CUEGIS on Starbucks

WITH REFERENCE TO A BUSINESS ORGANIZATION THAT YOU HAVE STUDIED EXAMINE HOW INNOVATION AND CHANGES IN THE EXTERNAL AND INTERNAL BUSINESS ORGANIZATION CAN AFFECT THE OBJECTIVES OF A BUSINESS ORGANIZATION. (THE STUDENTS SHOULD ALSO WRITE ABOUT ETHICS AND CSR IN CHANGE)

CUEGIS on Starbucks Thar Lun and Ye Min

This is our first CUEGIS report on a global company named “Starbucks” which is famous for their great taste of coffee.

CUEGIS

Thar Lun and Ye Min

Monday, September 28, 2015

Starbucks Starbucks Corporation, doing business as Starbucks Coffee, is an American coffee company and coffeehouse chain based in Seattle, Washington. Starbucks was founded in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker in Seattle: and, since then it has been expanding rapidly to the global scale. Starbucks is now the largest coffeehouse company in the world with 22,766 stores in 65 countries and territories. Starbucks offers the varieties of coffee and beverages in every coffeehouse: moreover, through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film.

Innovation Innovation is an organization's process for introducing new ideas, workflows, methodologies, services or products due to the sophisticated market demand. It includes researching on possible beneficial product and developing the modern, reasonable, efficient products to gain the competitive advantage over the business’s rivals, contributing the key element in providing aggressive top-line growth. For example, innovation has created new leading industry such as Smartphone. However, sometimes it can turn the business into the great loss. The causes of loss can be from internal or external. From internal, the factors may range from poor time management to poor creativities of the developers. For external, the factors may range from government policies to cultural background depending on the location. So, innovation is the important strategy for the business success and failure.

Change Due to the continuous changing external and internal factors, change should be managed within businesses if they are to move forward and remain competitive. These factors come from various backgrounds. Those include the population change, culture change, objectives change and etc...The importance of these factors determines whether the change should take place or not. Sometimes, changes are made. However, not all changes favor the businesses, but also give negative impacts on the business as the changes made do not always guarantee for the business profit. Hence, the businesses should be aware of the surrounding changes in the external environment and need to adapt to the new situation quickly not to be left behind in the business world.

Changes in internal business organization Internal business organization refers to the issues and functions within the business which is controlled by the business. Occasionally, numerous changes are made within the business which sometimes brings benefits and sometimes negative effects. Of course, managers and CEO will

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CUEGIS

Thar Lun and Ye Min

Monday, September 28, 2015

always try to choose the most beneficial methods and changes even though it is very risky. One of them is the change in the business ethic.

1. The change in ethical objective Ethics refer to the moral principles that guide decision making and strategy. Morals are concerned with what is considered to be right or wrong, from society’s point of view. Business makes ethical changes within the business by changing the mission and vision statements, the value of the organization and often these are due to the pressure group, the demand of the local communities.

2. The change in CSR By changing in the business ethical behaviors, the business becomes socially responsible business towards their stakeholders such as employees and the local communities. Those duties are known as corporate social responsibilities (CSR).

Business objectives The business objectives simply refer to the short to medium term specific goals of the organization, based on its aim. Usually, objectives are measurable. There are various objectives such as ethical objective, tactical objective, and strategic objective.

Analysis The innovative ideas are needed in almost every business as innovation brings lots of benefits to the business. So, these innovative ideas are produced from the developers and R&D teams of the businesses to get to the objectives of the business. Here, the business may have the wide range of objectives and some tools have to apply to achieve it. As we described, SMART analysis has to be used here to assess how innovation will affect on the business objectives. From Starbucks, we can see that Starbucks has done innovations on coffee making and unique services. Starbucks has developed the new different coffee products for different types of consumers. In 2012, Starbucks has introduced us the new type of coffee which is the first deliver thirst-quenching refreshment from real fruit juice and a boost of natural energy from a new source, green coffee extract. The introduction of this product is an evolution of the coffee market using a new breakthrough coffee experience using green coffee extract, resulting in delicious, low calorie refreshment with a boost of natural energy from caffeine and fruit juice. It has given the Starbucks the opportunities for the global coffee market as it attracted the world coffee consumers and has affected the coffee related businesses as well as rivals. Through this innovation, Starbucks has gain competitive advantage in market and has improved in market standing. Hence, some tactical objectives of Starbucks has changed due to the expansion in the services and function in the business. 3

CUEGIS

Thar Lun and Ye Min

Monday, September 28, 2015

In addition, the changes made in Starbucks have affected the whole business objectives. Since it was founded, the business has strong ethical objectives. Starbucks used to only purchased the best quality coffee beans from Latin America, Africa and Asia and it included forest conservation programs and loaning to farmers which have benefited to the local communities as well as to the business image and to the world climate. Moreover, Starbucks values the employee as much as customers and given the rank as the business partners where Starbucks being as a good CSR business. Since then, the simple mission has never changed and only the additions to the missions are made. Starbucks focus on making the emotional connections to the coffee and the atmosphere where the consumer can enjoy a moment without pressure. As the changes in the external environment were really fast, Starbucks has to cope with the changes by using different methods. The population increased and the business has to expand to different parts of the globe, so that Starbucks got more customers as well as strong competitors across the world. Before expanding, Starbucks had to take cautions in entering the different cultures based market by adapting to the local business styles and regulations. So some parts of the main business departments’ objectives have to change to suit with competitive business world. For example, Starbucks has opened numerous social foundations and youth centers to get the good business image from the local residents and pressure groups. It includes the Starbucks foundation and various farming communities. Although the compliance costs on these social responsibilities are fairly high, the impact on main stakeholders such as owners and employees were not big enough for them as in return they enjoy high profile in business standing compared to their rivals.

Summary From interpreting the analysis and the written information, Starbucks had made changes and innovations for their better future. These concepts have caused impacts on business objectives up to some extent and those impacts have been good for the Starbucks. To sum up, the innovation and changes of Starbucks has shown us that by applying those skills efficiently results in better future of the business.

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