INTERNATIONAL BUSINESS

International Business

Abstract

The global financial crisis is one of the biggest issues since last few years. This disaster has touched virtually every country. Reduced profits, loss of jobs, rising prices, delayed wages, stipends, pensions and unemployment. Clearly, small and medium-sised companies are particularly affected by market turbulence and its position representing the adverse economic circumstances. The problems are reflected in a reduction of demand, poor access to export markets and in capital markets that reserved for recovery of the economies that have caused the current economic crisis. Businesses all over the world including small, medium sised and also multinational organisations are affected by this economic crisis. Multinational organisations (such as Starbucks) have to come up with new and innovative strategies to cope with the changes in their organisational environment, which are caused by the economic slowdown. For this paper we will take the example of Starbucks as an international business and discuss the impact of economic slowdown on its operations and the strategies it should adopt to respond to these changes.

Table of Contents

Abstractii

Introduction1

Discussion2

Starbucks2

Core Competences4

Critical Success Factors5

Global Expansion Strategy7

Economic Forces affecting Starbucks' International Business8

Effective Management Strategies to Cope with Economic Changes11

Conclusion13

References14

International Business

Introduction

Globalisation is a phenomenon that is in vogue nowadays. In this rapidly changing world, to succeed it is imperative for an organisation to adopt the phenomenon of globalisation. On one hand, globalisation cultivates scores of benefits for the organisation. On the other hand, it also generates various dilemmas for management. Globalisation refers to the increasing interconnectedness of the world. In stark contrast with prior times, when countries frequently found themselves in competition with one another (and often at war), globalisation reflects their coming together to pursue common goals. This phenomenon is manifest most prominently, though not exclusively, through business. At the same time, however, the development of a world economy and global workplace has been accompanied by a general shift in thinking about social, economic, cultural, and political issues.

While globalisation has arguably been taking place for centuries, the term was not coined until 1983, in a Harvard Business Review article by marketing scholar Theodore Levitt. In “The Globalisation of Markets,” he argued that the world was moving toward a single “global” market and that success would be dictated by the ability of companies to integrate global thinking into their strategic thinking and planning. According to Levitt, “Companies that do not adapt to the new global realities will become victims of those that do.”

However, the global financial crisis is one of the biggest issues since last few years (Davies 2011, p.149). This disaster has touched virtually every country. Reduced profits, loss of jobs, rising prices, delayed wages, stipends, pensions and unemployment (Davies 2011, p.149). Clearly, small and medium-sised companies are particularly affected by market turbulence and its position representing the adverse economic circumstances. The problems are reflected in a reduction of demand, poor access to export markets and in capital markets that reserved for recovery of the economies that have caused the current economic crisis (Davies 2011, ...