Starbucks Analysis Paper
Starbucks Corporation Analysis
Business entity of Starbucks
Starbucks is the largest coffeehouse corporation in the world. A corporation is different from other forms of businesses because it’s considered a legal entity that is completely different from its shareholders. This means that the shareholders aren’t responsible for the corporation’s actions, they are only held accountable for their own investment. Starbucks Corporation is responsible for its own actions, can sue or be sued, can buy or sell property, can enter binding contracts, and can be taxed.
Also, Starbucks has a board of directors because it is a corporation. The job of the board of directors is to govern the corporation. They oversee major policies and decisions made …show more content…
by the corporation; they hire and evaluate the CEO (Howard Schultz), set goals and hold management accountable for achieving them. This corporation is owned by shareholders, who are defined as the investors of the company and they are entitled to pick the board of directors. They are payed in dividends which are distributed by the board of directors.
In the case of Starbucks, and all corporations, there are many positive and negative aspects to acquiring this type of business entity. The positive aspects, that Starbucks Corporation has, are that it has easier access to financing because all its shareholders, it will be allowed to exist beyond the lives of its owners, has talented employees, and the owners have limited liability. However, Starbucks has negative aspects such as a costly setup and has many regulations and government oversight, it is a subject to double taxation, and there may be differentiated goals between the shareholders and the corporate managers.
Target Market of Starbucks
The Starbucks located in la Fontana, in the district la Molina, has a primary target that is generally focused on customers of Tottus, students of USIL, and people that work, and live near that location. However, after doing further studies I have been able to further categorize the target market in three categories, which are the following:
Adults
Starbucks’ primary target market is men and women aged 25 to 40. They account for 49 percent of its total business. Since coffee is most common to people in this age, it is their primary target market. Customers tend to be urbanites with relatively high income and professional careers. The reason for this is because the prices of their products are generally expensive. According to the people I interviewed in that location, many people go to Starbucks to read, do work or to simply drink coffee because they enjoy it.
Young Adults
Young adults, which are aged 18 to 24, total 40 percent of Starbucks’ sales. Starbucks is a place for young adults to socialize, take a break from college studies, do term papers or reports, etc. This is one of the main reasons for why Starbucks has unlimited internet (Wi-Fi). Many of these young adults come from USIL.
Kids and Teenagers
Kids and teens are also a large part of Starbucks’ target audience. These customers are of age 13 to 17 and most items for kids are purchased by the parents. Whether it is whipped cream topped coffee or steamed milk, these costumers form a big part of Starbucks’ sales. While kids go there with their parents, Starbucks is also known as a place where teenagers socialize. Most of these teenagers come from schools near the location or from USIL.
International Operations of Starbucks
The first location outside of North America, where Starbucks operated, was in Tokyo, Japan. Since then, Starbucks has operated in 50 different countries, with over 16,000 stores. Starbucks Corporation maintained a franchise under its subsidiary, Seattle’s Best Coffee, which was acquired in 2003. At first, Starbucks amplified its brand through distinct business partnership alliances. Even though Starbucks Corporation wasn’t considered a franchise, it still maintained its principles through similar ideology of franchising. However, as 2013, the corporation, finally, began operate internationally through its brand name.
Starbucks Meeting the Needs of the Customers
In order to find out if Starbucks Corporation is actually meeting the needs of its customers, one must first analyze its potential strengths. Therefore, after doing intense research, I have been able to identify three key positive aspects of this corporation. They are the following:
1. The most important quality, of this corporation, is its products. It is recognized, by its customers and its market, as a high quality brand of coffee that offers distinct, innovative, and exotic blends. Products such as: Frappuccino Blends, Chocolate Beverages, Smoothies, Brewed Coffee, Kids Drinks, among others, are what gives Starbucks a unique superiority in its market.
2. Another factor, of this particular corporation, is that it has an atmosphere that provides its clients with a feeling of style, comfort, and a sense of knowledge. It gives the customer a chance to relax and enjoy their stay in the coffee shop. This is done by providing the customers with comfortable furniture, a cozy environment, and soothing music. This combination is a great way to market their brand by showing the clientele that not only their product is satisfactory, but also, the corporation in itself. In other words, the company welcomes its clients by opening the doors to them, and giving them a chance to forget about their problems, and have a chance to relax in their coffee shop. This takes a big part in the success of Starbucks because it is known as a place to “hang-out,” for people of all ages.
3. Finally, Starbucks has attracted well educated employees that are highly trained to transmit the importance of their product and culture. These employees are also highly aware of the Starbuck’s Corporate Social Responsibility. This includes their need to satisfy the customers’ needs through their product and through servicing their clients. They service their clients by relating with them, and trying to make them feel better about themselves. This markets the brand, as a polite and friendly work-force.
In conclusion, these three positive aspects of Starbucks, have aided the corporation to stand out from the average coffee store just because it exploits its resources and ideas, to its best advantage. So to answer whether or not Starbucks Corporation is able to satisfy the needs of its customers, according to this analysis, the answer would be, yes. Starbucks is the largest and most successful coffee shop corporation, in the world, for a reason.
Corporate Social Responsibility of Starbucks
According to Starbucks, social responsibility is “…conducting [their] business in ways that produce social, environmental and economic benefits to the communities in which [they] operate. In other words, it means being responsible towards their stakeholders, such as their:
Customers
According to Starbucks Peru, the company takes a holistic approach to ensure long-term quality coffee while at the same time establishing mutually beneficial relationships with coffee farmers and communities they work with. They also make sure they attain the best coffee in the world to satisfy their customers. However, even though they make sure to produce and sell a high quality product, their policy of corporate social responsibility towards the clients goes way beyond just providing a product, but at the same time providing a service towards them. This includes relating with them, in a social way, even if it’s just for an instant. For instance, I was being attended, by one of the employees, or partners as they like to refer to them, and while I was waiting for my coffee he would ask me about my day, and how I was feeling. This very example shows the company’s need to transmit positive attitude through a comfortable and cheerful environment. Starbucks not only emits a comfortable environment through their employees, but through coffee shop itself. It is designed to soothe the customer by creating a non-stressful environment. This is by giving the customers an environment where they could relax, work, study, read, etc. In other words, it provides a home-like experience, somewhat like a library, free from interruptions.
Community
Starbucks collaborates with the Fair Trade certification offering small time coffee farmers a way to increase their income by aiding them to organize cooperatives that will link them directly to coffee importers. Farmers with this certification are assured to get fair prices for their coffee, in the international market, and protection for their future plantations. In addition, Fair Trade and Starbucks work together to improve the economic stability of these farmers by encouraging importers to extend credit to cooperatives and establish long-term business relationships with these farmers.
Starbucks Peru is also working with Enseña Peru, which is an organization that hires professors to teach people of low income for free. Starbucks’ role, in this relationship, is it allows customers to add an extra shot of coffee in their cup. This allows the client to contribute a donation to these people in need. Starbucks also sells chocolate lollipops and bracelets which earnings are collected to provide education for Peruvian children.
Another way the corporation is attempting to aid their community is by minimizing environmental impact. This includes reducing sourcing impact, improving fuel efficiency during transportation, minimizing energy and water consumption, aiding the environment by improving store design and operations, waste reduction, recycling, energy conservation, etc.
Partners or Employees
Starbucks likes to call their employees “partners” because together they work to reach a common goal which is supplying the world with high quality coffee. After all, they are the ones that serve the customers with this product.
Primarily, all of the Partners of Starbucks are provided with benefits such as: savings plans, health care coverage, income protection, adoption assistance, Stock Investment Plan, and many more benefits. They are also required to be treated with respect in various ways. For example, they are allowed to share ideas and concerns with senior management. Finally, Starbuck also embraces diversity in their working environment regardless of ethnicity, culture or sexual preference.
Shareholders and Customers
Starbucks makes sure to listen to the stakeholders’ concerns about the company. Two of the mainly discussed concerns of the stakeholders are the presence of genetically modified material in their products, and the ubiquity of their stores. The first was solved by assuring the stakeholders that the company does not take part in selling genetically modified coffee or tea. The second concern is currently being solved, over time, just as the corporation is expanding all over the world. Starbucks is currently operating in 50 different countries and has over 16,000 establishments.
Orgaanika Coffee and D’lites Analysis Business Entity of Orgaanika
Orgaanika is a sole proprietorship, which means that it is owned by one person.
This form of business, like any other, has many positive and negative aspects. The positive characteristics to this business form is that it is relatively easy and inexpensive to form, it has few government regulations, all profits earned are acquired by the owner, and there are no special income taxes such as double taxation. However, the negative aspects are that the business dissolves when the owner dies, the only source of financing are the owner’s resources, and there is unlimited liability towards the owner. Having unlimited liability means that the owner is personally held accountable for all debts of the business. For instance, in the case of a lawsuit being filed against Orgaanika, the owner is responsible for the consequences of such …show more content…
lawsuit.
Target Market of Orgaanika
Orgaanika located in la Fontana, in the district la Molina, has a primary target is generally on customers of Tottus, students of USIL, and people that work, and live near that location. This can be classified into two categories, which are the following:
Adults
They are usually from ages 25 to 40. Customers tend to be from urban areas, with relatively high income and professional careers. The reason for this is because the prices of their products are generally expensive. Many people go to Orgaanika to read or do work. These adults may be people passing by on their way to Tottus, professionals on their way to work, people who go there to relax or to do work. I slightly interviewed people, at the location, to get this information.
Young Adults & Teenagers
Young adults, aged 16 to 24 mainly go to Orgaanika, in la Fontana, mainly after or during classes of Universidad San Ignacio de la Loyola. This is their primary target market since the USIL is so close to this coffee shop. As I interviewed these students most of them answered they went there to socialize, take a break from college studies, do term papers or reports, etc. This is one of the main reasons for why Orgaanika has unlimited internet (Wi-Fi).
International Operations of Orgaanika
Orgaanika is currently not operating internationally, since it’s a relatively new company. However, it has three actual locations in Peru. Two are located in Lima and one is in Arequipa. The company is planning to expand, furthermore, to have 8 locations, in total, by the end of 2014.
Orgaanika Meeting the Needs of Customers
Orgaanika provides 100% organic coffee which prevents the harm on its customers’ consumption. There were various people, which I interviewed during my visit at the coffee shop, who stated that they were very satisfied with the company’s policy of only providing organic coffee. They also stated that they were impressed of the causes that ordinary coffee had on the human body, after I shared with them the effects it could have, as a result of the chemicals that were used during the planting process.
Corporate Social Responsibility of Orgaanika
Orgaanika, like any other business, practice social responsibility by satisfying their customers’ needs. However, there are many more factors to consider within this company’s policy of corporate social responsibility. Orgaanika practices social responsibility towards its stakeholders in distinct ways. The following have been categorized into different groups: Customers
One factor that Orgaanika considers in its customers is the economic availability of their target market, which are students in universities. That is why the company provides a 20% discount to all students.
Apart from such factor, Orgaanika takes into accountability that the customers’ health is important; therefore they only provide organic coffee. Now, one might ask himself how this organic product might affect the consumer’s health and the answer is more complex than a simple yes or no answer. Therefore, it is necessary to analyze the difference non-organic (conventional) coffee and organic coffee, and how they each affect the customer. This will be easier to understand why having organic coffee is considered part of the corporate social responsibility of Orgaanika. According to the Environmental Protection Agency, the conventional production of coffee contains 30 percent of insecticides, 60 percent of herbicides and 90 percent of fungicides. One might not understand, at first, the effect that these substances have on the human organism. However, according to various scientific and medical studies these substances are carcinogenic. Furthermore, these substances can also damage the hormone and immune-system, and cause damage to the nervous and reproductive system. Another factor is that there has been a link to developmental and behavioral abnormalities because of these substances. In conclusion, these chemicals harm the human organism in distinct ways.
Consequently, you might be asking yourself why I am stating this in my analysis of Corporate Social Responsibility towards the customers of Orgaanika, and the answer is because drinking organic coffee eliminates the possibility of facing any of these health risks. In other words, since Orgaanika provides 100% organic coffee, this company is clearly concerned with their costumers’ health.
Community and Environment
Apart from the conventional way of assuming environmental responsibility towards its community by using recyclable napkins, cups, and bags, Orgaanika also supports the environment in a very important way that prevents a chain reaction that affects its ecosystem and community. Therefore, one must understand how the conventional way of cultivating and processing non-organic coffee affects the ecosystem.
Conventional coffee growers destroy rain forests, in order to produce less-expensive coffee. As a result of the loss of shade, of the forests, the water supply of the ground water dries up, inevitably hardening the soil over time. Also, deforestation affects the migratory population of birds. On the other hand, organic coffee is grown in the shade of the rain forest. This eliminates the need to use chemical pesticides and herbicides. In conclusion, Orgaanika supports a cultivating system which prevents the harm of its community and environment.
Employees
Orgaanika has periodical reunions with the supervisors of the company.
In this occasion, is where the supervisors discuss the employees concerns and comments on the way the business is being run. Orgaanika also provides its employees with health care benefits.
DI (Don Ignacio) Patisserie Business Entity of DI
Di is a sole proprietorship which is owned by Raúl Diez Canseco. This form of business, like any other, has many positive and negative aspects. The positive characteristics, to this business form, is that it is relatively easy and inexpensive to form, it has few government regulations, all profits earned are acquired by Raúl Diez Canseco, and there are no special income taxes, such as double taxation. However, the negative aspects are that the business dissolves when the owner dies, the only source of financing are the owner’s resources, and there is unlimited liability towards the owner.
Target Market of DI
DI is located inside the University of San Ignacio de la Loyola, in the district la Molina, has a primary target is generally, students and teachers of USIL, and people that work, and live near that location. This can be classified into two categories, which are the following:
Adults
They are usually from ages 25 to 40. Customers tend to be from urban areas, with relatively high income and professional careers, since it is relatively expensive. Many people go to DI go to eat and socialize. Many of them are business men.
Young Adults & Teenagers
Young adults, aged 16 to 24 mainly go to DI mainly after or during classes of USIL. This is one of their primary target markets since DI is inside the university. As I interviewed these students most of them answered they went there mainly to eat, socialize, and take a break from college studies. International Operations of DI
DI does not operate internationally because it is a relatively small company that is adapted to USIL. DI Meeting the Needs of its Customers
Most people who I interviewed have stated that while DI is a significantly good place to eat, it is also a relatively close place since it is located in the university. I had the privilege of getting number of statements, from certain students of the university. Here are a few words from some of the students, however, they were in Spanish but they were translated. Their names won’t be stated for privacy purposes.
“I have had the opportunity to try different dishes and I think it's great…”
“Nice place, delicious food, pleasant and appropriate to go with your significant other."
“Nice place, good service and good rich breakfast. Very good.”
However, many stated that the prices were high but, overall, people seemed very satisfied with DI’s food and service.
Corporate Social Responsibility of DI
Community and Environment
Di practices corporate social responsibility by providing jobs to Peruvian bakers, students and citizens. DI also provides training, for such jobs, so they can be able to acquire professional skills.
However, Don Ignacio does not practice environmental social responsibility because they do not recycle nor use recyclable products.
Summary of Starbucks, Orgaanika, and DI
First of all, Starbucks is the only corporation out of the three. The other two, Orgaanika and DI, are sole proprietorships. These two types of business entities, like any other, have positive and negative aspects. After analyzing Starbucks, I can conclude that its worldwide expansion is the main reason why the original owner, Howard Schultz, made it a corporation. He probably considered that it would be relatively easier to control Starbucks if it was a corporation. One main factor would probably be, that by being a corporation he wouldn’t have to worry about, himself, being completely liable for the corporations actions. However, the corporation is a victim of double taxation, is also extremely expensive to set-up, and doesn’t get all the income.
On the other hand, Orgaanika and Di aren’t corporations because they are smaller businesses. These types of businesses don’t have to worry about double taxation, they have fewer government regulations, and all profits earned are acquired by the owner. However, the negative aspects are that the businesses dissolve when the owner dies, the only source of financing are the owner’s resources, and there is unlimited liability towards the owner. If any of the two businesses got worldwide recognition, they would probably transfer into being a corporation just as Starbucks did.
Second, the three have similar target markets, since they are located in the same area. Starbucks and Orgaanika mainly focus on Tottus clients, business people, and students from USIL. DI mainly focuses on USIL students, teachers, and business people. As said before, they have similar target markets.
Third, one must go over whether these businesses operate internationally and if they satisfy their customers’ needs. From all the people I interviewed at these three businesses, they all seemed satisfied with their coffee, food, and services. Starbucks is a worldwide known corporation which is known for its quality coffee and exotic blends, out of the three it is the only one that operates internationally. It operates in 50 different countries with over 16,000 stores. Consequently, Orgaanika has three locations, so far, in Peru and DI only has one.
Fourth, one must state the corporate social responsibility of the three businesses. Starbucks is the one that takes in consideration the diversity of its stakeholders by taking into account its costumers, environment, community, employees and shareholders. However, even though Orgaanika covers the consideration of fewer stakeholders, they take much more concern of the health of its costumers, community, environment, and employees. This is by doing one simple alteration to Starbucks’ operations, which is supplying its customers with coffee that is 100% organic. In my opinion, Orgaanika practices a more ethical approach to running a business because they take into consideration the health of their clients and environment. DI is the company which least practices social responsibility because they only take into accounts its customers and employees. They don’t show any concern for the environment or community.
In conclusion, Starbucks is the biggest business out of the three. They both have many similarities and differences. Analysis and research of the three businesses is important, in order to understand each business entity.
Business entity of Starbucks
Starbucks is the largest coffeehouse corporation in the world. A corporation is different from other forms of businesses because it’s considered a legal entity that is completely different from its shareholders. This means that the shareholders aren’t responsible for the corporation’s actions, they are only held accountable for their own investment. Starbucks Corporation is responsible for its own actions, can sue or be sued, can buy or sell property, can enter binding contracts, and can be taxed.
Also, Starbucks has a board of directors because it is a corporation. The job of the board of directors is to govern the corporation. They oversee major policies and decisions made …show more content…
by the corporation; they hire and evaluate the CEO (Howard Schultz), set goals and hold management accountable for achieving them. This corporation is owned by shareholders, who are defined as the investors of the company and they are entitled to pick the board of directors. They are payed in dividends which are distributed by the board of directors.
In the case of Starbucks, and all corporations, there are many positive and negative aspects to acquiring this type of business entity. The positive aspects, that Starbucks Corporation has, are that it has easier access to financing because all its shareholders, it will be allowed to exist beyond the lives of its owners, has talented employees, and the owners have limited liability. However, Starbucks has negative aspects such as a costly setup and has many regulations and government oversight, it is a subject to double taxation, and there may be differentiated goals between the shareholders and the corporate managers.
Target Market of Starbucks
The Starbucks located in la Fontana, in the district la Molina, has a primary target that is generally focused on customers of Tottus, students of USIL, and people that work, and live near that location. However, after doing further studies I have been able to further categorize the target market in three categories, which are the following:
Adults
Starbucks’ primary target market is men and women aged 25 to 40. They account for 49 percent of its total business. Since coffee is most common to people in this age, it is their primary target market. Customers tend to be urbanites with relatively high income and professional careers. The reason for this is because the prices of their products are generally expensive. According to the people I interviewed in that location, many people go to Starbucks to read, do work or to simply drink coffee because they enjoy it.
Young Adults
Young adults, which are aged 18 to 24, total 40 percent of Starbucks’ sales. Starbucks is a place for young adults to socialize, take a break from college studies, do term papers or reports, etc. This is one of the main reasons for why Starbucks has unlimited internet (Wi-Fi). Many of these young adults come from USIL.
Kids and Teenagers
Kids and teens are also a large part of Starbucks’ target audience. These customers are of age 13 to 17 and most items for kids are purchased by the parents. Whether it is whipped cream topped coffee or steamed milk, these costumers form a big part of Starbucks’ sales. While kids go there with their parents, Starbucks is also known as a place where teenagers socialize. Most of these teenagers come from schools near the location or from USIL.
International Operations of Starbucks
The first location outside of North America, where Starbucks operated, was in Tokyo, Japan. Since then, Starbucks has operated in 50 different countries, with over 16,000 stores. Starbucks Corporation maintained a franchise under its subsidiary, Seattle’s Best Coffee, which was acquired in 2003. At first, Starbucks amplified its brand through distinct business partnership alliances. Even though Starbucks Corporation wasn’t considered a franchise, it still maintained its principles through similar ideology of franchising. However, as 2013, the corporation, finally, began operate internationally through its brand name.
Starbucks Meeting the Needs of the Customers
In order to find out if Starbucks Corporation is actually meeting the needs of its customers, one must first analyze its potential strengths. Therefore, after doing intense research, I have been able to identify three key positive aspects of this corporation. They are the following:
1. The most important quality, of this corporation, is its products. It is recognized, by its customers and its market, as a high quality brand of coffee that offers distinct, innovative, and exotic blends. Products such as: Frappuccino Blends, Chocolate Beverages, Smoothies, Brewed Coffee, Kids Drinks, among others, are what gives Starbucks a unique superiority in its market.
2. Another factor, of this particular corporation, is that it has an atmosphere that provides its clients with a feeling of style, comfort, and a sense of knowledge. It gives the customer a chance to relax and enjoy their stay in the coffee shop. This is done by providing the customers with comfortable furniture, a cozy environment, and soothing music. This combination is a great way to market their brand by showing the clientele that not only their product is satisfactory, but also, the corporation in itself. In other words, the company welcomes its clients by opening the doors to them, and giving them a chance to forget about their problems, and have a chance to relax in their coffee shop. This takes a big part in the success of Starbucks because it is known as a place to “hang-out,” for people of all ages.
3. Finally, Starbucks has attracted well educated employees that are highly trained to transmit the importance of their product and culture. These employees are also highly aware of the Starbuck’s Corporate Social Responsibility. This includes their need to satisfy the customers’ needs through their product and through servicing their clients. They service their clients by relating with them, and trying to make them feel better about themselves. This markets the brand, as a polite and friendly work-force.
In conclusion, these three positive aspects of Starbucks, have aided the corporation to stand out from the average coffee store just because it exploits its resources and ideas, to its best advantage. So to answer whether or not Starbucks Corporation is able to satisfy the needs of its customers, according to this analysis, the answer would be, yes. Starbucks is the largest and most successful coffee shop corporation, in the world, for a reason.
Corporate Social Responsibility of Starbucks
According to Starbucks, social responsibility is “…conducting [their] business in ways that produce social, environmental and economic benefits to the communities in which [they] operate. In other words, it means being responsible towards their stakeholders, such as their:
Customers
According to Starbucks Peru, the company takes a holistic approach to ensure long-term quality coffee while at the same time establishing mutually beneficial relationships with coffee farmers and communities they work with. They also make sure they attain the best coffee in the world to satisfy their customers. However, even though they make sure to produce and sell a high quality product, their policy of corporate social responsibility towards the clients goes way beyond just providing a product, but at the same time providing a service towards them. This includes relating with them, in a social way, even if it’s just for an instant. For instance, I was being attended, by one of the employees, or partners as they like to refer to them, and while I was waiting for my coffee he would ask me about my day, and how I was feeling. This very example shows the company’s need to transmit positive attitude through a comfortable and cheerful environment. Starbucks not only emits a comfortable environment through their employees, but through coffee shop itself. It is designed to soothe the customer by creating a non-stressful environment. This is by giving the customers an environment where they could relax, work, study, read, etc. In other words, it provides a home-like experience, somewhat like a library, free from interruptions.
Community
Starbucks collaborates with the Fair Trade certification offering small time coffee farmers a way to increase their income by aiding them to organize cooperatives that will link them directly to coffee importers. Farmers with this certification are assured to get fair prices for their coffee, in the international market, and protection for their future plantations. In addition, Fair Trade and Starbucks work together to improve the economic stability of these farmers by encouraging importers to extend credit to cooperatives and establish long-term business relationships with these farmers.
Starbucks Peru is also working with Enseña Peru, which is an organization that hires professors to teach people of low income for free. Starbucks’ role, in this relationship, is it allows customers to add an extra shot of coffee in their cup. This allows the client to contribute a donation to these people in need. Starbucks also sells chocolate lollipops and bracelets which earnings are collected to provide education for Peruvian children.
Another way the corporation is attempting to aid their community is by minimizing environmental impact. This includes reducing sourcing impact, improving fuel efficiency during transportation, minimizing energy and water consumption, aiding the environment by improving store design and operations, waste reduction, recycling, energy conservation, etc.
Partners or Employees
Starbucks likes to call their employees “partners” because together they work to reach a common goal which is supplying the world with high quality coffee. After all, they are the ones that serve the customers with this product.
Primarily, all of the Partners of Starbucks are provided with benefits such as: savings plans, health care coverage, income protection, adoption assistance, Stock Investment Plan, and many more benefits. They are also required to be treated with respect in various ways. For example, they are allowed to share ideas and concerns with senior management. Finally, Starbuck also embraces diversity in their working environment regardless of ethnicity, culture or sexual preference.
Shareholders and Customers
Starbucks makes sure to listen to the stakeholders’ concerns about the company. Two of the mainly discussed concerns of the stakeholders are the presence of genetically modified material in their products, and the ubiquity of their stores. The first was solved by assuring the stakeholders that the company does not take part in selling genetically modified coffee or tea. The second concern is currently being solved, over time, just as the corporation is expanding all over the world. Starbucks is currently operating in 50 different countries and has over 16,000 establishments.
Orgaanika Coffee and D’lites Analysis Business Entity of Orgaanika
Orgaanika is a sole proprietorship, which means that it is owned by one person.
This form of business, like any other, has many positive and negative aspects. The positive characteristics to this business form is that it is relatively easy and inexpensive to form, it has few government regulations, all profits earned are acquired by the owner, and there are no special income taxes such as double taxation. However, the negative aspects are that the business dissolves when the owner dies, the only source of financing are the owner’s resources, and there is unlimited liability towards the owner. Having unlimited liability means that the owner is personally held accountable for all debts of the business. For instance, in the case of a lawsuit being filed against Orgaanika, the owner is responsible for the consequences of such …show more content…
lawsuit.
Target Market of Orgaanika
Orgaanika located in la Fontana, in the district la Molina, has a primary target is generally on customers of Tottus, students of USIL, and people that work, and live near that location. This can be classified into two categories, which are the following:
Adults
They are usually from ages 25 to 40. Customers tend to be from urban areas, with relatively high income and professional careers. The reason for this is because the prices of their products are generally expensive. Many people go to Orgaanika to read or do work. These adults may be people passing by on their way to Tottus, professionals on their way to work, people who go there to relax or to do work. I slightly interviewed people, at the location, to get this information.
Young Adults & Teenagers
Young adults, aged 16 to 24 mainly go to Orgaanika, in la Fontana, mainly after or during classes of Universidad San Ignacio de la Loyola. This is their primary target market since the USIL is so close to this coffee shop. As I interviewed these students most of them answered they went there to socialize, take a break from college studies, do term papers or reports, etc. This is one of the main reasons for why Orgaanika has unlimited internet (Wi-Fi).
International Operations of Orgaanika
Orgaanika is currently not operating internationally, since it’s a relatively new company. However, it has three actual locations in Peru. Two are located in Lima and one is in Arequipa. The company is planning to expand, furthermore, to have 8 locations, in total, by the end of 2014.
Orgaanika Meeting the Needs of Customers
Orgaanika provides 100% organic coffee which prevents the harm on its customers’ consumption. There were various people, which I interviewed during my visit at the coffee shop, who stated that they were very satisfied with the company’s policy of only providing organic coffee. They also stated that they were impressed of the causes that ordinary coffee had on the human body, after I shared with them the effects it could have, as a result of the chemicals that were used during the planting process.
Corporate Social Responsibility of Orgaanika
Orgaanika, like any other business, practice social responsibility by satisfying their customers’ needs. However, there are many more factors to consider within this company’s policy of corporate social responsibility. Orgaanika practices social responsibility towards its stakeholders in distinct ways. The following have been categorized into different groups: Customers
One factor that Orgaanika considers in its customers is the economic availability of their target market, which are students in universities. That is why the company provides a 20% discount to all students.
Apart from such factor, Orgaanika takes into accountability that the customers’ health is important; therefore they only provide organic coffee. Now, one might ask himself how this organic product might affect the consumer’s health and the answer is more complex than a simple yes or no answer. Therefore, it is necessary to analyze the difference non-organic (conventional) coffee and organic coffee, and how they each affect the customer. This will be easier to understand why having organic coffee is considered part of the corporate social responsibility of Orgaanika. According to the Environmental Protection Agency, the conventional production of coffee contains 30 percent of insecticides, 60 percent of herbicides and 90 percent of fungicides. One might not understand, at first, the effect that these substances have on the human organism. However, according to various scientific and medical studies these substances are carcinogenic. Furthermore, these substances can also damage the hormone and immune-system, and cause damage to the nervous and reproductive system. Another factor is that there has been a link to developmental and behavioral abnormalities because of these substances. In conclusion, these chemicals harm the human organism in distinct ways.
Consequently, you might be asking yourself why I am stating this in my analysis of Corporate Social Responsibility towards the customers of Orgaanika, and the answer is because drinking organic coffee eliminates the possibility of facing any of these health risks. In other words, since Orgaanika provides 100% organic coffee, this company is clearly concerned with their costumers’ health.
Community and Environment
Apart from the conventional way of assuming environmental responsibility towards its community by using recyclable napkins, cups, and bags, Orgaanika also supports the environment in a very important way that prevents a chain reaction that affects its ecosystem and community. Therefore, one must understand how the conventional way of cultivating and processing non-organic coffee affects the ecosystem.
Conventional coffee growers destroy rain forests, in order to produce less-expensive coffee. As a result of the loss of shade, of the forests, the water supply of the ground water dries up, inevitably hardening the soil over time. Also, deforestation affects the migratory population of birds. On the other hand, organic coffee is grown in the shade of the rain forest. This eliminates the need to use chemical pesticides and herbicides. In conclusion, Orgaanika supports a cultivating system which prevents the harm of its community and environment.
Employees
Orgaanika has periodical reunions with the supervisors of the company.
In this occasion, is where the supervisors discuss the employees concerns and comments on the way the business is being run. Orgaanika also provides its employees with health care benefits.
DI (Don Ignacio) Patisserie Business Entity of DI
Di is a sole proprietorship which is owned by Raúl Diez Canseco. This form of business, like any other, has many positive and negative aspects. The positive characteristics, to this business form, is that it is relatively easy and inexpensive to form, it has few government regulations, all profits earned are acquired by Raúl Diez Canseco, and there are no special income taxes, such as double taxation. However, the negative aspects are that the business dissolves when the owner dies, the only source of financing are the owner’s resources, and there is unlimited liability towards the owner.
Target Market of DI
DI is located inside the University of San Ignacio de la Loyola, in the district la Molina, has a primary target is generally, students and teachers of USIL, and people that work, and live near that location. This can be classified into two categories, which are the following:
Adults
They are usually from ages 25 to 40. Customers tend to be from urban areas, with relatively high income and professional careers, since it is relatively expensive. Many people go to DI go to eat and socialize. Many of them are business men.
Young Adults & Teenagers
Young adults, aged 16 to 24 mainly go to DI mainly after or during classes of USIL. This is one of their primary target markets since DI is inside the university. As I interviewed these students most of them answered they went there mainly to eat, socialize, and take a break from college studies. International Operations of DI
DI does not operate internationally because it is a relatively small company that is adapted to USIL. DI Meeting the Needs of its Customers
Most people who I interviewed have stated that while DI is a significantly good place to eat, it is also a relatively close place since it is located in the university. I had the privilege of getting number of statements, from certain students of the university. Here are a few words from some of the students, however, they were in Spanish but they were translated. Their names won’t be stated for privacy purposes.
“I have had the opportunity to try different dishes and I think it's great…”
“Nice place, delicious food, pleasant and appropriate to go with your significant other."
“Nice place, good service and good rich breakfast. Very good.”
However, many stated that the prices were high but, overall, people seemed very satisfied with DI’s food and service.
Corporate Social Responsibility of DI
Community and Environment
Di practices corporate social responsibility by providing jobs to Peruvian bakers, students and citizens. DI also provides training, for such jobs, so they can be able to acquire professional skills.
However, Don Ignacio does not practice environmental social responsibility because they do not recycle nor use recyclable products.
Summary of Starbucks, Orgaanika, and DI
First of all, Starbucks is the only corporation out of the three. The other two, Orgaanika and DI, are sole proprietorships. These two types of business entities, like any other, have positive and negative aspects. After analyzing Starbucks, I can conclude that its worldwide expansion is the main reason why the original owner, Howard Schultz, made it a corporation. He probably considered that it would be relatively easier to control Starbucks if it was a corporation. One main factor would probably be, that by being a corporation he wouldn’t have to worry about, himself, being completely liable for the corporations actions. However, the corporation is a victim of double taxation, is also extremely expensive to set-up, and doesn’t get all the income.
On the other hand, Orgaanika and Di aren’t corporations because they are smaller businesses. These types of businesses don’t have to worry about double taxation, they have fewer government regulations, and all profits earned are acquired by the owner. However, the negative aspects are that the businesses dissolve when the owner dies, the only source of financing are the owner’s resources, and there is unlimited liability towards the owner. If any of the two businesses got worldwide recognition, they would probably transfer into being a corporation just as Starbucks did.
Second, the three have similar target markets, since they are located in the same area. Starbucks and Orgaanika mainly focus on Tottus clients, business people, and students from USIL. DI mainly focuses on USIL students, teachers, and business people. As said before, they have similar target markets.
Third, one must go over whether these businesses operate internationally and if they satisfy their customers’ needs. From all the people I interviewed at these three businesses, they all seemed satisfied with their coffee, food, and services. Starbucks is a worldwide known corporation which is known for its quality coffee and exotic blends, out of the three it is the only one that operates internationally. It operates in 50 different countries with over 16,000 stores. Consequently, Orgaanika has three locations, so far, in Peru and DI only has one.
Fourth, one must state the corporate social responsibility of the three businesses. Starbucks is the one that takes in consideration the diversity of its stakeholders by taking into account its costumers, environment, community, employees and shareholders. However, even though Orgaanika covers the consideration of fewer stakeholders, they take much more concern of the health of its costumers, community, environment, and employees. This is by doing one simple alteration to Starbucks’ operations, which is supplying its customers with coffee that is 100% organic. In my opinion, Orgaanika practices a more ethical approach to running a business because they take into consideration the health of their clients and environment. DI is the company which least practices social responsibility because they only take into accounts its customers and employees. They don’t show any concern for the environment or community.
In conclusion, Starbucks is the biggest business out of the three. They both have many similarities and differences. Analysis and research of the three businesses is important, in order to understand each business entity.