Intrapreneurship is also renowned as sustained regeneration (Covin & Miles, 1999) has ability to generate and sustain innovation for creativity. (Hitt, 2002) Moreover, intrapreneurship help corporations succeed under compound and highly demanding circumstances through leveraging corporation performance. (Amo & Kolvereid, 2005) When compared to corporate entrepreneurship, intrapreneurship is more of a bottom-up approach from self-initiated ingenuities to seed innovation by influencing organization. (Block and Macmillian, 1993) Meanwhile, intrapreneurs aid their organizations through their innovativeness by strengthening market place, and reshuffling strategies and structures. (Davis,1999; Antoncic & Hisrich,2001)
Creativity and innovation are
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First of all, new business venturing is most important dimension, as it can results in new business’ creation within organization by defining firm’s products and services and entering new markets. (Antoncic and Hisrich; 2001: pg498)
Secondly, product and service and process innovativeness means that including new product improvement and new manufacture rules that differentiates successful from failure organizations. (Auruskeviciene et al; 2006: pg341) Intrapreneurship is “innovative products or processes developed by creating an entrepreneurial culture within an already existing organization.” (Fry, 1993: pg 373, cited by Hill; 2003: pg19).
Next, self-renewal means organizations’ transformation through renewal of basic ideas as it has strategic and includes the redefinition of the business reorganization and innovation. (Antoncic and Hisrich; 2001: pg499)
Moreover, proactiveness is related to pioneering and it indicates the determination of company to comply opportunities, by not only respond to competitors’ move (Zahra and Garvis; 2000: pg
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Intrapreneurship provides an environment to support and sustain innovation over time.
According to Tim Cook, the CEO of AppleInc., diversity is critical to innovation and Apple address broad underlying challenges, offer new opportunities, and create a future generation of employees. Apple also committed in fostering and advancing inclusion and diversity, as for an instance Apple also spending on minority-owned businesses exceeded $650 million last year. (Apple official website, 2015)
According to Mintzberg, Sony are restructuring into an innovative organization as they utlize the quantity of support staff such as innovative workers and they are centralized with their decision-making. Moreover, Sony is attempting to re-establish their internal progression through innovation with brand new strategy. In Google Company, has created many significant products through this emphasis on innovation, including the Google search engine, Google Maps and the Google Chrome Web browser.
4.3 Change
Firms can grow internally or externally. However, not all firms have adequate resources and capabilities and thus look for partners. Studies showed that more than two-third companies depended on external growth (Hewitt 2005).
Pitts and Koufopoulos (2012) argue that resources and capability are highly important internal factors that should be taken into account by the organization in order to obtain the successful performance in the long run.
Howard Shultz and the senior management at Starbucks have to decide how to react to the opportunities that are being made available because of their rapid growth. The decision for a strategic growth plan has to be made in the near future. This will prove to be key for Starbucks reaching their long-term goal of becoming the most recognized and respected brand of coffee in the world.
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
This paper will provide an argument for diversification to be presented to board of directors for Starbucks. A strategy for diversification indicating the products and industries for diversification and how synergies may be gained will be provided. The identification and the discussion of the foreign market Starbucks should enter will be presented, along with the strategy it should use to enter the market. Challenges Starbucks may face in the foreign market will be discussed, as well how it might respond strategically to minimize the impact of these challenges.
Starbucks has identified high value opportunity in China, India, Brazil and Japan. The large expansion opportunity of twelve billion in China alone is enough to drive Starbucks to expand globally. The organization has planned to double its footprint to 3000 stores in China by 2019 ("Starbucks Details Five-Year Plan to Accelerate Profitable Growth", 2014). Starbucks realizes that eventually there will be a diminishing return on their existing market within the US due to market maturity and there are only two ways to expand through diversification in their offerings and entering new markets. Given the international opportunity for growth and expansive tea market in Asia, the company will enjoy the benefits of the growth opportunity. Management’s decision to continue to grow globally is a driving force that has yielded
This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA, 2010).
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,
First, companies identify interrelationships among already existing business units in order to seek for any opportunities to transfer skills or share activities. Second, companies select the core businesses that will be the foundation of the corporate strategy by determining the attractive industry and sustainable competitive advantages. Third, companies create horizontal organizational mechanisms to facilitate interrelationships among the core business units by strong corporate identity, mission statement emphasizes integration, and incentives for business-wide success. Fourth, companies pursue diversification opportunities that allow shared activities. Fifth, companies pursue diversification through the transfer of skills if opportunities for sharing activities are limited or exhausted. In other word, it is the stepping stone for sharing activities in the future. Sixth, companies pursue a strategy of restructuring if this fits the skills of management or no good opportunities exist for forging corporate interrelationships. At last, companies pay dividends so the shareholders can be the portfolio
Organisational change can arise due to a change in strategy and this begins with examining capabilities and the internal environment. This is portrayed in the Strategy diamond. Firstly through arenas the organisation can plan where they will be active in and which part to place most emphasis on for example technologies or value creation strategies. Only after determining this can they implement a positive change, leading to the next element, vehicles to get them where they need to be such as alliances. This can lead to change in management along with strategic partnerships, and the way managers transition to this change will determine if the strategy impacts on the overall organisation in a way that reinforces its purpose and goals. Partnerships indicate how an organisation can strengthen its capabilities by merging with businesses who possess the skills they lack. (Carpenter et al. 2010)
The improvements to coffee brewers and the innovation of Keurig has allowed for Starbucks to repackage their products and distribute it as a home product. Many of the flavors consumers could only get from the Starbucks espresso machine in the store can now be duplicated in the home. The opportunity for continued expansion is present. Coffee is quickly being consumed in almost every country in the world, Starbucks has a legitimate opportunity to influence those countries without the Starbucks brand to open their doors.
One could argue that this could be imitated by competitors but it also is very costly. Another strategy is their strategic alliances and acquisitions such as Teavana (Tea), Bay Breads, Evolution Fresh, and many more. Their acquisition strategy has known to be very horizontal. This gives Starbucks the ability to effectively leverage their cornerstone product differentiation strategies by offering a premium product mix of the highest quality beverages and snacks. Starbucks’ goal is to provide each and every customer with a unique “Starbucks Experience” excellent customer service, and well maintained stores which in turn translates to a high degree of customer loyalty. Its HRM value-based approach is for building strong internal and external relationships with suppliers which helps its deployment to international markets, horizontal integration, and organic expansion across the world. Starbucks is known for its high knowledge employees. Human capital is the main asset for most companies and they are provided with great benefits, stock options, retirement accounts, and competitive pay. Good human capital translates into great customer service. I talked to my friends about working at Starbucks and they both said it
Expansion of Domestic and International retail markets: With the target of 2000 stores by year 2000, Starbucks is on an expansion mode. They are expanding into the international markets and simultaneously they are diversifying in the domestic markets also. Initiatives like Frappuccino and the Doppio cart are part of this.
In the first stage of growth, the founders of an organization develop skills and create new products. Learning is a huge component of this phase of organizational growth. Entrepreneurs learn what works and what doesn’t. People’s behaviors are governed by organizational culture rather than by hierarchy (Jones, 2010).
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.