Assignment Sample on International Operations Strategy and Innovation
1. Introduction
Innovation can be considered as a practical implementation of different ideas that help the company to introduce goods or products whereas it also helps to improve the quality of existing products. In recent business markets innovation has a great importance that helps the company to increase its productivity. Innovation gave opportunities to the company for achieving competitive strategies in both national and international level. In this report Starbuck has been selected to evaluate its International operation by developing the management system of the organization. Apart from that, a brief discussion about the role of innovation in development of operational management techniques has been discussed in the present report.
Starbuck is anAmerican multinational chain of roastery reserves and coffeehouse headquarters in Seattle. The company worked with 349,000 employees and had a share price of$109.4 in April 2021 (Starbucks.com, 2021). The present report aims to identify why Starbucks needs to adopt an internationalization process to introduce their services in a new business market. Starbucks needs to focus on its business strategy, manufacturing and organisational structure as well. The company was founded in 1971 and has around 32,660 outlets in different countries such as the US, China, Canada, Japan, India and many more (Starbucks.com, 2021). However, this report will help to identify the role of innovation in International operation management.
2. Main body
2.1 Evaluation of International Operations Management of Starbucks
International operation management is one of the strongest strategies to promote a brand’s equity in front of global context. Customers’ engagement is higher in such a case and brand’ provost can be increased with internationalisation activities. Present segments of this study aim to discuss operational management entry mode that can be adopted by Starbucks in order to make an entry in different new countries (Martinroll.com, 2020). Discussion related to recommendations based on different major international operations of Starbucks has been proposed to understand marketing strategies that can be further adapted by this company. Better entry mode can be better for its grip in a corporate activity oriented to international context.
It has observed that Starbucks globalisation strategy aims to develop suitable economic development within acquired countries. Partially, it helps the company to get investors for its domestic’s business services in the form of the globalisation strategy of Starbucks. Besides this, another strategy that can be adapted easily by this company is licensing, in order to grab a position, the company can channelize a licence for its franchise. As mentioned by Isaacet al.(2019), raw materials usages, resources usages can be ensured by the licensing process within other countries for Starbucks. However, it showed the company has built several important International management systems which help the company to introduce its services or products globally.
On the other hand, promotion can be done in a better manner for the company in the International business market. As encouraged byRoth and Prior (2019), to promote its brand, the company can target youth for its target audiences and promote it through social media platforms such as Facebook, Instagram, Pinterest, YouTube and others as youth are more engaging with social media these days. Additionally, the company can promote content creators who are famous within the country in order to influence customers more. However, it has further recommended to the company to observe which pace of international market people are available in huge numbers. As motivated byPalm and Crum (2019), it will ensure customers’ involvement so that the company is required to notice that in the place it’s going to establish its corporate activities have fewer competitors. Those strategic orientations can be helpful for the company to develop a better internationalisation strategy.
The proposed market entry mode and type include Starbucks operational strategy and licencing which have different impacts on both the company and its products as well. Starbucks operational strategy acts as an international market entry mode or strategy which is used to involve a company’s investments to upgrade the company’s business in another country. As stated by Tanakaet al. (2017), this market entry strategy has an acquisition of controlling interest of different firms or organisations in a new target market. In this case, Starbucks needs to choose a different market entry mode which helps the company to understand the company’s investment rate and its production value as well.
At the same time, Licencing is also considered as an international market entry mode that helps every individual company to enter the international business market. According toVattikoti and Razak (2018), this foreign market entry mode acts as a licensor for the home country and also prepares limited rights and resources that are available for the licensee in the home country. Hence, this business entry mode will be appropriate for Starbucks should adopt this market entry mode that helps the company to lower its capital requirements. On the other hand, this market entry mode acts as an easy and quick entry into a foreign market. Moreover, it has a potential for ROI that could be released quickly and fairly.
2.2 Demonstration of critical awareness of problems, issues and practices
This section helps to identify critical awareness of the issue, practices and problems which generally develops from international operational management. Starbucks need to build a strong and effective business plan that helps the company to introduce its products or services in a new country’s business market (Starbucks.com, 2021). Apart from that, Starbucks has a great demand in different country’s market and it needs to improve its product quality so that it could attract more customers towards the company. Starbucks has established in 1971 and it has a partnership with different delivery companies such as Zomato, Amazon and many more which help the company to sell their products both online and offline in different country’s business market (Starbucks.com, 2021). At the same time, the company need to build a strong partnership with retail companies as well (Martinroll.com, 2020). This strategy will help the company to sell its products both online and offline.
This section will help to find out risks and problems of Starbucks in order to enter different country’s business markets. As stated byAzriuddin et al. (2020), every company needs to monitor risk factors of new business markets thoroughly which help the company to adopt new business strategies based on different market positions. Starbucks needs to develop different business strategies so that the company could minimize the risk factors of introducing their business to a new country’s target business market. International operation management has several risk factors such as organisational structure, better services, employee motivation, new technologies and many more. However, Starbucks needs to focus on these risk factors that could affect the company badly to improve its international operation management (Hbr.org, 2020). It has observed that Starbucks globalisation strategy aims to develop suitable economic development within acquired countries. Partially, it helps the company to get investors for its domestic’s business services in the form of the globalisation strategy of Starbucks.
Starbucks faced problems due to its high product rate whereas it has a huge customer base as well. Therefore, the company needs to focus on their product prices so that it could attract more customers for the company (Martinroll.com, 2020).
2.3 Role of innovation in Operational management techniques
Innovative ideas and skills are essential on the behalf of operational management techniques, the role of innovation is needed in every domain. Innovation is the main cause for existence in the modern market, despite innovation having some undesirable outcome, change is unavoidable and, in most cases, innovation creates practical changes. Operational management techniques are concerned with the outline, planning, management, and development of an organization’s assets and processes to supply goods or facilities for customers. El-Kassar and Singh (2019) stated that increment in the implementation of innovative ideas and technologies is very much essential to the growth of society.
Innovation in operational management reflects approaching new paths of packing orders, expanding products, supplying well customer service, and doing activities that a company executes. Innovation should affect the economic growth of a company, increase well-being, job opportunities in the future, increment of productivity, increase the rate of interest and affect the culture of the company positively.
Outcomes of innovation
In this modern era, it is needed to do something new to keep the existence in the highly competitive world market. For every company, innovation is needed on the behalf of their development and increment of the resource and assets; generally, the outcome of innovation should always be the development.
Role of innovation
In modern business markets, innovation has a great significance that assists the company to develop its efficiency. Hamid and Durmaz (2021), creative ideas and innovations are the basis of the modern global technology market. Innovation provides opportunities to the company for attaining competitive strategies at both the national and international levels.
- i) Economic development of the organization
Economic growth is essential for every company, innovation reflects as the main asset of the growth of a company economically. Economic development is referred to the increment by modifying the inflation rate of the market value of the goods and services made by an economy in a period. Implementation of innovation can assist the economic development of the organization and it will help the workers to do their jobs more effectively. As per the view of Bagheri et al. (2019), innovation is not only connected to the multinational method of firms but also plays an essential role in their durability, health, and development and retaining the competitive advantage in global markets.
Increasing the value of assets and increasing the number of outcomes based on the same asset is a major motto of economic growth. With the help of innovation, Starbucks can develop its business in the acquired country as well as at the international level. They came up as a brand coffee selling company in the global market from a small farm of cups.
- ii) Scope of employment in the organization
With the help of innovation, the future of the young generation will be safe, on the behalf of jobs. Technological development and escalated productivity reflect the major changes for jobs today as well as in the future. Due to the implementation of innovative ideas, organizations will be able to provide a vast range of job opportunities. With the help of innovative and creative culture, Starbucks will be able to recruit more employees as they are working in more than sixty countries, to expand their business merging more employees will be recruited to work on the technologies based on innovative skills.
iii) Competitive advantage
The advantage in a competitive market reflects the required developments in potentiality that give a margin of comparison among the competitors of the same level industry. The capability to go ahead of a company is one of the main reasons for implementing innovative ideas. All the successful and innovative organizations can retain their actions, services, and products regarding the demand of their customers and with the changes in the competitive market situations. Innovation plays an important role to increase the possibilities to behave with the changes and locating more helpful opportunities.
- iv) Increment in productivity
Economic growth is operated by innovative ideas and improvements on behalf of technology, which cut down the expenses of fabrication and permits the higher value of the output. With the help of innovation, several automation solutions can be used by a multinational organization. Lim, Zheng, and Chen (2019) opined that innovation is connected with the increment of productivity of a specific company. Several automation techniques fall off the physical and monotonous job and permit that time for more essential and productive tasks. Innovation assists Starbucks to reduce expenses, escalate the turnovers and supply the benefits to the customers.
- v) Help in growing organization
Innovation also affects the culture of the organization positively, because it assists to increase the capability of creating the valuable use of proficiency. The practice of innovation helps to build up the culture of learning innovative skills, developing personal growth.
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