Iom

Graduate Business School
Assignment Cover Sheet

Student name: SUMEET DUHAN
Student number: 2804324
Course: PGDIP-IBM Stage/year: 2
Subject: INTERNATIONAL OPERATIONS MANAGEMENT
Study Mode: Full time YES Part-time

Lecturer Name: LIZ CARROLL
Assignment Title:
No. of pages: 28
Disk included? Yes No X

Additional Information: (ie. number of pieces submitted, size of assignment, A2, A3 etc.)

Date due: 09/04/2012

Date submitted: 09/04/2012

Plagiarism disclaimer:
I understand that plagiarism is a serious offence and have read and understood the college policy on plagiarism. I also
understand that I may receive a mark of zero if I have not identified and properly attributed sources which have been
used, referred to, or have in any way influenced the preparation of this assignment, or if I have knowingly allowed
others to plagiarise my work in this way.

I hereby certify that this assignment is my own work, based on my personal study and/or research, and that I have
acknowledged all material and sources used in its preparation. I also certify that the assignment has not previously
been submitted for assessment and that I have not copied in part or whole or otherwise plagiarised the work of anyone
else, including other students.
Signed & dated:

Sumeet Duhan (2804324) Page 1

TABLE OF CONTENTS
S.No. Title Page No.
1. Introduction……………………………………………………………….....3

2. Volkswagen Corporation……………………………………………………4

2.1. Internal supply chain………………………………………………………5

2.2. External supply chain………………………………………………………7

2.3. Operational strategy improves their competitiveness…………………….7

2.4. Challenges and Recommendations………………………………………..10

2.5. Country selection…………………………………………………………...13

3. Starbucks……………………………………………………………………...18

3.1 Internal supply chain………………………………………………………..19

3.2 External supply chain……………………………………………………….19

3.3 Operational strategy improves their competitiveness…………………….21

3.4 Challenges and recommendations for Starbucks ………………………..26

3.5 Country selection……………………………………………………………27

4. Conclusion……………………………………………………………………29

5. Reference……………………………………………………………………..30


Introduction

In today's highly competitive international marketplace, the pressure on organizations
to search out new ways in which to form and deliver worth to customers grows ever
stronger. There‘s a growing recognition that through logistic potency and effective
management of the availability chain each value reduction and repair enhancement
are often achieved. The goal of offer chain management is to link the marketplace, the
distribution network, the producing method and also the procurement activity in such
the way that customers are serviced at higher levels and nonetheless at a lower total
value (Christopher, 2012).Communication is ‗the academic also as informal
administration of allusive and appropriate information between firms‘(James and
James, 2003).Adaptation happens back assemblage and suppliers advance in
transaction-specific investments (Heide and John 1988).

We have selected Starbucks as a service company and Volkswagen as a
manufacturing company. This report will define about the internal and external supply
chain of both of the companies. To analyze he internal supply chain of Starbucks,
we‘ve been so many times in Starbucks and saw how they accomplish their business
like to take orders and confined their customers and for the external supply chain,
we‘ve been their sites and added accessories which primarily begin from their
suppliers and finished at Starbucks. In the case of Volkswagen internal supply chain,
we talked about how they access into the steel industry to abate the time wasted,
amount and to accommodate the aerial customer demand.And for external supply
chain, we artlessly have gone through how they breach all their apparatus into altered
smaller parts and accelerate their requirements into altered countries to gain
advantages of local action and to sustain their waiting time from distinct suppliers.
After that we discussed about the each company‘s operational strategies which they
adopted and how these are helpful in gaining competitive advantage in this
competitive world. These strategies do not alone affectation benefits to the company
but additionally accord some challenges that each and every company should face and
work for the added success.Then assuredly we did market study for each company
depended upon altered factors like market efficiency, income and infrastructure and
so on. The attributes of business and the countries in which they operate are the main
pillar of success of any business.


VOLKSWAGEN

In 1937, the company known as ―Gesellschaft zur Vorbereitung des deutschen
Volkswagens mbH‖ was founded and no one could imagine that it would be the
Europe‘s largest automobile manufacturer. Its main headquarter is in Wolfsburg and
the Group accumulated the number of vehicles delivered to the consumers to 6.189
million corresponding to a 9.8% share of the world car market in 2007.The
Volkswagen Group is fabricated up of nine brands from seven European countries:
Volkswagen, Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda, Scania and
Volkswagen commercial vehicles. Each brand has its own appearance and operates as
an absolute article on the market.The Group operates 94 assembly plants in 18
European countries and an added eight countries in the Americas, Asia and Africa.
Each alive day, 501,956 advisers common aftermath some 34,500 vehicles, are
complex in vehicle-related casework or plan in the added fields of business. The
Volkswagen Group sells its cars in 153 countries (Volkswagen, 2011).

It is the goal of the Group to supply enticing, safe and environmentally sound vehicles
which are competitive on an increasingly robust market and that set world standards
in their respective categories (Sharma, 2011).


Internal supply chain:

Due to increase of demand and productivity, their supply chain flowed abundant
quicker than earlier, so their logistic costs are added expensive. Volkswagen
accustomed a new diversification- Volkswagen logistic company to abate the
extravagant fees on transferring these stocks to different department. But they alone
accept planning and controlling functions. And moreover Volkswagen developed
their steel plant additionally in his vertical diversifications. In adjustment to abate to
the minimum amount and time waste in the supply chain, they choose to advance that
part by themselves. Such as the RFID tracking system is to clue their stocks in logistic
process.

The application takes advantage of an existing provider portal that already connects
suppliers with Volkswagen. That system permits the information collected via RFID
reads to be linked to specific purchase or delivery orders from VW, addressing one in
all the challenges of RFID systems between firms – the way to connect the RFID tag
information with alternative data to create it meaningful (scdigest, 2009).

http://www.scdigest.com/assets/On_Target/09-03-30-1.php


Primary, suppliers can use handheld readers to scan RFID container IDs, which are
related to the particular things within the containers primarily based on the acquisition
order and what's really being shipped. Volkswagen can scan the containers once they
arrive to automate the receiving method. It‘ll additionally track empty containers as
they move back to suppliers, which means the system can offer asset tracking edges
additionally to improving receiving processes and provide chain visibility to inbound
merchandise (scdigest, 2009).

The system is predicated on 2 items of technology from IBM:

A container management software system that involves an analytic application
getting used to develop a web-based dashboard for container management.
WebSphere Premises Server software, that acts as the information collection
and ―middleware‖ application to push the RFID information into the portal
and also the container management system.

According to the Klaus Hardy Mühleck, cluster CIO and head of cluster IT at
Volkswagen, ―Our long-term goal is to implement an integrated, paperless production
and logistics chain throughout the complete cluster,‖ ―The pilot project showed that
we will reliably integrate RFID technology into our business processes at a minimum
value,‖ he defined.

The contributions they created within the supply chain were to form them success and
sustained their competitive benefits, details as following:

Improved client service, all the feedback may pass to the connected
department directly and with the reality and recognize the important demand
of every level within the supply chain encompassed customers. They cut the
availability chain so as to urge the important customers‘ expect desires
directly. Which will create Volkswagen can manufacture acceptable volume in
correct quality avoiding the waste.
Optimized their prices and investments, they will use their capital for
additional comes. And that they saved cash from the supply chain and
conjointly created it additional potency work for them. Cash flow is extremely


necessary for each company, if they are doing not have the force on their
money flow, there'll be plenty of extra space for them to enhance.

External supply chain:

There are several different suppliers within the scale of Volkswagen supply chain
they'll not include; therefore the external suppliers are necessary for them. If they'll
not deal well with them, that may damage their internal supply chain and heavily
overall performance. However recent years, Volkswagen invited a replacement
technology for logistic with external provider. They break all their elements into
totally different smaller elements, and send their necessities to totally different partner
in India, China and a few countries with their characteristics, in adjustment to share
the benefits in native policy. It adored time to delay a large aggregate stock from only
one partner and averaged the value from all suppliers. The result's anyone partner or
one country modified their condition, which may not influence the supply chain, in
additional saying, they afar the risks.

Basically, offer chain management is a crucial issue for Volkswagen success and
abiding their competitive advantages. It coordinated the relationships between internal
and external suppliers and reassessment them. Conjointly they added the client
service, created the client happy to urge what they absolutely need to urge.

Operational strategy improves their competitiveness:

This operations strategy binds the varied operations decisions and accomplishments
into an adamant constant acknowledgment to competitive forces by linking company
policies, programs, systems, and accomplishments into an analytical acknowledgment
to the competitive priorities called and announced by the company or business
strategy. In simpler terms, the operations strategy specifies how the close will apply
its operations capabilities to abutment the business strategy.


Operations strategy includes a long-term concern for a way to best verify and develop
the firm's major operations resources in order that there's a high degree of
compatibility between these resources and also the business strategy.

An operation has two necessary roles it will play in strengthening the firm's overall
strategy. One possibility is to produce processes that offer the firm a definite
advantage within the marketplace. The second role that operations will play is to
produce coordinated support for the essential ways in which during which the firm's
product win orders over their competitors, conjointly called distinctive
competencies(eNotes.com, 2012). So it‘s an action between the operation resources
and the market requirements.

Operation
Operation resources strategy Market requirements

In adjustment to advance their competitiveness I will appraise the role of the
Volkswagen operation.

Through its achievement at five competitiveness objectives, the operations action can
accommodate a competitiveness advantages.


I anticipate the best quality of product and best client service is actual important for
Volkswagen as a car manufacture. Here is the 5-competitiveness objectiveness of
Volkswagen. I accomplish a rank of account for each objectives of Volkswagen.

0-Not appropriate 10-very essential

a) Quality - 8

The quality is extremely vital for our company. As a result of our product is for the
daily used basis, and it highly associated with peoples‘ safety and life. Actually, our
product is branding by the high safety and top quality. Additionally use the new
technology is extremely vital within the automobile manufactory business, for
instance, the new engine to avoid wasting oil usage and scale back the air pollution.

b) Speed - 6

The speed for delivery is simply fine for us. As a result of its car—not one thing like
occasional and television, folks are spending millions of cash in getting their cars, so
that they are ready to attend for his or her cars. But also, we've got to make sure that;
folks don't have to be compelled to wait too long for his or her cars. As a result of we
have a tendency to be giving the luxurious cars that the purchasers might have a lot of
patient to attend for. Therefore we'll manage our transport to be a lot of efficiently.

c) Dependability - 7

The dependability is vital for us. As a result of initial of all, we have a tendency to
should make sure that we have a tendency to are giving the merchandise that the
purchasers will trust. And additionally it's the trend of the competition. A lot of and a
lot of automobile advertising are describing this philosophy; folks are relaxed and
have a fun time with their automobile. It‘s price to trust with. Therefore this can be
we have a tendency to are pursuing to realize.


d) Flexibility - 7

It is additionally vital for the automobile manufactory. With the event of the world
economic, folks would really like to own their own customized cars to satisfy their
totally different desires. This can be what truly the automobile manufactories are
attempting to try to currently. They‘re launching completely different levels and
model of cars to satisfy different market segments. Additionally they're doing the
market analysis completely to undertake to grasp customer‘s desires and new trend.
Therefore for our company, it's vital for us.

e) Cost – 6

It will have an effect on our business, however not such a lot as a result of
Volkswagen isn't famous by low value like Toyota and Honda. Actually, we have a
tendency to be famous by the top quality and safety. However additionally as a
manufactory, we have a tendency to can‘t forget the price as a result of it influences
the profit margin for our company. The economy of scale is extremely vital within the
automobile manufactory. Therefore it's the competition trend to try to therefore.
Actually, Volkswagen is gap two main manufactures in China, Shanghai and
Changchun to share the low labor value so as to realize the high profit margin.

Challenges and Recommendations

What challenges do the operational strategies allowance and acclaim means in which
during which they'll be overcome.

Quality - 8

Total Superior Management (TQM) is the main and important challenge. There are
abounding samples of manufacturers who have encountered quality problems on one


product and therefore the consequences on the complete image impacted the
entire company.

Recommendation

Quality ought to be a section of the company culture, each employee, each actor of
the business ought to be pondering ways in which to enhance, to regulate the
merchandise in the least steps of its producing.

Speed - 6

Delivery speed is a smaller amount and fewer vital to customers. Automobile makes
specialize in their money objectives and cut back their stock levels. They even have
merchandise that is a lot of and a lot of customizable for purchasers. These 2 factors
increase time of delivery, and it issues all the automobile makers. But as customers‘
needs amendment, speed of delivery isn't the challenge, maintaining the correct level
of stock and answering all customers‘ desires is.

Recommendation
An absolute sales anticipation helps managing the stock levels; there should be bigger
advice amid the financial and sales departments. Answering every charge of the
customer is an objective but it should not be at any cost.

Dependability - 7
Customers accept a manufacturer‘s calmness in its actions, calm with apropos
deadlines and consistently producing the same quality.

Recommendation

Implementing processes and management that will facilitate having similar product
and delivery time no matter downside arises.


Flexibility - 7

Flexibility is the better challenge, abbreviation amount while accretion the array of
product. Flexibility puts burden on the employees, the development of a car
acclimated to yield a couple of years and now it takes a brace of months.

Recommendation

Training the humans to be able to acclimate new technologies and new alive
environments. The efficient the workers are, the most adjustable the company will be.

Cost - 6

Volkswagen will quickly become the biggest automobile manufacturer within the
world. High sales are a lot of able way to minimize costs, acknowledgment to
economies of scale.

Recommendation

Using ―platforms‖, bodies of vehicles that are aggregate for various brands and
models among the cluster helps accomplishing economies of scale whereas all added
locations can be customized to customers. Advance in R&D helps anticipating
industry changes as well, the automotive business evolves rapidly, technologies arise,
and trends drive sales. VW have to be compelled to watch these anxiously and
influence them as abundant as accessible by anticipating and investing.


Country selection

Singapore, Japan and Thailand are the countries where Volkswagen is considering a
new operation.

The Global Competitiveness Index 2011-2012 rankings

GCI 2011-2012 GCI 2010-2011

Country/Economy Rank Score Rank Score

Singapore 2 5.63 3 5.48

Japan 9 5.40 6 5.37

Malaysia 21 5.08 26 4.88

http://www3.weforum.org/docs/WEF_GCR_CompetitivenessIndexRanking_2011-12.pdf

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf

SINGAPORE

Singapore moves up by one rank to 2nd position, advancement the advance a part of
Asian economies. The country‘s institutions still to be adjourned as the best in the
world, ranked 1st for both their lack of corruption and government efficiency.
Singapore places 1st and 2nd, respectively, for the ability of its goods and activity
markets and leads the apple in agreement of monetary market development, ensuring
the able allocation of these factors to their best use. Singapore conjointly has world-
class basement (3rd), with accomplished roads, ports, and air carriage facilities. In
addition, the country‘s competitiveness is strengthened by a robust focus on
education, accouterment individuals with the abilities required for a rapidly alteration
all-around economy. In adjustment to strengthen its competitiveness further,
Singapore could encourage even stronger acceptance of the latest technologies (10th)
as able-bodied as measures that abutment the composure of its companies (15th)
(WEF, 2011).


JAPAN

Japan slides three places to rank 9th, with an achievement agnate to endure year‘s. 23
The country continues to enjoy an above competitive edge in business composure and
innovation, ranking 1st and 4th, respectively, in these 2 pillars. Company spending on
R&D stays top and Japan edges from the supply of many scientists and engineers,
buttressing a robust capability for innovation. Indeed, in agreement of accession
output, this pays off with the second-highest amount of patents per capita. Further,
firms accomplish at the highest end of the worth chain, bearing high-value-added
appurtenances and services. The country‘s all-embracing competitive performance,
however, continues to be abject down by severe macroeconomic weaknesses (113th),
with top account deficits over several years (135th), which accept led to the best
public debt levels in the absolute sample by far (over 220 percent of GDP in 2010)
(WEF, 2011).

MALAYSIA

Malaysia scores 5 ranks to achieve 21st position, registering improvements beyond
the board. The country‘s progress is decidedly noteworthy in the institutions and
macroeconomic atmosphere pillars, as able-bodied as in several measures of market
efficiency. A part of the arresting advantages of this able and constant performance
are its able and complete banking sector— which places a part of the world‘s a lot of
developed, just abaft Singapore and Hong Kong—and its awful economical
merchandise market, ranked 15th. In addition, its macroeconomic bearings has bigger
clearly over the accomplished year to ability 29th place, even admitting the country
continues to run a budget deficit of about 5 percent of GDP. As it moves against
acceptable added innovation driven, Malaysia can get to advance its achievement in
technological and education readiness. In the closing dimension, the country places a
low 44th, with area for advance in technological adoption by both businesses and the
population at massive. In agreement of college education and training (38th),
convalescent access remains a priority in lightweight of low enrollment rate of 69
percent (101st) and 36 percent (66th) for secondary and tertiary education,
respectively (WEF, 2011).


Rating Score

Pillars/factors Weight Singapore Japan Malaysia Singapore Japan Malaysia

1st Institutions 7 6.1 5.1 4.6 48.7 40.7 33

2nd Infrastructure 8.5 6.2 5.7 5.0 52.6 48.44 40.3

3rd Macro 6 5.2 4.1 5.0 31.1 23.6 29.7
environment

4th Health & 5 6.7 6.5 6.2 26.7 26 22.3
primary
education

5th Higher 6 5.8 5.3 4.6 34.5 31.7 25.5
education &
training

6th Goods market 7 5.7 5.1 4.8 45.7 40.7 35
efficiency

7th Labor market 9 5.9 5.1 4.7 53.5 45.8 43.5
efficiency

8th Financial 7 5.8 4.6 5.3 40.4 32.1 30.5
market
development

9th Technological 9 5.3 4.9 4.2 47.8 44.1 32.3
readiness

10th Market size 5 4.5 6.1 4.7 22.3 30.4 24.4

11th Business 7 5.1 5.9 4.8 40.4 47.1 33.5
sophistication

12th Innovation 7 5 5.5 4.1 41 43 26.3

Total 484.7 453.64 376.3



Our factors are affiliated to:

a) Institutions

It‘s the acknowledged and authoritative framework of the country, it is actual
important in our business area important amounts of money are complex and area
acknowledged conflicts can appear with partners. Weight: 7

b) Infrastructure

Effective modes of transport, including superior roads, railroads, ports, and air
transport, accredit us to get our appurtenances and casework to bazaar in a defended
and appropriate address and facilitate the movement of workers to the a lot of
acceptable jobs. Weight 8.5

c) Macroeconomic environment

Economic adherence is not actual important; we focus on the economy of the entire
area and not the country on its own. Its accent is average. Weight: 6

d) Health and primary education

Poor health leads to cogent costs to business, as ailing workers are generally absent or
accomplish at lower levels of efficiency. Furthermore, all our advisers charge a basic
akin of education. Compared to added factors it is the atomic important. Weight: 5

e) Higher education and training

Our business is adult and requires top accomplishment personnel. Weight: 6

f) Goods market efficiency

Good supply-and-demand conditions, area barter works properly. We cannot allow
accepting suppliers in a monopolistic scenario for example. Weight: 7


g) Labor market efficiency

When VW settles new operation in a country, it needs bags of people, some with adult
skills. The aggregation cannot teach anybody and needs to acquisition in the country
its appropriate human resources. Weight: 9

h) Financial market development

Our business requires abundant investments, in plant and accessories especially. It is a
continued appellation investment and we have to be able-bodied accurate by a proper
banking arrangement for example. Weight: 7

i) Technological readiness

The country that we will accomplish in has to be compatible with our technology. All
are computer systems, way of working, and processes in general. Our merchandise
should be as economical as attainable and therefore need economical technology.
Weight: 9

j) Market size

Again, we tend to concentrate on the region, and also the country‘s domestic market
isn't the foremost necessary criteria. Weight: 5

k) Business sophistication

As we plan with bags of partners, and our desires are rising every day, the business
network have to be sophisticated, able-bodied developed suppliers and industries.
Weight: 7

l) Innovation

Our industry is so competitive that success can alone be accomplished through
innovation. Weight: 7

Further to all the abstracts in the WEF address and the weight of every factor,
Singapore is the best destination for us.


STARBUCKS

Three coffee lovers Gordon Bowker, Jerry Baldwin, ZevSiegel in 1971, founded
Starbucks. Howard Schultz has abutting the Starbucks in 1982 and the turning point
in company‘s history was his appointment to Italy in 183, area he saws a coffee bar
culture. He likes the abstraction and suggests introducing the ready-to-drink coffee in
US. Howard Schultz buys Starbuck for $3.7million with its six retail food and one
roasting plant in 1987.

Starbucks Corporation is the one of the fastest growing Coffee companies of the
World and it‘s based in Washington, United States. Starbucks coffee acquirement and
sells top superior broiled beans with the beginning rich-brewed coffee. And a variety
of exceptional tea and coffee articles and accessories absolute altered retails stores.
Starbucks as well sells its trademark to some retail food and this practice is accepted
in Starbucks as specialty operation.

Starbucks is currently operating in added than 49 countries with 17000 stores. The
absolute amount of advisers in Starbucks was 176000 at 28, September 2008. In
United States Starbucks has 11,068 (6,764 Company Owned, 4,304 Franchised) food
with the about advisers of 143000 with 136000 are working in retail area and added
are affianced in administering and administration activities (Todeva, 2012).


Internal Supply Chain

The objectives of Internal supply chain management system's is to anticipate
organization's activities and contest spawn during its work flow and offers across-the-
board appearance of upstream and after activities (Hyder 2009). Our one of the team
planned to go one Starbucks coffee center abreast city center to beam their
performance. To analyze the employee activities, we stayed there about 3 hours. And
we got that every employee are able-bodied behaved, able-bodied dressed and all of
them are able-bodied accepted about their duties and responsibilities. When customer
visit into the coffee shop they yield their order and the way they make coffee and
added menu is actual transparent. It looks like their organizational structure is totally
flat because still the store administrator was present over there; he was not giving any
apprenticeship during working time. Starbucks was called to FORTUNE‘s ―100 Best
Companies to Plan For‖ list for the 11th time in 2009. Starbucks is accustomed as a
nice place to work for acceptable reason: we accept fabricated alleviative our partners
with dignity and respect one of our allegorical attempt (www.news.starbucks.com).
All advisers knew their responsibilities. They are appropriately demography the
customers‘ order, advancing coffee or added dishes as ordered and carrying it to the
customers. They consistently acceptable the acknowledgment for the service that
customers receive.

External supply chain

Coffee beans could appear from all over the world—about 50 percent came from
Latin America, 35 percent from the Pacific Rim, and 15 percent from East Africa. A
lot of the coffee producers were baby to medium-sized family-owned farms. Some
farms were able to action their coffee beans, but a lot of awash their outputs to
processors through bounded markets (mills, exporters or cooperatives). The
processors turned low ―cherry‖ into block or inexperienced low, and again awash it to
suppliers who were exporters or distributors. These suppliers provided abounding
casework to processors and farmers, such as marketing, dry milling, abstruse coffee
expertise, financing, and export logistics. The layout below depicts the easy and
simple supply chain of Starbucks from the farmers to the Starbucks (gbs).


http://www.gsb.stanford.edu/scforum/login/abstracts/documents/GS54.pdf
Coffee affects the lives of over twenty five million farmers in additional than seventy
countries round the world, several of that are developing regions. Traditional coffee
assembly methodswill usually adversely have an effect on the encircling surroundings
through the employment of harmful chemicals and unnecessary deforestation.
Although Starbucks occasional Company purchases solely 2 % of the world‘s
occasional, Starbucks has used its position within the international marketplace to
demonstrate how innovation in combining company social responsibility and business
strategy will result in long-term economic and environmental sustainability.
―Contributing absolutely to our communities and surroundings is at the center of
Starbucks,‖ said Howard Schultz, Starbucks chairman. ―Starbucks is committed to
constantly improving our environmental footprint in each level of our provide chain,
from occasional farmer to client. Starbucks as well incentivize the farmers with low
amount loans, continued appellation affairs and affirmed price. ―This artistic new
manner of doing business has the potential to enhance the lives of individuals and also
the international surroundings. The success of supply chain management of Starbucks
mainly depends upon its relationship with farmers, processors, exporters/ distributors
and customers. It believes that if there's smart relationship and trust among the trading
parties then there'll not be any downside in obtaining top quality occasional beans for
the corporate (Nelson 2005).


Today, the corporate is leading in its trade everywhere the planet as a result of its
correct management of its internal and external provide chain. The connection they're
maintaining with their suppliers and customers is contributing them to become the
successful company within the world. It comes beneath the Fortune magazine‘s prime
one hundred international corporations of the planet and prime twenty America‘s
most admired corporations in terms of revenue they generate, profit they earn and also
the manner they treat the shoppers and community.

Operational Strategy improves their Competitive Advantage

Product line

Starbucks aliment offered an alternative of standard or decaffeinated coffee
beverages, an appropriate "coffee of the day," and an ample alternative of Italian-style
espresso drinks. In addition, customer could accept from an advanced alternative of
fresh-roasted whole-bean coffees (which could be arena on the bounds and agitated
home in characteristic packages), an alternative of beginning pastries and added
aliment items, sodas, juices, teas, and coffee-related accouterments and equipment.
The company's retail sales mix was about 61 percent coffee beverages, 15 percent
whole-bean coffees, 16 percent aliment items, and 8 percent coffee-related articles
and equipment. The merchandise combine in every store varied, depending on the
admeasurement and site of every outlet. Larger aliment agitated a greater kind of
whole coffee beans, gourmet aliment items, teas, coffee mugs, coffee grinders, coffee-
making equipment, filters, accumulator containers, and added accessories. Smaller
aliment and kiosks about awash a abounding band of coffee beverages, a restricted
choice of whole-bean coffees, and a few accouterments items.

The company was consistently affianced in efforts to advance new ideas, new
products, and new adventures for barter that belonged abandoned to Starbucks.
Schultz and added arch admiral drummed in the accent of consistently accepting
accessible to re-inventing the Starbucks experience.


Building a Top Administration Team

Schultz connected to strengthen Starbucks' top administration team, hiring humans
with all-encompassing acquaintance in managing and accretion retail chains. Orin
Smith, who had an MBA from Harvard and 13 years' acquaintance at Deloitte and
Touche, was brought in as arch banking administrator in 1990 and again was answer
to admiral and arch operating administrator in 1994. The four key admiral during the
company's determinative years—Howard Schultz, Dave Olsen, Howard Behar, and
Orin Smith—contributed the a lot of to defining and abstraction the company's values,
principles, and culture. As the company grew, added admiral were added in
marketing, abundance supervision, specialty sales, human resources, finance, and
advice systems. Schultz as well took affliction to add humans to Starbucks' board of
admiral who had acquaintance growing a retail chain and who could add admired
perspectives.

Staff Training

Accommodating quick advance as well meant putting in systems to recruit, hire, and
train baristas and store managers. Starbucks' vice chairman for human resources
acclimated some simple guidelines in screening candidates for new positions: "We
wish amorous humans who adulation coffee. We're analytic for a assorted workforce,
which reflects our community. We wish humans who relish what they're
accomplishing and for who work is an extension of themselves."16 Some 80 percent
of Starbucks staff was white, 85 percent had some apprenticeship above top school,
and the boilerplate age was 26.

Every partner/barista assassin for a retail job in a Starbucks abundance accustomed at
atomic 24 hours training in the aboriginal two to four weeks. Everyone was
accomplished in the Star Skills, three guidelines for on-the-job interpersonal relations:
(1) advance and enhance self-esteem, (2) accept and acknowledge, and (3) ask for
help.

Each time Starbucks opened aliment in a new market, it undertook an above
recruiting effort. Eight to 10 weeks afore opening, the company placed ads to rent
baristas and activate their training. It sent a Star team of accomplished managers and


baristas from absolute stores to the breadth to advance the store-opening
accomplishment and to conduct one-on-one training afterward the company's
academic classes and basal acclimatization sessions at the Starbucks Coffee Academy
in San Francisco.

Product Supply

Dave Olsen, Starbucks' senior vice chairman for coffee, abandoned spearheaded
Starbucks' efforts to defended best coffee beans to provide the company's growing
needs. He travelled consistently to coffee-producing countries—Colombia, Sumatra,
Yemen, Antigua, Indonesia, Guatemala, New Guinea, Costa Rica, Sulawesi, Papua
New Guinea, Kenya, Ethiopia, Java—building relationships with growers and
exporters, blockage on agronomical altitude and crop yields, and analytic out varieties
and sources that would accommodated Starbucks' burdensome standards of superior
and flavor.

Starbucks entered into fixed-price purchase commitments in adjustment to defended
an able accumulation of superior blooming coffee beans and to absolute its
acknowledgment to clashing coffee prices in accessible periods. If satisfactory fixed-
price commitments were not available, the company purchased coffee futures affairs
to produce worth protection.

Bonding with Customers

About 5 million customers per week were patronizing Starbucks stores in aboriginal
1998. Stores did regarding half of their business by 11 am. Loyal customers
patronized a Starbucks store 15 to 20 times a month, spending conceivably $50
monthly. Some customers were Starbucks fanatics, advancing in daily. Baristas
became accustomed with approved customers, acquirements their names and their
admired drinks. Christine Nagy, a field administrator for Oracle Corporation in Palo
Alto, California, told a Wall Street Journal reporter, "For me, it's a circadian call or I
alpha accepting withdrawals."17 Her accepted adjustment was a custom drink: a decaf
grande nonfat no-whip no-foam extra-cocoa mocha; if the baristas saw her appear
through the door, she told the reporter, "They just [said,] 'We charge a Christine
here.'"


Mail Order Sales

Starbucks revealed a mail-order catalog that was broadcast six times a year and that
offered coffee, candies and pastries, and choose coffee-making equipment and
accessories. An appropriate business gift-giving archive was mailed to business
accounts during the 1997 Christmas anniversary season. The company as well had an
electronic store on the net. In 1997, sales of this analysis were about $21.2 million,
about 2 percent of absolute revenues; about 50,000 mail-order customers were active
up to accept account deliveries of Starbucks coffee as of backward 1997. Starbucks
administration believed that its direct-response business accomplishment helped pave
the way for retail amplification into new markets and able cast acceptance in existing
markets.

Joint Ventures

In 1994, afterwards months of affairs and experimentation, PepsiCo and Starbucks
entered into a collective adventure adjustment to actualize new coffee-related articles
for mass administration through Pepsi channels, including algid coffee drinks in a
canteen or can.

In October 1995 Starbucks partnered with Dreyer's Grand Ice Chrism to provide
coffee abstract for a new band of coffee ice chrism fabricated and broadcast by
Dreyer's beneath the Starbucks brand. The new line, featuring such flavors as Dark
Roast Espresso Swirl, JavaChip, Vanilla MochaChip, Biscotti Bliss, and Caffe
Almond Fudge, hit supermarket shelves in April 1996; by July, Starbucks coffee-
flavored ice chrism was the top-selling super premium cast in the coffee segment. In
1997, two new low-fat flavors were added to accompaniment the aboriginal six
flavors, forth with two flavors of ice chrism bars; all were able-bodied accustomed in
the marketplace. Added new ice chrism articles were planned for 1998.

Also in 1995, Starbucks formed with Seattle's Redhook Ale Brewery to actualize
Double Black Stout, a stout beer with an attempt of Starbucks coffee abstract in it.


International expansion

In markets alfresco the continental United States (including Hawaii), Starbucks'
action was to authorization an acclaimed and able bounded company with retailing
ability in the ambition host country to advance and accomplish new Starbucks stores.
In some cases, Starbucks was a collective adventure accomplice in the aliment
alfresco the continental Untied States. Starbucks created a new subsidiary, Starbucks
Coffee International (SCI), to arrange across amplification and activate to body the
Starbucks cast name globally via licensees; Howard Behar was admiral of SCI.

Going into 1998, SCI had 12 retail stores in Tokyo, 7 in Hawaii, 6 in Singapore, and 1
in the Philippines. Agreements had been active with licensees to start gap stores in
Taiwan and Korea in 1998. The company and its licensees had affairs to accessible as
abounding as 40 aliment in the Pacific Rim by the end of September 1998. The
licensee in Taiwan foresaw an abeyant of 200 stores in that country alone. The
potential of locating stores in Europe and Latin America was accepting explored.

Corporate responsibility

Starbucks was the better accumulated contributor in North America to CARE, a
common abatement and development alignment that sponsored health, education, and
altruistic aid programs in a lot of the Third World countries area Starbucks purchased
its coffee supplies. In addition, CARE samplers of coffee and CARE-related mugs,
backpacks, and T-shirts were offered in the company's mail-order catalog; an
allocation of the amount on all sales was donated to CARE.

Thus we can say that the operational action of Starbucks is to access top superior
beans from farmers by advancement acceptable accord with them in adjustment to
fulfill their demand yet as fulfilling the company responsibility towards the
communities. . And these will facilitate them to actualize able cast image in the
market place and accretion competitive advantage (Gamble, 2012).


Challenges and Recommendations

Dependent on suppliers and business partners

Suppliers and business partners are the center body locations for the organization in
adjustment to be success that awful depends on the affiliation amid them. Moreover,
the success is accessible in company if there is blend of the superior product and
casework and that will be accessible alone if their business partners and suppliers
appearance them acceptable affiliation and adherence in active the business.
However, it is actual difficult assertive the acceptable accord amid business partners
and suppliers in continued run or in approaching because approaching is uncertain. As
for example, if any of the suppliers are abort to accumulation the superior coffee
beans appropriate on time again it can anon bassinet the cast of the Starbucks and that
may advance to customer loss and assuredly the profit margin of every store ability be
beneath in compared to antecedent times. Therefore, Starbucks are managing
acceptable relationship with their suppliers so that their accumulation alternation will
be able and any break in the supply chain can accord them negative impact on
Starbucks operation.

In adjustment to break these kinds of problems and accept ascendancy over suppliers
operation, abstracts and advice flow, the aggregation can use backward integration.
Astern integration will advice the alignment to be added arresting and bright but the
aggregation should not be absent-minded and should accept on the needs, wants and
apprehension of the suppliers including farmers of that company.

Quality of the product

Starbucks is accepted a part of the customer because of its superior of the coffee or
product and casework which helped them to attain the cast image. They are accessible
in bound shops as they are big-ticket to accepted customers. Starbucks has top
superior product with big-ticket amount and because of which the customer who has
average earning finds harder to appointment to Starbucks area as customer whose
assets is low they can‘t allow the amount of the coffee in Starbucks. Therefore, in
adjustment to abate this, in the processing appearance they can use added new
technology equipment.


Dependent on advice technology

In this aggressive apple all the companies are directly accompanying to advice
technology and so does Starbucks. For the right flow of operation like supply chain
management, point of sales and processing they relies heavily on advice technology.
In this supply chain if any of the systems fails again this directly affect the company
and they may buck riskand huge loss. Therefore, in adjustment to break these kinds of
problems they have to at aboriginal alternation their advisers and on approved base
they should analysis and appraise their operation system.

Country Selection

Starbucks currently accept 16706 foods in added than50 countries including 8850
aggregation aggressive food and 7856 licensed store and as well they are going to
accessible new stores. (Source: Starbucks, 2010)

Starbucks is planning to accessible their new food in one of the Asian country Japan,
Malaysia or Singapore by searching at the factors like location, market, appeal and
added factors I acclaim Starbucks to decide on Japan instead of Thailand and
Singapore because the appeal of coffee on Japan is actual top as it stands third
position in better coffee burning in the apple afterwards affiliated states and Germany.
There are already 877 stores in Japan till the and of March 2010 but in Singapore
accommodate 35 and Thailand contains 132 coffee shops. (Source: Starbucks, 2010).

Starbucks accept already stared its operation in Japan in the year 1995 and their
operation and actuality in the Japanese market was absolutely acknowledged in
agreement of superior and achievement as a aftereffect there are abounding food
operating currently. The success of the every boutique of Starbucks is because they
accept ascendancy over the supply chain management and acceptable affiliation a part
of their business partners and suppliers like farmers and so on. Therefore, if an
aggregation opens new store here then it will not be a big issue to administer their
supply chain.


Japanese humans provide capital antecedence to the whole image and superior of the
product rather than amount of the product. Likewise Starbucks as well got the top
whole image and superior product that will match the needs of every Japanese people.
Japan has 5th rank in purchasing ability parity and Singapore has 40thand Malaysia has
30th rank respectively, which acutely shows that the active accepted of Japanese
humans is analogously college than that of Singapore and Malaysia (CIA the apple
actuality book, 2010) and Japan has 6.00 purchasing ability parity and Singapore has
0.34 which acutely shows that the active accepted of Japanese humans is analogously
college than that of Singapore and Malaysia (Weforum, 2010).

Although all of them are Asian countries Japan is the place for foreign currency
exchange rate, has accomplished activity force, acceptable market size and has
abundant basement for supply chain in compared to Singapore and Malaysia. The
aggrandizement amount of Japan in compared with the two added nations are low but
the tax adjustment and amount is college than added two countries Japan is the best to
select to launch new shop by because added factors (Weforum, 2010).

Conclusion

Volkswagen and Starbucks are two companies that accept acceptable supply chain
management and operations administration in general. It is actual absorbing to go
through their processes and analyze their strategies. We accept there is place for
improvement, these companies who accept all-international operations, appointment-
challenging issues that crave able assay abilities and absolute ―tools‖ to affected them.
In adjustment to expand each company have to ask it all the questions we answered in
this report. Selecting a new area in an above investment and the competiveness of the
markets does not allow authoritative mistakes. Success depends on your strategy,
decidedly your all-embracing operations strategy.


Referencing
Christopher, M., 2012. Logistics & supply chain management, creating value-adding
networks (3rd ed.) CHRISTOPHER Martin: Librairie Lavoisier. Available at:
http://www.lavoisier.fr/livre/notice.asp?id=O3LW2XASRLXOWO

Central Intelligency Agency, 2010. CIA - The World Factbook -- Country
Comparison:National product. Available at:
https://www.cia.gov/library/publications/the-world factbook/rankorder/2001rank.html

eNotes.com, 2012. Operations Strategy. Available at:
http://www.enotes.com/operations-strategy-reference/operations-strategy

Gamble, J., 2012. Starbucks Case Study. Available at:
http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html

gbs, Starbucks Corporation: Building a Sustainable Supply - Stanford graduate
business school. Available at:
http://www.gsb.stanford.edu/scforum/login/abstracts/documents/GS54.pdf

James, A., James, N., 2003. Business Market management- understanding, creating
and delivering value, second ed.

scdigest, 2009. RFID News: Volkswagen says it will be First Automaker to
Extensively Use RFID in Daily Supply Chain Operations Available at:
http://www.scdigest.com/assets/On_Target/09-03-30-1.php

Sharma, R., 2011. Brand assignment on Volkswagen brand audit. Available
at:http://www.scribd.com/doc/13548429/brandassignment-on-volkswagen-brand
audit

Todeva, E., 2012. Starbucks Assignment.Available at:
http://www.scribd.com/doc/42363006/Starbucks-Assignment

Volkswagen, 2011. Volkswagen Group Production Plants Available
at:http://www.volkswagenag.com/content/vwcorp/content/en/the_group/production_
plants.html

WEF, 2011. The Global Competitiveness Report 2011-2012: Country Profile
Highlights. Available at:


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