Organizational Resources Paper
Sep 23, 2013
Coffee retail production is a multi-billion dollar industry. America leads the world in coffee-consumption, consuming over 2 million pounds of coffee per year. Companies have come and gone but power houses like Folgers and Maxwell House have maintained the top shelf with American consumers, until the 1990’s. Starbucks, founded by Jerry Baldwin, Gordon Bowker, and Zev Sieg, initially started in the early 1970’s as an importer of the world’s finest coffee in a little coffee house located in Pike Place Market Seattle, Washington. Portraying a vision of ”To inspire and nurture the human spirit – one ...view middle of the document...
I feel this is directly related to the span of control issues in that operating fewer than one is less effective than that of the new reorganization. By formulating these divisions Starbucks is enabling a decentralization effect, whereby each division is able to conduct business autonomously in their own region while still maintaining a clear organizational structure that reaches back to corporate headquarters. In addition to dividing markets; we’ll take a look at associated physical attributes.
Since the start of their globalization in 1988, Starbucks has developed into a global entity encompassing over 16,000 locations from the Mid-West to the Middle East. I would dare to say if you were in a different country and asked where the nearest Starbucks location was, someone would be able to point you in the right direction. The rapid expansion of the Starbucks Corporation has led to considerable profits; according to (2) Forbes the company is valued at $8.5 billion in physical assets, sales that exceed $13 billion, with profits of $1.4 billion and a market share of $43.2 billion. In 2003 Starbucks acquired one of its’ hometown rivals “Seattle’s Best Coffee (SBC) in a $72 million cash-for-stock transaction, helping further tighten a grip on the coffee industry. While commonly associated with Java or Joe, this coffee icon is not staying in that lane and according to Bloomberg, recently acquired Teavana Holdings Inc. for $620 million dollars on 14 Nov 2012 furthering its’ investment in the Tea industry. This will not only add to Starbucks’ vast physical assets but sets the company up to corner the coffee and tea retail industry. Tevanna with over 300 stores worldwide will certainly be expanded as Starbucks is actively looking to expand in Asia as this beverage is much more popular in China and Japan, "Business Insider" (2013) website. According to “Starbucks Newroom” (2013), “Together, Starbucks and Teavana will jumpstart the next wave of growth in this dynamic category, leveraging Starbucks core competencies of real estate, design and store operations and integrating these with Teavana’s world-class tea authority, global sourcing capabilities, merchandising and best-in-class retail store unit economics. Powered by Starbucks existing infrastructure, Starbucks plans to continue to grow and extend Teavana’s already-successful 300 mall-based stores as well as add a high-profile neighborhood store concept that will accelerate Teavana’s domestic and global footprint.” Besides physical assets like we have discussed so far, Starbucks has many more avenues for generating revenue. Starbucks is successful in selling general merchandise such as coffee mugs, gift cards, and bakery...