Research Paper: Featuring an Analysis

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SAMPLE EXCERPT:

[. . .] In addition, a large proportion of the firm's products come from coffee, and other beverages. This suggests that with the rising prices of coffee bean, the company takes advantage and increases the consumer products. In so doing, the competitors have realized this weakness. For instance, McDonald and Dunkin Donuts, who are the main competitors, have used this weakness to their advantage. Nonetheless, Starbucks' strengths outweigh the weaknesses, which make the company survive the competition.

Opportunities

A company like Starbucks has many opportunities. An assessment of the beginnings of the company reveal that the firm is almost exhausting the local opportunities. Therefore, the international market is still the main source of opportunity for the company. Countries, which are slowly realizing growth in their economy, are slowly embracing the special coffee offered by the firm. This is because of the division within the middle and upper classes of people. The countries are achieving globalization, which is causing the expansion on coffee tastes. A typical example is Brazil, which is the largest consumer of coffee worldwide. This provides an opportunity for the company because of the potential huge market (Murphy).

India is also a country, which is embracing the coffee sector. This also provides a huge opportunity for subsequent success for the company in the country. India is experiencing economic success, which is making the women and men to turn away from tea, and embrace the taste of coffee. Still in India, the company signed a treaty with Tata Coffee of India, which is a global exporter of coffee, to negotiate into collaborating and start selling their coffee. China also provides an opportunity for the company to venture and expand its business. Therefore, there are many opportunities for the company, which can see to its competitive advantage, and subsequent growth (Bose).

Threats

One of potential threats the company is facing is competition. This a significant threat at the current state and in the future. McDonald is the major company that is offering Starbucks a lot of competition. This is because McDonald is also capable of opening their Cafes in franchise stores across the globe. In addition, McDonald is targeting the European market, which means that it will offer Starbucks stiff competition. Opening a store in Europe requires a great deal of investment. In the case of Starbucks, it would require more than $350,000, but McDonald will only require 1/3 of the amount. Therefore, if McDonald continues to open stores all over Europe owing to the low investment startup costs, it would reduce the geographic scope merit enjoyed by Starbucks, and offer stiff competition (Dicarlo).

Summary

The SWOT examination proposes that the company has many opportunities when compared to the threats it has. The company also has an exceptional setting, which the competitors will find hard to copy. Therefore, if Starbucks takes advantage of these opportunities, it will continue dominating in the coffee industry. In business, it is impossible to lack threats. On realization of the threats, it becomes a strategy to gain competitive advantage. Nonetheless, Starbucks is strong and it is going to experience much success in the future. It is financially sound, even after firms went through financial crisis and declined, the company was strong. This analysis provides proof that the company is strong both internally and externally.

Step 2

Starbucks Resumes Tax Payments in Britain (article)

Similar to other global leaders, Starbucks Corporation does not fall short of corporate social responsibility issues. One of the issues that raised global concern was the tax scandal whereby the company had not been paying its taxes. Apparently, the firm had avoided paying tax since the year 2009, but paid its first tax in the year 2013. In response, critics have suggested that U.S. companies in other countries have the tendency of avoiding paying taxes. In this case, the Starbucks Corporation was in the United Kingdom where it did not pay its taxes as expected. In this regard, the firm handed over €5 million in U.K taxes (Colchester).

Consequently, the firm was insisting that it was tax compliant, even after it was apparent that it was not paying the required taxes. In addition, this issue tarnished the company's name, and some consumers reacted by protesting and condemning such practices from corporations that make substantial profits. In response, after paying the taxes, the company said that it did so for its many consumers. The company paid its taxes, and added another €20 million to cater for the year 2013, and 2014. It is also rumored that the company does not make substantial profits in the UK, but this does not warrant it not to pay taxes (Colchester).

Lawmakers in the UK have condemned such acts by renowned corporations in avoiding to pay cuts. Some of the other firms in the same situation as Starbucks Corporation are Google, and Amazon. Therefore, the lawmakers aimed to provide mechanisms, which will deter such companies from avoiding tax remissions (Petroff). The tax evasions are one of the ways in which companies fail to perform socially, and this can result to adverse consequences. In addition, corporate social responsibility is a strategic move, and it is possible that the company's competitors can take advantage of this issue (Petroff).

Taxes: An Ethical Issue

Tax is a reflection of social responsibility. When companies pay a fair amount of money in the countries of operation, it is a socially responsible action. This is an action, which will help the country provide services such as healthcare, education and investment in infrastructure. In addition, when paying taxes, the company should appreciate because the governments involved will improve the infrastructures, which will contribute to the growth of the firm. It is also likely for people to perceive the company as selfish and greedy, which will damage the company's reputation, and subsequent sales. This is because consumers will lose trust in the company and opt to seek the same services from other companies (Baker 5).

Conversely, avoiding tax is an ethical issue, but avoiding tax by interfering with the rules does not qualify as illegal. Nevertheless, people perceive such as illegal, rather than operating within the rule of law. On the other hand, many countries have outlined how companies should pay the taxes as provided in the law. The issue comes in when companies try to interpret the law to suit their needs, as such, to avoid paying the taxes. Avoiding paying tax is therefore immoral and unethical, and it can undermine the integrity of the company.

Corporate taxation is in a way an expression of good corporate governance. One way for the companies to comply with taxation rules is through tax planning. In most cases, countries make it easy for companies to plan their taxes by providing tools and mechanisms for purposes such as allowances, deductions, rebates and exemptions (Baker 5). Using the tools, the companies can then make appropriate choices concerning on how they would want to pursue their business, but after they consider other implications, such as tax. Tax planning is a compliant behavior, but evading tax is a grey issue.

Influence of Tax Avoidance

Many studies have provided empirical evidence concerning the association of practices such as tax avoidance, and subsequent corporate social responsibility. Companies that fail to observe such practices often take part in major social scandals. Studies have suggested that when a company fails to remits its taxes, it has failed to perform its social responsibility. Therefore, as a strategy, it is important for companies to perform socially, environmentally, instead of only aiming at making profits. In the case of Starbucks Corporation, when consumers became aware that the company failed to pay taxes, they protested (Baker 5).

This was suggestive that they perceived Starbucks Corporation as selfish and greedy. Such a perception is dangerous because the consumers could opt from consuming products from the company. In addition, competitors can take advantage of such issues from their corporation to lure consumers into consuming their products. Failure to pay taxes also suggests a failure of the administration, or management to align the companies to socially responsible practices. Therefore, companies should also create policies, which ensure that the company pays tax to avoid adverse effects of losses, or losing the competitive advantage (Dyreng, Hanlon and Maydew 61-82).

Recommendations

Companies should perceive taxes as a legitimate pay, and should not view it as an extra cost, which is not fair. In respect to this case, one of the reasons provided by Starbucks is that the firm was not making profits in the U.K. This is not legitimate, and the company should have paid taxes to comply with the laws of the land. Companies should consult experts on how to plan for the tax, which will help in strategic planning. Paying taxes is a strategic move, which will build the company's reputation, and avoid losing customers.

Starbucks lost a large proportion of their customer because of the tax scandal. This was something the company could have avoided.… [END OF PREVIEW]

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Featuring an Analysis.  (2014, March 16).  Retrieved June 20, 2019, from https://www.essaytown.com/subjects/paper/featuring-analysis/6469680

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