Article Review
Business face a number of potential legal issues that affect the way they operate. Businesses potential legal issues include intellectual property, privacy, ethics, and security. Legal disputes always cost money to resolve. The money needed to resolve a legal dispute puts strain on businesses. Some legal disputes can drag on for years, for example in the case of Kraft vs. Starbucks a case that began in November 2010 and was finally resolved in November 2013.
Article Synopsis
In 1998 Kraft and Starbucks made a deal. Kraft gained the sole rights to sell Starbucks bagged coffee in retail outlets. “Kraft first began marketing Starbucks roast and ground coffee in 1998 and succeeded in building a highly profitable CPG business, from a base of approximately $50 million to approximately $500 million in 2010” (PR Newswire, 2013, P. 1). In November 2010 Starbucks informed Kraft they intended to break their contract. Starbucks would no longer allow Kraft exclusively to market and produce Starbucks coffee. Kraft initially tried to place on injunction on Starbucks to prevent the breach of contract but the court ruled in favor of Starbucks. In November 2013 in binding arbitration Mondelez International, which spun off from Kraft in 2012, was awarded 2.7 million in damages.
Legal Issue
The conflict between Kraft and Starbucks is a legal issue. Starbucks and Kraft entered into a legal and valid contract. Kraft made an offer to Starbucks to be exclusively market, produce, and sell bagged Starbucks coffee, and Starbucks accepted the agreement. Starbucks exhibited nonperformance to the agreement by not following the terms of the agreement. Originally Kraft wanted to place an injunction to stop Starbucks from the breach of contract unt...
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...ed the legal dispute by honoring the contract with Kraft. The breach of contract is illegal and unethical. Starbucks made the decisions that the legal consequences of breaching their contract with Kraft was worth it. Each business must weigh the cost of every option and decide which direction to take. Most companies avoid legal disputes to reduce operating costs.
Works Cited
Leo, S. (2013). Five common legal issues faced by businesses. Retrieved from http://www.businessdictionary.com/article/538/common-legal-issues-faced-by-businesses/
PR Newswire. (2013, November 12). Arbitration ends coffee contract dispute. Retrieved from http://search.proquest.com/docview/1450046726?accountid=458
The New York Times. (2011, February 25). In dispute against Starbucks, court dismisses Kraft’s claim. Retrieved from http://www.nytimes.com/2011/02/26/business/26starbucks.html?_r=0
Geoff Herzog is the product manager for coffee development at Kraft Foods Canada. After reviewing successful results of single-serve coffee pod systems, he wondered whether it would be successful in other areas. It was July 6, 2004, and Herzog had just learned that Kraft Foods North America was planning an aggressive launch of coffee pods in the United States. He then had only a month to decide whether or not the company should proceed with a simultaneous launch in Canada, or await the U.S. results.
1) Starbucks’ legal case strategy legal maneuvering cannot be considered as ethical. The company tried to use its power in order to weaken the small company that already was much weaker. It is obvious that Black Bear had much less finances than the Starbucks did, and that is why legal procedures were exhausting the small company financially. The maneuvering, undertaken by Starbucks, had the aim to destroy the Black Bear Company, and thus to reach its target in the legal proceedings.
One of the major corporations today that is trying to control a large portion of the supply of coffee is Starbuck. Starbucks Corporation is the leading retailer, roaster and brand of specialty coffee in the world. Starbucks purchases, roasts, and sells whole bean and rich-brewed coffees, espresso beverages, cold blended beverages, an assortment of food items, coffee-related
There are many topics that arise throughout the case with Starbucks Corporation. Starbucks Coffee is located worldwide and there are many different ways to look at this situation. The company offers a unique range of coffee, lattes, espressos, and café style drinks. The company intended to reach a specific target audience, but has ended up in many different markets and has been growing rapidly. Starbucks has greatly used the “youth appeal” strategy to gain entrance into new markets. However, such enthusiasm cannot be counted on indefinitely; other strategies are always in the works. Over time Starbucks has been able to acquire a solid brand reputation and has a world renowned company logo.
Moving on, Starbucks Corporation proves that consumers can trust them because one of the main goals of the company is ethical service, their goal is to serve the customers with less than three minutes. The author said, “Starbucks’ “Just Say Yes” policy empowered partners to provide the best service possible, even if it required going beyond company rules” (Moon). Having this policy shows that the company tries to make customers satisfied. Also, it is ethical to have this policy because service is a key that makes the company successful. For example, if the customer spilled a drink, he/she can ask for another one. Additionally, if a customer does not have cash or credit and wants to pay by check, he/she will get a simple drink for
Business was good, but it was not without its problems. There was the political upheaval in the Middle East, followed by further tension after then CEO Howard Schultz commented on growing anti-Semitism in the region. Their integrity came under fire when certain Non-Governmental Organizations (NGO's) accused them of purchasing coffee beans under questionable social and economic conditions. These situations, together with difficult economic times globally, meant that Starbucks was likely going to take a hit somewhere. Eventually, they shut down their Israeli operations altogether.
Bruss (2001) argues that the company hopes as well to make new investments in new coffee types. Starbucks has recently developed a new type of coffee called green-coffee. These strategies are created with the objective of support Starbucks’ commitment to buy coffee that has grown and processed by suppliers. They meet certain conditions of social, economic and quality standards. In addition to that, the company is paying additional premiums to those vendors who meet the specific requirements that the company wants.
Also, this paper will encompass a scenario when it would not make sense for Starbucks to diversify or expand into a foreign market and how the company will create a business environment conducive to ethical behavior will be assessed.
Kluyver (2010) mentions that Starbucks maintains sole decisions making power over “brand, product line advertising and corporate communication”. Although though the choice o...
In 2002, unexpected findings of a market research showed problems regarding customer satisfaction and brand meaning for Starbucks customers. The situation was unacceptable for a company whose overall objective is to build the most recognized and respected brand in the world. Starbucks was supposed to represent a new and different place where any man would relax and enjoy quality time, alone or with others. But the market research showed that in the mind of the consumers, Starbucks brand is viewed as corporative, trying to expand endlessly and looking to make lots of money. This huge gap between customers' perception and Starbucks' values and goals called for immediate action.
Nithin Geereddy. 2013. Strategic Analysis of Starbucks Corporation. [ONLINE] Available at:http://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf. [Accessed 18 April 14]
The threats facing Starbucks include trademark infringements and increased competition from local cafes and specialization of other coffeehouse chains, and the saturation of the markets in developed economies, and supply disruptions. Furthermore, the increasing prices of its inputs such as dairy products and coffee beans pose a threat
Starbucks case study: background 1971-87; private company 1987-92. (1997). McGraw-Hill Companies. Retrieved March 20, 2007, from the McGraw-Hill Companies website: http://www.mhhe.com/business/management/thompson/11e/case/starbucks-1.html
When I saw this discussion, I couldn’t help but think of Starbucks and the impact they’ve made throughout their 45 years of establishment. I worked with them for about 7 years and saw how unique they were from your everyday coffee and latte spots. A retail company with thousands of coffee shops in the US as well as in other countries, this particular retailer has been able to catch the eyes of all ages as well as locations throughout the world. For example, today college students utilize Starbucks locations to study rather than go to a nearby library. Starbucks is also known for its best coffee and espresso drinks (Latte or Frappuccino) and with one of its delicious espresso 's any student or just a person stopping in to enjoy its lounge area where there is free Wi-Fi is awesome! Starbucks lifecycle has made a 360 turn around and been revamped twice to accommodated the growing market. Customizing their brand to fit more in with everything and not just one thing. By doing this they’ve created multiple product lifecycles within their own lifecycle as a corporate company.
Starbucks is a worldwide company, known for is delicious brews of coffee and seasonal varieties of tasty drinks for any occasion. Starbucks opened with two main goals, sharing great coffee with friends and to help make the world a little better. It originated in the historic Pike Place Market of Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker. The creation of Starbucks’ name came from the seafaring tradition of early coffee traders and the romance evoked from Moby Dick. At the time, this individual shop specialized in the towering quality of coffee over competitors and other brewing services enabling its growth to becoming the largest coffee chain in Washington with numerous locations. In the early 1980s, the current CEO Schultz saw an opportunity for growth in the niche market. After a trip to Italy he brought back the idea of a café style environment of leisure and social meetings to the United States we now see in Starbucks locations today. Schultz ultimately left Starbucks to open his own coffee shop, Il Giornale which turned out to be a tremendous success. Fast forward a year later, Schultz got wind that Starbucks was going to sell all their components of Starbucks including their stores and factories, he immediately acquired the funds to buy Starbucks and linked both operations. Within five years he was able to open more than 125 stores starting in New England, Boston, Chicago, and gradually entered California. He wanted Starbucks to be a franchise system based on the mission of telling the truth and emphasize the quality,