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Summary Unit 37 - Understanding Business Ethics (21021c)
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- PEARSON (PEARSON)
Summary of 5 pages for the course Unit 37 - Understanding Business Ethics at PEARSON (unit 37)
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L3 Btec National Extended Diploma in BusinessUnit 37: Business Ethics
Subject Teacher: Anthony Johnson
Klein Luyindula
Examine the ethical concerns of the communities in which a selected business
operates - P4
Explain the ethical concerns of the communities in which a selected business
operates and suggest measures that could be taken to improve corporate
responsibility - M3
https://www.youtube.com/watch?v=_FGUkxn5kZQ
Why Starbucks failed in Australia.
Starbucks opened its first coffee retail chain store in Sydney, Australia which is proven
to the be the toughest markets in world to break into. Evidence shows to how hard the
organization struggled. Once they entered the Australian market, they instantly opened
their first Sydney store in July of 2000. The coffee retailer quickly expanded and
branched out into different areas within Australia having up to a total of 87 active stores
running across the continent.
But 8 years later in 2008 Starbucks had closed 2/3’s of its retailer stores. Now entering
a new market Starbucks quickly failed because of their poor business strategy as the
business thought because the organizations success in other countries led the owners
to instantly thinking that entering a new market with a same business strategy would be
acceptable enough for business to roll out and succeed in Australia from which they
thought they didn’t need to adjust which caused their downfall. The reasons behind to
went wrong for Starbucks because once they had officially open their first dew chain of
stores within Australia the company just began opening a numerous of different stores
at a rapid rate other then slowly integrating into the market slowly which didn’t give
Australian consumers an opportunity to develop an appetite for the Starbucks brand
another downfall was that the organization moved into different areas ranging from
regional areas, outer suburbs areas which shows to the Australian consumers that its ‘
too available to them’ which dictates that customers didn’t have a demand/ want for
Starbucks which decreased their organic growth in Australia this issues would later
gone on to effect Starbucks downfall drastically as the company went on to take $105
million in losses within their first 7 years of operating in Australia, by 2007 the business
was struggling to maintain their brand in the Australian market as they relying on loans
, L3 Btec National Extended Diploma in Business
Unit 37: Business Ethics
Subject Teacher: Anthony Johnson
Klein Luyindula
to keep the business operation totaling up to $54 million in loans from the US
government, then in 2008 Starbucks announced they were closing 61 of its 87 stores.
Other key areas that affected Starbucks and impacted their downfall was their ethical
concerns that they had in their local communities. The coffee retailer quickly had a
negative response to the local communities due to the efficiency of products from which
the organization where selling on their menu. The coffee chain thought by only selling
sweet beverages would intrigue customers, but this business strategy began to
increasingly frustrate a number of customers within the community solely because the
beverages were not healthy. Other communities such as vegans were also affected
because of the highly amounts of sugars which is mixed into the beverages but also the
choose of using dairy products which had a negative response due to the fact that not
have soya milk and gluten free diary products will force communities such as the
vegans not to purchase products from Starbucks will results in Starbucks taking on the
impact as they make less profits and loosing more customers and have to taking in
more debts. This shows conclude my point of Starbucks poor marketing strategy as
they are not flexible enough to meet the customer needs of the different communities
within the area which shows why the company’s failing to keep up with the times.
The department of health is a department of the government of Australia which is
charged with overseeing Australia’s health system that is administrated by the state and
territory’s belonging to the government. As a result of Starbucks constantly distributing
over sugary food and beverages products to the community Is what led to the
organization gaining the attention of the Australian department of health who stepped in
and took action on the brand ordering them to change and remove products which don’t
meet the health guidelines. The reason to this is because there has a been a real surge
of obesity which is has had a negative impact to the local communities which why the
department places health guideline procedure into place to prevent the surge from
increasing which is why if they continue to let Starbucks operate and sell unhealthy
beverages to the public then more communities will be effected. As a result of this to
improve corporate responsibility Starbucks will need to recreate a healthier menu to
distribute to their consumers which is acceptable by the health departments in doing this
will bring in reassurance from consumer in the local communities which can prevent the
surge of obesity.
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