Corporate Strategy and Governance.

Corporate Strategy and
Governance

Table of Contents
TITLE: “To evaluate the factors or drivers that yield sustainable competitive advantage to an
organization”. A case study on Starbucks........................................................................................1
Chapter 1: Introduction....................................................................................................................1
Background of Research Project............................................................................................1
Review of Issue faced.............................................................................................................1
Aims and objectives...............................................................................................................2
Rationale for choice of the topic............................................................................................2
Chapter 2: Literature review............................................................................................................3
Chapter 3: Discussion on primary and secondary research undertaken for analysing issues..........8
Chapter 4: Critical review of the results of the research................................................................13
Chapter 5: Recommendation and action plan................................................................................23
Recommendations................................................................................................................23
Action Plan...........................................................................................................................24
REFERENCES..............................................................................................................................27
Appendix I: Dissertation Supervision Record...............................................................................28
Appendix II: Ethical Form.............................................................................................................31

TITLE: “To evaluate the factors or drivers that yield sustainable competitive
advantage to an organization”. A case study on Starbucks.
Chapter 1: Introduction
Background of Research Project
Sustainable competitive advantages are the representative of the assets, factors, attributes,
and abilities of company that are superior and its biggest strength and relatively difficult for
other organisation to copy or duplicate these factors. Thus, It can be evaluated that sustainable
competitive advantage are the main factors that provides a superior and more favorable long term
position to a organization over its competitors (Johnson, 2016). The sustainable advantage
includes cost advantage, timely innovations and creativity, infusion of resources, regular product
development along with other factors that makes an orgnisation more better superior than other
thus, it could be evaluated that Sustainable competitive advantages can only be build and
establish through effective corporate governance and strategy formulation. Corporate governance
basically provides the combination of rules, processes or laws in order to facilitates more
effective way to operate, regulate or control operations and performance of an organisation.
Thus, corporate governance plays a vital role in leading Sustainable competitive advantages for
an organisation but at the same time some issues associated with corporate governance failure
like lack of board effectiveness, poor leadership on ethos and cultured, defective communication,
excessive complexity and inappropriate incentives policy are also faced (Habbash, 2017). Thus,
the current investigation is based on Starbucks that is a famous American coffee house and chain
having its main headquarter in Washington, US but the operations of this company is spread out
across the 30000 locations of world that also includes many parts of UK also. Starbucks
Company is selected for current investigation to evaluate about the factors or drivers that yield
sustainable competitive advantage to an organisation along with determining about the issues
faced in corporate governance along with suggested action plan to overcome those issues.
Review of Issue faced
The issues and problems that are discussed and evaluated through current research work
consist of need and importance of maintaining sustainable competitive advantage for an
orgnisation. Further, the main issue that is evaluated through current research work consist of
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factors that could lead to corporate governance failure so that better evaluation of strategies
could be made to encounter these failures and eliminate their occurrence in future.
Aims and objectives
Research aim
The aim of this research project is “To evaluate the factors or drivers that yield
sustainable competitive advantage to an organization together with its importance in success
of organisation.”
Thus, this research project is focused on determining various ways that yield better
sustainable competitive and plays a crucial role in improving position of organisation in business
environment. Beside this, the current investigation also includes a description about its industry
life cycle and existing corporate governance along with discussion about corporate governance
failure and suggest actions that can be taken to reduce or eliminate such occurrences and
happening in the future.
Research Objectives
The current research project that is conducted on Starbucks is having following main objectives
and purposes:
 To determine the factors or drivers that yield sustainable competitive advantage to an
organisation.
 To evaluate the role and importance lead by sustainable competitive factors in success of
Starbucks.
 To determine the factors that could lead to corporate governance failure along with
evaluation of actions and strategies that could be adopted by Starbucks to reduce or
eliminate such occurrence from happening in the future.
Rationale for choice of the topic
The selection of current research topic on factors or drivers that yield sustainable
competitive advantage to an organization is rationale along with determination of factors that
lead to corporate governance failure along with solutions and actions to overcome these issues to
reduce there occurrence in future. Thus, selection of current research work is viable from
professional perspective of researcher. Beside this, it also lead to betterment in skills of
researcher along with meeting the educational and academic criteria. Thus, can be evaluated that
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current research work is rationale and vital from both personal and professional view point of
researcher.
Research Hypothesis
The hypothesis for this research is based on the factors or drivers that yield sustainable
competitive advantage to an organisation together with role and importance lead by sustainable
competitive factors in success of Starbucks. Beside this, the set hypothesis for current
investigation also includes the factors that could lead to corporate governance failure along with
evaluation of actions and strategies that could be adopted by Starbucks to reduce or eliminate
such occurrence from happening in the future. While conducting this research project due care is
provided to all possible research principles and moral in order to conduct this research in most
ethical way. For that purpose all the provisions associated with data privacy protection act are
followed and a written consent is obtained from respondents before asking their personal
information of perspective. Beside this, all the tasks and activities of research are performed in
an ethical way to ensure that it does not harm or hurt feelings or sentiment of any individual
Research questions
The main issues and research problems that are evaluated and discussed through current
investigation are stated as follows:
 What are the factors or drivers that yield sustainable competitive advantage to an
organisation?
 What important role is lead by sustainable competitive factors in success of Starbucks?
 What are the possible factors that could lead to corporate governance failure within the
premise of Starbucks?
 What possible actions and strategies could be adopted by Starbucks to reduce or
eliminate the happening of corporate governance failure in the future?
Chapter 2: Literature review
Literature review is kind of academic writing in which current scholarly information is
summarised and synthesises about particular topic (Fink, 2019). It is synopsis addition to
summary of specific research that allows the people to establish reasons to pursue the research.
Some of the requirements or purposes of conducting the research in perspective of Starbucks are
as follows:
To evaluate industry life cycle of the company and reflection on existing corporate strategy
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According to Outlaw, 2019, Industry life cycle is termed as evolution of particular industry
or company on the basis of stages related to growth and decline. It depicts about wide number of
phases in which an organisation introduces itself, operate, develop, prospect addition to slum up
in the sector. In context to Starbucks, the lifecycle of the entity is as follows:
Introduction stage: This is the stage at which an organisation starts its operations in the
industry. In context to Starbucks, market population was unfamiliar about its offerings and
promotional activities at this stage. Its distribution channel was also underdeveloped and it had
limited complementary commodities which add customer values.
Growth stage: Hereby, offerings of the organisation attract attention in slow manner from
bigger market segments to lead towards growth in which profitability initiates to rise. In this
stage, managers of Starbucks have adopted corporate strategy that is differentiation strategy
through which it offered coffee products that are different from that of rivals. This increased the
demand of its products and resulted in increasing profits and customer base.
Maturity stage: Maturity stage of industrial lifecycle is defined as increasing number of
competitors along with corresponding reduction on profit growth in context to sales percentage
(Canedo, 2016). In case with Starbucks, the company attained the maturity stage and to
compensate for saturation level, its corporate governance strategy revolved around expansion in
untapped market and so on. It helps in enhancing efforts for meeting satisfaction of current
customers for preserving customer base.
Decline stage: At this stage, competition for commodity pricing escalate and decrease is
sales is experienced by an organisation. Through working with industrial commodities, markets
of Starbucks have opt to discontinue specific product at the time when it have attained the level
or launching a replacement product which makes previous version obsolete.
With the evaluation of industrial life cycle stages, it is analysed that the current corporate
strategy of Starbucks benefits it to attain huge profits and increasing customer base. At same
time, the corporate strategy also needs some modifications that impact the business and practices
negatively.
To comparison and contrast of board’s corporate governance structure along with
effectiveness
According to thoughts of Mohammad, Wasiuzzaman and Salleh, 2016, corporate
governance structure is defined as the ways in which roles, responsibilities and accountability of
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the company and boards are stated or outlined in clear manner. However, corporate governance
effectiveness is defined to the mechanisms or degree at which successful results are obtained
from governance of the organisational board.
The essence of board corporate governance structure is all about ensuring trustworthy
relations among stakeholders as well as company. In case with Starbucks, trustworthy relations
are build and managed among all stakeholders and the company so to develop business
sustainability. However, corporate governance effectiveness is more than corporate governance
structure as it involves CRAFTED mode of governance which includes consistency,
responsibility, accountability, fairness, transparency and efficiency which are deployed within
entire business. The administrators of Starbucks have responsibility for ensuring sustainable
improvements within valuations of corporate through providing strategic guidance along with
oversights to management decisions.
The similarity among corporate governance structure and effectiveness is that by
considering the both, important decisions for Starbucks are taken and strategies are implemented
to accomplish workings on time as per the desired goals. Moreover, these both influences quality
of decision making together with management of operations within the organisational premises
(Jacoby, 2018).
To devise board crisis action plan for natural disaster of unforeseen events of catastrophic
proportions
As per the perspective of Kennedy, 2020, It is important for all organisational board to
devise crisis action plan for any type of natural disaster of unforeseen events. In association to
Starbucks, the global pandemic of Covid- 19 is the natural disaster that is faced by the
organisation and has resulted in huge effects on existing business climate. Mentioned below are
steps for crisis management for unforeseen events for Starbucks:
Choosing objectives: It is seen that crisis management is no different from other types of
projects. In this, one particular direction is selection for unforeseen events. For example,
managers of Starbucks have selected objective of trade offs during the crisis. Along with this, it
is also working towards accepting weaknesses and playing on strengths.
Communication of objectives to team members: When the objective is clearly outlined
then the next is to share it with team members (Fearn-Banks, 2016). In case with Starbucks, the
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managers communicates set objective with team members who are part in crisis management
procedure.
Designating key contacts: It is analysed that crisis develops quickly, it is important to
designate contacts with key team members as they are part of crisis management. Company like
Starbucks designate key representative from its all divisions and units for weighing towards
crisis decision making and staying with apprised of facts which are unforeseen.
Establishing roles along with responsibilities during crisis: Once key contacts are
designated, the next is establishing roles and responsibilities so that there re no confusion lines
for who is performing what when crisis strikes.
Using impact based matrix as model: In this situation, major focus of organisations must
be on using impact based matrix model so to minimise uncertainty as possible.
Conducting post-mortem: In this, managers of Starbucks gartner shares which sets
successful establishments apart becoming deligent for conducting post-mortem after project
related decisions. In relevance with Starbucks, post mortem of the situation is done to gain
insights about the losses due to pandemic situation.
Analysis of corporate governance failure and suggestion of actions which can be taken to
eliminate or reduce such occurrences from happening in future
With relevance of thoughts of Tan, Chapple and Walsh, 2017, corporate governance is
described as set of processes, regulations and practices which are used for directing and
controlling an enterprise. It is seen that corporate governance failures do not happen overnight.
Moreover, it provides various warning signs which are required by managers to note for avoiding
the failures. In case with Starbucks, certain governance issues that are faced by the organisation
that resulted in corporate governance failure are as analysed:
 Ineffective mechanisms: This is due to limited board committees as well as committees
that includes few members when are unable to implement regulations and practices in
effective manner then it leads to failure of corporate governance.
 Poor leadership: This is another issue that has resulted in corporate governance failure
in Starbucks as leaders are unaware about their roles and responsibilities dur to huge
politics within the divisions of the entity. This creates complexities in working of leaders
to motivate manpower and when they fail in doing so then faces failures on corporate
governance.
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