Ethical issue in Starbucks Starbucks, an American coffeehouse chain based in Seattle, Washington, is the world largest coffee retailer chain in the world having more than 21,000 stores in 65 countries (Starbucks website, n.d.). In United States, Starbucks owned 12,973 stores (Starbucks Company Statistics, 2014), which is more than 73% of the market shares of the United States coffeehouse industry. Hence, Starbucks possesses monopoly power in the specialty coffee market. Enjoying monopoly position, Starbucks plan to completely dominate the market by eliminating competition. Starbucks engages in a range of anti-competitive activities. Starbucks anti-competitive business practices include making lease payments higher than market value in exchange …show more content…
It will generate a significant social cost and thus is seen as illegal. Therefore, government regulator needs to examine closely and review it competition law to prevent any of such anti-competitive practices from occurring. Ethical Principles The actions of Starbucks are deemed to be unethical or ethical from the utilitarian benefits and self-interest theories. Utilitarian Benefits According to the utilitarian benefits theory, Starbucks’ actions are unethical as the actions of Starbucks result in greater harm than good for the society. Small coffee retailers are providing more to the people of the towns that they are located than Starbucks does as those small local coffee retailers offer reasonable priced for their coffee. People would prefer to have a reasonable priced coffee to Starbucks’ overpriced coffee. Even though, there might be some people who would be happy to have Starbucks instead of their small coffee retailer but the majority of the people still enjoy their local coffee (Katie , 2013). Small coffee retailers provide more happiness to the local people than Starbucks …show more content…
In order to drive other coffee retailers out of business, Starbucks will resort to buying over the coffee retailers and flooding the neighborhoods with new Starbucks outlets to a degree that the sales from existing Starbucks outlets were cannibalized (Katie , 2013). This action does not serve any interest to Starbucks. However, Starbucks can be considered to be ethical as the actions that they have adopted, are to increase market share, to be the leading leader in the industry. This helps Starbucks to stand firm in the industry. It is the long-term self-interest of Starbucks. Conclusion In conclusion, Starbucks only concern and goal is to generate profit. Thus, to achieve their goal, Starbucks is selfishly putting the small coffee retailers out of business to gain more profit and disregarding the effect that it could cause to the various stakeholders. These actions are not the right thing to be done from a business viewpoint. Therefore, Starbucks is seemed as extremely unethical and
Click here to unlock this and over one million essaysShow More
This situation creates an identity of the company as being fake and acting against the community. The company is going against the theory of Utilitarianism which is concerned with making decisions that promote human welfare. The Company’s bad consequences were more than good consequences making it an unethical decision which resulted in a fine of $7 million. The company was charging more price for the specific range which contained the same active ingredient breaching the theory of justice and fairness which supports the idea of fairest overall distribution of
Most of the Coffee Shops are the same thing by selling coffee, but there is a little bit of differences in all of them, and mostly in the decoration of the coffee shop. We have the most two popular coffee shops and they are Starbucks and Tim Hortons. The similarity between of them are, both sale coffee, hot and cold cappuccinos, iced teas and hot teas, hot and cold drinks, soft drinks, bagels, cookies, and baked good. Also they have a lot of locations in the United States. The differences between of them are, the Starbucks is more expensive than Tim Hortons and Starbucks is a huge company.
In "Getting Coffee is Hard to Do" by Stanley Fish (August 5, 2007), the author asserts that by shifting the burden of labor to the consumer, businesses are frustrating their customers. Fish supports this thesis by describing the frustrating process of getting coffee in today's coffee shops. The purpose of the essay is to ridicule the "coordination problems" faced by customers in coffee shops in order to get the reader to appreciate the frustrations consumers experience. Fish's intended audience is fellow coffee consumers, and he provokes thought in these consumers about how the practices of businesses are changing; another intended audience is coffee shop owners and employees, whom he encourages to have empathy toward the customer and do more
Starbucks and Tim Hortons Nowadays, the number of coffee drinkers are increasing. As the demand for coffee grows, the number of coffee chains is also increasing. Of that, the representative coffee chains in North America are Starbucks and Tim Hortons. Starbucks has the highest brand awareness amongst the world coffee chains. It started in Seattle, the United State in 1971.
They are focused on their suppliers such as coffee beans farmers and customers. Starbucks through the fair transition to keeping coffee beans market position and provide high-quality coffee as well as a comfortable place to customers enjoy Starbucks’ coffee and food. Also, Starbucks has involved a lot of community activities, so they are created a long-term relationship with the community. Moreover, Starbucks also focus on environment development. Such as cycling activities and water Conservation.
Walmart Case Study This case study involves America’s largest and most recognizable retail chains. Walmart steadily grew from its founding in 1962 as a small Arkansas based retail store into the multi-national giant that it is today. One of the issues that Walmart’s unprecedented growth has raised is how it can maintain the ethical standards and principles held by its founder, Sam Walton, when it has grown past its humble roots and continues to grow in an ever more competitive and hectic world.
• “Side Deals or Side Letters” : Every piece of business dealt by Apple must be in clear written form and should not be altered by means of mouth or writing after the day it goes into effect. Then aside from these specific laws, Apple’s Business Conduct also has sections detailing basic borders for legal behavior, like a section prohibiting corruption practices like “Money Laundering”. “Governments as Customers” In addition to their dedication to the customers as a stakeholder, Apple’s Business Conduct has an entire section dedicated to clarifying the ways in which business should be conducted between Apple and the governments and how to stay ethical in such transactions. • “Governments as Customers”: Before bidding for government business,
Finally, Starbucks successfully employed the “expansive external relationships” (CanÌas, Sondak 2014). One of the main ways Starbucks embraces diverse relationships is by working with underserved coffee farmers. Starbucks ensures all the farmers they work with are working in healthy conditions and are paid a fair wage. They have helped to improve the lives of thousands of farmers. Besides this, Starbucks supports several communities/organizations such as the LGBTQ
Political • Growing demand and supply shortage has increased world coffee prices. • Favorable advantage to accessing raw material through supplier relationships. • Fair-trade practices include its Coffee and Farmers Equity (C.A.F.E.) program among other fair trade policies and agreements. • Starbucks adheres to local, national and international government laws and policies and tightly control labour practices, avoiding scrutiny and negative imagery from being a large corporation. Economic • High industry sensitivity to the macroeconomic factors affecting disposable income, a main industry driver.
Part A. The primary externals influences to Starbucks PESTEL describes a framework of macro-environmental factors used in the environmental factors component of strategic management. PESTEL analysis includes some several factors: political, economic, social, technological, legal and environmental factors. This report analyzes the factors which have main impact on Starbucks. 1.
Starbucks is known for its delicious fresh brewed coffee and its dedication to employees, customers and communities. Starbucks is one of the largest companies in USA and it is based in Washington. The company keeps its customers on their toes with new products and loyal customer deals. Every year the company is introducing something new and interesting. This strategy and approach keeps the company on the top and customers coming back for more.
Fast food companies have demolished competition throughout the last 30 years in the restaurant industry. The practices used to eliminate competition such as using unhealthy food to make a profit have been reported unethical by Americans, but it tends to be desired by the American society. According to the American Franchise Corporation, certified by TrustArc, fast food companies generate $570 billion annually in the United States ("Fast Food Industry Analysis"). These statistics continue to rise as more and more fast food companies become ubiquitous. As a result, fast food companies get richer, while people contract life-altering health effects.
Introduction The key ethical issues that were presented in this case study were quality control, lack of customer care, responsiveness, and harming the customer. The Johnson and Johnson case may have been seen as a turning point due to many things the company did right. However, there were many ethical issues in this case which will be explored more throughout this paper.
Starbucks was founded in 1971. They have 18.850 stores in more than 40 countries which makes them the first coffee specialty retailer in the world. They operate most of their stores having only 50 franchises (as of 2017) as to keep strict control over quality. The success of Starbucks is based on their unique value proposition. They offer customer the finest coffee produced by themselves, with strong commitment on creating a global social impact, served in stores that promote a welcoming and warmth sphere where everyone can feel “like home”.