Friday, December 13, 2019
STARBUCKS IN 2009 1 TABLE OF CONTENT Starbucks issues and causesÃ¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦ Ã¢â¬ ¦. Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦. 2 Starbucks current strategies and evaluationÃ¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦. We will write a custom essay sample on Starbucks in 2009 or any similar topic only for you Order Now . Ã¢â¬ ¦Ã¢â¬ ¦. Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦.. 4 Analysis and recommendationsÃ¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦. 10 SOAR analysisÃ¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦.. Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦.. 10 Competitive analysisÃ¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦. 11 Value chain analysisÃ¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦14 RecommendationsÃ¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦. Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã ¢â¬ ¦Ã¢â¬ ¦.. Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦17 AppendixÃ¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦. 18 ReferencesÃ¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦.. Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦. Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦Ã¢â¬ ¦. 19 STARBUCKS IN 2009 2 STARBUCKS IN 2009 Starbucks issues and causes Starbucks share price went down from the peak of $40(October 2006) more than 75% over the next two years. The sale and operating profits decreased 73. 1 million dollars compared to the last year in 2008 (Table 1 in the Appendix). The growth rate of Starbucks store sales decreased 8% in 2008 (Starbucks Corporation, 2008). 60. 00% 50. 00% 40. 00% 30. 00% 20. 00% 10. 00% 0. 00% 2005 2006 2007 2008 ROA ROE The chart above shows the ROA (return on assets) and ROE (return on equity) ratio of Starbucks has generally gone down between 2005 and 2008. STARBUCKS IN 2009 3 Following are five main factors that caused Starbucks downturn in 2008: 1. Economic environmentÃ¢â¬âGreat Recession The global economic decline began in 2007 and took a sharp downward turn in September 2008. Due to this recession, each U. S. household lost an average of approximately $5,800 in income, and gross domestic product declined 6. 2 percent annualized (PEW, 2008). 2. Competitors Some independent coffee shops, such as Caribou Coffee (U. S. ), have imitated the operating model of Starbucks and have expanded and become national chains. In addition, fast food chains, including McDonaldÃ¢â¬â¢s, Burger King, and DunkinÃ¢â¬â¢ Donuts, started to provide coffee and get favorable comments. 3. Consumer performance Customers, especially coffee-lovers, became connoisseurs through the education process of coffee, which is a part of Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ . Those educated customers would look for superior alternatives to satisfy the appetite. Another factor that affects sales is local preference. Customers could prefer different flavors and different types of coffee in different regions and areas. Ignoring the custom is the main aspect that leads to the failure of Starbucks in Australia. STARBUCKS IN 2009 4 4. Excessive store expansions One of StarbucksÃ¢â¬â¢ operating strategies is to increase its market share by continuing to open new stores in the existing market, and expanding stores in the new market to support its long-term strategy. During the recession, Starbucks did not slow down the expansion which resulted in 300 store closures and 6700 job losses in 2009. In 2008, cost of sales increased from $3999 million to $4645 million from the previous year. The store operating expenses have increased $528. 0 million between 2006 and 2007; and the long-term debt has also increased from $2. 7 million in 2006 to $550. 9 million in 2007 (Table 1 in the Appendix). 5. Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ brand dilution Although Starbucks has already created a distinguished mission and value for the last twenty years, consumersÃ¢â¬â¢ perception towards the Ã¢â¬Å"Starbucks Experie nceÃ¢â¬ has changed rapidly. Consumers are becoming too familiar with the brand and consider StarbucksÃ¢â¬â¢ product overpriced compared to other coffee stores in the market. Many questions arise to if consumers really value and recognized the Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ . Starbucks current strategies and evaluation 1. Rediscover and Revitalize Starbucks Experience The Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ includes the high quality coffee beans, employee involvement, community relations, social purpose, the layout and design of the stores, STARBUCKS IN 2009 5 and Starbucks location strategy. Howard SchultzÃ¢â¬â¢s strategy is to redefine the core brand value. Although the company has a well-established image in the market in the past twenty years, the same distinctiveness and concept might not have the same appeal to the consumers in the second decade of the twenty first century. . Revise mission statement and objectives: According to the Starbucks Corporation report for Fiscal Year 2008, Starbucks aims to establish itself as one of the most recognized and respected brands in the world through continuing expansion of its retail operations, growing its specialty operations, and pursuing other opportunities by introducing new products and developing new ch annels of distribution. This strategy shows that Starbucks place their attention on the scale and leading position of the company, and underestimate the importance of branding and differentiation. Both the fast expansion and over diversification would hurt the brand concept and cover the outstanding features, which could be proved by the decreased gross margin showed in the following graph. STARBUCKS IN 2009 6 Gross Margin of Starbucks 0. 53 0. 52 0. 51 0. 5 0. 49 0. 48 0. 47 0. 46 0. 45 0. 44 2006 2007 2008 Gross Margin 3. Re-emphasize core value Although one of the Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ location strategies is to cluster 20 or more stores in each urban hub, Howard Schultz have re-emphasized the core value of the company and reduced store expansions in 2008. Under operating expenses, it shows the total of $266. 9 million in restructuring charges as the company is reducing retail stores that are not profitable. The total net stores opened in United States were only 445 in 2008 year ended, compared to 1065 net stores opened in 2009 year ended. Starbucks also closed 64 stores in Australia due to the highly competitive environment of European culture influences. Instead of opening more retails in the city, the company has increased the drive-thru stores in the suburban locations in the U. S. and Canada, with approximately 35 percent and 31 percent of growth between 2007 and 2008. The decision of restructuring stores in 2008 cause a great lost in the company. However, the changes were necessary for the company to re-focus and re-define its core value of Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ which leads the company to a fresh start in the following year. STARBUCKS IN 2009 7 4. Reconnect with customers through community projects and social responsibility Ã¢â¬Å"Perhaps we have the opportunity to be a different type of global company. One that makes a profit but at the same time demonstrates a social conscienceÃ¢â¬ , this was SchultzÃ¢â¬â¢s vision for the company and showed his concern for re-establishing Starbucks social responsibility. In 2008 Starbucks held their annual meeting in New Orleans and used this as an opportunity to raise 10,000 volunteers to take part in various community projects to help rebuild this area. They have also created what they call Starbucks Shared Planet; which focuses on ethical sourcing, environmental stewardship and community involvement. Starbucks knows how important it is to their customers that they are socially responsible and offer something different and outstanding in comparison to their competitors. 5. Review operating practices Starbucks operates in both company-operated and licensed retail stores, and provides packaged coffee, tea and other branded products through a licensing relationship with partners. Starbucks installed new coffee making equipment, which cost millions of dollars, to emphasis the Ã¢â¬Å"hand-madeÃ¢â¬ feature. They also revised the food menu and removed the non-core products to avoid the conflict among concepts. Around 84 percent of total net revenues during fiscal 2008 came from the company-operated retail stores. By maintaining and developing company-operated retail stores, it could help keep the leading position and the experience provided by Starbucks STARBUCKS IN 2009 8 based on the superior customer service to reflect personality and build loyalty. On the other hand, the strategy of licensing rights to operate retail stores and produce branded products through partnership improves the awareness of Starbucks and reduces barriers to developing new markets through the local advantage of partners. Although it brought up the operating expenses both in U. S. and international markets, upgrading the coffee machine is a positive approach to keep consistency with the Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ and Starbucks image. Once the coffee is made individually from freshly ground beans, the customers would notice the Ã¢â¬Å"hand-madeÃ¢â¬ feature, which results in a different perception from other competitors. Since foodservice sales accounted for 17 percent of all products and Starbucks gained about 5 percent of total revenues through providing food in the U. S. market, food is still a crucial element of the business. Therefore, it is necessary to seriously think about reinventing the food menuÃ¢â¬âdistinguishing the conflicts and then removing the products that really affect atmosphereÃ¢â¬ârather than cancelling all the options. 6. Remain shareholder value Base on the annual report of Starbucks in 2007 and 2008, the company did not pay cash dividends to share holders, as well as in the near future (Starbucks, 20072008). The factors that influenced the stock price are comprised of companyÃ¢â¬â¢s operational and financial performance, current and future industrial condition, and external economic situation. STARBUCKS IN 2009 9 In 2008, investors were concerned about the current situation of Starbucks as many companies were facing bankruptcy, the stock price went down quickly due to selling stocks to receive cash. In order to increase the confidence of shareholders, the CEO of Starbucks pronounced that company would keep forces on create long-term shareholder value. During the financial crisis, it was hard to let people believe in the future. Starbucks must make changes on their performance to satisfy the investors. However, the data shows that it was continuing deteriorated. The operating margin and net margin kept falling, which would disappoint shareholders. . 16 0. 14 0. 12 0. 1 0. 08 0. 06 0. 04 0. 02 0 2005 2006 2007 2008 Operating Margin Net Margin 7. Re-emphasize employee values to the company After Schultz returned as CEO, he was driven to reignite his commitment to his employees in which he referred to as partners. In the past the company has done many STARBUCKS IN 2009 10 things to insure a workp lace that people would be proud to work for. Schultz offers full health care benefits to all employees including part time; by doing this the company has dramatically lowered their turnover rate compared to other companies in the industry. During the hard time of reduced revenues Schultz realized the importance of bringing the full Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ to each and every customer, and to do that he needed to have dedicated employees. Losing a knowledgeable and trained barista meant losing their valuable customer relationships that they have created. Schultz took human resource very seriously and made sure to meet with all levels of the company to reconsider and realign their purpose and principles and re-establish their connection with their customers. From SchultzÃ¢â¬â¢s perspective focusing on and improving the Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ was just as important, if not more important than number crunching. Analysis and recommendations It is important for Starbucks to utilize three main stream strategic tools to see the issues of the organization and make action orientated plan. 1. SOAR analysis Strengths Ã¢â¬ ¢ Ã¢â¬ ¢ Ã¢â¬ ¢ Ã¢â¬ ¢ Strong business ethic Consistency within stores Many locations, equalling convenience Well known brand recognition STARBUCKS IN 2009 11 Ã¢â¬ ¢ Ã¢â¬ ¢ Ã¢â¬ ¢ Ã¢â¬ ¢ Ã¢â¬ ¢ Clear positioning Loyalty to customers Strong company culture Quality of product International presence Opportunities Ã¢â¬ ¢ Ã¢â¬ ¢ Ã¢â¬ ¢ Ã¢â¬ ¢ Ã¢â¬ ¢ Continuous cooperation with local farmers Conducting more research before quickly penetrating area Recognize consumer behaviour regarding new trends in the coffee industry Focusing on potential competitors (McDonalds/Tim Hortons) Sponsorship of local community events Aspirations Ã¢â¬ ¢ Ã¢â¬ ¢ Recreate Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ Implement third place, Ã¢â¬Å"Home Ã¢â¬â Work Ã¢â¬â StarbucksÃ¢â¬ Results Ã¢â¬ ¢ Ã¢â¬ ¢ Measure by re-establishing SOAR every 3, 6, and 9 months Measured by aspirations becoming strengths and opportunities becoming results 2. Competitive analysis Based on the PorterÃ¢â¬â¢s Five Force model, the competitive environment that Starbucks faces could be considered in following five aspects: STARBUCKS IN 2009 12 Bargaining power of suppliersÃ¢â¬âlow Starbucks purchases large amounts of coffee beans directly from farmers all over the world, and they have built a relative stable relationship with some high quality coffee providers. Under this circumstance, the suppliers are at a disadvantage in the bargaining. Bargaining power of buyersÃ¢â¬âlow Individual customers who consist of the majority of the target market usually do not have bargaining power, compared with a large corporation. In addition, customers have gradually accepted the slightly higher price of Starbucks because of the increasing awareness that they are paying for not only the coffee and food, but also the service and experience. Threats of substitutesÃ¢â¬âmedium The substitutes of coffee could be tea, juice, soft drinks, milk, and other kinds of drinks. Since the similarity among these groups is relatively low, especially for coffee-lovers, and the distinct flavor and functions, coffee is a special category. However, considering the experience that Starbucks wants to provide to customers, some other retail stores, such as ice-cream stores, would also target on the same market, which is the substitute of the Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ . STARBUCKS IN 2009 13 Threats of potential entrantsÃ¢â¬âhigh Starbucks has a large amount of potential entrants, including ? New ventures that have plan to enter the market and become big corporations or national chains ? ? Local independent coffee shops that provide high quality imported coffee. Large national chains, such as Tim Hortons and Burger King, that start to serve gourment coffee and become high-end. Since the entry barrier of the specialty coffee industry is relatively low, new entrants could share the market and develop their loyal customers without high technology and heavy investment. Rivalry among existing firmsÃ¢â¬âhigh Most coffee-shop chains that provide high-end coffee and relaxing experience would be considered as existing competitors of Starbucks. The competitive situation would vary enormously from country to country. The most typical and powerful competitors are Caribou Coffee, McDonaldÃ¢â¬â¢s, and DunkinÃ¢â¬â¢ Donuts. ? Caribou Coffee is the nearest competitor in the U. S. arket, which has 495 coffee shops in 15 states and ? In 2001, McDonaldÃ¢â¬â¢s-run coffee counters were placed inside of McDonaldÃ¢â¬â¢s stores, offering espresso drinks as well as teas and pastries. Consumer Reports magazine rated McDonaldÃ¢â¬â¢s regular coffee as better tasting than Starbucks as well as other STARBUCKS IN 2009 14 national competitors 6 years later. In January 2008, M cDonaldÃ¢â¬â¢s announced it would begin installing coffee bars, called McCafe throughout its US stores, and priced , these drinks between $1. 99 and $3. 29. By comparison, StarbucksÃ¢â¬â¢ comparable drink versions were priced between $2. 65 and $4. 5, a premium of approximately one-third (Seaford Culp Brooks, 2008). ? Starbucks considered Dunkin Donuts as an indirect competitor that competed within the lower-end convenience-oriented fast-food market; however, Dunkin Donuts pursued an aggressive growth strategy that shifted its positioning to coffee, and reached the top selling retailer of coffee-by-the-cup in America at 2. 7 million cups a day by 2006 (Seaford Culp Brooks, 2008). Besides, Starbucks also needs to grab market share from Nescafe and Lavazza who introduced sophisticated easy-to-use coffee system that help customers make good coffee at home. . Value chain analysis Firm Infrastructure The Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ , including the store design and layout, i nvolves a unique experience that the consumers will not receive it anywhere else. Starbucks also incorporates local stories and culture when designing the store; this creates a community involvement and more personal experience for the customers. Customers who buy Starbucks product are not only purchasing a simple beverage, they STARBUCKS IN 2009 15 are purchasing an experience and bring back the value for the company. Human Resource Starbucks believes in a workplace where people are treated equally and respectfully; also to inspire them and to share in its success. The company offers extensive training for their employees, to involve them in the company culture. Starbucks creates value and company morals for their employees by providing them with great health benefits and empowering them in the decision making process. Employees then create value for the company in return by selling Starbucks product. Technology Development Starbucks is always trying to be innovated in the market by introducing new technologies and creative products. The POS system provides efficiency when placing customer orders and it also detects sales on specific products for managers to monitor certain sales patterns. StarbucksÃ¢â¬â¢ Verismo machine also plays an important part of the companyÃ¢â¬â¢s technology development by providing fast production of high quality beverage to their customers. Procurement Starbucks has a huge buying power internationally and has a great long-term relationship STARBUCKS IN 2009 16 with the local coffee beans suppliers. This helps the company control costs, in turn being able to create greater value and profit for the organization. Operations From selecting and searching high quality coffee beans all over the globe to the cup of coffee prepared by certified Baristas; StarbucksÃ¢â¬â¢ operation process creates a standardized guideline all across the organization by the efficient service from all level of employees and management. Outbound logistics StarbucksÃ¢â¬â¢ distribution system is expansive, including the storefront retail stores, licensed products and brand, as well as airport terminals. The company also offers mobile apps, and loyalty cards for regular customers to provide efficiency and show appreciation of their business to the company. Marketing and Sales In order to provide greater consumer value, Starbucks has created many loyalty programs for return customers as well as frequent promotions and new flavored beverages to keep its product interesting. The company also focuses on holiday season products such as holiday flavor beverages and merchandises to add value for the existing products. STARBUCKS IN 2009 17 Recommendation: Considering the increasing average price of coffee beans resulted from the resource shortages, Starbucks would face a higher costs of material and more powerful suppliers. Planning vertical integration to unite or own the valuable farms and plants could effectively guarantee the supply and control costs. Maintaining a clear brand image and position and holding the principles and concepts that have long been implemented are effective approaches to survive Starbucks within the fierce competition. The unfavorable opinions of customers towards VIA instant coffee make it clear that aggressive expanding and changing for competition would confuse consumers and lose market. Since in-store atmosphere, free Wi-Fi, and considerate customer service are no longer the unique features of Starbucks, it is necessary to create new ideas to develop Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ that makes Starbucks different. Figuring out more ways that are consistent with the core value of the brand to integrate and re-launch the concept of Ã¢â¬Å"Starbucks ExperienceÃ¢â¬ to motivate customers by turning familiar things new. STARBUCKS IN 2009 18 Appendix Table 1. The table of figures showed in the graphs: 2008 ROA ROE Gross Margin Operating margin Net Margin 12. 67% 8. 88% 0. 470 0. 057 0. 036 2007 29. 45% 19. 72% 0. 00 0. 132 0. 084 2006 25. 32% 20. 19% 0. 517 0. 136 0. 086 0. 145 0. 092 2005 23. 65% 22. 21% STARBUCKS IN 2009 19 REFERENCES Grant, R. M. (2010). Contemporary Strategy Analysis (seven editions). Chichester: John Wiley Sons. PEW. (2009). The Impact of the September 2008 Economic Collapse. Retrieved January 31, 2013, from http://www. pewtrusts. org/our_work_r eport_detail. aspx? id=58695 Seaford, B. C. Culp, R. C. Brooks, B. W. (2008). Starbucks: Maintaining A Clear Position. Journal of the International Academy for Case Studies, 18(3), 39-57. Starbucks Corporation. (2008). Fiscal 2008 Annual Report. How to cite Starbucks in 2009, Papers
Thursday, December 5, 2019
Question: 1. What is the impact of globalisation on International HRM? (50%) In answering this question you may find it useful to consider a) Why have the multinational companies been using Foxconn as a supplier b) What sort of HR strategy is adopted by Foxconn in China and why? 2: What are theHRM challenges faced by MNCs in their global operations? (50%) In answering this question you may find it useful to consider a) What are the main HR issues identified in the Foxconn Case b) What further changes might be required in thecurrent practices of Foxconn? What could help these changes to become a reality? Answer: Globalization can be defined as the set of process that is complex in nature and operate very erratically in both space and time. The transnational corporations are focusing on their extensive operations geographically and also in states through their industry policies, foreign investment and trade which is supporting to reshape and shape their global economic map (Abrishami and Peivandi, 2012). Further, the revolutionary, time and technological changes in the production processes, transport and communication have facilitated the globalization and internationalization for production of both goods and services (Hunter and Katz, 2012). The changes in the external factors of the organization and also increase in various opportunities and innovation is enabling the companies to expand and extent their operations in the foreign market. Thus to adapt to the changing demand in the business operations due to globalization, the top management of the organizations are focusing on changing thei r business model, to gain market entry in the international markets and also operate effectively (Gachunga, 2009). In this context, the essay will analyze the case of Foxconn in China. The essay will highlight the reason behind why most of MNCs choose Foxconn as their supplier presently and also discuss the current HR strategy adopted by Foxxconn in China to help the employees in meeting their needs. The essay will also demonstrate the HRM challenges faced by the multinational in operating globally and also discuss the HR issues that Foxxconn had to face. Human Resource Management can be termed as the practices and policies that mainly emphasizes on carrying out different aspects of people including the training, screening, recruiting, appraising and rewarding(Ohtaki and Bucknall, 2005). However, it is too be noted that the key activities of the business remains same even if the country is working outside its domestic country but the scale and context of activities might change to emergence of globalization. There are three dimensions of International Human Resource Business: The first dimension involves the utilization and distribution of Human resources including the work relations, training, performance evaluation, salary and compensation, employee recruitment and selection and also pertinent planning. The second dimension mainly includes different countries that involve various internal activities related to human resource management. The third dimension is the different employee types working for the international organization li ke Host-Country Nationals (HCNs), Third-Country-Nationals (TCNs) and Parent-Country National (PCNs) (Maksimovic, 2003). Due to globalization, the expansion of international market has issues related to employees like acquainting and coordination with employees of different culture, the feeling of loss of identity, learning new international business rules etc. Human Resource management helps to deal with such differences. Human resource management plays a vital role in this globalization process. It helps to determine the fitness of cultural scale among the companies before finalizing the possible arrangement. This globalization process has led Foxconn improve its competence, teamwork and creativity(Almond, 2006). Foxconn is the International Technological group from China which is engaged in electronic business contracts for manufacturing channel business, digital contents, automotive electronics, consumer electronics, telecommunication and computers. Presently, it is the largest Contracted Electronic Manufacturer (CEM) of the world. It has become the first choice supplier for most of the multinational corporations (LaPedus, 2010). The main reason behind this is Foxconn commits its clients to provide the best solution of IT products and services. The major clients are Japanese electronics, European and American companies. It has contracts with Toshiba, Sony, Samsung, Nokia, Nintendo, Motorola, Microsoft, Intel, Dell, Cisco, Apple, Acer and Amazon.com. America, Europe and Asia are the three designed and manufacturing zones where the design is implemented and assembled through vertical integration process, at high quality/low cost/ high efficiency/large scale (Pistono, 2012). The vision of Foxconn is to make solace of electronic products use a feasible reality for all humankind; Through the restrictive one-quit shopping vertical coordinated e-cmms model to change the traditional wasteful gadgets outsourcing model; Through the commitment to more noteworthy social agreement and higher moral benchmarks to accomplish a win-win model for all stakeholders including shareholders, workers, group and administration. Foxconn prides itself on its dedication to having "on-time delivery and zero inventory that increases the value of existing products, creates new product offerings, and beats rivalry to the business sector, and where reasonableness meets technological changes. Through its backups and subsidiaries around the world, Foxconn furnishes its clients with an "all-in-one service" and forefront IT products around the world. The leadership of Foxconn is established on the premise of keeping up a steady concentrate on Component Module Move and Service (CMMS), a plan of action that was conceived by its CEO and founder, Terry Gou. Foxconn offers a phenomenal arrangement of capacities on the outline of segments and modules that empowers it to convey a one-stop solution to design, manufacturing, logistic, repair and maintenance worldwide. The five key fundamentals of the basic plan of action cost-efficiency, flexibility, technology, quality and speed - have demonstrated sustainability of Foxconn that lies at the center of its journey for achievement (Management Association, Information Resources, 2012). With its entrenched innovation on tooling and embellishment, Foxconn has advanced from being a maker to an imaginative innovation designer and to turning into the business pioneer in electronic, optical and mechanical integration. It is now trying to discovers another areas like heat transfer technology, networking systems, nanotechnology, green environmental technology, CAD/CAE, sputter technology, optical film, designing of networking chipset and SMT. The legacy of Foxconn reflects the list of priorities and core technologies that helped the organization to be the leading supplier: Foxconn applies its six "C" key competencies (content, car, channels, consumer electronics, communication and computer) and propelled technologies to address the various and complex issues confronting its clients. Its wide base of abilities likewise permits the Company to grow the frontiers of the seventh "C" (health care) and the eighth "C" (CSER investment). The organization stays focused on fortifying its position as a reasonable corporate national on a worldwide scale (foxconn.com, 2009). The key HR strategy of Foxconn is to create trust, collaboration and openness in their work relationships through integrity, values and dignity. The HR policy of Foxconn focuses on value diversity, leveraging innovation where the employees of Foxconn can develop themselves and fulfill their potentials. No Forced Labor and No Child Labor are two most important policies that Foxconn strictly implements. The recruitment and selection policy of Foxconn focuses on hiring the best candidate and also prohibit discrimination with regards to disability, culture, religion, nationality, citizenship and political preference. To be the best employer in China, Foxconn implements the local hiring policy through presently in its manufacturing sites 99% of the employees are citizens of China. Further, the living and working environment of Foxconn also contributes to success of HRM. The organization nurtures positive, invigorating and equal opportunity working environment. It offers individually-tailored salary and compensation packages that comprises of equity components, bonus and rewards. It encourages active living at work where employees get the opportunity to participate in various recreational activities like reading rooms, basket ball courts, gymnasiums etc. This policy helps to optimize the work-life balance and also incorporate the social and health practices in daily working patterns. Foxconn conducts employee performance appraisal process annually to assess the performance of their employees and give them a chance to improve based on their performance outcome. It hosts various award ceremonies to honor the best performance employees. The organization also makes sure the safety and healthy environment for employees. To ensure good health of the employees, the organization has implemented testing machines, safety regulations and also conducts health related activities and made employees to have access to health education (Price, 2004). Foxconn also believes that effective training and development helps to improve the skills and capabilities of the employees. It also motivates the employees to enhance their skills which contribute towards creation of positive working environment. Thus Foxconn facilitates classroom based training along with off-site, on-site and e-learning sessions. This facilitates the employees to attend after-hour seminars and training sessions (L aird, Naquin and Holton, 2003). Finally, for welfare of employees, Foxconn had established Labor Union which works for the protection of workers. The primary duties of The Foxconn Labor Union are to strengthen the ability and cognitive skills of employees, to guide in management and corporate growth, to encourage union democracy and lastly to protect the legal rights and interest of the employees. These functions help the organization to lead the market of China and to sustain in this competitive market. Through these strategies Foxconn emerges as a market leader in its business stream (Jacobsen and Skillman, 2004). However, even after implementing the best strategies, the MNCs are facing huge challenge while operating in international market. Due to globalization there is an increase in the business internalization. This is creating a great impact on the MNCs while operating globally like unfamiliar work ethics, management styles, competitions, practices, languages, laws etc. The HR managers of the MNCs are finding difficulty in dealing with heterogeneous functions. They are also facing issues in managing the workforce diversity and also unfamiliar ways of doing business, customer needs thus creating a big issue in integrating the share global working values with the diverse value system. Similarly, Foxconn also faced some HR issues while operating in China. The recent suicidal news at Foxconn has raised various questions against the HR policy of the organization. In the year 2010, 10 employees had committed suicide to avoid ghastly and long working hours. 150 workers protested against the working condition of the organization. Further in the year 2011, 18 employees were injured and 4 were dead due to explosion in the factory. These all led to unprecedented challenges in the organization (Integrity HR, Inc., 2012). Analyzing the fact, it can be said that Foxconn operated on 3 key principles discipline, control and authority which created mental pressure for the employees working in the plants. Since Foxconn mainly emphasized on delivering the best to its clients to beat the competition, there was high physical and mental work pressure on the employees leading no work-life balance. Further, there was huge income gap for the employees working in Foxconn. They felt unfair towards their effort they put in and also felt low in status in the society. Altogether, Foxconn had to face a huge challenge with suicide, self-injury and unexpected death (Guo et al., 2012; (Srivastava and Agarwal, 2012; Kapoor, n.d.).. In coming future, Foxconn can also face challenge for working in China as it is no longer a cheap place to outsource services or manufacture goods. Cost is increasing in China making it as an expensive place to do business (kpmg.com, 2012). To overcome all these issues, Foxconn need to develop a HR framework that would help to maintain sustainability through HR activities. Foxconn need to appoint an HR officer who would be responsible for reviewing all the core functions of HR relating with the organizational culture, employee rights, recruitment, training and development, salary and compensation etc. The process should involve alignment of HR infrastructure with the sustainability ways. Throughout the process, the HR officer should use the metric based tool that would help to measure the sustainability performance. Foxconn should ensure that the HR department of the organization is following a broad roadmap (shown below) for high business outcomes (Cohen, Taylor and Muller-Camen, 2011). In conclusion, this essay demonstrates the impact of globalization on HRM practices with respect to Foxconn Group. The essay identifies the HR issues and challenges that the organization faced in recent years and what are the recent HR strategies that the organization is following presently to sustain in the market of China. The essay found that Foxconn have implemented various strategies related to training and development, recruitment and selection policy, the labor union, performance management, working and living environment, everything has helped the organization to lead ahead in the Chinese market. The recent suicides and injuries have made the management to take proper steps for better life of the employees. References Abrishami, M. and Peivandi, A. (2012). The Impact Of Globalization on The Transformation From Traditional to Modern Business Practices and Operations in India. IJSR, 3(4), pp.79-83. Almond, P. (2006). International Human Resource Management: Globalization, National Systems and Multinational Companies ? Tony Edwards and Chris Rees. Human Res Manag J, 16(4), pp.432-433. Cohen, E., Taylor, S. and Muller-Camen, M. (2011). HRs Role in Corporate Social Responsibility and Sustainability. [online] shrm.org. Available at: https://www.shrm.org/about/foundation/products/documents/csr%20exec%20briefing-%20final.pdf [Accessed 6 Jan. 2015]. foxconn.com, (2009). Foxconn- CSER Annual Report. [online] Available at: https://ser.foxconn.com/.../2009+Foxconn+CSER+Annual+Report.pdf [Accessed 6 Jan. 2015]. Gachunga, H. (2009). Impact of Globalization on the Human Resource Management Function in Developing Countries: A Case Study of Kenya Public Corporations. KCAJBM, 1(1). Guo, L., Hsu, S., Holton, A. and Jeong, S. (2012). A case study of the Foxconn suicides: An international perspective to framing the sweatshop issue. International Communication Gazette, 74(5), pp.484-503. Hunter, L. and Katz, H. (2012). The impact of globalization on human resource management and employment relations in the US automobile and banking industries. The International Journal of Human Resource Management, 23(10), pp.1983-1998. Integrity HR, Inc., (2012). Foxconn Horror Stories Make Our HR Professionals Cringe - Integrity HR, Inc.. [online] Available at: https://integrityhr.com/foxconn-horror-stories-make-our-hr-professionals-cringe/ [Accessed 6 Jan. 2015]. Jacobsen, J. and Skillman, G. (2004). Labor markets and employment relationships. Malden, MA: Blackwell Pub. Kapoor, B. (n.d.). Impact of Globalization on Human Resource Management. [online] jimsjournal.org. Available at: https://www.jimsjournal.org/6%20Bhushan%20Kapoor.pdf [Accessed 6 Jan. 2015]. kpmg.com, (2012). The Future for MNCs in China. [online] Available at: https://www.kpmg.com/ru/en/services/nationaldesk/china-practice/documents/future-for-mnc-in-china.pdf [Accessed 6 Jan. 2015]. Laird, D., Naquin, S. and Holton, E. (2003). Approaches to training and development. Cambridge, Mass.: Perseus Books Group. LaPedus, M. (2010). Foxconn wants to dominate LCD market | EE Times. [online] EETimes. Available at: https://www.eetimes.com/document.asp?doc_id=1258219 [Accessed 6 Jan. 2015]. Management Association, Information Resources, (2012). Supply Chain Management: Concepts, Methodologies, Tools, and Applications: Concepts, Methodologies, Tools, and Applications. IGI Global, pp.1009-1010. Maksimovi, M. (2003). Strategic human resources management in international management,Strategijski menadzment, Vol. 7, No. 1-2/2003. September, Faculty of Economics Subotica, Subotica, YU ISSN 0354-8414, pp. 160 162 Ohtaki, R. and Bucknall, H. (2005). Human resource management. Singapore: John Wiley Sons (Asia). Pistono, F. (2012). Robots will steal your job but that's ok. Lexington, KY: Createspace. Price, A. (2004). Human resource management in a business context. Australia: United Kingdom. Srivastava, E. and Agarwal, N. (2012). The Emerging Challenges in HRM. INTERNATIONAL JOURNAL OF SCIENTIFIC TECHNOLOGY RESEARCH, [online] 1(6), pp.46-48. Available at: https://www.ijstr.org/final-print/july2012/The-Emerging-Challenges-In-HRM.pdf.
Thursday, November 28, 2019
Roman Life in Julius Caesar In the play of Julius Caesar, we see a brief picture of Roman life during the time of the First Triumvirate. In this snap shot, we see many unfortunate things. Shakespeare gives us the idea that many people try to circumvent what the future holds, such as unfortunate things, by being superstitious. Superstition seems to play a role in the basic daily life of most Roman citizens. For instance, the setting of the first scene is based upon superstition, the Feast of Lupercal. This feast is in honor of the god Pan, the queen of fertility. During this time, infertile females are supposed to be able to procreate, and fertile ones are supposed to be able to bear more. It is also a supposed time of sexual glorification and happiness. Other scenes depict how throughout Rome, roaming the streets are mysterious sooth-sayers, who are supposedly given the power to predict the future. Dictating what is to come through terse tidbits, these people may also be looked upon as superstitious. In the ope ning scene, one sooth-sayer, old in his years, warns Caesar to "Beware the Ides of March," an admonition of Caesar's impending death. Although sooth-sayers are looked upon by many as insane out of touch lower classmen, a good deal of them, obviously including the sayer Caesar encountered, are indeed right on the mark. Since they lack any formal office or shop, and they predict forthcomings without fee, one can see quite easily why citizens would distrust their predictions. Superstition, in general elements such as the Feast of Lupercal, as well as on a personal level such as with the sooth-sayers, is an important factor in determining the events and the outcome of Julius Caesar, a significant force throughout the entire course of the play. Before the play fully unravels, we see a few of signs of Caesar's tragic end. Aside from the sooth-sayer's warning, we also see another sign during Caesar's visit with the Augerers, the latter day "psychics". They find "No heart in the beast", which they interpret as advice to Caesar that he should remain at home. Ceasar brushes it off and thinks of it as a rebuke from the gods, meaning that he is a coward if he does not go out, and so he dismisses the wise advice as hearsay. However, the next morning, his wife Calphurnia wakes up frightened due to a horrible nightmare. She tells Caesar of a battle breaking out in the heart of Rome, "Which drizzled blood upon the Capitol," with Caesar painfully dying, such that "...The heavens themselves blaze forth the death of princes." Although Caesar realizes Calphurnia is truly concerned about his well-being, he seeks another interpretation, coming to the conclusion that the person who imagines the dream may not be the wisest one to interpret it 's meaning. Later Caesar tells his faithful companion Decius about it, and he interprets it quite the contrary, "That it was a vision fair and fortunate," and indeed, today is an ideal day to go out, since this is the day "To give a crown to mighty Caesar." Perhaps Decius is implying here that today is a day where much appreciation and appraisal will be given to Caesar, surely not the endangerment of his well-being as Calphurnia interprets it. Caesar predictably agrees with him, as most citizens enjoy believing the more positive of two interpretations. After Caesar's assasination at the hand of Brutus, Cassius, and the rest of the conspirators, Brutus and Cassius are chased into the country side, where we see a few superstitious signs of their forthcoming painful death in battle. In a dream, Brutus sees Caesar's "ghost", interpreted as an omen of his defeat. He also looks upon the ensign, and instead of the usual stock of eagles, ravens and kites replace them, construed as another sign of their loss at Phillipi. Not surprisingly, Caesar's death is avenged in the end, with the two of the conspirators' double suicide. As superstition is inter-twined within the basis of the entire play, we can reasonably conclude that it is because of this irrational belief of why certain events occur and how to avoid them, that Caesar is retired and eventually avenged.
Monday, November 25, 2019
The American Dream in Raisin in the Sun Research Paper Example The American Dream in Raisin in the Sun Paper The American Dream in Raisin in the Sun Paper Essay Topic: A Raisin in the Sun Name: Tutor: Course: Date: The American Dream in Raisin in the Sun Individuals from all lifestyles in America dream of vast opportunities and freedoms. The concept of the American dream has influenced the way many Americans think about life and success. The ordinary American envisions a successful life from all fronts including love, business and fame. The American dream is all about having aspirations and striving to achieve them. A Raisin in the Sun captures the story of an American family in their struggle to achieve their American dream. In the play written by Lorraine Hansberry, each individual in a Black-American family has a dream that they want to achieve. The family is however faced with many challenges that hamper the achievement of these dreams. Members of the family are captured in the midst of a struggle for success and a shortage of opportunities. Members of the family are captured in a struggle for the limited financial resources in their possession. Raisin in the Sun is therefore an indictment of the American dream and its emphasis o n financial success. The fascination with being materially wealthy in the play is evident especially among the younger and more robust members of the family. According to Paul P. ReubenÃ¢â¬â¢s article on the American dream, the real purpose of the Dream has long been distorted (Reuben, 2011). The pursuit of financial success represents a far-flung shot from the original intentions of the notion of the American dream. The American dream consisted in seeking justice, freedom, unhindered participation in economic activities and a better for future for the coming generations. These factors were supposed to be the motivations behind the pursuit of the American dream. Any other motivation other than these was ill advised. In Raisin in the Sun, the $ 10000 received from the elder WalterÃ¢â¬â¢s insurance generates a lot of conflict since all the family members want to use to achieve their dreams. They are all focused on their own financial stability. The version of the American dream captured in this play leans on individualism. As Reuben says, Americans had turned the American Dream into a vehicle for individual uplift (Reuben, 2011). Each i ndividual in the family has different aspirations. None of them shows any concern for the otherÃ¢â¬â¢s dreams. It is an individualistic contest of sorts. Walter wants to invest the money in a liquor store, and Beneatha wants the money to be used on her college education while their mother intends to use the money to purchase a house for the family. Hansberry tries to point out this misunderstanding of the American dream and its possible effects on the original motives of the American dream. He uses Walter to portray this skewed version of the American dream. In a Raisin in the Sun, Hansberry criticizes the American dream by using WalterÃ¢â¬â¢s misunderstanding of the notion. Hansberry tries to reflect on how important the aspects of freedom and a better life are compared to financial wealth. She highlights the evident changes that have occurred in the understanding of the American Dream. Walter envies Charlie Atkins because he owns a dry-cleaning business that is performing quite well. Walter embodies a classic form of the American dream, the fascination with material wealth. In fact, Walter tells his mother that money is life and that there was a time when freedom and other fundamental needs were life, but that has long changed (Hansberry 74). The author understands how much the notion has been distorted and tries to show how much freedom, economic participation and a better future for the children had been overshadowed by material wealth. Walter is determined to see his dreams fulfilled and will stop at nothing to gain wealth. He ref uses to heed his motherÃ¢â¬â¢s attempts to stop him from investing in the liquor shop. Because of this obsession with wealth, he refuses to listen to RuthÃ¢â¬â¢s advice on the honesty of his business partner. Since its inception, the American dream was not a dream of wealth and economic betterment but a dream of a better life for everyone, diverse opportunities to those who are able and overall social order. Hansberry in the play mocks this notion. From her perspective, certain circumstances make it difficult to achieve the American Dream. Walter, for example, meets racial prejudice, discrimination and poverty in his quest for success. These factors hinder his pursuit of the American dream. The play shows how some factors in the environment one lives in can make achievement of the American Dream impossible. Walter lacks the money to make his investment in the liquor store. In the play, the Younger family as a whole aspires to gain wealth and acceptance in the white society. This represents the distorted and misunderstood version of the American dream. While gaining acceptance in white society is a viable semblance of the American dream, financial success is not. The Raisin in the Sun iden tifies the most significant factor of the American dream today that has overshadowed the other more fundamental issues. The inability of the country to provide opportunities for even the less privileged to pursue their dreams is a failing of the American dream. People like Walter and Beneatha find it difficult to succeed because the available conditions do not favor them. Hansberry reveals the enormous challenges facing the less privileged in achieving the American dream. According to Raisin in the Sun, priorities have shifted from those that want to achieve social order to individualistic motives. Perhaps, what she wants to put across is that the American dream regenerated into one served by materialistic motives. Americans are increasingly being driven by material concerns rather than the pursuit of individual freedoms and privileges. Hansberry, Lorraine. A Raisin in the Sun. London: Methuen Drama, 2011. Print. Reuben, Paul P. Ã¢â¬Å"PAL: Appendix S: The American Dream.Ã¢â¬ PAL: Perspectives in American Literature- A Research and Reference Guide, 10 Nov. 2011. Web. 18 April. 2013. Available csustan.edu/english/reuben/pal/append/axs.html
Thursday, November 21, 2019
Can married woman today have it all - Essay Example In the past, some societies felt that women were a liability especially when taking them to school. Secondly, women are not considered as possible leaders in many parts of the world. This has been holding women back in the society as well. In many countries, majority of leadership is held by the male gender, which leaves the women at a disadvantage in the society. Women have to struggle way harder than men to get elective posts in many countries even in the developed world. Despite their struggles, they make limited progress. Though some end up getting some of the leadership roles, they are not given the ultimate control especially in high decision making ranks. This has been a setback for women as most of them are not delegated the duties of policy formulation for the society as a whole. Similarly, there is the infamous quote that states that women are their own enemies. This rhetoric statement means that some women are pulling down their fellow women. The unity of women is wanting, and they do not have the much needed corporation to make the best outcome for their own gender. In some instances, women are openly seen to oppose other women. In such cases, the opposing sides create a drift among the women leaving room for men to flourish at their expense. The idea of marriage has been changing over time but depending on the stated issue. To begin with, in the previous years, men were known to be the bread winners of the family. Nowadays, this is almost a forgotten case. The man and woman in the home are both bread winners. A family has to depend on both of them for ultimate survival. For example, while the father provides the basic needs like shelter, the mother is, on the other hand, providing clothing. This has brought stability in families as they never lack basic needs. Similarly, women nowadays are career focused and are likely to look for a career and develop it to the highest of levels. However, in yesteryears, women remained as housewives meaning that th ey did not have any other career apart from caring for the family at the basic level. The changing world has proved that women can also have career even when they have families to take care of. Apparently, women are also in control of numerous families. In ancient times, the man was the only one in control of a home. As such, men had the ultimate control in decision making and execution of tasks. Therefore, women had no room to make any decision when the man of the house was not around. In most cases, women had to wait for the head of the house to make decisions. Such decisions were made without consulting their wives. However, nowadays, this has changed: Women have room to make critical decisions even in the presence of the man of the house. This change has been attributed to the change in women and their desire to make changes in the world. This has uplifted the need for women in the society as they have resulted to positive changes cross the world. In many homes, women are equall y in control just like their male counterparts. It is possible for a woman to have a career and still bring up the family in the best manner possible. To begin with, women have instigated the change they wanted in the world as they now have more opportunities to be heard. Since they want to uplift the girl child in the society, they will work tirelessly to ensure they attain their goals. As such, women are working