Impact of E-Commerce in Starbucks
Functional areas of a business refer to the activities that employee or group of employees (department) of an organisation engage in order to efficiently satisfy the dictates of the objectives. Depending on an organisations’ size, many activities can be carried out by one person in the case of a small enterprise or divided among a large group of people which is largely the requirement for large organisations. This task will be evaluating ‘Starbucks Coffee’ as the chosen organisation for this report, identifying its business aims, functions and relationship with stakeholders, consumers, government.
It will examine the various global business functions used by Starbucks to meet its organisational goals and objectives. Starbucks is a private sector organisation in the speciality coffee industry. Being private it means the organisation is not state controlled and its activities are profit driven by its owners, i. e. the directors, boards and other management structures built by starbucks to ensure its survivability and effectiveness as a brand. Their mission statement is ‘to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time’.
Impact of E-Commerce in Starbucks Essay Example
By examination of this statement we can identify that the company organizational culture will promotes an ‘experience’. This means they want to affect what their consumers see, taste and feel. Also they make to make the experience different at every visit. This gives us an insight in the internal structures they have adopted and the functions that are carried out on a daily basis. Corporate Objectives: •All coffee must meet Starbucks standards of high quality •We plan to increase our farmer loan guarantees to ? 12 million by 2015 and provide farmers with incentives to reduce the environmental impact of coffee production. It’s our goal for all of our coffee to be grown under the highest standards of quality, using ethical sourcing practices.
Our coffee buyers personally travel to coffee farms in Latin America, Africa and Asia to select the highest quality Arabica beans. Once these quality beans arrive at our roasting plants, Starbucks experts bring out the balance and rich flavour of the beans through the signature Starbucks Roast™ Starbuck s internal business functions Management Information System: a management information system is a computer ystem designed to aid managers in the planning and direction of the business and operations and the generation of reports and the provision of company data.
Starbucks MIS system is built on the IRIS application which stands for Intelligent Restaurant Information System. This MIS system provides two basic functional categories which are; •Point of sale system and, •Manager work station module. Point of sale – is used to perform cash register functions on the till. It provides transaction information to the shift managers, assistant mangers and other middle level management staff.
Manager work stations – are used to manage cash operations in all the stores (per store). They provide and hold information about inventories and stock for that particular store. They monitor the till systems and perform bank transaction functions. Intranet – there is an employee intranet system, which is a corporate version of the Internet. Employees are able to access information that is common the Starbuck over communication networks i. e. the internet. Online ordering – the system is design to assist in the electronic ordering of food from partners and suppliers.
Cash Management functions – the IRIS platform provides an integrated cash management function which assists with cash operations, counting of till and preparing bank deposits The MIS provides information for starbucks managers to identify business requirements on a day to day basis, track and analyse customer transaction by time, check the sales of different product categories available in each shop irrespective of geographical location. They also record wastage, void items and other operations related functions for the shops.
Store Managers can use the Management information System to prepare short term budget to lan long term profit and prepare proper forecasts. In starbucks the Iris system provides a number of reports that can be used to help manage store profitability and reviews of performance of sales. Support Centres: Starbucks support centres function as payroll services. They aid in the processing of payroll transfers for servicing starbucks partners. Support centres are used as service stations for distilling central inter and intra company operations on a daily basis within the same district and others. Marketing functions: Starbucks have completely embraced the P’s concept of marketing.
Place- all of starbucks coffee shops are located in high traffic areas. Locations like college campuses, high streets, malls, business parks have been chosen by starbucks. The company currently boosts of over 27,000 stores in both the USA and international location put together (Coffeealeara, 2009). The marketing department are responsible for developments of various marketing and advertising ideas which will promotes the products, image and brand of the company and position the company for greater sales, market penetration and market dominance.
Starbucks do a lot of donations and support a lot of none profit organizations within the community which they are located. This enables the company to get free advertising and promotion of its products and services. Business services are another marketing campaign which starbucks adopts. This services supply coffee and related products to businesses within the locality of its existence. Human Resources: it is said that a company is only as good as it employee. Part of Starbucks goals is treating its people right (called partners). Due to this they have several human resource policies which aim to enforce these policies.
Starbucks illustrates the key role that human resource management (HRM) plays in determining the survival, effectiveness, and competitiveness of its businesses. Human resource management (HRM) within starbucks refers to the policies, practices, and systems that influence the company’s employees’. This business function addresses behaviour, attitudes, and performance. Starbucks have a number of HR practices which they recently had to change in order to stay competitive in light of the recent economic recession. The strategies underlying HR practices needs to be considered to maximize their influence on company performance.
HRM practices include analyzing and designing work, determining human resource needs, recruiting the right employees, choosing employees, teaching employees how to perform their jobs and preparing them for the future. Internal control: means a process designed by, or under the supervision of, our chief executive and chief financial officers, and carried out by the Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of Starbucks financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles.
Starbucks internal controls: Pertains to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of Starbucks assets; They provide reasonable assurance that transactions are recorded as necessary to permit preparation of Starbucks financial statements in accordance with generally accepted accounting principles, and that Starbucks receipts and expenditures are being made only in accordance with authorization of Starbucks management and directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition.
They control the use or disposition of Starbucks assets that could have a material effect on Starbucks financial statements. Finance: the finance department employs more than 500 professionals working together as part of the finance group. There are different areas of finance within starbucks like the corporate finance, business unit finance, and internal audit. Others include international business finance, operations and consumer products. Legal functions: the legal counsel of starbucks are responsible for issues like brand protection. This is reported to be the number one issue for the company.
It company has a dedicated team of 40 lawyers in North America alone. The department is headed by general counsel. Other functions include legal matter regarding transportation, warehousing, insurance, ensuring legal matters concerning acquisitions are dealt with accurately. They are involved in the acquisition of new stores and rent issues with existing stores as starbucks in not a franchise driven business. Human resources related functions and handling of employee issues is also part of the responsibilities of the legal department of starbucks. Corporate governance and compliance is also covered by this department for the company.
The company has a trading house in Switzerland which has the legal department in charge of contracts for the buying of coffee produce. Supply Chain Functions: the supply chain of starbucks handle the distribution of goods from one location to another. They are known as the ‘deliver group’ within the starbucks culture. The supply chain person a key role in the ‘from bean to cup’ process as it is called in starbucks. The supply chain ensures that all the key ingredients of the business produce and obtain. They have the sourcing from around the world and successfully deliver to starbucks corporations in retails stores.
Their role is so crucial that fails in the process could cost the company millions of dollars in costs. An example of this was the rise of the supply chain expenses in 2008 from 750 million dollars to 825 million, with no rise in the sales at the stores. This led to the revamping of the supply chain process in order to reduce costs and leverage sales figures. One of the observations made by management was that it too long for stores to get deliveries of supplies needed. Starbucks however managed to turn the situation around to realize higher sales figures only 10 months down the line. Stakeholder Relationships
A definition from the business dictionary states that a stakeholder is a person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization’s actions, objectives, and policies. Key stakeholders in a business organization include creditors, customers, directors, employees, government, owners, suppliers, unions, and the community from which the business draws its resources. The community – starbucks an initiative called the Starbucks share planet initiative. This program was geared at reducing waste and carbon foot print within the localities where starbucks operates.
It became part of the corporate objective of the company to reuse and recycle all their cups. Indeed this is evidence today. Starbucks engages itself in different relief programs all over the world especially the areas where their shops are located. They have confessed and profession their commitment to help the community. The company has pledged that by the year 2015, it would have contributed one millions volunteer hours to the development of local communities around the world. The Supplier: Starbucks refers to its sourcing methods as ethical sourcing.
The company consistently develops and maintain strong, long? erm relationships with farmers all over the world that help ensure they are able to buy the high? quality coffee produce. It is stated in the company corporate objectives to buy only certified ethical trading products. The company’s major suppliers are in Asia and Africa. From reports, it is clear that starbucks has placed a lot of importance on the way they source the raw materials for their products. They also engage in development programs that in turn will engender the loyalty of their suppliers. This holds a great advantage for the organization because of the possibility of discounts and other valuable incentives.
An example of this is the loan Programmes which the company embarked upon a few year back. During the growing and harvest cycles, many coffee farmers dip into their modest reserves to cover expenses until they can sell their crops. Some farmers may even experience a cash shortage, prompting them to sell their crops early – and for less – to local buyers. Starbucks provides funding to organisations that offer loans to coffee growers, which will help them sell their crops at the best time to get the right price. The loans also help farmers to invest in their farms and make capital improvements.
Starbucks has established Farmer Support Centres in Costa Rica and Rwanda to provide local farmers with resources and expertise to help lower the cost of production, reduce fungus infections, improve coffee quality and increase the production of premium coffee. The Investors: Starbucks went public on June 26, 1992 at a price of $17 per share (or $0. 53 per share, adjusted for subsequent stock splits) and closed trading that first day at $21. 50 per share. The Customer: these stakeholders are the people who buy this coffee and other complimentary products that Starbucks offers.
Identified as the taste buds they have set out to satisfy. Starbucks has a culture of trying to engage the consumers of the products in the shops. That method marked a major turning point in the company’s fortune with the development of various loyalty programs. Like the starbucks card and the mysterbucks idea forum. This strategy is quite unusual because starbucks created an online forum where their customers go and share ideas about how the business should be run. The types of services and blends of coffee they like the most.
This caused thousands of ideas to come forward which in turn led to the creation of different products and services. The company also provides very timely feedback on the suggestion of those ideas and the adoption of it to make the whole process transparent. It is little wonder why they have become the largest facebook business with 30 million followers as of 2011. Howard Sculz once said ‘we are fully engaged; we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments’. This clearly shows the company’s dedication to creating an environment that the customer you live to remain in.
In the company’s culture a term called ‘third place’ is used to describe their continuing effort to make every starbucks shop a place people want to go to apart from home and office. Government: the policies of the government, the law and regulation which govern import and export in every country will affect the trade of the starbucks. Operating out of over 57 countries, government regulation has a fundamental hold on the operation, and indeed the success of the organization. Abiding by trade laws, taxation, and customs could make a huge difference in the integrity and confidence of the brand called starbucks.
The Employee: Starbuck boosts of the finest coffees in the world, grown, prepared and served by the finest people. Its employees, called partners in the internal culture of the company, are at the heart of the Starbucks Experience. They are stakeholder as they provide work and add value to the organization. They are provided with benefit packages, stock options career development. Starbucks have shown that they place a lot of emphasis on training and development, rightly so because they develop and present new products to the market on a regular basis.
However, not all these products remain on the market because of acceptance and other management issues that may affect the sale and existence of these products. Employees are the face of the company especially the barrister who sell and interface directly with the customer. The training program includes the coffee master program, servant leadership workshop, star skills. Shareholders: the company allow stockholders and new investors to purchase and sell shares of starbucks common stock. The company pays dividends on its stock at an impressive rate. These share holders are not just member of the public but also employees of the business.
Unions: starbucks has over 110,000 employees worldwide. It has a very crucial responsibility to the worker union. Ensuring that the right practises are adopted by the company and that employees are treated fairly is part of the mandates of the union. The union can also affect the image of the starbucks brand and therefore necessitates the respect of the union. The union is the voice of the employee collectively. Issue like work actions, strike are organized and supervised by the unions. Conclusion Starbucks is a company has proven they have the ability to reinvent themselves.
The company has shown that creation of goals and objectives can be achieved and it reflects all through the lifecycle of the company and what they do. Due to the ability and the people on the board of directors and employee, they have been able to build a strong band in the coffee industry and can thrive even in the face of recent economic recession. The interaction and activity of the stakeholders and how they have managed to align this with making profit is a commendable thing. The company was award the most ethical company in 2011 because of the way they buy their coffee produce from farmers and suppliers.