Business

1. The ongoing global economic recession is the prime external economic driver for Starbucks. As I already mentioned, this factor dented the profitability of Starbucks. This has convinced buyers to shift to cheaper alternatives. As they did not quit buying coffee, Starbucks should seek an opportunity here. The company has to deal with rising labor and operational costs. The inflationary environment and falling profitability is causing a lot of stress.

2. Starbucks ethical sourcing program continued to grow, and in 2008 we set a goal that by 2015, 100% of Starbucks coffee would be ethically sourced through C.A.F.E. Practices, Fairtrade, or another externally audited system. In 2014, 96% (400+million pounds) of our coffee met this standard, with 95.5% C.A.F.E. Practices, 8.6% Fairtrade, and 1% organic (some coffees receive multiple verifications or certifications). Over the past decade, C.A.F.E. Practices has helped positively impact millions of workers, and improved the long-term environmental and social conditions on thousands of participating farms around the world. In our journey to 100% ethically sourced, we plan to work to continue to improve sustainability across our industry.

3. Global expansion is essential to successful companies; Starbucks is no exception. While Starbucks was very successful in its domestic market, the leaders of the company knew they would have to exploit globalization and expand the company to foreign markets to fully utilize the potential that the company had. In 2003, Starbucks quickly expanded into foreign markets and began to evolve into the world-wide company we know today.[2] Countries began experiencing the “Starbucks Effect,” which is the continuous emergence of new competitors with superior business models that force businesses to reconsider the viability of what they’ve always done. In a nutshell - if your company can’t keep up with the efficiency of the Americans, it won’t succeed.

4. The choice of entry mode is a...