Starbucks: Challenges - Research Paper Example

? Starbucks Every organization faces challenges in its daily operations. Regardless of how successful an organization is it faces quite a number of challenges. Right from its production stage to the marketing stage, an organization has to struggle to stay relevant among the competitors in the market. Such are challenges facing one of the leading food retail chains in the United States, Starbucks. Despite Starbucks being a leading retail food chain in the United States, Starbucks has to contend with various challenges in its product life cycle. Although Starbucks, a high quality product provider in the foods industry in the United States is popular among the people, it suffers from the lack of variety in its products. Essentially, it offers a limited variety of products, with its main product coffee. There is need for diversification in the kind of products offered to the customers as a company attracts all types of people to its stores. Some people may want to meet in the Starbucks stores, but one does not take coffee but prefers soft drinks such as Pepsi, however, since the company does not store Pepsi as part of its products, these potential customers are likely to opt for another place to hold their meeting. Starbucks enjoys high popularity from its customers due to the high quality drinks and snacks that it provides to the people. Its coffee, being the best in the market has a great taste and smell. However, a section of people accuses the company of adding a number of additives in their drinks to give them a good taste. This makes their drinks unhealthy. Any foodstuff regarded as containing any type of chemicals does not qualify as safe. Instead, it loses its healthy qualities and becomes unhealthy. The kind of snacks that the company provides to its customers is low in their nutrient value and high in fat, sugar and salt content. Therefore, these foods fall in the category of junk food. Junk as a type of food poses a number of risks to the users. One of these problems is that they lead to poor health of the people. Major characteristics of the people used to junk food are obesity and high weight conditions. The company, to remain competitive in the ever growing food market, it has to adapt a new product design. In the proposed design, the organization should consider the nutrient level of the product. Old folks do not consider taste as being the biggest factor when deciding the kind of products to purchase. This should be the biggest factor that Starbucks has to consider when deciding on their product development cycle. Snacks and drinks that the company has to offer should address the nutrient content. There must be special drinks for the diabetic and pregnant women. Three strategies that Starbucks need to implement while developing its products include increasing the variety of products offered to the people. Another strategy involves deciding providing drinks that are free of additives and some should have their original natural taste. Finally, the kind of snacks provided should be low in fat, sugar and salt content. 2. Five key components of supply chain management that affects Starbucks as an organization. According to Dam & Skjott-Larsen (2005), the five components of supply chain include planning, sourcing, making, delivering and returning. Starbucks needs to make a strategy on how to manage the resources in order to increase the customer demand for their products and services. The supply chain ensures that the company provides high quality products to its customers and thus win their loyalty (Dam & Skjott-Larsen, 2005). Sourcing to Starbucks involves a careful selection of suppliers to deliver goods and services required for the production of goods and services for the company. Managers of Starbucks need to develop a pricing and delivery system in the supply chain. Additionally, managers can also put down processes for managing their goods and inventory. In manufacturing, the supply chain manager should schedule the activities needed for the production, packaging, testing a preparation system for delivery of goods. After this step, the managers should then affect the delivery of the products to the customers. In this case, Starbucks managers coordinate receipts of orders and develop a network for the warehouse. The management of Starbucks should create a flexible response network for receiving any form of flaws and excess products sent back to them. Three major issues that are likely to affect the structuring, sourcing, purchasing, and the supply chain of Starbucks as an organization include the knowledge and skills, financial position and availability of information (Dam & Skjott-Larsen, 2005). Starbucks should have enough knowledge and skills to ensure that they provide the best quality drinks in the market. The financial position of Starbucks determines the ability of the company in providing the structuring, sourcing, purchasing, and the supply chain. Finally, the availability of information to the management of the organization helps them to understand the needs of the customers and provide high quality products to the customers. 3. Mukherjee (2006) defines total quality management tools as a systematic approach used in developing high quality products that meet the product specifications top the performance of the customers. The main purpose of this tool is to deliver products that have no defects to the customers (Mukherjee, 2006). The advantage of this is that it creates a virtuous cycle of continuous product improvement that aims at boosting the production, customer satisfaction and profits. Here are a number of reasons why Starbucks need to use this tool. The tool aims at increasing the productivity of the company, it also lowers the cost of scrap and rework process, it also improves a product’s product reliability and decreases the time-to-market cycles. While developing the tool, the main requirement is for the managers to carry out an assessment of customer requirements aimed at understanding the future needs of the customers. After understanding customer requirements, the managers should then aim at delivering quality products to the market. The tool focuses on a number of factors that lead to high products by the organization. these include identifying the key problem areas in the product cycle, training employees on the use of new technologies, developing effective measures that ensures that the quality of the product are high as well as creating incentives linked to the quality of goods. 4. According to Curry & Feldman (2011), just in time production as a production strategy, strives to improve a business return on investment by reducing the in-process inventory and all the carrying costs involved. Just in time philosophy focuses on the company having the right material, at the right time, at the exact place it is required, and in the exact amount. There are a number of accrual benefits from Starbucks if it chose to use the just in time philosophy (Curry & Feldman, 2011). In case there are funds tied up in inventories, the method enables the application of these into other projects. Just-in-time philosophy releases areas previously used to store inventories, and thus serve other productive means. The method also reduces the defect rate in products especially that results in less wastage and increased customer satisfaction. There are different means in which the product could affect quality assurance of Starbucks. Transaction cost approach helps in maintaining the inventory at minimum in the company. It also takes care of the environmental concerns as the model allows deliver of products by the use of simple means such as bicycles. Price volatility of the just in time model assumes that the level of input stability remains at minimum as the organization purchases in puts in parts. 5. Quantitative method Algorithms of varying complexities form the basis of quantitative methods. The most effective quantitative method is the time -series method. Strengths Among the strengths of the time series technique, include its simplicity of application and accuracy of the data and information provided by the method over short time analysis. It also important in explaining the patterns present in historical data. Weaknesses The time series technique suffers from a number of weaknesses. While forecasting, the cases used in making predictions never form a random sample from same populations just like the same time the predictions made. There are difficulties in analysing a single event as there are many events occurring at the same time. Additionally, there must be two time series for one independent variable, yet observations made are non-independent of each other. Qualitative method Qualitative methods base their ideology on educated options of the most appropriate persons, where a panel of experts anonymously answer a series of questions about a particular phenomenon. The Delhi technique, which is a structured communication technique, originally started as a systematic and interactive forecasting method that relies entirely on a panel of experts. Strengths There are number of strengths of the Delhi technique. The technique allows for subject anonymity, which reduces the effects of dominant individuals’ major concern for many when using group-based processes used to collect and synthesize information. Further, geographic dispersion of subjects allows for anonymity, electronic communication such as e-mail to solicit and exchange information ensures anonymity. There is minimal coercion or manipulation of the subjects to conform or adopt a certain viewpoint in the Delhi technique. Controlled feedback in the Delphi process reduces the effect of noise as well as the ability to use statistical analysis techniques also helps in reducing potential of group pressure for conformity. Weaknesses Delhi technique suffers from a number of weaknesses. The use of poor techniques of summarizing and presenting responses leads to poor results, ignoring disagreements leads to discouraged presenters dropping put. Further, underestimating the demanding nature of a Delphi leads to poor results. Assuming that the Delphi technique can function as a surrogate for all other human communications in any situation leads to poor results. Characteristics of time series Characteristics of the Delphi techniques  Trend, which determines whether the trend is increasing, or decreasing It has a feedback process that encourages the participants to reassess their initial judgements about information provided in previous iterations. Seasonality which means there is a regular repeating pattern of highs and lows connected to calendar times such as seasons, months or days It has the ability to provide anonymity to respondents Presence of outliners, where in time series they are far away from the data It has the ability to provide anonymity to respondents The long run cycle or period related to seasonality of data There is a controlled feedback process Abrupt changes occurring either to the level of the series or the variance It also provides the suitability of a variety of statistical analysis techniques to interpret the data References Curry, G. L., & Feldman, R. M. (2011). Manufacturing systems modeling and analysis. Berlin: Springer. Dam, J. B., & Skjott-Larsen, T. (2005). Supply chain management: In theory and practice. Copenhagen: Business School Press. Mukherjee, P. N. (2006). Total quality management. New Delhi: Prentice-Hall of India. Read More