Business Strategy Essay Example for Free (#2)

Business Strategy Essay In 2006, Starbucks’, the ubiquitous coffee retailer, closed a decade of astounding financial performance. Sales had increased from $697 million to $7.8 billion and net profits from $36 million to $540 million. In 2006, Starbucks’ was earning a return on invested capital of 25.5%, which was impressive by any measure, and the company was forecasted to continue growing earnings and maintain high profits through to the end of the decade. How did this come about? Thirty years ago Starbucks was a single store in Seattle’s Pike Place Market selling premium roasted coffee. Today it is a global roaster and retailer of coffee with more than 12,000 retail stores, some 3,000 of which are to be found in 40 countries outside the United States. Starbucks Corporation set out on its current course in the 1980s when the company’s director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company’s owners to experiment with the coffeehouse format—and the Starbucks experience was born. Schultz’s basic insight was that people lacked a â€Å"third place† between home and work where they could have their own personal time out, meet with friends, relax, and have a sense of gathering. The business model that evolved out of this was to sell the company’s own premium roasted coffee, along with freshly brewed espresso-style coffee beverages, a variety of pastries, coffee accessories, teas, and other products, in a coffeehouse setting. The company devoted, and continues to devote, considerable attention to the design of its stores, so as to create a relaxed, informal and comfortable atmosphere. Underlying this approach was a belief that Starbucks was selling far more than coffee – it was selling an experience. The premium price that Starbucks charged for its coffee reflected this fact. From the outset, Schultz also focused on providing superior customer service in stores. Reasoning that motivated employees provide the best customer service, Starbucks executives developed employee hiring and training programs that were the best in the restaurant industry. Today, all Starbucks employees are required to attend training classes that teach them not only how to make a good cup of coffee, but also the service oriented values of the company. Beyond this, Starbucks provided progressive compensation policies that gave even part-time employees stock option grants and medical benefits – a very innovative approach in an industry where most employees are part time, earn minimum wage and have no benefits. Unlike many restaurant chains, which expanded very rapidly through franchising arrangement once they have established a basic formula that appears to work, Schultz believed that Starbucks needed to own its stores. Although it has experimented with franchising arrangements in some countries, and some situations in the United States such as at airports, the company still prefers to own its own stores whenever possible. This formula met with spectacular success in the United States, where Starbucks went from obscurity to one of the best known brands in the country in a decade. As it grew, Starbucks found that it was generating an enormous volume of repeat business. Today the average customer comes into a Starbucks’ store around 20 times a month. The customers themselves are a fairly well healed group – their average income is about $80,000. As the company grew, it started to develop a very sophisticated location strategy. Detailed demographic analysis was used to identify the best locations for Starbuck’s stores. The company expanded rapidly to capture as many premium locations as possible before imitators. Astounding many observers, Starbucks would even sometimes locate stores on opposite corners of the same busy street – so that it could capture traffic going different directions down the street. By 1995 with almost 700 stores across the United States, Starbucks began exploring foreign opportunities. First stop was Japan, where Starbucks proved that the basic value proposition could be applied to a different cultural setting (there are now 600 stores in Japan). Next, Starbucks embarked upon a rapid development strategy in Asia and Europe. By 2001, the magazine Brandchannel named Starbucks’ one the ten most impactful global brands, a position it has held ever since. But this is only the beginning. In late 2006, with 12,000 stores in operation, the company announced that its long term goal was to have 40,000 stores worldwide. Looking forward, it expects 50% of all new store openings to be outside of the United.i 1. What functional strategies at Starbucks’ help the company to achieve superior financial performance? 2. Identify the resources, capabilities and distinctive competencies of Starbucks? 3. How do Starbucks’ resources, capabilities and distinctive competencies translate into superior financial performance? 4. Why do you think Starbucks’ prefers to own its own stores whenever possible? 5. How secure is Starbucks’ competitive advantage?What are the barriers to imitation here? Starbucks 10K, various years; C. McLean, â€Å"Starbucks Set to Invade Coffee-Loving Continent,† Seattle Times, October 4, 2000, p. E1; J. Ordonez, â€Å"Starbucks to Start Major Expansion in Overseas Market,† Wall Street Journal, October 27, 2000, p. B10; S. Homes and D. Bennett, â€Å"Planet Starbucks,† Business Week, September 9, 2002, pp 99–110; J. Batsell, â€Å"A Bean Counters Dream,† Seattle Times, March 28th, 2004, page E1; Staff Reporter, â€Å"Boss Talk: it’s a Grande Latte World†, Wall Street Journal, December 15, 2003, page B1. States. C. Harris, â€Å"Starbucks beats estimates, outlines expansion plans†, Seattle Post Intelligencer, October 5th, 2006, page C1 Business Strategy. (2017, Jan 06). We have essays on the following topics that may be of interest to you

Economic Order and Democracy Essay Example | Topics and Well Written Essays - 4250 words

Economic Order and Democracy - Essay Example For this reason especially, experiments with various kinds f worker ownership have increased sharply in the United States in the past two decades as a response to the problems f capital flight, runaway shops, bureaucratic waste in the managerial sector, and industrial decline. In the Progressive era, when theologians such as Rauschenbusch and Temple made the case for economic democracy, there were few examples f cooperative ownership or decentralized social ownership to which they could point. But today there are thousands f worker-owned firms in the United States and, though they have been characteristically slow in rising to the challenge, many American unions have begun to bargain for worker ownership, worker control over pension funds, and worker management rights. These developments are not yet, but have the potential to become, the building blocks f a genuine movement for economic democracy. (Krimerman 1-4) The Mondragon cooperatives in the Basque region f Spain offer one instructive example f economic democracy at work. In the 1950s a Catholic priest, Jose Maria Arizmendi, inspired a group f students to launch a cooperative stove factory (Ulgor) that quickly grew into a network f foundries incorporated as agricultural cooperatives. Mondragon has since grown into a highly successful and diversified network f worker-owned enterprises that are democratically managed on the basis f cooperative membership. Between 1966 and 1975, sales rose from $47 million to $336 million, and in the 1980s Mondragon became Spain's largest exporter f durable goods. In over forty years, it has witnessed only two closings. The Mondragon cooperatives employ over 100,000 workers in an integrated network f more than 125 financial, industrial, and service companies in virtually every economic sector, including robots and mass transit. Mondragon contains over 75 industrial firms, an agricultural cooperative, five schools, a technical college, and a central bank -- the Caja Laboral Popular -- which is half-owned by its own employees and half-owned by other cooperatives. Founded in a church basement in 1958, the Caja Laboral Popular has become a bank with $2 billion in assets that specializes in making loans to cooperative firms and providing industry-specific consulting assistance. Each Mondragon worker/owner holds one share f voting stock, and profits are distributed in the form f additions to a capital account on which 6 percent interest is paid annually. Seventy percent f annual profits are distributed to worker/owners on the basis f salary scale and seniority, 10 percent are donated to charity, and the remaining 20 percent are reinvested. Because the network's worker/owners cannot withdraw money from their capital accounts until they retire, Mondragon is able to make long-term investments in expansion, diversification, research and development, and reinvestment from its accumulated capita l stock. [TM] The Mondragon network consistently outperforms comparable capitalist enterprises throughout Europe, and thus demonstrates that worker empowerment and cooperation can be turned into economic advantages. Without question, the cultural variables are daunting; it is difficult to imagine how a similarly integrated network f pure-form cooperatives could be established in individualistic

Analysis and consideration prior to developing operations in Research Paper

Analysis and consideration prior to developing operations in Australian wine industry - Research Paper Example The recommendations given will aid the company to settle and establish itself without many problems. In addition, the techniques used to do this study include evaluation of other wine companies, government’s policies, and other deterministic factors. Here, competitiveness refers to the forces that are likely to hamper productivity while attractiveness refers to profitability of a business venture by a company. The continent has good climatic conditions for growing vineyards, a rich cultural heritage of wine making and skilled work force. Moreover, most of the wines industries and vineyards are owned by families, with a few commercial plantation and firms. Australia produces three percent of the world’s wine, and is the second to Italy largest wine exporter country (Allen, 2003, p.43). Primarily, the wine industry in Australia is experiencing rapid growth and international recognition in the present days (Gibson, 2010, p.301). This nation has some of the world’s most proficient winemakers, mainly based in the southern region. The industry highly depends on the export especially to the United Kingdom, Canada, and New Zealand. (Kym, 2004, p.264) The common regions of wine production are south and west Australia, Victoria, and New South Wales, which have a wide range of grapes produced. Australia is largely a tropical region; however, some parts such as the south have warm temperate and cooler climates (Gibson, 2010, p.301). Wine production is done in the cooler region of the country. Needless, other regions without the conducive climate for vineyards growing have used methods like irrigation that facilitate production of grapes. The Shiraz type of grape is the most common as it grows even in the warmer parts of Australia, while other types of grapes like the chardonnay and cabernet sauvignon have adapted well to the climatic conditions. In addition, the landscape has a system