Starbucks is a chain of coffee shops created by Jerry Baldwin, Gordon Bowker, and Zev Siegl in 1971 in the American city of Seattle. At first, they sold roasted coffee beans, but in 1987 the company was sold to Howard Schultz, who began to form the chain known today. At the moment (2021), it has reached annual revenue of about 24 billion dollars. The American coffee company has 32,660 coffee shops worldwide and continues to expand. For example, in China, one of the most priority markets, Starbucks Corp. It has about 3,700 coffee shops and opens new ones approximately every 15 hours – 600 locations per year. The goal by 2023 year is 6000 new coffee shops. The company is implementing plans for delivery services in the United States and other countries. The main competitors of Starbucks are Caffè Nero, Costa Coffee, Mc Café, Dunkin Donuts, Cafè Ritazza, Café Coffee Continue reading
International Business Management
Technology Risk in Business – Challenges of Changing Technology in Business
The changing technology environment has and still become one of the biggest challenges in international business management. Technological changes can wreak havoc on industries. In making decisions regarding technological changes, companies err in two ways. They either commit themselves to a new technology too fast and burn their fingers or wait and watch while another company comes up with a new technology that puts them out of business. The issue of when and how to react to the emergence of a new technology is a matter of judgment. However, this judgment need not be based purely on intuition. By doing a systematic structured analysis of developments in the technological environment and putting in place the necessary organizational mechanisms, technology risk in business can be considerably reduced. How can managers identify the emergence of a disruptive technology? Clayton Christensen’s research reveals that disruptive technologies are often developed privately by engineers working Continue reading
Advantages and Disadvantages of Franchising Business
Franchising is a style of business which has a lot of different but same branches throughout the world. Franchising business is an arrangement for a continuing relationship in which one party – a franchisor provides an accredited opportunity to another party – the franchisee to do business using its trade name and offers assistance in organizing, training, producing, marketing and managing a good or service in adherence to certain specifications, in return for monetary exchange. The franchisee usually pays a one-time franchise fee plus a percentage of sales revenue as royalty, and in turn gains instant name and recognition, tried and tested products, standard infrastructural design and interior decor, detailed techniques in running and promoting the business, training of employees and on-going help in promoting and improving the product The advantages of franchising from the franchisee’s point of view are myriad. First, the franchisee can benefit from the widely recognized Continue reading
Challenges of International Financial Management
Financial management of a company is a complex process, involving its own methods and procedures. It is made even more complex because of the globalization taking place, which is making the world’s financial and commodity markets more and more integrated. The integration is both across countries as well as markets. Not only the markets, but even the companies are becoming international in their operations and approach. Managers of international firms have to understand the environment in which they function if they are to achieve their objective in maximizing the value of their firms, or the rate of return from foreign operations. The environment consists of: The international financial system, which consists of two segments: the official part represented by the accepted code of behavior by governments comprising the international monetary system, and the private part, which consists of international banks and other multinational financial institutions that participate in the international Continue reading
Decentralized Decision Making in Multinational Enterprises
Where does the decision making power in Multinational Enterprises (MNEs) rests? Is the decision power vested with the parent’s headquarters or with the subsidiary? Decisions made at the foreign-subsidiary level may be considered decentralized, while those made above the foreign-subsidiary level, that is the parent level, are considered centralized. The location of decision making power may vary within the same company over time as well as by product, function, and country. In addition, actual decision making is seldom as one-sided as it may appear. A manager who has decision-making authority may consult other managers before exercising that authority. Centralized decision making is a global strategy while decentralized decision making is a multi-domestic strategy. A combination of the two is called a transnational strategy. The reason for choosing one over the other is partly a function of companies’ attitudes. For example, an ethnocentric attitude would influence a company to develop competencies, Continue reading
Competitiveness for Globalization – Country and Company Competitiveness
Strategic management of a global company requires an understanding and analysis of international business environment in order to assess opportunities and threats. The management has to formulate alternative strategies to exploit the opportunities provided by the environment by using company strengths. Many MNCs having the strength of technology and the environment of developing countries provide the opportunities of high quality and low priced products. Therefore, it is necessary to study the competitiveness of global business. The comparative cost theory concludes that the countries can specialize in producing certain products in which they have the competitive advantage of producing goods at low cost. It means that the customers in all the countries can have the goods at low price. Comparative cost theory also indicates that the countries which have the advantage of raw materials, labor, natural resources in producing particular goods can produce the goods at low cost with good quality. Continue reading