Starbucks Business Strategy

• These study notes cover various business cases and concepts.

Starbucks Strategy

• Recent struggles are due to expanding places with high demand and competition.
• The company aims to create a connection between baristas and customers.
• Improving customer experience involves streamlining operations.
• Options to address challenges include increasing efficiency (pros: efficient; cons: cost, employee morale), renegotiating supply contracts, closing underperforming stores, expanding digital/mobile offerings, addressing labor issues, diversifying products, global expansion, lowering prices, and increasing differentiation/exclusivity.
• Faces challenges in the global market with Luckin in China and boycotts.
• Pricing strategy focuses on selling an experience, not just coffee and bundling to create perceived value.
• Aims to appeal to price-conscious consumers.
• Challenges include long wait times, increase in mobile orders, and price sensitivity compared to competitors.

Google's Environment

• Inclusive work environment contributes to success by allowing employees to focus on work.
• Benefits of the work setting boosts creativity and attracts innovative talent.
• Drawbacks include potential loss of money leading to amenity cuts and reduced morale.
• In some cases unproductivity can occur from employees overusing amenities

Amazon's Operations

• Robots are implemented in warehouses (fulfillment centers).
• Creates unrealistic expectations for workers.
• Employees face pressure to meet packing rates, leading to a disposable workforce.
• Constant surveillance causes psychological stress.
• Opposed to unions, as seen with closures in Quebec.
• Offers tuition benefits, double minimum wage, and flexible sick leave.
• Boxes create environmental waste.
• Aggressive with third-party vendors.

The Future of Remote Work

• Remote workers may be passed over for promotions due to being "out of sight, out of mind."
• Fewer networking and "water cooler" opportunities.
• Nicholas Bloom notes challenges in mentoring, culture, and productivity with fully remote work, but it’s cost-effective. It enables hiring globally.
• Younger workers prefer in-person for development, while older workers prefer remote due to home responsibilities, causing generational disconnect.
• Arthur Brooks notes that remote work brings challenges to workplace relationships, leading to loneliness and lower recognition and productivity.
• Hybrid work is cost-effective and good for those with family responsibilities. It allows for hiring from areas with cheaper cost of living.
• Disadvantages for hybrid work include employee isolation and lack of mentorship.

Lisa LaFlamme Case

• The dismissal from CTV News due to gray hair raises ethical questions.
• Ethical arguments include appealing to younger audiences and promoting diversity with a visible minority hire.
• Unethical arguments include ageism and sexism, not based on merit.
• Hired by CityNews (Rogers), showcasing diversity.

Ashley Madison's Ethical Issues

• Overwhelmingly male base with fake women accounts.
• Business model extracts money for interactions with fake profiles.
• Ethical issue with fake accounts.
• The TTC rejected Ashley Madison's ad purchase due to ethical concerns.
• Stakeholders to consider include the general public, customers, employees, and investors.

Trump's Tariffs

• US companies and consumers pay for the tariff.
• 2018 tariffs on washing machines created 1,800 jobs and $82M in revenue but cost $1.5B annually.
• Each job cost the US economy $815K.
• Tariffs on aluminum aim to punish China and protect domestic production.
• Manufacturers face higher costs, leading to job losses and reduced competitiveness.
• Potential US benefits include more job opportunities and increased revenues.
• Negative impacts for Canada include the need to set up new industries, job losses, and decreased competitiveness.
• For the US, reciprocal tariffs increase costs for American households and manufacturers, potentially leading to a global trade war.

Target's Canadian Expansion

• Expanded due to perceived similarities between Canadian and US markets.
• Opportunity to buy Zeller's stores.
• Mistakes included not solidifying the supply chain, rushing expansion, underestimating competition (Walmart, Costco), weak management in distribution, high prices.
• Misunderstanding Canadian habits and preferences (fliers vs. coupons).
• Private labels didn’t resonate well.
• To succeed, Target could have appointed a president familiar with the Canadian market, focused on key hubs, and brought in desired brands.
• Walmart succeeded with precision, planning, and understanding the Canadian demographic.

Costco's Success

• Successful for membership-based model and sunk-cost fallacy, treasure-hunt strategy, and Costco-specific products (Kirkland brand).
• Keeps costs down by making most money on membership.
• Sells a limited selection of products.
• Pays employees well.
• Market strategy includes moving products around, free samples, and rotating stock.
• Threats include a declining middle class, lack of appeal to millennials, and online shopping.

Tesla SWOT Analysis

• Strengths: technology, self-driving, branding.
• Opportunities: Elon Musk in government, environmental concerns.
• Weaknesses: manufacturing, Elon Musk's decisions and reputation.
• Threats: Chinese electric vehicles, tariffs and regulations.

Eaton Center Case

• Illustrates strategy formulation: Identify, Analyze, Revise, Implement, Evaluate.
• Failed high-end retailer conversion due to a lack of alignment with existing brand image.

Cultural Diversity Examples

• China: avoid giving clocks (symbol of death) and signing with red pens.
• Italy: 17 is considered a bad number.
• India: avoid beef due to cultural reasons.
• Islamic culture: avoid giving wine.
• Nigerian culture: don't use the left hand to shake hands.
• Arab culture: avoid starting with numbers or business right away.
• Persian culture: stand up when someone enters the room.
• Brazil: side kiss twice.
• In some Middle Eastern cultures bidirectional kissing (man and woman) or shaking hands is not okay.
• Turkish culture: crossing legs when sitting can be considered disrespectful.
• West coast of Canada: Less common to shake hands and bring a gift to someone's house.
• Victoria, BC: Saying 'thank you' when getting off the bus.
• Europe and Japan: It is seen as rude to tip servers
• Filipino culture: weight gain can be seen as a compliment.
• German culture: punctuality is highly valued

Sonya K's Takeaways

• Bridging strategy-execution gap through skills, capabilities, and discipline.
• Importance of trust, conflict around ideas, commitment, accountability, and focus.
• Communication and meeting rhythm.
• Cultivating a culture of performance, celebrating wins, and constant communication.
• Advice includes continuously reading and networking.
• Organizations grow in predictable phases; leadership teams need to be fit-for-size; strategic context and readiness is important
• Strategies fail – learn from failures; and execute the strategy by building and tending to the team.
• Always be reading, networking and delivering results.

Capstone Case Study: Amazon

• Key success factors include a mass catalog, fast shipping, efficient distribution, and customer trust.
• Cheetah and gazelle concept involves targeting weak suppliers, making them dependent, then changing terms or squeezing them out.
• Strategic decisions include predicting future trends and creating a subscription service (Prime).
• Utilizes customer data, acquisitions, and creates own delivery service.
• Amazon Web Services (AWS) subsidizes other businesses.
• Prioritizes the customer and uses social media to its advantage.
• Big data analytics are used to predict customer demand and track employee efficiency.
• EU antitrust lawsuit addresses anticompetitive behavior.
• Amazon provides a huge marketplace and takes advantage of them.
• The most profitable sector is AWS.
• International sector is not profitable, but losses are decreasing.
• Should continue because it's trending positively, but there is also potential for anti-US sentiment