Starbucks' international expansion and ethical business strategies

¶ … Strategy at Starbucks

The Main Organizational Structure Aspects That Keep Starbucks at the Helm of World Economy

Expansionist Approaches:

The company decided to get into India to explore fresh international business horizons. Indeed, India is a worthy choice, since it has a large middle class population that is noted as one of the world's fast growing economies. There is a good chance for Starbucks to stir interest in specialty coffee among the citizens of India (Bose 2011). As India continues to grow, the need for specialty coffee consumption is going to increase. It is evident that as the country industrializes, people are increasingly divorcing tradition and adopting new ways of life. These are projected developments; even though Starbucks has not opened an outlet there yet.

Starbucks has also penetrated China. It is reported that the coffee consumption since this penetration into the new market stood at 9% as at the end of 2010 (Burkit, 2010). With this trend in China, it is likely that Starbucks will now compete favorably with established conglomerates, such as McDonald's. In fact, China is well on its way to overtaking major traditional coffee consumers, such as the UK, Japan and Canada (Burkit 2010). The horizon looks bright for Starbucks as it explores these potential bullish markets, with a promise of lifting the company's profit profile. It is evident that Starbucks has a great strategy that can lift it to greater heights in future.

Ethical Perspectives With Regard To Starbucks

Starbucks seeks to become a world leader in the coffee sector. Consequently, the company has sought to adopt mechanics that go with a company of that stature. A lot of companies falter on the ethical front, in their plight and attempt to make greater profits. The company seeks to become the de facto leader in environmental maintenance, and sustainability in all their business operations (Starbucks Shared Planet, 2009). The central mission regarding ethical standards and Starbucks management is that the company should run its operations in the background of irreproachable practices. One of the tools it has practically applied to achieve this objective is adopting its fair trading in coffee. This is a business policy that ensures that poor, small scale farmers get the best price for their coffee produce. The policy tries to make sure that the prices offered for coffee from such farmers can help them (farmers) sustain coffee production. It also includes providing some money to groups so that they can improve their business ventures and communities in general (Davids, 2009).

How Management Helps To Create and Sustain the Culture of the Organization

There are challenges that managers will face in implementing such robust strategies as Starbucks has adopted. There is a new way to run marketing campaigns at Starbucks. As opposed to pursuing traditional approaches, such as channeling cash for advertisements on TV, billboards and newspapers or even online, the company encourages its staff to relay the good news to the public. The difference is that the company actually spent a lot more on its employees compared to advertizing campaigns (Roby, 2011).

The Effect of the Decisions by Starbucks Managers in Meeting Customer Expectations

The management has made many decisions that have helped the company continue to expand to its current international outlook. The differentiation approach has assisted the company meet customer expectations and consequently made it a darling of the public. Starbucks Digital Network and the provision of Wi-Fi Service have been noted as top value addition strategies that have seen the company improve tremendously in the recent past. These services are said to enable the company deliver better services. Consequently, the company has recently reported improved sales and profits. The catch is that such services are likely to make customers stay at these venues for longer. The longer the customer stays at an outlet, the more likely they are to buy more coffee and other related Starbucks food items on the menu. The wireless network is expected to enable the company sell a lot more music and related media. It was reported in January that soon after wireless network was introduced, the company's product sales rose by 4%. This was against a background of previous sales declines, prior to the introduction of the new services (Miller, 2010).

It appears that wireless network is a major sales carrier that will continue to boost Starbucks sales in the countries that the company ventures. The introduction of these services was a courageous gamble at providing services that are otherwise accessed at specified fees. With these services, Customers can access such sites as iTunes and others. The service will certainly improve the image of the company in the public.

The introduction of the above services is certainly the ingredient that was missing to enable the company attain new levels of sales output and counter stiff competition from McDonald's; which offers wireless internet too (Roby, 2011)

Qualities a Manager Needs to Succeed at Starbucks

Diversification

In modern business, one must embrace the tenets of diversification in order to excel. Starbucks strategy is greatly hinged on the need to diversify so as to align to its primary objective of utilizing a blend of congruent and tangents, in the chase for fresh ways and engagements with individuals all the time (Company Overview, 2009).

How Such Performance Elements Help the Culture of an Organization

The pursuit of diversity at Starbucks helps them evolve in unforeseen dimensions. Divergent groups add value and help an organization to craft unique ways to operate in the ever dynamic business environments. The decision-making at the company has been decentralized. Managers make decisions that are relevant and business smart, in the regions of operations. They then compare results at the corporate meeting. This approach is in itself a hybrid of diversity and unity. It is also an effective complete communication strategy in which feedback is received from both ends; corporate and localized managerial levels.