge of the new markets drive its operation. Assess how the vision statement and mission statement of the corporation influence its overall success. Starbucks secret of success is enshrined within its mission and vision statement which have driven the company operation since its inception. In keeping with the spirit of the mission statement which is “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow,” Starbuck has developed a unique set of values that shape its way of engaging its customers, partners and the communities served. Here, the company pays much attention to ensure they it remains cognizant of its responsibility to stay true to its guiding principles and lead by example. Star bucks vision statement that is “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” has been contributed to its success in the following ways. First, it has helped them “create a culture of warmth and belonging, where everyone is welcome. It has also helped them boost its presence, connect with dignity, transparency and respect and also deliver the very best in all its operation. Putting all these together, the mission and vision statement have played a major role in ensuring Starbuck gains new customers and also maintain the old ones and thus boost its sales (Plog, 2013). Evaluate how each category of stakeholder impacts the overall success of this corporation. Starbuck Company success depends heavily on contribution made by its various stakeholders. Being a popular company in the global set up, Starbuck is committed to supporting its stakeholders by showing deep responsibility in the community within which it operates. Starbuck stake holders include shareholders, employees, suppliers, customers and the community. Suppliers Starbucks suppliers play a major role in ensuring uninterrupted production of its brands. Suppliers such as coffee producers, external trading companies and exporters of green coffee produced by the company are very important to the company. Such is the case that by maintaining good relationship with this group of people, the company avoids the problem of non-deliver on purchase commitments made, ensures future supply of quality green coffee and reinforces its leadership position within the coffee industry. It is important to note that farmers (suppliers) work alongside agronomist sent to the support centers within the farming communities to implement best farming practices in coffee production. By doing this the farmers help improve both the yield and quality of the crop. Other than coffee suppliers, Starbuck Company depends on other suppliers that offer dairy products, fluid milk in particular, tea, ready to drink beverages and food products. For example, breakfast sandwiches, La Boulange™ pastries, breakfast sandwiches and lunch items, are supplied by regional, national and local sources. Lastly, Starbuck Company also relies on business partners that supply a wide range of plastic and paper products like cutlery and cups used in the retail stores and in the manufacturing and distribution area. The company believes that such people play an important role of ensuring the risk of non-delivery with regard to the mentioned items remains remote. Employees According to 2013 annual report, Starbucks boasted of a work force of about 182,000 people across the world. In America alone, Starbucks employees number to about 137,000 people, of whom 129,000 work in stored operated by the company while the rest in store development, support facilities, warehousing and roasting operations. This same report further detailed that about 45,000 employees were assigned to work in the company’s ventures outside US. Out of these employees 43,000 served in company-operated stores while the reminder worked in the regional support operations. Based on this analysis it is obvious that the company employees play a big role in ensuring its success both in US and internationally. Such is the case that these employees serve as a driving force towards the high returns realized in the subsequent trading years (STARBUCKS CORPORATION Fiscal 2013 Annual Report, 2014). Customers In the fiscal year 2013, Starbuck Company boasted of having received about 3 billion customers in the more than 1900 stores located in 62 countries. From these numbers, the American segment (which is the largest) realized a revenue growth of 11%. In 2013, for the first time Canada alone surpassed $ 1 billion revenue in a full year. Latin America market has not been left out in growth as in the same year it grew to be a centre of about 700 stores. This reflected an 18% increase that followed a sales growth in the entire 12 markets. As stated earlier the China and Asia Pacific segment, which comprises 13 countries, has been the fastest growing region. This segment delivered a 27% growth in 2013. Based on this statistics it is no secret that Starbucks success is directly related to the growth of its customers(STARBUCKS CORPORATION Fiscal 2013 Annual Report, 2014). It is even recoded in the report that the company expanded its loyalty program to more markets, a move that contributed to further increase in sales. Following the rising customer base, the company seeks to open 1500 new stores. We can clearly see customer’s contribution to the success of Starbucks when we consider the fact that net revenue growth from $9.8 billion in 2009 to $14.9 in 2013. Shareholders Share holders serve as the major capital base of any business. Starbuck is not exception as its shareholders who stood at about 18,470 as at November, 8, 2013 come in handy by trading their shares. The role played by shareholders in ensuring Starbucks success is further seen through the issuer purchases of equity securities. Starbuck has seen a rise in the number of shares repurchased over the past few years. In novermber, 3 2011, 20 million shares were publicly authorized and in the following year an increase was realized that made the total shares announced 25 million. In 2013, no shares were repurchased in the 4th quarter of fiscal year 2013. However, by the time this quarter was ending the maximum number of shares available for repurchase was 26, 359.511(STARBUCKS CORPORATION Fiscal 2013 Annual Report, 2014). References Plog, S. (2013). Starbucks: More Than A Cup Of Coffee. Cornell Hotel and Restaurant Administration Quarterly, 284-287. STARBUCKS CORPORATION Fiscal 2013 Annual Report. (2014). Retrieved January 14, 2015, from http://news.starbucks.com/uploads/documents/Starbucks_Fiscal_2013_Annual_Report_-_FINAL.PDF Read More