Apr 12, 2021
folder_opencategory: Business

Introduction

Starbucks Company Limited is a leading American corporation that specializes in the supply of coffee both locally and internationally. Starbucks began its operations on March 30, 1971 (Starbucks Newsroom, 2014). The first store was opened in Seattle and functioned just as a roaster and retailer of tea, spices, whole beans, and ground beans. However, significant expansion that followed in the subsequent years led to the emergence of the largest global brewer of high quality coffee. Starbucks sells a variety of coffee products. They include first-class whole bean coffees along with fresh rich-brewed coffees, premium teas, diverse complementary food items, and related beverages. Therefore, the paper seeks to analyze how such factors as globalization technology, industry and resource-based models, vision and mission statements, and stakeholders influence Starbucks’ overall success.

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The Impact of Globalization at Starbucks

Starbucks’ global expansion is one of the most significant aspects that contribute to its popularity. Irrespective of the fact that the company was successful domestically, the corporation partners found it essential to exploit the global market and expand the organization to overseas markets to completely utilize the company’s potential. Over the years, Starbucks has continuously evolved into the worldwide company that is known today for quick expansion in a foreign market (Starbucks Newsroom, 2014). The so-called “Starbucks Effect” was experienced in many countries, which resulted in the continuous emergence of new rivals with greater business models that made companies reconsider the effectiveness of what they have previously done. Basically, the idea implies that if your corporation cannot accept the efficiency of the Americans, it will not succeed. Due to its globalization strategy, Starbucks continued to penetrate into the market around the globe. It has extended its business to countries such as Japan, Singapore, South Korea, Germany, etc. The company has significantly connected both the poorest and the wealthiest countries in the world simply through coffee beans, sugar, milk, and paper cups (Starbucks Newsroom, 2014).

Globalization has not only helped Starbucks become a global company but it has also brought the company certain problems. These challenges arose both domestically – within the organization’s business model and externally – in the form of foreign rivalry. Furthermore, Starbucks’ rival coffee brewers started duplicating the company’s entrepreneurial culture, name, and even its logo. Starbucks had to heavily rely on intellectual property laws to eliminate customers’ confusion.

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Technological Impact on Starbucks

Starbucks’s success has been due to its consistent digital transformation and committed leadership. Currently, the company continues to reap the benefits of these strengths increasing value for customers and shareholders through digitalization of its services. For instance, Starbucks strongly depends on mobile channels that in some ways have to advance the Starbucks experience. According to Starbucks Newsroom (2014), today the company benefits hugely from over 7 million mobile application users, and it expects to collect 10% of internal payments through mobile phones in the coming years.

Starbucks has incessantly expanded its mobile payment capabilities by following the advances in mobile technology. The company announced in 2012 that consumers would be able to make purchases at the register through Square, which is an application-based mobile payment system (Starbucks Newsroom, 2014). Besides, Starbucks has connected its apps with Apple’s Passbook feature that integrates ticket, loyalty card, and coupon information on an iPhone touch for proper access.

Interestingly, the enterprise strives to establish a leading presence in the social media. Numerous fans on Facebook, Twitter, and Instagram made Starbucks rank number one among socially engaged companies. Through digital innovation, Starbucks has made technology significant to the company strategy thus enhancing its customers’ experience. This not only happens in its local businesses but also in overseas markets. Consequently, Starbucks’ goal of maintaining its leading position in the industry is enhanced.

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Industry-Based Model and Resource-Based Model

The industry-based and resource-based models can be utilized to establish how Starbucks can earn above-average returns.

Industry-Based Model

According to Starbucks Newsroom, there are 365 coffee buyers or every coffee venue in New York, which proves that there is market saturation in the US. As a result, Starbucks has to think outside the American borders so as to multiply profitability. Usually, the targeted countries must have real potential regarding huge population sizes and the number of consumers with high disposable income and with the interest of experiencing Americanization. Since America is the most developed and innovative country, Western nations always have a keen interest in American products. Starbucks managers can use this and bring its recognized brands to other countries, thereby earning above-average returns.

Moreover, the company can continue capitalizing during globalization by implementing the first mover advantage, which entails following the major competitors such as Dunkin’ Donuts. McDonald’s is always spreading the American way of life. This provides it with an advantage in its innovative approaches of healthier snacks, which can benefit the company in other nations where this kind of lifestyle is attractive. Additionally, for Starbucks to continue to earn above-average returns, especially in the overseas market, it needs to follow the laws and regulations of the host countries, even if these rules are not always favorable for the company. Nevertheless, USA is a member of NAFTA, APEC, NATO, and Pacific Community trading block (Starbucks Newsroom, 2014). Consequently, the supply of raw materials is cheaper, which enables Starbucks to provide the high-quality service at a reduced price yet earning good returns.

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Resource-Based Model

An organization’s core competencies are formulated from tangible and intangible resources and capabilities. It is easier to identify the tangible assets, since they include raw materials, financial resources, real estate, and production facilities. Starbucks buys its high quality coffee beans from established coffee-producing climates. The organization ensures it maintains equitable relationships with farmers, communities, and workers as well as protecting the environment. As a result, the company has improved its marketing capacity and upgraded its chain of supply that converts the essential resource to an advantage for meeting the requirements of premium roasted coffee. Therefore, the Starbucks’ supply level is secured. Moreover, it makes the price and quality of the company’s services more competitive in the new markets and global coffee industry. Starbucks’ exclusive strategy of the main locations enables it to attract foreigners. In other words, its brand image and prominence are promoted (Starbucks Newsroom, 2014).

Starbucks’ intangible assets include the brand name, knowledge, reputation, and experience among others. The creation of Starbucks relied on Italian coffee shops where one of the founders learned about the Italian culture of drinking coffee that initially began not in the US. However, after necessary knowledge and experience were gained throughout the US, Starbucks was able to acquire the unique know-how, which increases competitiveness in global markets. The brand of Starbucks possesses elements of differentiation and uniqueness, which are significant to the establishment of positive relationships in the minds of the consumers. Starbucks’s brand name has a full recognition in most countries around the globe that makes the buyers pay a higher price for the brand name. Starbucks is strongly associated with no-name logo that could enable it to expand in the countries that have different languages and different writings.

Starbucks is among the companies with the lowest staff turnover as well as a high employee satisfaction quota making international employee hiring much simpler as they are seen as attractive to work for. The company has a reputation of a responsible firm in social terms. It maintains clean environment no matter where it is located and encourages the consumers to use recyclable cups. It is stored are designed with green paint, and the firm helps the farmers reduce carbon emissions. As a result, its brand image throughout the world is continuously being enhanced, which increases customers’ loyalty around the globe (Starbucks Newsroom, 2014).

Starbucks’ Mission and Vision Statements and Their Influence on Overall Success

To control its organizational performance and strategic direction, Starbucks Coffee continues to formulate and implement its mission and vision statements. The today’s achievements and worldwide industry leadership of Starbucks is a direct expression of is objectives. The vision statement of Starbucks is “to establish Starbucks as the first-class producer of the finest coffee globally while keeping up with our adamant principles while we grow” (Starbucks Newsroom, 2014). Being a first-class producer means that Starbucks Coffee wants to win leadership in the market, especially by offering the coffee of the best quality. However, this is already in place since Starbucks is the leading supplier of quality coffee in the world. It also supports the growth component of its vision statement as indicated in the consistent global expansion program of the firm through the new Starbucks cafes.

The Starbucks’ mission statement is “To motivate and nurture the human spirit one person, one cup and one neighborhood at a time. The firm’s mission statement replicates what Starbucks does to “keep its business running” (Starbucks Newsroom, 2014). Starbucks Corporation motivates and nurtures the human spirit, starting from its employees. To address this component, it maintains a small business culture, where the relationship and warmth are important. The one person, one cup, and one neighbor at a time indicate that Starbucks ensures the meaningful impact on all the employees and customers. In essence, the Starbucks’ vision statement informs the customers about the advantages they can get from it. On the other hand, the company’s mission statement shows what the corporation plans to do at the core of its business.

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Starbucks’ Company Stakeholders and Their Influence on Overall Success

Starbucks’ stakeholders include the employees, customers, suppliers, the environment, investors, and the government. An employee of Starbucks is an important stakeholder in the company. In its corporate social responsibility efforts, the firm prioritizes the employee primarily. To ensure the company meets the demands of their employees, it ensures that the employees get wages above the lawfully mandated minimum wage. The company believes that a satisfied employee is a happy worker, which translates to a successful organization (Thompson, 2017).

Starbucks’ customers are also highly ranked by the company. The enterprise ensures that the interests of the clients are met by providing high quality products and services, for instance, coffee and other complementary items. Therefore, Starbucks shoulders the corporate social responsibility efforts for this group. Its suppliers are the commercial supply firms and coffee farmers. They ensure timely supply of coffee beans required for coffee production. The environment refers to various areas where Starbucks stores are located, while the investors of Starbucks represent the persons and corporations that fund the firm. Finally, the government has a role to ensure that the industry is governed by rules and regulations that promote healthy competition in the market (Thompson, 2017).

 

Conclusion

Starbucks Company Limited is the leading American firm in the supply of coffee and other complementary products. The company’s success is as a result of its high-tech services as well as consistent expansion globally that has seen they company’s profits multiply over the years. The Starbucks’ industry based model indicates what the firm does to withstand the competition. Its resource-based model shows the organization’s tangible and intangible assets that made the company thrive. Moreover, Starbucks’ success is majorly contributed by the firm’s stretch of stakeholders including the employees, customers, suppliers, environment, investors, and the government.

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