Contemporary Management Issues Of Starbucks Assignment

Introduction Of Contemporary Management Issues Of ‘Starbucks’ Assignment 

Contemporary management issues require managers to be adaptable, innovative, and forward-thinking in order to succeed in today's rapidly changing business environment. It includes the dynamic forces which can affect the business as well as society. The report is based on Starbucks that covers a discussion base on the case study on contemporary management issues. Further, it also covers the change drivers that affect the strategic decision-making procedure. In addition to this, the discussion includes the evaluations of the information regarding the change brought by two drivers. New technologies, climate conditions, and economic forces are the driving forces. The purpose of this paper is to examine current management issues. That the very first part of this document addresses the notion of contemporary affairs. Further, it also discusses societal changes. The third section of this paper goes over the kinds of modifications that take place in societal structure and their rates. At last, it explores the causes of the variations. The fifth section goes over the formation of social arrangements and classrooms. Finally, this paper discusses cultural diversity. It will help to understand the different scenarios of contemporary management issues within the business. In terms of understanding the societal changes in the business, it will help to explore the path of Starbucks to meet the changes required for the business.

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Brief about the company and case

For this report, the case of Starbucks is an American coffee corporation mainly built in Seattle. Starbucks is mainly considered as offering second-wave coffee and they are known for quality, taste, and enhancing customers by offering cooked coffee. They are using mechanized coffee machines in order to maintain proficiency as well as for security purposes. The case study mainly covers the aim of Starbucks to develop completely recyclable ad compostable ups as they also committed $10 million within three years. The business aims to move towards recyclable cups and needs to work on the changes. For this, they also adopt certain drivers of change so that they can implement them for the betterment of the business. It will help to enhance the ability to make improvements in the quality of the material.

Discussion on the two selected drivers of change

Environmental concerns as well as cultural shifts have indeed been chosen as the report's two enablers based on the case of Starbucks.

Environmental concern: Environmental issues refer to an organization's greater awareness but instead appreciation for the effect that human behavior has on the natural world. This consideration is now a key cause of transformation in modern industry for a variety of explanations (Vrontis, and Christofi, 2020). To begin, buyers are progressively demanding ecologically sustainable products and services, and companies are replying by creating more environmentally conscious goods, containers, but also practices. A burgeoning consciousness about the environmental effect of usage and a need to decrease one's carbon impact is trying to drive the above change in customer consumption.

Second, regulators are enforcing harsher emissions regulations and levying fees for violating them, attempting to force companies to embrace quite environmentally friendly practices. Industries that don't keep up with enviro rules and regulations risk tarnishing their public image and having to face court action, which can both be expensive as well as harmful to their bottom line. Third, once trying to assess enterprises, investors are more and more concentrating on ecological, interpersonal, and democratic accountability factors (do Carmo, 2019). Businesses that prioritize ecological responsibility are viewed as being more personally liable and appealing holdings, whereas companies that don't prioritize these considerations might well find it difficult to increase businesses.

Finally, companies are seeing the value of minimizing the environmental impact, like cost reductions from effective energy and eliminating waste, enhanced brand recognition, and greater client retention. As a direct consequence, numerous businesses are incorporating environmental issues into their core principles and approaches, and placing a premium on sustainable practices as a driving factor of accomplishment (Shittu, Williams, and Shaw, 2021).

Societal Changes:

Individuals and community members create opportunities for new, religious views, and perceptions in response to shifting institutional, sociocultural, and cultural contexts are referred to as cultural shifts. These modifications are indeed a key factor in transformation in corporate management for a variety of causes (Taliento, Favino, and Netti, 2019).

For starters, as sociological values shift, so do buyers' anticipations of business owners. Customers are growing interested in goods and amenities that are in line with their principles and religious views, like those that are morally sound, encompassing, and environmentally friendly. Industries that don't meet the above preconceptions may very well have difficulty attracting and keeping clients.

Second, cultural shifts can open up new markets for companies. For instance –, the increasing trend to healthier lifestyles and environmental protection has increased demand for natural and leaf food products, and also for ecologically responsible home furnishings. Companies that are prepared to acknowledge and capitalize on all these developments will benefit (Dong, and et.al., 2019).

Third, companies are anticipated to become more involved in tackling social problems like racial disparity, economic hardship, and environmental issues. Businesses that show a pledge to solve these problems are much more likely to be perceived as held to account and trustable, which can boost their image and trademark valuation.

Finally, changes in society in employment acceptance and diversity affect company finances. Businesses that celebrate multiculturalism and establish effective approaches are often more likely to attract and keep top talent, which results in more creativity and improved business results as public mores change.

Two drivers of change affecting the company

PEST evaluation is an instrument for assessing the various environment that can have an effect on a company. PEST is an abbreviation for the acronym for Political, Economic, Social, and Technological considerations. Using the PEST framework, the assessment will be done on how environmental concerns and changes in society are influencing Starbucks (Jänicke, and Jörgens, 2020).

Environmental Concern: Political: Starbucks is present in an array of states, each with its own unique environmental restrictions. Starbucks has set an ambitious target to minimize its environmental impact in order to comply with these rules and regulations. They have pledged, for instance, to minimize their environmental impact, store water, and reduce waste.

Economic: Customers have been growingly demanding environmentally friendly goods, and Starbucks has reacted by implementing a variety of sustainable alternatives, such as using compostable cups but also straws. This decision has assisted Starbucks in attracting environmentally responsible consumers while strengthening its brand image (Whysall, Owtram, and Brittain, 2019).

Social: The expanding awareness of ecologically sustainable practices has led to a change in consumer preferences for environmental products. Starbucks has recognized this transition and therefore is continuing to work to provide more sustainable packaging, such as flower dining options, to meet evolving customer tastes (Baloch, and et.al., 2021).

Technological: Starbucks is reducing its impact on the environment by investing in technology. For instance, they have implemented a cell phone ordering system that eliminates the requirement for invoices, thereby reducing paper waste. In order to minimize their energy usage, they have also installed electricity hardware in their retail locations.

• Societal Changes

Political: The changing politics has raised public consciousness regarding social problems like diverse cultures, incorporation, and women's rights. Starbucks has chosen to respond by emphasizing equality and inclusion in its employment policies, as well as guaranteeing equal wages for all staff members (Bulturbayevich, 2021).

Economic: Earnings, rising prices, and joblessness are all industrial variables that may impact cultural shifts. A rising middle class with more discretionary income, for illustration, can cause a trend toward quality goods and services. Economic crashes-worthy the flip hand can cause a move forward into really worthy goods and services.

Social: Consumption patterns, socioeconomic status, and social traditions have all influenced the business. Starbucks is affected by evolving consumer preferences, well-being and health, and personal accountability. Political and social considerations like population shifts, user views and needs, and cultural trends end up driving cultural shifts. As previously stated, a shift to lifestyle changes and environmental sustainability are important reform drivers for Starbucks (Muthu, 2020). These modifications have led to the creation of more nutritious dining and drinking choices, as well as more environmentally conscious company practices.

Technological: Consumer habits are always changing as a result of shifts in habits, society, and future technologies. Starbucks has responded with new goods and services that satisfy evolving customer tastes. Starbucks, for instance, has created new latte flavours, non-dairy product alternatives, and foodstuffs that appeal to a wider variety of preferences. Consumers have grown more mental well-being, which has resulted in a change against less processed food and drink options. Starbucks did respond by adding better health items on the menu such as salad dressings, fruit roll-ups, and reduced beverages to its restaurant (Luttenberger, 2020). In addition, to accommodate customers who already are low in carbohydrates or have a restricted diet, Starbucks has presented semi-dairy product alternatives and sweetener corn syrup. Generally speaking, these cultural shifts have compelled Starbucks to adjust its methods and services to fulfil their requirements evolving demands and requirements. Starbucks has been capable of being a leader in the coffee market all while going to contribute to a more environmentally friendly and sustainable societal structure by replying to these drivers of change.

Identification of the pressure on the operation

Based on the operations of Starbucks there are huge implications of the driving forces while addressing inventory and the ‘Supply Chain’ of the Company. The image of the company in a certain considerable market is as important as the defining concern for the company. So, the company is working on the predefined driving force for the development of the company in the targeted market.

Figure 1: ‘Outlet of Starbucks’

(Source: knoema.com, 2021)

Environmental factors

Enviroemnatl aspect for the company are evaluated based on the development and procurement of the cups which helps the company to generate greater sales by achieving certain phenomena. In the metropolitan city, it's quite easy for the company to develop a chain, But the development particular outlet with the same quality in every cafe is quite difficult for grabbing the niche targeted customers. Here are some basic identified pressures that Starbucks has to deal with make better development in the operational sector,

The Price is one of the bigger factors that Starbucks has to deal with. But the important and noticeable thing here to mention is that the potential of the company's image lies in the price of products that are given at Starbucks. Most of the products which will be taken into consideration are the development of the image for the customers (Moon et al. 2022).

Exploring ‘Emerging markets'', the company has a very minimal chance to explore the market in a different location other than the metropolitan part of any city. Even sometimes the opening of an outlet or the creation of the inventory became so difficult for the company that they will only be able to maintain only one outlet in a big city.

Social factors

Social aspect for the Company is helping the company to address the two important aspects, which influenced the market segment of Starbucks,

• Involving ‘Market Risk’, the business of Starbucks is quite overhyped, if taken into consideration the products. There is no flagship product the company is focused on. Due to this kind of business model, Starbucks took itself to the stage of the elite experience, but on the other hand, this model makes an unapproachable aspect for the median class of society. That creates a huge market risk (Kettunen, 2020).

Figure 2: The Paper cup issue

(Source: EcoMerge.com, 2022)

• The Competition, Starbucks focused on the development of the targeted niche market for the elite kind of customers. But the problem is the product of the company which is available at a very minimal cost in any outside branches of the company. It is also very easily available at a minimal cost. So, there is lots of competition for the company while developing the operation for Starbucks.

Those Compositions not only give the company an extra threat to deal with the operation but also its influence on the already targeted group of consumers. The situation for Starbucks got worse, specifically after the outbreak of the Pandemic. Development of inventories of the company takes a huge budget which cannot be possible to grant till there is no consumer base in a certain region.

The impact of pressure

The impact of the threat discussed earlier is quite big considering certain facts for operation management. Ideally, every operational impact of a company can be judged based on three defining factors.

The first one should be the implication of inputs, there should be some kind of measuring thing considering the inputs like the commodity and the outlet of the Company. According to the case study, there is the consideration of the paper cups that have been used by Starbucks since 2008. The company pledged $10m in the usage of the paper cup. There is some committed scenario that will impact the basic understanding of developing and the money invested while developing a proper outlet.

The second one is, the ‘Transformation Process’, ideally a business lies on the implication of the continued process of the transformations. But Starbucks got stuck in the scenario of giving the elite class consumer a better experience of Starbucks. The ambiance-giving scenario, not only generates a huge gap from the big number of consumers, but also it will make sure of better procurement thing by taking the action of the implicative prospect for Starbucks (Musonera, 2021).

The third one might be theOutputs; the end implications of the scenario not only provide a lucrative experience by taking into consideration of all the input factors. In the scenario of the Output, the inventory plays a vital role. But the Starbucks cost of making an outlet with proper and systematic inventory might not be possible if taken resources in a certain manner. [referred to appendix 2]

There are resultant of pressure that is defined previously,

Table 1:Resultant of pressure

(Source: Created)

Effectiveness on Decision making

The ‘decision making’ of the company is completely taken by focusing on the aspect of the impact which will come from analyzing the two main drivers. Here comes a challenging aspect for the company. The two driving forces considered in the analysis are taken into conservation after influencing the strategies of the company. Specialty to the procurement of paper cups in 2008 after investing $10M. There is the issue of social aspects which also help the company to better its CSR in terms of developing the management scenario (Sanchez Herrera, et al. 2021).

The Environmental Effectiveness

Starbucks is quietly focused on the development of the growing ‘business model’ by consideration of the three factors,

‘Carbon Emission’, There is a huge impact of the carbon and the subsidiary gasses coming from the production even at the time of the cooking. Starbucks targeted to reduce it by 50% from the current by the end of 2030 (Wang et al. 2022).

‘Waste Output’, the company is completely dedicated to arranging the proper channelized method that will help to generate a circular process for the ‘Waste management’

‘Water Impact’, This will make the company project a better image in the competitive market

• Figure 2: ‘Environmental Effectiveness’
• (Source: Created)

Incorporating technology, the better use of technology not only became helpful for Starbucks but also created a better ambiance and experience for t targeted customers. The Company is also targeting thy part while considering the ‘footprint of carbon emission’.

The implication of ‘Plant-based food’, this concept is new but quite appealing in terms of targeting the new segment of the customer. It's good that the company I tried to focus on the product rather than the ambiance creation (Lim and Arumugam, 2019).

‘Greener Apron’, this another biggest keeping tone that helps the company to take ideas from the crowd of the cafe business market. The Company is focused on the development of the ‘aha moment’ when the management and the company itself started talking about wildlife in ‘social media’.

The Social Effectiveness

The social responsiveness of Starbucks is quite amazingly dealt with after calculating all the risk factors that are getting from the calculated market approaches. It comes with handling the specialty and the market factor by taking the consideration of the business aspects. There is the implication of the ‘employee responsibility which helps the company’ to generate a greater market by calculating the various factors. There is the issue for the generation of developing concern in the problem like,

• ‘Employee relationship’,
• The consideration of the local communities
• Empowering the outlet workers
• Maintain ‘gender equality’
• Diversity among the higher management

Starbucks focused on the factors that implicate changing scenarios by considering all the provocative conclusions. The social aspect of the company helps to target a new kind of market as access the new responsibility by considering h developing factors. Development of the Chain coffee shop also includes the part of making a difference by implicating the ‘CSR responsibility’. There is another factor that helps the company is ‘Sustainable Sourcing’, that movement step by Starbucks helps the over 1,000 employees to generate proper income sources (Tjokrosaputro and Cokki, 2020).

Business’s response and its effectiveness

Consideration of Pandemic

The evaluation in 2023, for any kind of business, needs to be done based on the ‘pre- and post-pandemic era’. The priority after the Pandemic became quietly changed and keratin after concluding the necessity factor. As Starbucks has to deal with consumers with food and barrage kinds of products so hygiene is the most important thing. There are implications to the policy that helps the consumer to believe in the ambiance of the stores, especially after the ‘outbreak of the pandemic’ (Shim et al. 2021).

Figure: After Pandemic scenario of ‘Starbucks’

(Source: Census Bureau.com, 2020)

The Starbucks partners are helping the company to struggle to win those difficult times by realizing the $10M for the betterment of the outlets. Starbucks helped the government and the Covid staff by providing healthy foods as per their definitive and emergency requirements. The Company shows responsibility towards the employee while the stores are opening the Covid scenario. The farmers, in the case of Starbucks the ‘Coffee farmers’ struggle a lot because due to the failure of the ‘Supply chain’ all of the operations got stuck. So, the farmers are struggling with their targeted Income source. Starbucks gives them financial aid and helps them to get rid of this particular situation.

The great PPC model

Here are the three mentionable factors which help Starbucks to generate and impute all the strategies in a developing method consideration. There is the implication of the communities as the most dress able factor. Because Starbucks is wholly focused on the experience and the ambiance provided in each outlet of the company (Tsai et al. 2022).

Table 2: The PPC model of ‘Starbucks’

(Source: Created)

Not only implicating these PPC models into the business demographic but also Starbucks will start researching the untapped coffee plants all ‘over the globe’. There are developments and the corresponding behavior for the company helps Starbucks to engage a greater number of people. This initiative will target a broader market in terms of developing the people scenario by accepting all the scope for the new market creation (Mi et al. 2021). [referred to appendix 2]

Recommendation

The Company is one of the biggest companies in the market which deals with ‘premium quality’ cafe experience for Customers. Starbucks happens to be the only kind of cafe that has an overseas market chain. The reputation of the company lies in managing the issue regarding the development of the image and giving the experiences. The Company faces the operation issue while providing a better-quality experience in all the outlets of the company. Except for the elite calls, there is a huge customer base for the company who are only parching Starbucks due to taking selfies and uploading them on their respective ‘social handles’ (Chaimankong et al. 2019).

Here is the ‘Porter Five-force model’ that helps to incorporate the analyzed factor based on these two drives,

• Competitions, where the company is quite performing well in terms of the market competition. But to sustain itself in the market Starbucks should need to work on its Pricing and moderate-level products. So, this can be a ‘Strong Force’
• ‘Bargaining Power’, the company works on the development of this criteria. As when the company stores even at that point the core range of the custom is the high society elite class who are not so comfortable in bargaining... So, this can be a ‘Strong Force’.
• Supplier's ‘Bargaining Power’, in terms of suppliers, companies need to come out from their monopoly in the ‘Supply Chain’. The continued pressure on the farmers for lowering prices will not be helpful after a certain point in time. So, this is a ‘Weak force’
• ‘Threat of Substitutes’, is a bigger issue that companies deal with when there is an exploration of a certain kind of market. As the company always targeted the elite class. A bigger percentage of society is always left behind, which generates substitutes in the market. So, this is a ‘Strong force’ (Carter et al. 2023)
• ‘Threat of new entries’, there is a huge issue while delivering the consideration of the model by taking into the exploration for the development of a certain kind of market. The creation of the new entries is implicated with the help of the contributed factor that comes under the collaboration for market consideration. So, this is a ‘Moderate force’

There is consideration of integrity that will help the market to be firmer and more intuitive This factor will not only impact the market and targeted customers but also project a bad image in the market. Based on the two developing factors, they issue the implication of the resulting criteria for targeting the bigger market according to the development of the company in certain aspects. Starbucks follows the environmental aspect and the similar aspect of the social model in a bigger way which will put them towards the definitive factor regarding the development of a certain market. The Company needs to focus on the formative criteria by taking into consideration issues like the pricing in the market. To sustain itself in the market for a longer time it needs to incorporate the changes and recommendations that will help Starbucks to retain its customer segments and create the new section and niche the customer.

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