Investigating Business of Starbucks Coffee Company and ALDI Company - Case Study Example

Business Development Starbucks Coffee Company Introduction Starbucks Corporation is an international coffeehouse company based in Seattle, Washington. The first store of Starbucks was set in Seattle, Washington in 1971, and it used to purchase coffee beans from Alfred Peet before buying them directly from the growers. In1986, the company, had six stores in Seattle, and by 1989 the number had risen to 46 stores located in Canada, Chicago, Columbia and Washington (Pahl 2008, p. 4). Purpose The major purpose of Starbucks coffee company is to provide cold and hot beverages, micro-ground instant coffee, whole-bean coffee, pastries, full-leaf tea, and snacks. In addition, most stores of the company sell cold and hot sandwiches, pre-packaged food items, things such as tumblers and mugs, and a variety of wines, beers, and appetizers. It also markets film, music and books through its Hear Music Band and Entertainment division (Simmons 2005, p. 14). Forms of ownership The Starbucks coffee company is owned by three partners who founded the company. They include Jerry Baldwin, Zev Siegel, and Gordon Bowker. The three set the first Starbucks in Seattle, Washington in 1971 after Alfred Peet – a coffee roasting entrepreneur inspired them to sell coffee beans of high-quality (Leadbeater 1997, p. 65). Aims and objectives Starbucks coffee company has various goals and strategic objectives in place that it seeks to achieve by the year 2015. The company aims at ensuring that the ethically sourced coffee reaches 100% by 2015. The company plans to ensure that farmers grow their coffee responsibly, trade ethically, and its third-party verified. It also plans to protect the environment especially in coffee growing areas. The company is set to purchase third party as well as organic certified coffees and offer a Fair-trade certified coffee. It also plans to improve the accessibility of carbon markets to farmers and help them to generate more income as they protect the environment. It also aims to invest in farming communities and increase the amount of loans of farmers to $ 20 million by 2015. By seeking to achieve this goal, the company aims to support eligible small-scale farmers in obtaining substantial loans. The company also intends to promote environmental stewardship, as well as economic stability in the coffee market. It plans to use sustainability program and initiative of farmers in partnership with Fairtrade both in the USA and internationally. By doing this, the company will be in a position to organize and manage the shared commitments with farmers (Griffin 2014, p. 68). Further, the company aims to develop comprehensive solutions for recycling paper and plastic cups in all stores it owns globally by 2015. The company also plans to implement front-of-store recycling in all stores. As a strategic objective in position, the company is set to use alternative materials to make cups and gain a better insight of recycling bins and identify specific actions of reducing waste. It is also set to work with Global Green Coalition for Resource Recovery of the USA to assist in the testing of recyclability of paper cups. The company aims at serving 25% of the beverages made in stores in personal tumblers by 2015. By accomplishing this goal, the company seeks to come up with cups that can be recycled after use and avoid littering the environment. The Company also aims to mobilize partners and its employees to contribute one million hours in a year to community services by 2015. In the effort of accomplishing these goals, the company will collaborate with non-profit making organizations to establish beneficial and meaningful investment. It is set to celebrate its anniversary with projects that add value to community service. It will contribute financially towards programs that build the community. The company also aims at engaging about 50,000 youths to innovate and take action in their communities by 2015. The company is set to encourage youths to become entrepreneurs and drive a positive change in communities in order to achieve this goal. Lastly, the company aims at reducing the consumption of energy and water by 25% in stores owned by the company by the year 2015. It also aims to purchase renewable energy that is equal to 100% of electricity used in stores owned globally by the company by the year 2015. Organizational structure Three years ago, the top management of Starbucks devised a new organizational structure for the company. The company adopted a matrix organizational structure that uses the communication channels. Such a structure is very effective in taking full advantage of all available communication channels and serves as a pivotal point of success in the communication structure of the organization. A matrix organizational structure is designed to group employees by both product and function (Agarwal 1986, p. 117). The organizational structure tends to be flat, and the matrix is differentiated by various functions to be executed in order to achieve certain goals with the new organizational structure. Starbucks has restructured into three regions, namely, Asia Pacific and China, American markets – covers Canada, Mexico, Latin America and United States, and EMEA – U.K, Russia, Africa, Europe, and Middle East country (Starbucks, 2011). Apart from the general chief executive officer - Mr. Howard Schultz, the president was selected to oversee the operation of the retail business of the company in each region. ALDI Company Introduction ALDI Company is a leading international discount supermarkets chain with at least 9,000 stores currently that are located in more than 18 countries. It is a private company owned by two brothers with its headquarter in Germany. The company started as a small store in 1913 in Essen, Germany and in 1946 the family under its ownership started to open other retail stores which amounted to 300 stores by 1960. Today the supermarket serves customers from different regions of the world such as Spain, Portugal, Australia, United Kingdom, United States, Belgium, and France. By ensuring that ALDI’s products sell at low prices, the company has no middlemen and negotiate with its direct suppliers about considerable discounts. Also, the company does not offer free bagging services to its customers. The company does not accept credit cards to avoid the associated charges and cut its total cost to offer products of low prices in return (Rudolph 2012, p. 141). Purpose of the company Like many other supermarkets, ALDI supermarket stores majorly sell staple items such as beverages, foodstuff, toilet paper, wears, sanitary articles and other less expensive household items. The company offer its customers a variety of in-house brands and does not accept coupons from any manufacturers (Rosenberg 2012, 29). In Germany, ALDI Company is the largest wine retailer while, in some countries like USA, it sells alcoholic beverages such as beer. Form of ownership ALDI supermarket chain is a private company owned by two brothers, namely, Karl Albrecht and Theo Albrecht. At the starts of the company, the brothers had a cordial relationship, which deteriorated in 1960 after a fall out over the sale of cigarette. Following the disagreement, the company’s operations were separated into two groups, namely, Aldi Nord (owned by Karl) and Aldi Sud (owned by Theo). However, in 1962 they agreed to operate under the same name, ALDI, while operating their individual stores independently (Marc, 2010). Organizational structure ALDI Company operates under a division organizational structure. Every division of the company takes the following organization structure. (ALDI company, 2009) Aims and objectives ALDI supermarket Chain Company aims to open new 650 stores and operate about 2,000 stores across the US by 2018. In an effort to accomplish this goal, the company has set to build its new regional headquarters as well as distribution centre in California, Moreno valley. It has also set to accelerate the opening pace of these stores by raising it from an average of 80 stores per year to 130 stores annually. It has set $3 billion to purchase land, equipment and facilities (Patton 2013). The company also aims to launch a new promotion campaign to encourage customers to increase their purchase of ALDI‘s products by 10% at the end of 2014. In order to attain this goal, the company plans to provide high-quality products at incredibly low prices. The company commits at understanding the needs of customers to design customer-specific service levels. Through this strategy, the company can track profitability at consumer level, retain customer and increase value per customer. Conclusion The main purpose of Starbucks is to offer cold and hot beverages (tea and coffee) while ALDI sells household and staple items mainly such as wears and foodstuff. However, both companies sell alcoholic beverages – bear and wine in addition to their main offers to customers. Starbucks is under a partnership form of ownership with three main pioneers who are partners. Conversely, ALDI came to the existence through proprietorship – the company is owned by Albrecht’s family. The major goals of Starbucks are; promote environment stewardship, stabilise the coffee market in economy, and build and add value to the community. Unlike Starbucks, ALDI goals are focused towards its expansion and growth – to open more stores and achieve competitive advantage. Starbucks operates under a matrix organizational structure that combines both divisional and functional structures while ALDI works under divisional structure. In term of expansion, both companies have many stores in various countries in the world. Reference List ALDI (2009). Divisional structure. Available at: http://aldiuscareers.com/about-aldi/divisional-structure [Accessed 28 10 2014]. Agarwal, R. D. (1986) Organization and management. New Delhi: McGraw-Hill Griffin, R. W. (2014). Fundamentals of management. Leadbeater, C. (1997) A piece of the action: employee ownership, equity pay and the rise of the knowledge economy. London: Demos. Marc, S. (2010) Hard Discount Retailers: The Secrets of Their Success. [Online] Available at: http://www.ieseinsight.com/doc.aspx?id=1125[Accessed 28 10 2014]. Pahl, N. (2008). The idea behind the Starbucks experience: the main elements of Starbucks strategic diamond. München, GRIN Verlag. Patton, L., 2013. Aldi Plans to Expand U.S. Store Count by 50%. [Online] Available at: http://www.bloomberg.com/news/2013-12-20/aldi-plans-to-expand-u-s-store-count-by-50-.html [Accessed 28 10 2014]. Rosenberg, M. (2012). Business advantage: Personal study book: Intermediate. Cambridge, Cambridge University Press. Rudolph, T. (2012). Diversity in European marketing text and cases. Wiesbaden, Springer Gabbler. http://dx. Simmons, J. (2005). The Starbucks story how the brand changed the world. Singapore, Marshall Cavendish. Read More