Case Study; “The Commoditization of Starbucks,” located in the back of the textbook. Go to Yahoo...

Question

Case Study; “The Commoditization of Starbucks,” located in the back of the textbook. Go to Yahoo Finance’s Website, located at http://finance.yahoo.com/. Research Starbucks to obtain the financial information.
Write a 4-6 page paper on the following:

Explain the reasoning for Starbucks’ need for a change in strategic direction in response to McDonald’s and then explain the process of the changes.

In 2008, Starbucks replaced its CEO and realigned its leadership structure. Review the benefits of making this organizational change and why it was necessary.

Assess the risks of making such a structural change in an established company like Starbucks.

Compare the financial data in the case study to the data on Yahoo Finance’s Website. Conclude whether or not the change in organizational structure has returned Starbucks to its former status.

Use 4 quality resources for this assignment.

Your assignment must:

Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.

Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.

The specific course learning outcomes associated with this assignment are:

Develop organizational structures to fit a variety of operating environments and implement business strategies.

Analyze interorganizational relationships and management resources in order to successfully implement strategies.

Use technology and information resources to research issues in strategic planning in hospitality and tourism.

Write clearly and concisely about strategic planning in hospitality and tourism using proper writing mechanics.

Points: 150	Case Study 3: The Commoditization of Starbucks
Criteria	Unacceptable Below 70% F	Fair 70-79% C	Proficient 80-89% B	Exemplary 90-100% A
1. Explain the reasoning for Starbucks’ need for a change in strategic direction in response to McDonald’s and then explain the process of the changes. Weight: 20%	Did not submit or incompletely explained t he reasoning for Starbucks’ need for a change in strategic direction in response to McDonald’s; did not submit or incompletely explained the process of the changes.	Partially explained the reasoning for Starbucks’ need for a change in strategic direction in response to McDonald’s; partially explained the process of the changes.	Satisfactorily explained t he reasoning for Starbucks’ need for a change in strategic direction in response to McDonald’s; satisfactorily explained the process of the changes.	Thoroughly explained t he reasoning for Starbucks’ need for a change in strategic direction in response to McDonald’s; thoroughly explained the process of the changes.
2. Review the benefits of making this organizational change and why it was necessary. Weight: 20%	Did not submit or incompletely reviewed the benefits of making this organizational change; did not submit or incompletely stated why it was necessary.	Partially reviewed the benefits of making this organizational change; partially stated why it was necessary.	Satisfactorily reviewed the benefits of making this organizational change; satisfactorily stated why it was necessary.	Thoroughly reviewed the benefits of making this organizational change; thoroughly stated why it was necessary.
3. Assess the risks of making such a structural change in an established company like Starbucks. Weight: 25%	Did not submit or incompletely assessed the risks of making such a structural change in an established company like Starbucks.	Partially assessed the risks of making such a structural change in an established company like Starbucks.	Satisfactorily assessed the risks of making such a structural change in an established company like Starbucks.	Thoroughly assessed the risks of making such a structural change in an established company like Starbucks.
4. Compare the financial data in the case study to the data on Yahoo Finance’s Website. Conclude whether or not the change in organizational structure has returned Starbucks to its former status. Weight: 20%	Did not submit or incompletely compared the financial data in the case study to the data on Yahoo Finance’s Website. Did not submit or incompletely concluded whether or not the change in organizational structure has returned Starbucks to its former status.	Partially compared the financial data in the case study to the data on Yahoo Finance’s Website. Partially concluded whether or not the change in organizational structure has returned Starbucks to its former status.	Satisfactorily compared the financial data in the case study to the data on Yahoo Finance’s Website. Satisfactorily concluded whether or not the change in organizational structure has returned Starbucks to its former status.	Thoroughly compared the financial data in the case study to the data on Yahoo Finance’s Website. Thoroughly concluded whether or not the change in organizational structure has returned Starbucks to its former status.
5. 4 References Weight: 5%	No references provided.	Does not meet the required number of references; some or all references poor quality choices.	Meets number of required references; all references high quality choices.	Exceeds number of required references; all references high quality choices.
6. Clarity and writing mechanics Weight: 10%	More than 6 errors present	5-6 errors present	3-4 errors present	0-2 errors present

Robert · Accepted Answer

1. Explain the reasoning for Starbucks’ need for a change in strategic direction in response to McDonald’s and 
then explain the process of the changes. 
Solutions:  Starbucks Corporation is engaged in offering its own brand speciality coffees. The major business for the 
company is to generate revenue by offering its own brand speciality coffee. The company has been successful in operating 
retail locations across the globe. The company also sales through its sales group, supermarkets and World Wide Web. The 
company also sales a line of ice creams along with bottled coffee. As we understand that Starbucks has only dealings in 
Coffee, if company’s like McDonald is also offering Coffee to its valued customers, then it becomes extremely difficult 
for Starbuck’s to improve business. Following are the reasons for Starbucks’ need for a change in strategic direction in 
response to McDonald’s: 
(i) If Starbucks does not take bring changes in its strategy, eventually it will lose its valued customers. 
(ii) As we know that, the core activity for McDonald is not dealing in Coffee and if it serves Coffee along with its 
regular line of business, then there are chances that, Starbucks will lose it business and slowly it will McDonald 
who will be getting strong in this line of business.  
(iii) If Starbucks does not take any immediate initiatives towards McDonald’s coffee serving, then it will be extremely 
difficult for Starbucks to retain as well attract more customers.  
Starbucks should continue its existing business and along with that it should also go diversifying its own business by 
adding some of the food products offered by McDonald. Once this kind of initiatives is taken, this gives an impression to 
the customers and customer retention becomes very easy. Let Starbucks offer some of the services rendered by McDonald 
and then offering this to its customers, it will bring help the company to position in the market against McDonald. 
2. In 2008, Starbucks replaced its CEO and realigned its leadership structure. Review the benefits of making this 
organizational change and why it was necessary. 
Solutions: On 7
th
 January 2008, the Board of directors of Starbucks Coffee Company announced many initiatives aimed at 
driving shareholder value and the board replaced the leaving CEO Mr. Jim Donald with Chairman Mr.Howard Schultz 
returning as CEO. There were lots of improvements seen in the company’s performance subsequently which are as follows: 
(1) Improvement in U.S. business operations with a view to refocus on the unique customer experience with 
introduction of new products and designing of stores.  
(2) Underperforming stores located in U.S were closed and slowing pace of opening and closing of branches did 
help the company to smoothen its activity in a productive way. 
(3) The realignment of Starbucks helped igniting the emotional attachment and the customer centric approach 
leaded to the betterment of company. 
(4) It was always helpful for the company to restore the connection which customers post the strategies adopted 
because of the realignment. 
(5) Reallocation of resources to key value drivers, expansion acceleration and increase profitability in the 
international market by deploying some portion of capital in the international market which were earmarked to 
the store growth in U.S has been very successful for Starbucks.  
3.

Case Study; “The Commoditization of Starbucks,” located in the back of the textbook. Go to Yahoo Finance’s Website, located at http://finance.yahoo.com/. Research Starbucks to obtain the financial...

Answer To: Case Study; “The Commoditization of Starbucks,” located in the back of the textbook. Go to Yahoo...

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