Starbucks is a coffee farm based in Seattle in Washington and it is up to date the largest coffeehouse in the world with 18,000 stores in 50 countries of the world. Starbucks mainly specializes in selling brewed coffee, espresso hot drinks, snacks and other items such as coffee beans. Starbucks is one of the most successful companies in the world and it does not only sell coffee but it also sells its experience to potential customers (Wen, 2016) . For this reason, it has a strong customer base who believes in paying more for high quality goods and services. Starbucks established its brand through expanding its retail operations, introducing new store concepts and products and developing new distribution channels to mention but the least.
Topic 1: strategy implementation
International strategy implementation
An international strategy is when a firm or a business organization sells its goods and services outside its domestic market. The most important reason why firms implement international strategy is because it helps them get more opportunities as compared to implementing a strategy that is solely based on the domestic market. Starbucks is one of the largest firms in the world that has implemented an international strategy. Its expansion started in the 90’s with two major strategies (Verweire, 2014) . First was to start a joint venture with local companies in their target host countries. They introduced Starbucks coffee international to help coordinate the international expansion which started in China, Japan, Singapore, Taiwan and Korea.
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Its second strategy was to build a unique culture and increase its distribution channels. In order to create a unique culture, Starbucks encourages its employees to think of themselves as business partners in the business because management believe that encouraged employees will take the business to greater heights in terms of competitive advantage and development. It has also expanded its distribution channels to serve hospitals, airlines and hotels among other areas of interest. This has created business for Starbucks throughout the United States.
Influence of governance and ethics
Starbucks is determined to maintain their uncompromising principles as they continue to grow. They have therefore adopted governance principles and policies to lead them through their governance practices. Starbucks acknowledges that conducting their businesses in an ethical manner guarantees their success (Verweire, 2014) . Ethics influence employee relation issues in that they have to present a report s part of a comprehensive ethics and compliance program. In addition, they have a program known as business ethics and compliance that helps protect their organizational culture and reputation to the public by supporting their mission. This program also provides resources that help partners to base their decisions on ethics.
Social value
Social value refers to the importance placed by businesses on change. Some of this social value is seen in market prices and it is measured from a perspective of those that are affected by an organization’s work. Starbucks is one of the companies in the world that has a lot of social value to the world. First, all Starbucks companies have a connection to the local community by partnering with local neighbors (Wen, 2016) . This helps them build relationships with community groups and local projects. Starbucks helps the community by funding projects and community projects. In addition, they add social value by supporting a new generation of employees through employing workers and partners that are below twenty four years old. More so, Starbucks has demonstrated consistency in helping customers to make informed choices regarding nutrition for a long time now. This has promoted their health and wellness.
Innovativeness and diversification
Starbucks has been concentrating on diversifying his operations away from coffee. It has been concentrating on consumer goods and food and this led to the emergence of highly innovative products such as soy or almond milk in place of dairy milk. In addition, a research from sense 360 shows that traffic in Starbucks stores had decreased considerably after this diversification ( Wen, 2016) . In addition, Starbucks has always been a leader in product innovation and this has always made it relevant in the market thus maintaining its competitive advantage. For example, they launched one of their favorite coffee flavors known as pumpkin spice latte and this was followed by a tremendous increase in customer base. In addition, they also customize on changing consumer preference and this has maintained its popularity because customers value flexible businesses. It has always been on board to adapt based on customer’s tastes and preferences and its flexibility have led to increased innovation and diversification.
Legal limitations
Most of the countries that have Starbucks companies have trading blocs such as G20 and APEC to mention but a few and their main aim are to reduce tariffs but global companies are affected because they operate across borders. Since it operates in over 50 countries, high tariffs may affect its reputation because it compromises importing from different countries ( Verweire, 2014) . This means that Starbucks will not be known for sourcing the best coffee beans and this may affect global sourcing and its competitiveness as well.
Topic 2: evaluation and control
Since Starbucks implemented its international strategy, the business has been growing continuously. First, Starbucks rose to greater heights by using social media metrics that helped it remain relevant in the market for the longest time. It has used social media continuously and this has led to its consistent expansion in different countries. Another value metric in Starbucks that has led to its undisputed growth is same store sales. It reported a same store sales growth of 10%for all its 10,000 operated company stores all over the world this metric is one of the most important drivers in restaurant industries and its adoption by Starbucks increased its revenues by very high percentage (Grant, 2016) . Its role is to measure the percentage change in revenues for existing restaurants over the same period of time.
Since Starbucks operates in the restaurant industry, its financial analysis ratios must consider a few aspects like operational leases financial leverage and balance sheet. The key financial ratios in Starbucks are fixed charge coverage ratio that represents funds to cover the company’s debts. Secondly, equity ratio assesses the company’s financial health by assessing the company’s extent of leverage and risk. The third financial ratio that has helped Starbucks implement its international strategy is operating margin ratio (Grant, 2016) . Just like any other company, Starbucks is supposed to generate profit margins higher than those generated by its competitors. Therefore, one of the most important ratios in the company is margin ratio because it provides comparisons with competitors thus indicating its effectiveness from a creditor’s point of view.
References
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition . John Wiley & Sons.
Verweire, K. (2014). Strategy Implementation . Routledge.
Wen, S. (2016). Marketing strategies: Starbucks in China.
