Starbucks Singapore Beyond Making Profits Marketing Essay

Starbucks is a reputable name for premium java and drinks. This study shows how their direction are carefully established through franchising, sing corporate societal duty towards the appropriate stakeholders, constructs of ethical sourcing and just trade patterns and using it to their entities.

1a. I )

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What is a franchise? It is a right granted to an person or group utilizing the company ‘s name and repute to market its goods or services at a certain portion of district or location. Some illustrations of popular franchises include McDonalds, Subway, 7-Eleven Inc. , Pizza Hut Inc. and Dunkin ‘ Donuts.

It is normally mistaken that merely fast-food eating houses are franchises, but in fact many other concerns like hotels, automotive, wellness & A ; fittingness, fiscal services and even pet-grooming services are besides franchises.

So how does a franchise work? A franchisee who wishes to purchase into a specific company has to follow the regulations and guidelines set by the franchisor. Normally the franchisee has to pay ongoing royalty fees, every bit good as an upfront erstwhile fee to the franchisor. Footings and conditions are stated in the franchise understanding to adhere the franchisor and franchisee together. Some of these footings are: Contract Explanation- lineations the type of relationship the franchisee is come ining into. The Operations Manual- guidelines set by the franchisor which the franchisee has to stay by. The Proprietary Statement- outlines how the franchise name and stigmatization is to be used, together with selling and advertizements processs. It besides states how much the franchisee has to lend in national advertisement attempts. The Ongoing Site Maintenance- types and clip of care point and ascents to be made consequently to the franchisee ‘s location.

Franchising and licensing are rather similar. Both offer the same type of foreign market manner of entry. To purchase a licence or a franchise is an agreement to obtain Intellectual Property rights to enable the concern to sell goods/services of the parent company. Equally near as they may sound, there are some cardinal differences between the two. In franchising, the franchisee and franchisor are closely linked together and are most frequently an extension of the parent company. They will have ongoing and selling support. They may besides hold territorial advantages in control to the merchandises or service offered. The relationship between a licensee and licensor are non as closely knitted, due to the fact that the licensor does non keep the rights of a parent company ‘s hallmark or logo every bit good as stigmatization is concerned. They besides do non acquire sole territorial rights or receive the drawn-out support and preparation from the parent company.

1a. two )

Harmonizing to, the universe ‘s top reigning rival of franchise is Hampton Hotels. How Hampton Hotels made it to the top was bring forthing user friendly merchandises in usage in their hotels. In 2004, Hampton Hotels designed a wireless dismay clock which was so simple, yet convenient to utilize. It sparked a ‘trademark ‘ that made the hit for Hampton Hotels among travelers. The company besides added ascents to their services like free breakfast, free high velocity cyberspace in every room and elusive touches like the curving drape rod in the shower. These attempts super jumped Hampton into the hot topographic point as the value leader for mid-priced hotels and set it in a strategic place when the recession hit in 2008. Hampton Hotels now has 1810 locations worldwide. Part of their success was due to the fact that Hampton Hotels were non seeking to trail the high-end hotels but instead to turn to clients ‘ demands straight. Companies from other industries such as Dunkin ‘ Donuts, Kumon Math HYPERLINK “ hypertext transfer protocol: // ” & amp ; HYPERLINK “ hypertext transfer protocol: // ” Reading Centers and GNC Franchising have besides broken into the blossoming Singapore market. All of them use franchise to spread out their company ‘s repute and stigmatization overseas. ( ctrl+click hyperlink to entree URLs )


When Starbucks Corporation bought back Bonvests ‘ Starbucks ‘ franchise in Singapore, it took over as a wholly-owned subordinate. In my sentiment, this is in fact more hazardous than holding a franchise. Firms come ining the international market via a wholly-owned subordinate have to bear all costs and hazards associated with the venture. However the parent company will hold full control over the concern to prosecute planetary standardisation or multinational schemes. Which is hazardous in this instance, as Bonvests Holdings Ltd had non been able to gain from the Starbucks franchise.


There are three sorts of corporate societal duty positions, strategic corporate societal duty position, societal duty position and efficiency position. Starbucks CSR activities autumn under the class of societal duty position. Social duty position defines as companies that have duties and duties to the community as a whole and non merely provide to their stockholders. A house concerns non merely the stockholders but besides the employees, clients, providers, communities, moneymans, and of class the society. They are being managerially responsible if their actions do non harm any of the stockholders or stakeholders.

First, Starbucks is assisting the society by recycling in shops, utilizing ‘greener cups ‘ , composting, and by conserving energy and H2O. In 2005, they received the National Recycling Coalition Recycling Works Award. Customers are encouraged to convey their ain reclaimable cups and are given a 10 per centum price reduction off if they do. They conserve H2O by taking all “ dipper Wellss ” and replacing them with manual spigots. This helps them devour 15 per centum less H2O and over a long-run period, that would be a big sum of H2O being conserved. They are taking to devour 25 per centum less H2O by 2015. They have besides installed a new H2O infiltration system, which helps to cut down H2O wastage by 50 per centum.

Second, Starbucks help their clients by guaranting their wellness and well-being is taken attention of. They adopted a national menu-labeling criterion to help clients in doing more informed picks. Furthermore, they provide healthier nutrient and drinks with low Calories and Na. Many people are really wellness witting and 1000000s visit the nutritionary web page on their web site compared to any other pages. It is crucially of import that Starbucks take their clients ‘ wellness earnestly and seek their best to supply an gratifying yet healthy drink.

Third, Starbucks provide wellness coverage to eligible parttime and full-time employees, as they have been a firm supporterA of meaningful health care reform. As employees, you are good taken attention of and you are besides given fillips at the terminal of every twelvemonth.

Last, they besides have a diverse sum of providers and it keeps turning each twelvemonth. Starbucks have besides joined partnership with big companies like Apple and MSNBC. It is ever better to hold a huge sum of providers and to maintain in good footings with them. By holding diverse providers, it helps them to guarantee the quality of the services and merchandises while driving value and economic development in the society that they serve.


The word ethical sourcing means guaranting merchandises being purchased are created in a safe environment implemented by workers who are paid wages to work legal hours and are treated good. It besides represents the provider in sing the environment during the industry and production of the merchandises. Simultaneously, the significance of just trade is supplying better monetary values ( which are ne’er higher than market pricing ) for trade goods. For those who have been traditionally disadvantaged by conventional trade pattern, do anticipate an alternate market system, as it is an just trade pattern. A societal moral force concentrated on making a fairer market for manufacturers in developing states, just dainty purposes to economic, environment conditions and address societal duty.

As what Starbucks said, “ Our success as a company has ever been linked to the success of 1000s of husbandmans and providers who grow and produce our merchandises. ” Starbucks had created a set of guidelines that helped them to do certain that they are responsibly adult and ethically-trade java with the aid from Conservation International. They ever guarantee that the java qualities meet their criterions. Meanwhile, they besides take note that the working environment is safe and just, yet protecting the workers ‘ right. Child labor and forced labor is out. Starbucks has established Farmer Support Centre in Costa Rica and Rwanda to supply local husbandmans with the resources and expertness that help lower the cost of production, cut down fungus infections, better java quality and increase the output of premium javas. Fair trade java companies authorize little size husbandmans that are organized in democratically-run co-ops. It is to establish the concern accomplishment to vie in the planetary market. In twelvemonth 2000, Starbucks began buying Fair trade java. By bring forthing for economic and societal investing for the community, Starbucks paid $ 16 million in just trade premium. Over $ 10 million was besides paid for the just trade licencing enterprises that support the production service, international enfranchisement system and consciousness edifice around the net incomes of just trade. Starbucks have set a end to put U.S $ 20 million to a programme by twelvemonth 2015. There were 45,000 husbandmans in seven states that profited from their plants with the third-party organisation ROOT capital, Verde Ventures, and Calvert Foundation. So far, they have provided $ 14 million and are taking to work harder towards reassigning the remainder.


Supporting the thought that corporate societal duty ; CSR does do concern sense to most companies can be proven by successful illustrations of companies such as Sony, Marina Bay Sands Singapore, Canon, Yakult, Singapore Airlines, ST Engineering. These illustrations supra are the leaders of the market in their field. Their success is contributed by holding a strong corporate societal duty, authorising their concern.

Singapore Airlines supported ‘National Events, Anti-Corruption/Anti-Bribery Policy, The Humanistic disciplines and Heritage, Sports, Corporate Governance, Education, Community Welfare ‘ publically as their CSR. These six factors above are duties based on the nature and extent required by the constituencies of Singapore Airlines leting them to endeavor for excellence towards being a holistic air hose compared to their rivals. Numerous sum of accomplishment had been attained by Singapore Airlines including the award of being the ‘Airline of the twelvemonth ‘ 3 times in 10 old ages.

The different advantages CSR brings to most companies are similar, the six factors listed before by Singapore Airlines are illustrations on how CSR benefited Singapore Airlines, ’employees and future work force, concern chance, organizational leading, trade name value and repute, organizational growing and hazard direction ‘ .

Corporate societal duty is an built-in procedure of concern sense to most companies. By back uping the nucleus targeted countries intensively, companies can maximize their concern net incomes and chances competitively, while run intoing the outlooks to their constituencies. Research based on consequences of successful companies proved that CSR and growing in net incomes go really good together. Singapore air hoses attained their success with appropriate CSR as a stepping rock, accomplishing the name of being a prestigiousness air hose.

Similarly, corporate societal duty may complement or stain companies through public relation. If CSR is successfully implemented, the public relation markets the procedure of companies present and future programs towards the several countries. The ideal illustration would be the Singapore air hoses that were explained earlier. Unfortunately, if CSR is unsuccessfully implemented, public relation may make a negative impact towards the company. An illustration would be a coffin nail company which we would be farther measuring on in the paragraphs in front.

We can obviously turn out how CSR does do concern sense to most suited companies if it is executed suitably.

By back uping the thought that corporate societal duty does non do concern sense to most companies can besides be defined by ‘Corporate societal irresponsibleness ‘ ; CSI. They seek a different attack towards CSR by concentrating on the fiscal pursuit, side tracking the true intent and extenuating the public relation to countervail CSI. These companies may look successful, but they induce CSI due to several factors such as being unethical. Their intent to make a conceptual image to the audience that hides themselves to be irresponsible, by a relationship on how much more ‘good ‘ they will make after the ‘harms ‘ that they caused. They portray themselves to be socially responsible and concerned to their societal moralss to countervail the actions that may be regarded as socially irresponsible.

Examples. ‘Shell, Victoria ‘s secret, Forever 21, Aeropostale, Toy’R ‘ Us, Urban Outfitters, Coca-cola and Philip Morris ‘ .

Philip Morris is one of the universe ‘s largest coffin nail makers. They have many international companies globally but a big sum of clients in the universe are incognizant of its unethical concern schemes. They are known as the top 10 unethical company for being irregular in their selling schemes. The company hire minor misss to publish samples of Marlboro coffin nail at concerts and nines. Ads on how tobacco merchandises are modelled by immature grownups in cowpuncher suits illuming up a coffin nail. Their purpose to aim immature consumers on their merchandise by bring forthing a more ‘masculine entreaty ‘ with the carried slogan ‘delivers the goods on spirit ‘ had been successful, but neglecting to warrant the ethical aforementioned negative injuries of baccy to the organic structure. This had clearly violated the ethical norms.

If a company like Philip Morris were to follow corporate societal duty, and to market their merchandises as were to how Singapore Airlines did. They would be extenuating the truth on how coffin nails may be harmful towards wellness. The sensitiveness of the issue on how they are bring forthing a merchandise that causes decease to tierce of the universe ‘s population people prematurely would do a negative consequence to their selling, holding the disadvantages outweighing the advantages. This is why corporate societal duty would non do concern sense to administrations like them.

The statement if ‘corporate societal duties ‘ ; CSR, does or does non do concern sense depends on the type of concern companies are associated with. The merchandise or service offered to the market may be harmful to the environment, human organic structure, or societal moralss. Therefore, corporate societal duty is idealistically advantageable to suited companies, yet inevitable detrimental to others.

In decision, successful companies have a few cardinal direction guidelines in common. Franchising is one manner of spread outing the concern ‘ repute internationally ; nevertheless there may non be full control over them. There are besides hazards in taking up a wholly-owned subordinate in a foreign state. Most of these companies will maintain good footings with all their cardinal histories so as to construct up its repute. Besides, by integrating societal duty and moralss, concerns will be given to hold lesser jobs with societal dealingss and accomplish its concern end.



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