Revision- Starbucks case study

Starbucks

Starbucks is an Amercian global coffee company. There are about 20,891 stores in 62 countries. Starbucks established in 1971 as a Seattle coffee beans roaster and retailer by three partners.

From this graph, it describes the number of starbucks shops  have a significant increase within 30 years. Especially, from the 2001 to 2007, the date rise from 4000 stores to 17000 stores.

Firstly, in this case study, I will do the SWOT anlysis,  the SWOT is a tool help people to identify the strengths, weaknesses, opportunities and threats. The SWOT is a basic,straight forward model to analysis a company what they need to do an what they can not do.  It  show the company's potential opportunities and threats.

Strengths. W. O. T





The starbucks shop's locations are often in the marked places, such as the city centre, large shopping mall, high-end residential. It can attract amout of customers.The starbucks is a global coffee brand. It has almost 19000 cafes in 62 countries. The high quality products and services are also streagths.The starbucks have good relations with the suppliers. In addition, the organization has strong ethical values and ethical mission statement as follow," starbucks is committed to a role of environment leadershio in all facts of our business". Because of  these facts, the consumer loyalty is very high.

From this chart, we can know from 2009 to 2013, the revenue and EPS are have an significantly rise, the date of EPS increased quicker than the Revenue, the starbucks is a public limited company, the invester and the shareholders earned lots of money from the starbucks.

In 2011, the starbucks profit margins were hit seriously by the global financial crisis, however, the company covered quickly, it increased 12.7% in 2012. The starbucks famous brand name and the high customers loyalty help the company recovered quikly.

In 2013, the starbucks opened aout 1200 new shops, many in the United States and China.

S. Weakness. O.T

The starbucks faces strong competitions. The McDonald's, Burger King, wendy's, Subway and the Taco Bell 's market share in the US in 2005 are larger than the starbucks. The McDonal's market share is 7.7%, the Burger King's market share is 2.4%, the Wendy's and the Subway's market share are 2.3% and 2.2%. The Taco Bell and the starbucks's market share are 1.7% and 1.6%.

There are few new products development and creativity. Their innovation may flater over time.

Global coffee beans price influence the starbucks's profit.

High product prices in some counties also make the starbuck's maret share lower than other company.

The McDonald's premium coffee price was lower than the starbucks.

Some negative publicity (Health Problems,; Tax evasions; poor treatment of suppliers)

The starbucks does not grow its own coffee beans, it must depand on the coffee suppliers.

S.W.Opportunities.T

1. Develop new products and new services.
2. Starbucks has may opportunities to expand its global operations. Develop new market such as India, China and any other Pacific Rin.
3. Co-branding with other companies to develop other companies food and drinks (offer wine and beer)
4. Technoligical advances( new coffee machines etc)
5. The starbucks should form more of such partnerships and offer  coffee to some big supermarket.
6. To extend supplier network.

S.W.O.Threats

• Different cultural and Political issue in foreign countries.
• Consumer trends towards more healthy lifestyles. They think people should away from coffeeine
• Coffee price volatilty in developing countires.
• In the US mareket, the coffee market is saturation.
• Due to the political, economic and weather condition, the supplier line may disruption, it will increase the cost of the firm.
• Trademark infrigement. Some company illegal use the brand of starbucks.

Ways to global and growth strategies

• Horizontal integration
• Starbucks combine with its competitor.eg It introduced a drink of coffee with Pepsi through joint ventures. In this way, they can decrease the loss of competition. This product was accepted by the customers and creating a win-win effect.

• Vertical integration
• Starbucks is trying to control its input. Direct control of suppliers and their roasted coffee plants. The safety of their first-class coffee beans to meet growing demand and grower and exporter, check te agricultural environment and crop yield, and look for variety and source: will conform to the starbucks strict standards of quality and taste.



Globalization

Recent years, the globalization become one of the most controversial subjects. It changes millions people's lives. The economics have been encourages by the globalization. People who come different coutries can communication very well.


Definition:
"Globalization is the tendency of businesses, technologies, or philosophies to spread throughout the world, or the process of making this happen. "Margaret Rouse 2007
"Economic globalisation is the international integraton of goods, technology, informaton, labour, capital or the process of making this happen."

Four events encourage the globalization:

1. In 1990, the sovient Union collapse.

2. In the mid 1990's, China under the leadership of Deng Xiaoping had carried on the reform and opening up. 

3.After 1998, the Internet developed quickly.

4. After 2000, the India become the world centre.

 

Five forces encourage the globalization:

1. Political: EU and NAFTA preferential trading agreements, openning up economies of communist nations to global competition.

2. Teconological: Internet encourage the small companies to compete globally.

3. Market and Costs: Saturated domestic markets force businesses to move markets.

4. Living standard: Developing countries want to have high living standard.

5. Competitive: Developing countries compete with developed countries.

Good example- Global industries.

1. Apple

There are  11 countries have the apple retail store. Online stores access in 37 countries. Products can be easily purchased through the web and stores. Information about apple can easily find all over the world. Many manifacaries in other countries,such as China, Phillippines.Not restricted to one region, prodution line distrubted all over the world, globally.

2. COCA COLA

The coca-cola industry follow other countries taste and culture, it created many new products, thi strategies can earn more profits.

In India, the coca-cola's market share was in the third, it behind the Pepsi and the local drink Thums-up.

3. Starbucks

The starbucks is the NO.1 coffee brand in the world , it valued about $4 billion. One advantages of the starbucks is gives its customers high quality products and services. Perfect blended coffee,  premium music, friendly staffs and warm atmosphere.

Bad Example

Google in China

why did china banned Google?

1.  The local search engine Baidu which has now more than 80% of the market. 

2. The Chinese government take this action to shield themselves from foreign espionage while people using search engines and the social media networks.

3. Google does not want to be involved in the "government censorship"-restricting people from sites the Chinese government does not want people know. Some information break the China law.

How To Go Global !

Internal Strategies

• company try to sell goods in the other countries. open the oversea markets.
• invest in the oversea markets. Establishing operations in other countries.
• E-Commerce. Consumers can buy the products online.

these  method, the companies can control in their own countries

External Strategies

There are 5 ways  the companies go to other countries to control their global activities.

1. Joint Venture

eg. the US fast food industries cooperate with Turkish private equity business

2. Strategic Alliance

eg. Star Alliance and one world

3. Franchising

two or more companies become a single business

4. Merger

5. Acquisitions

International Busness---SWOT Anlysis GEELY

A SWOT anlysis is a method used to evalueate the strength, weakness, opportunities and threats.



Strengths：characteristics of the business p project that give it an advantage over others.
weeknesses: caracteristics that place the businss or project at a disadbantage relative to others.
opportunites: elements that the project could exploit to its adantage.
Threats: elements in the environment that could cause trouble for the business or project.




Internal: strengths; weeknesses
External; opportunities; threats






EXAMPLE:


The SWOT anlysis-GEELY





Strengths：
The GEElY automobile is localed in zhejiang. The economy is developed, the transportation is convenient, there are many excellent talents.
In hangzhou, zhejiang province, there are Geely automobile technology center and Geely automobile research insititute. It has strong deveipment abilities. Geely has a broad product line, it can meet the needs of different cosumers. Geely automobile's production cost is low, it is a significant cost advantage. It will produce  a strongr competitive advantage.




Weakness:
Due to China's automobile indstry started relatively late, the quality of Geely automobile product is poor, it can not compete with the foreign brand. Geely automobl sales network generally fous on the country's second and third tier cities. And although Geely automobile has launched many models, the product upfate speed is too slow.


Opportunities:
Nowadays, the government gives more and more support to automobil brand, a series of encouraging policies to spped up the development of Chinese automobile. In addtion, China'seconomy rapid growth in recent years,the buy level grdually increase.
In 2010, Geely purchased the shares of the ford automobile company's Volvo car. It increases the awareness of Geely brand.

Threats:
Because China has a large car market, the domestic automobile industry competition is very strong. In addtion to the international energy prices, people are growing t the requirement of environmental protection, the structure of the domestic automobile industry inevitabe adjustment to Geely automobile bring great threat.

organization context part2

This week, I will talk about the Macro Environment, PESTLE Analysis.

PESTLE: (Political; Economic;Social; Technogical; Legal; Environmental)

Political

Political factors that influence business include:

1.The political changes at local, reginal, national, EU and international

2. The political integration of countries affect the business. For example: the grownth of the EU and lowering of trade bariers.

3.Changes in legislation For example: taxation and employmemt law, visas

4. Privatisation/Deregulation Policies

Economic

The economic factors includes the consumer activity- confidence, spending patterns, willingness to spend; Interest Rates; Inflation Rates; Exchange Rates; Unemployment; Fixed an variable business costs; Energy costs; State Investment; Effects of changes in labour and product market.

social-culture

People's lifestyle has changed in recent years, this suitation will affect the business.For example:

nowadays, people prefer the bicycles so that the car industries will loss many profits. There are many factors like this influnce the business: Shifts in value in culture;Changes in attitudes to work and leisure; Education and health; Deomographics eg, birth rate, life expectancy; Distribution of income.

Technlogical



1. Outcomes of changes in th technology that is used to design, produce or distribute goods or services

2. Production methods can go out of date quickly

3. Communication methods may be inefficient with IT developmenta

4. Government and EU investment policy

5.Indenrified new research initatives

Legal

The legal factors include the change in Law; Competition Law and government policy; Emplyment and Safety law; product safety issues; Laws to protect society and environment laws.

Environmental

Environmental factors include ecological and environmental aspects such as weather, climate changes, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

Example: Analysis the airline Indusry

 

• Political - Taxes that they get charged in different countries for landing, fuel taxation etc
• Economic -  Oil prices increasing, is this affecting their profits from increased fuel costs
•     Social - People are using more airlines to fly to their favourite holiday destinations because of the economic growth and therefore market has expanded and new opportunities for tourism have opened in previously frequently visited countries. 
•  Technological - high technology -cheaper
• Legal - Different legalities of different countries 
• Environment - The CO2 emission for 2 people traditional driving vacation will be around 20 Kg of CO2 which when compared with the emission caused by an airline would be around 1.4 tons. (add ref). There are reports that have warned that failure to limit greenhouse gases would lead to disastrous consequences. European Union will most probably imply tax aviation fuel on airline industry for their contributions to global warming.

 

 

 

 

 

 

 

organization context part1

What is organization context?

The organization context is the set of forces surrounding an organization that have the potential to affect the way  it operates and its access to scarce resources.

The organization context can divided into 3 parts:
1. Internal
2. Competitive (micro)
3. External    (macro)

Today, I will analysis the internal environment.


Porter's Five Forces

Porter's theory on competitiveness is that it is based on 5 factors.

1.Supplier Power
2.Buyer Power
3.Competitive Rivalry
4.Threat of Substitution
5.Threat of New Entry



Example:
This is Porter's five forces analysis example for a car industry.

1.Threat of new entry (very weak)

• Large amount of capital required
• Few legal barriers protect existing companies from new entrants
• New entrant could easily access suppliers and distributors
• Governments often protect their home markets by introducing high import taxes.

2.Buyer power (strong)

• There are many buyers
• Buyers do not threaten backward integration
• Buyers can easily choose alternative car brand
• It does not cost much for buyers to switch to another brand of vehicles or to start using other type of transportation

3.Competitive rivalry (very strong)

• Moderate number of competitors
• Customers are loyal to their brands 
• Industry is very large but matured
• There is moderate threat of being acquired by a competitor

4.Supplier power (weak)

• Large number of suppliers
• Materials widely accessible
• Suppliers do not pose any threat of forward integration
• Some suppliers are large but the most if them are pretty small

5.Threat of substitutes (weak)

• There are many alternative types of transportation, such as bicycles, motorcycles, trains, buses or planes
• Substitutes can rarely offer the same convenience
• Alternative types of transportation almost always cost less and sometimes are more environment friendly

Management Theory

This week,our topic is the management theory.Before talk about the theory, we must think about that why do we need to study this?

Firstly, the theory represents a more complex reality which allows us to examine a problem from different perspectives. Secondly, it is difficult to understand this world without theory, it helps us to understand the process of management.
In addition, the theory provides a basis for action.

The management theory can divided into four main schools:

Classical   Human Relations   Systems    Contingency

Classical: Emphasis on purpose, formal structure, hierarchy of management, technical requirements and common principles of organisation.

Human Relations: Attention to social factors at work, groups, leadership. the informal organisation, and the behavior of people.

Systems: The integration of the the classical and human relations approaches, importance of the socio technical system. The organisation within its external environment.

Contingency: No one beat design of organisation. Form of structure, management, and success of the organisation dependent upon a range of situation variables.




Scientific Management

   ·       Scientific management, also called Taylorism, was a theory of management that analyzed and synthesized workflows. Its main objective was improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management.


Bureaucratic Management :- (1930-1950)

   ·     Max Weber

Bureaucratic management is a form of management that is based on clearly defined hierarchical levels. It is a formal system that specifies the role of each employee in an organisation. Bureaucratic management is aimed at improving effectiveness and efficiency in an organisation.

Organization struture

"Organizational structure refers to the different hierarchies or levels in a company."

The organization structure is extremely important. It influence the whole organization,

 An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs.

This week, our team analysis the Kodak. We searched the information on the Internet. 

This strategic failure was the direct cause of Kodak’s decades-long decline as digital photography destroyed its film-based business model. Kodak long-term dependence on relatively backward traditional film department, and for the impact of digital technology to the traditional image department, the management style of old-fashioned, meet the traditional film products market share and monopoly position, lack of market prospective analysis, there is no timely adjust the structure of business strategic focus and divisions of the company, decision-making hesitant, miss the good chance.


Centralized Vs Decentralized Organization Structure

Definition

Centralized organizational structures rely on one individual to make decisions and provide direction for the company. Small businesses often use this structure since the owner is responsible for the company’s business operations.

Decentralized organizational structures often have several individuals responsible for making business decisions and running the business. Decentralized organizations rely on a team environment at different levels in the business. Individuals at each level in the business may have some autonomy to make business decisions.

Advantages

Centralized organizations can be extremely efficient regarding business decisions. Business owners typically develop the company’s mission and vision, and set objectives for managers and employees to follow when achieving these goals.

Decentralized organizations utilize individuals with a variety of expertise and knowledge for running various business operations. A broad-based management team helps to ensure the company has knowledgeable directors or managers to handle various types of business situations.

Disadvantages

Centralized organizations can suffer from the negative effects of several layers of bureaucracy. These businesses often have multiple management layers stretching from the owner down to frontline operations. Business owners responsible for making every decision in the company may require more time to accomplish these tasks, which can result in sluggish business operations.

Decentralized organizations can struggle with multiple individuals having different opinions on a particular business decision. As such, these businesses can face difficulties trying to get everyone on the same page when making decisions.

The Disadvantages of Having Many Levels in an Organization Structure
1.Slow Decision Making

2.Communication Problems

3.Expensive

4.Inflexible and Rigid

There are many kinds of organization structure

1.Functional Structure

• Functional organization is a common type of organizational structure in which the organization is grouped based on specialization by functional areas, such as IT, finance, and marketing.

2. Divisional structure

3.Matrix Structure

Reading articles and cross-referencing them to my books and lecture/tutorial notes has since increased my knowledge and understanding on business studies.