Featuring an Analysis of a Corporation Starbucks

¶ … Featuring an Analysis of a Corporation

Starbucks Company Analysis

In the year 1971, Starbucks opened its first store in Seattle's Pike Place Market. At the time, it engaged in selling ground beans over a small counter. In addition, the location was an open-air market, and its beginning, was more or less similar to a hobby. The friends, who started the now renowned global company, were not profit oriented. However, the joining of Howard Schultz is the primary cause of its current growth. He first expanded to Italy, and in the year 1990, the firm began expanding in the United States. The company expanded its headquarters in Seattle, built other plants, including stores in renowned cities in nationwide (Green).

Its growth was partly because of the contracts the director negotiated with the United Airlines, Nordstrom, Barnes and Noble, and the Sheraton Hotel. In addition, the director made efforts to expand beyond the United States, and managed to open stores in Hawaii, Britain, Japan and Asia. Initially, the strategy behind the growth of the firm was "a Starbucks on every corner," which saw the company saturate in the markets. There was a Starbucks shop sometimes a block away from one another. Gradually, the firm grew, and operated and licensed over 14,000 coffee shops in over 40 countries (Green).

The firm offered various premium coffee drinks, and Starbucks brand merchandise. The strategic concept was that the shops would attract many people, especially because of the locations in destination points. At such points, several people could meet and get coffee, read or complete homework. Many companies collaborated with Starbucks, such as, HP, Visa, which further contributed to its growth. In addition, Starbucks leveraged its popularity to expand the brand beyond coffee to provide some home goods, including lifestyle products. For instance, the firm collaborated with Amazon.com to sell coffee supplies, and kitchenware. In other instances, Starbucks marketed its product through grocery stores, and used licensing to grow the company (Green).

Mission and Vision

The company's mission statement is to nurture the human spirit, one person, one cup, one neighborhood at a time. The mission statement is a typical ambitious driven statement, which endeavors to change the perception of a cup of coffee to be uplifting and nurturing, and a builder of neighborhoods. The suggestion here is that a cup of coffee, particularly from Starbucks will make someone nicer. Starbucks' vision is to design an inclusive environment, which comprise of people and their individual variances (Gullati, Huffman and Neilson 1-8). This is regardless of age, race, gender, origin, culture, religion and other attributes. The company's vision and mission are strategic, in the sense of planning and management. They both help people to understand the objectives of the firm. In addition, the vision of the firm helps the company in developing other aspects of strategic planning. Furthermore, the vision must be in line with the mission, main strategies, aims and the implementation should follow evaluation to establish the results (Starbucks).

Strategic Plans

Starbucks has had humble beginnings, and its growth has been typical. Similar to other renowned organizations, it began because of hobbies. In addition, it has similarities to other organizations, exclusively when it comes to the facet of growing, and venturing into other fields of business. The company was negotiating with French yogurt maker Dannon to create yogurt products, which will have Starbucks' label. The yogurt, which the company dubbed "Evolution Fresh, Inspired by Dannon" will reach grocery stores by the year 2015 (Horovitz). In addition, this move will put the company a step further beyond the juice business.

Alternatively, the firm has also expanded into tea business by purchasing Teavana, and into pastry business by purchasing La Boulange (Horovitz). In addition, expanding is another strategic plan the company seeks to achieve. The drive behind this is to gain entry to other large markets. Owing to its current situation, the firm will not find it complicated to expand to other promising countries. Although this is the main motivation, the firm is not ready to sacrifice its morals to achieve the strategic plan for expansion. The firm also plans to be the leader in all facets of business. The company aims to raise its standards, which the competitors will find hard to emulate.

One of the ways the firm aims to achieve this is through the fair trade coffee. Fair trade coffee is an approach where the peasants get fair prices for their coffee and additional finance for improving their community. This is how Starbucks shows that it will appreciate the farmer's efforts. In addition, this adds to the social responsibility of the firm. Although the company may be offering high prices for their products, the firm has done a good job to improve the life of peasant farmers. In addition, the quality of the coffee also demands for high prices (Gullati, Huffman and Neilson 1-8).

Organizational Design and Culture

Organizational Design

Many businesses that deal in similar products with Starbucks run independently as small businesses. Starbucks runs its business through a vast network of coffee houses. The structure of the company varies greatly with other firms. The variation is due to the complications that arise with the creation and maintenance of such a global brand. The company's structure is general where the executives oversee the activities of the company from Seattle, Washington. In a given country, district managers are responsible of activities, and stores. Similar to other organizations, the district managers report to the management (Iversen).

In every store, the store manager serves as the chief, and under him or her, there are shift supervisors. They also play the role of the store manager when the manager is absent. Below the supervisors, the company has other employees, referred to as the baristas. Conversely, the firm does not operate through a franchise system, but the firm licenses its storefronts. They are common in grocery stores, bookstores, and other sites, especially where the firm does not have a stand-alone store. Nevertheless, the firm still controls the operations of the licensed store, which is strategic to ensure the stores follow the company's guidelines.

This also means that the company approves the products sold in the stores. The motive behind this is to defend the brand, and ensure that the products are of high quality. In addition, the employees of Starbucks are the company's partners. Although there are titles for each of the employee, they are all partners. This illustrates that the company values its employees regardless of how subordinate an employee is, they all share in the success. Social responsibility is another aspect the company works to achieve. The firm practices aims to perform environmentally by having eco-friendly options. For instance, the firm discourages the throwing away of coffee grounds during summer, and encourages consumers to leave the grounds for consumers who wish to use them in their gardens (Iversen).

Culture

Every global company has its own organizational culture. At Starbucks Corporation, the firm has endeavored to create a culture, which values and respect diversity, and advocates for the inclusion of all employees. The company struggles to gain leadership in diversity and inclusion, which will help in further growth, and maintaining of the company's mission and statement. In order to realize the corporation's goals, the firm has integrated diversity and inclusion as the core aspects in leadership (Starbucks). Leaders in the company are to uphold ethical behavior, and advocate for inclusion. In so doing, the firm will leverage diverse points-of-views, talents and abilities. In addition, the firm works in teams, functions and corporations, across markets, cultures and societies. Some of the way the firm endorses for diversity is through encouraging and hiring staff from all parts of the globe. This has led to emergence of a diverse workforce, increased cultural competencies, shaped a culture of inclusion and realized a diverse network of suppliers (Starbucks).

SWOT Analysis

Strengths

Starbucks is a renowned corporation, especially in the coffee business. The firm has managed to become the market leader in the industry. Owing to this, the company had 16,858 stores in the year 2010, which have now possibly increased. In addition, the company has a rapid pace of development, both locally and globally. The company is opening many stores globally, and this has led to attraction of many consumers across many countries. Another important strength is that the company is financially stable, which was proven during the years 2008-2009, and the current state is promising. Even though it is promising that the company will have undergone decrease in stock price, the firm has consequently recorded profits throughout. The firm has strong brand recognition across many countries by consumers. People acknowledge that the firm produces high quality products, and consumer friendly environment. In general, the firm has much strength, some of which will emerge through the future.

Weaknesses

Although the company has much strength, it does not go short of weaknesses. One of the apparent weaknesses is in the price of its products. The company has high prices of its products, and some of the competitors have used this against them. In addition, a large proportion of the firm's products come from coffee, and other beverages. This suggests that with the rising prices of coffee bean, the company takes advantage and increases the consumer products. In so doing, the competitors have realized this weakness. For instance, McDonald and Dunkin Donuts, who are the main competitors, have used this weakness to their advantage. Nonetheless, Starbucks' strengths outweigh the weaknesses, which make the company survive the competition.

Opportunities

A company like Starbucks has many opportunities. An assessment of the beginnings of the company reveal that the firm is almost exhausting the local opportunities. Therefore, the international market is still the main source of opportunity for the company. Countries, which are slowly realizing growth in their economy, are slowly embracing the special coffee offered by the firm. This is because of the division within the middle and upper classes of people. The countries are achieving globalization, which is causing the expansion on coffee tastes. A typical example is Brazil, which is the largest consumer of coffee worldwide. This provides an opportunity for the company because of the potential huge market (Murphy).

India is also a country, which is embracing the coffee sector. This also provides a huge opportunity for subsequent success for the company in the country. India is experiencing economic success, which is making the women and men to turn away from tea, and embrace the taste of coffee. Still in India, the company signed a treaty with Tata Coffee of India, which is a global exporter of coffee, to negotiate into collaborating and start selling their coffee. China also provides an opportunity for the company to venture and expand its business. Therefore, there are many opportunities for the company, which can see to its competitive advantage, and subsequent growth (Bose).

Threats

One of potential threats the company is facing is competition. This a significant threat at the current state and in the future. McDonald is the major company that is offering Starbucks a lot of competition. This is because McDonald is also capable of opening their Cafes in franchise stores across the globe. In addition, McDonald is targeting the European market, which means that it will offer Starbucks stiff competition. Opening a store in Europe requires a great deal of investment. In the case of Starbucks, it would require more than $350,000, but McDonald will only require 1/3 of the amount. Therefore, if McDonald continues to open stores all over Europe owing to the low investment startup costs, it would reduce the geographic scope merit enjoyed by Starbucks, and offer stiff competition (Dicarlo).

Summary

The SWOT examination proposes that the company has many opportunities when compared to the threats it has. The company also has an exceptional setting, which the competitors will find hard to copy. Therefore, if Starbucks takes advantage of these opportunities, it will continue dominating in the coffee industry. In business, it is impossible to lack threats. On realization of the threats, it becomes a strategy to gain competitive advantage. Nonetheless, Starbucks is strong and it is going to experience much success in the future. It is financially sound, even after firms went through financial crisis and declined, the company was strong. This analysis provides proof that the company is strong both internally and externally.

Step 2

Starbucks Resumes Tax Payments in Britain (article)

Similar to other global leaders, Starbucks Corporation does not fall short of corporate social responsibility issues. One of the issues that raised global concern was the tax scandal whereby the company had not been paying its taxes. Apparently, the firm had avoided paying tax since the year 2009, but paid its first tax in the year 2013. In response, critics have suggested that U.S. companies in other countries have the tendency of avoiding paying taxes. In this case, the Starbucks Corporation was in the United Kingdom where it did not pay its taxes as expected. In this regard, the firm handed over €5 million in U.K taxes (Colchester).

Consequently, the firm was insisting that it was tax compliant, even after it was apparent that it was not paying the required taxes. In addition, this issue tarnished the company's name, and some consumers reacted by protesting and condemning such practices from corporations that make substantial profits. In response, after paying the taxes, the company said that it did so for its many consumers. The company paid its taxes, and added another €20 million to cater for the year 2013, and 2014. It is also rumored that the company does not make substantial profits in the UK, but this does not warrant it not to pay taxes (Colchester).

Lawmakers in the UK have condemned such acts by renowned corporations in avoiding to pay cuts. Some of the other firms in the same situation as Starbucks Corporation are Google, and Amazon. Therefore, the lawmakers aimed to provide mechanisms, which will deter such companies from avoiding tax remissions (Petroff). The tax evasions are one of the ways in which companies fail to perform socially, and this can result to adverse consequences. In addition, corporate social responsibility is a strategic move, and it is possible that the company's competitors can take advantage of this issue (Petroff).

Taxes: An Ethical Issue

Tax is a reflection of social responsibility. When companies pay a fair amount of money in the countries of operation, it is a socially responsible action. This is an action, which will help the country provide services such as healthcare, education and investment in infrastructure. In addition, when paying taxes, the company should appreciate because the governments involved will improve the infrastructures, which will contribute to the growth of the firm. It is also likely for people to perceive the company as selfish and greedy, which will damage the company's reputation, and subsequent sales. This is because consumers will lose trust in the company and opt to seek the same services from other companies (Baker 5).

Conversely, avoiding tax is an ethical issue, but avoiding tax by interfering with the rules does not qualify as illegal. Nevertheless, people perceive such as illegal, rather than operating within the rule of law. On the other hand, many countries have outlined how companies should pay the taxes as provided in the law. The issue comes in when companies try to interpret the law to suit their needs, as such, to avoid paying the taxes. Avoiding paying tax is therefore immoral and unethical, and it can undermine the integrity of the company.

Corporate taxation is in a way an expression of good corporate governance. One way for the companies to comply with taxation rules is through tax planning. In most cases, countries make it easy for companies to plan their taxes by providing tools and mechanisms for purposes such as allowances, deductions, rebates and exemptions (Baker 5). Using the tools, the companies can then make appropriate choices concerning on how they would want to pursue their business, but after they consider other implications, such as tax. Tax planning is a compliant behavior, but evading tax is a grey issue.

Influence of Tax Avoidance

Many studies have provided empirical evidence concerning the association of practices such as tax avoidance, and subsequent corporate social responsibility. Companies that fail to observe such practices often take part in major social scandals. Studies have suggested that when a company fails to remits its taxes, it has failed to perform its social responsibility. Therefore, as a strategy, it is important for companies to perform socially, environmentally, instead of only aiming at making profits. In the case of Starbucks Corporation, when consumers became aware that the company failed to pay taxes, they protested (Baker 5).

This was suggestive that they perceived Starbucks Corporation as selfish and greedy. Such a perception is dangerous because the consumers could opt from consuming products from the company. In addition, competitors can take advantage of such issues from their corporation to lure consumers into consuming their products. Failure to pay taxes also suggests a failure of the administration, or management to align the companies to socially responsible practices. Therefore, companies should also create policies, which ensure that the company pays tax to avoid adverse effects of losses, or losing the competitive advantage (Dyreng, Hanlon and Maydew 61-82).