Company Background and Business Strategy

Developing a compelled innovative surrounding for an organization helps in generating efficient advancements in the productivity of the firm. It is quite vital for the firms to raise their productivity by implementing new technologies into their production process. In order to analyse the type of advancements to be implemented in such a firm, a thorough environmental analysis is quite necessary for the firm. It helps in surveying, internal, and external factors affecting the organization, and thereby acknowledging the strategies that must be implemented in such a firm (Slocum et al.). After the environmental scanning being conducted the organization must adhere to the demand and supply factors available in order to proceed with the advancements and achieve the target of the firm.

In this report, in order to analyse the technological advancements in the firm, based on their environmental scanning analysis, the case of Starbucks has been taken into consideration. Following the introduction of the report, a company background, business strategy and the hr strategy of the firm is discussed based on the environmental scanning. The key group that must be focussed for such a technological improvement to be amended in Starbucks has been stated. A forecasting approach for the demand and supply factors has been done in the following section. This section deals with the approach to identify the key group and the supply needed in order to facilitate the ability to perform better in the economy.

Starbucks is considered s the leading American coffee company and a coffeehouse chain. The company has been founded in the year 1971 (Starbucks Coffee Company). The mission of the company is to inspire and nurture the human spirit. The organization has aimed to develop its surrounding and expand its business internationally. The main products of the company are coffee beverages, smoothies, tea, baked goods and sandwiches. Starbucks has its strong presence all over the world with a strong and effective strategy prevailing in the company.

On analysing, the economic scanning of the organization, various strengths and weaknesses of the firm has been acknowledged. Environmental scanning of Starbucks has been analysed which consists of the external and the internal factors affecting the firm. Based on the environmental scanning it could be stated that there is an ongoing political issue about the sourcing of raw materials for the company. The ongoing recession in the world is also creating limitations dor the business of the firm to certain extent. One of the major favourable factors of the firm is that it aims at taking full advantage of the technological advancement of the era. The environmental scanning of Starbucks focuses on the opportunity of the firm to expand the business internationally. The threat of competition is quite high in the world; hence, to cope up with the business, the organization must develop and implement some specific business and hr strategies.

Environmental Scanning

Starbucks aims at improving their ability to perform better and achieving their targets of profit maximisation. The aims of the firm can be best accompanied with advancement in technologies. The organization has already started utilising various applications and new modern techniques in communicating their business with the customers (Antonioli, Susanna and Massimiliano ). Starbucks has adopted various payment techniques that would be beneficial in reducing their cost of handling the business and attracting more sales of the firm. In order to implement better advancements associated to the firm, Starbucks must enhance their methodologies and techniques associated with the business. The organization has an opportunity of globally expanding their business in some if the untapped sessions of the world. The brand image that is created by the firm would be quite beneficial in order to raise the demands of their product and thereby improve their ability to attain growth rate (Ghinea, Valentina and M?d?lina). Starbucks must utilise effective and efficient business strategies that would focus on profit maximisation of the firm.

Human resource planning for an organization is considered as one of the most important aspect, that would help in increasing the productivity of the company. In order to improve the stability of Starbucks, a well developed human resource strategy must be implemented. With the scope of improving the technology that is used within the system,  hiring of efficient information technology developers must be undertaken by the firm. This hiring would help Starbucks in raising the efficiency of the firm and reducing their cost of production. The main aim of Starbucks is to implement certain improvements that would increase their profit margin. The involvement of efficient technology improvements in the structure of the firm along with skilful individuals into considerations, it could be stated that Starbucks would be efficient enough to generate more profit. Hiring the employees would be formulated with an extensive training program. The training program would implement certain development strategies in the organization that would be quite crucial in attaining the targeted growth rate of the organization (Zaefarian, Stephan and Peter ). The training program would help the hired employees to attain the appropriate skills that would enhance their ability in improving the conditions of the firm and seeking innovative amendments to be made. Following the training program, the human resource department of Starbucks should also formulate an appraisal strategy. This appraisal strategy would help in acknowledging the talent of the hired individuals and reward them for their performance (Saeed and Khuram). It provides the workers of the firm with the ability to improve their performance and maintain a healthy workplace. Starbucks need to emphasize on the human resource planning of the company to get the desired organizational success. With the help of happy employees, the company can increase its revenues along with its profitability.

Technological Advancements for Starbucks

Figure : Forecast of organisation chart for Starbucks

Technological development is the business strategy of Starbucks for enhancing competitive advantage in the Canadian market. Human capital is important resource for the company to increase market share in the competitive market environment. Therefore, in order to execute the marketing strategy, the company has to recruit skilled and experienced employees for the new project. The company has to build up a cohesive project team for planning and proper execution of the project in the target market. There would be a line manager, who has formal authority over people and resources. There would be staff manger, who would be assigned the task to mange technology development function.

The organisation chart for the project can be  divided into three tiers, where there would be four line manager having control over their team  members. Business analyst manager and technology development manager have more responsibilities in this respect. The team members under business analyst manager and the project manager need to forecast the requirements and prospects of the new technology in the Canadian market (Cavusgil et al). Technology is something that is being enhanced every moment, so the technology developmental manager needs to study the market in proper manner and look for opportunities that would position Starbucks ahead of its rival in the Canadian market. The Business Analyst manager is the person who would be focusing on the current market situation of the company and the ways through which it can improve itself more and establish itself as the sole leader in the market.

The Sales and Marketing manager needs to aim his focus in increasing the sales of Starbucks coffee more. The team that would be in charge of seeing after the sales figures of Starbucks need to work with retailers existing in the Canadian market for launch of any sort of Starbucks products at places like the grocery stores, campuses of schools and airlines. The team needs to understand the brand value that Starbucks has for which it is even served in the White House and Delta Airlines. The Sales manager needs to come up with exclusive strategies that would hold good for the company for which the company need to have a strong sales team that would be able to execute the plan into action. The brand is already an established one, and people do have belief in this brand, so the project team needs to build on that (Cooper and Sydney). The Quality Assurance Manager needs to focus on the product quality for which it needs a good tester who would be accurate in its process of testing the product and it should be innovative so that no one gets the same taste in any of its rival products.

Human Resource Planning

Starbucks has always been a product that has been stylish and attractive to the younger generation of people, especially the students. They have even shown high interest in getting attached with the brand and working for it even on part-time basis. People are ready to work with this organization more so because of the culture it provides to all. Moreover, people rely on this organization on matters of strong financial resources and innovative operations measures. Their strength lies in the brand name and goodwill that it has earned for itself over the years.

However, one problem that the organization might find is the gap in the demand and supply of labour in Canada. The organization has many stores around the continent of North America, where they require human labour. The company should look to outsource people from different countries to meet the demand of its labour. The company cannot just laid back and wait for the situation to get improved. The company should look to fill up its requirement of manpower through outsourcing as it has got stable financial conditions for which it does have the capability to perform such activities (Dunning). It should take the initiative in meeting its labour requirement before its rival organizations put their hands or do something that Starbucks has thought of.

Recession is something that has affected the company on previous occasions when the labour market was badly hit. The situation has turned for good and the company has passed that situation to become stable again. However, the company has been witnessing certain underperforming outlets in Canada, which were not offering desired results, though costs were only getting augmented. The company would do well to re-strategize its recruitment strategies and come up with offers and schemes that motivate the workforce even more to perform even better. Weekly or monthly training and assessment is required for employees to perform better. The company has previously been criticized on issues of labour relations and fair trade policies, which the company has remodelled.

The economic growth of Canada is high with in the present scenario Canada witnessing a decline in the rate of unemployment that offers Starbucks with enough opportunities in gaining more revenues from the Canadian market. However, increase in the labour cost is another factor that bothers Starbucks a huge deal. The HR management of the company needs to look after this matter and recruit purposefully check listing the candidates who would be meeting their requirements. The company’s spending is becoming more due to the high labour cost, which needs to be dealt with.

Organisation Chart for Starbucks

Advancement of technology is another factor that the company should focus on. It should recruit people who have the ability to mould themselves with the advancement of technology. The company needs to focus on the opportunity it has in improving the mobile apps and the other linked services (Zikmund et al). Its supply chain is also based on the new technologies that the farmers use. The company is investing enough bucks in developing its technology, so the people who would be looking after the technological aspect need to have the technical expertise, understanding the current marketing trend and generating something, that work wonders for the company. Canada witnesses increased regulation in employment, which the company needs to focus on, or else its entry into the labour market would be restricted.

Figure: Demand and supply for labour

(Source: created by author)

Short term demand for human resource for the company depends upon demand for the product, elasticity of demand for the product. The following analysis takes into account the demand and supply of labour for Starbucks. The initial wage is stated to be W1 and the equilibrium supply to be L1. The real equilibrium point is the intersection point of the supply curve and the previous curve of demand. At the time when the price of coffee stays same, there is an increase in the income of the consumers and the coffee demand is stated to increase.  As demand for the product increases, the company has to meet market demand before the competitors can do. So, the labour demand curve would make a shift down the right (Wilkinson).

During a very short run, labour supply is not likely to change. Consequently, the labour supply in the company is likely to increase with a hike in wage. Elasticity of demand for software engineer and IT staffs for the new technology development strategy is not very high. As there is shortage of labour supply in the Canadian labour market, Start buck has limited choice. Therefore, wage is likely to rise within run (Rao, Bhaskara).

Labour Starbucks elasticity has been comparatively elastic as the products are more in the direction of luxurious items. Demand for software engineer would be elastic if technological improvement in the company brings benefit to the company. 

As  it is not possible for the firm to evaluate productivity of the new employees, the company needs to emphasis on the marginal productivity of the employees in the long run (Ismail, Rahmah). As increasing marginal productivity of the engineer and other IT staff is required for the sustainability of Starbucks in the long run in the Canadian market (Ingold, Jo, and Mark Stuart).

On the other hand, as there would be wage hike in the short run in Startbucks, people may offer themselves to work for the company in long run. Therefore, there would be a possibility of decrease in wage rate in future.

Figure : Long run demand and supply for labour

(Source: created by author)

Forecast for human resource demand depends on the factors such as employment trends, employee replacement trends, productivity of the company, absenteeism and the growth and expansion trend of the company. Human resource forecast can be done in both qualitative and quantitative method. Qualitative method includes managerial judgment (Sing et al.). Quantitative techniques are work study techniques, ratio trend techniques. Econometrics model such as Delphi techniques, Estimates based on historical records can be used for this purpose.

	2018	2019	2020	2021
Estimated production	120,000	144000	172800	207360
Estimated number of workers	100	150	150	160
ratio trend	1200	960	1152	1296

Table 1: HR Demand forecast

(Source: created by author)

Figure: Ratio trend forecast model

(Source: created by author)

The above forecast technique shows that demand for human resource for the selected key group is forecasted to have a positive trend. This forecasting model shows that with the increase in production, demand for It staffs increases in the long run. Therefore, it is forecasted that there would be a positive trend in the labour demand in the long run (Sparrow et al.).

External supply of labour depends on the factors such as educational level of the demand, demographic characteristics, rate of population growth, expected growth rate of the domestic industries, technological development in the country and at the organizational level, compensation system in an organization based on skill, age and experience. Different human resource supply forecast techniques are succession analysis, which is qualitative techniques and the MarKov analysis, which is quantitative analysis.

Starbucks has to forecast the demand the supply of labour once it has forecasted demand for labour. The company has to forecast the supply to determine the availability of the potential of the human resources within and outside of the organisation in the long run. Internal supply of labour depends on the projected outflow and projected inflow of the current year. The company has to analysis number of people currently engaged in various jobs and skills within the organisation, their job satisfaction. Number of retirements, transfer, voluntary turnover and termination are also major factors (Daspit, Joshua).

Figure : Estimation method of internal supply of labour

(Source: Sparrow et al.)

The internal supply forecasting can be one by projected inflow and outflows of labour in the current year.

	2017	2018	2019	2020	2021
Projected inflow	20	22	18	26	28
Projected outflow	10	8	5	7	10

Figure : Internal supply forecasting

(Source: created by author)

Internal labour supply for the key human resource is expected to fluctuate overtime. During 2019, internal labour supply is expected to fall due to crisis in production condition. However, it is expected to rise after 2019 due to the growth of the company and increasing labour demand in Starbucks.

References

“About Us”. Starbucks Coffee Company. N.p., 2017. Web. 10 Mar. 2017.

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Rao, B. Bhaskara, ed. Aggregate demand and supply: a critique of orthodox macroeconomic modelling. Springer, 2016.

Saeed, Zafar, and Khuram Shahzad. “HR Strategy: Creating Business Strategy with Human Capital.” South Asian Journal of Management 22.4 (2015): 200.

Sing, Chun-Pong, Peter ED Love, and Chi-Ming Tam. “Forecasting the demand and supply of technicians in the construction industry.” Journal of Management in Engineering 30.3 (2014): 04014006.

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Sparrow, Paul, Chris Brewster, and Chul Chung. Globalizing human resource management. Routledge, 2016.

Wilkinson, Frank, ed. The dynamics of labour market segmentation. Elsevier, 2013.

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Zikmund, William G., et al. Business research methods. Cengage Learning, 2013.