Critical Thinking for Contemporary Business Issues

This report deals with two business-marketing theories and has identified the differences between them. The theories are a business-to-business and business-to-consumer theory. The advantage and the disadvantages of the theory have been pointed out in this case and choose Starbucks as an example of the business-to-consumer market model.

Running head: CRITICAL THINKING FOR CONTEMPORARY BUSINESS ISSUES
Critical thinking for contemporary business issues
Name of the student
Name of the university
Author Note:

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CRITICAL THINKING FOR CONTEMPORARY BUSINESS ISSUES
Executive summary:
This report deals with two business-marketing theories and has identified the differences
between them. The theories are a business-to-business and business-to-consumer theory. The
advantage and the disadvantages of the theory have been pointed out in this case and choose
Starbucks as an example of the business-to-consumer market model. The reasons for
selecting this company has been discussed under the report and the marketing analysis of the
two models are also being prescribed in a detailed way.

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Table of Contents
Introduction................................................................................................................................5
Reason for choosing Starbucks:.............................................................................................5
Starbucks:...............................................................................................................................5
Demographics:.......................................................................................................................6
Sales:......................................................................................................................................6
Volume:..................................................................................................................................7
Definition of B2C Markets.....................................................................................................8
Discussion..................................................................................................................................8
Difference between B2C and B2B firms and Markets...........................................................8
Purchase Decisions are made by a committee in B2B...........................................................9
Business Models of Traditional firms in B2C markets..........................................................9
Generation Z and their Characteristics.................................................................................10
Process by which innovation takes place in traditional B2C product and service firms.....13
Nature of innovation in Starbucks........................................................................................15
Issues faced by the company previously:.............................................................................17
Present issues:......................................................................................................................17
Differences:..........................................................................................................................18
Difference in between open and closed innovation:........................................................18
Difference in between old and new innovation:..............................................................18
Use of Crowd sourcing by different firms...........................................................................19

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Adoptability of the traditional B2C firms in the modern marketing environment..............20
Implications for Organizational Structure............................................................................21
Process by which new firms and Business Models have emerged work with external
groups...................................................................................................................................22
Implications of new firms in Organizational Structure, leadership and innovation process23
Implications for Organizational Structure of traditional firms............................................24
Conclusion................................................................................................................................24
Reference:................................................................................................................................26

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Introduction
Reason for choosing Starbucks:
Starbuck is the best example of B2C firm as it sells its products to the consumers directly.
The company has been incorporated in the year 1971 and since then the company is
professing its business successfully. The company is following the essentials of the B2C
market and offer its product to the consumer in both the ways (online and offline). The main
product portfolio of the company is based on the coffee, espressos, Fontana, sandwich and
other snacks. This report is covering the effectiveness of B2C market and the company is a
perfect example of this aspect. The company is following the brick and mortar model, even in
case of the international market and therefore, it can be treated as traditional B2C firm.
Starbucks:
Starbucks Corporation is originated in USA and head quartered in Seattle,
Washington. The company has been incorporated in 1971 and since then it has been serving
quality products to the customers directly and become very popular coffee destination in the
world (Starbucks Coffee Company 2018). It has been observed that the company has adopted
various policies for developed its base and the efforts has assisted the company to achieve the
place of most desirable coffee shop in the world. The company is very popular for selling the
roasted coffee, fresh cappuccino and espresso. The company has gained revitalized profits in
1980 when the whole country was affected by the economic downturn. The company follows
a matrix organizational structure, which is basically a combination of all the different
structures namely;
1. Functional Structure
2. Geographic based Division

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3. Product based Division
4. Teams
All the different information of Starbucks can be gained from its website and other
related articles (starbucks.com 2018). Starbucks can be linked with the B2C business as
the organisation sells its products directly to the customers. The fact that Starbucks have a
physical store present in most of the countries makes it possible for it to interact with the
customers. This provides opportunity for the company to continue with the business it
provides and helps in maintaining the satisfaction of the customers.
Demographics:
The company is professing its business for decades and it has been observed that the
products of the shop are in demand. The company has able to catch its consumer who
preferred all the flavored coffee and espresso a lot. However, the company has now become
an international company and it has opened several outlets all over the world. The products of
the coffee shop are preferred by every age of person. However, the people from age 20 years
to 30 years are mainly attracted by this. It has also been observed that the elder persons have
also a desire to taste the excellent flavor of the roasted coffee and espresso. People
irrespective of gender come to taste the products of Starbucks.
Sales:
Starbucks is one of the most reputed companies in the world and it is essential that the
company maintain its reputation in the market. The reputation of the company is such that it
provides opportunities for people to interact with the company at a close proximity. The
brand name of the organization helps it to attract people and thereby create an opportunity to
increase its sales. The report has it that the sale of coffee in Starbucks increases at a constant
rate every year (Starbucks Coffee Company 2018). The sales chart for the last 5 years shows

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that since 2013 Starbucks has seen a steady increase in the sales of the company. In 2013, the
sales were $14.8 billion but in 2017, the sales rate increased to $22.38 billion. This shows the
significant growth of the company and the manner in which it is popular with the people.
Figure: Sales of Starbucks (2013-2017)
(Source: Starbucks Coffee Company 2018)
Volume:
The report shows that Starbucks sells a huge number of coffees per day along with
other products such as cookies and cups. The volume of coffee that is sold by Starbucks
average between 2.916 to 2.946 billion cups (Starbucks Coffee Company 2018). This is an
important statistics given the fact that this particular report is based only on the sales of the
coffee in the physical stores. Apart from the physical stores, Starbucks also provide service
online which when put together increases the volume amount to more than 4 billion. Thus,
with a proper target market, promotion and exceptional brand image, Starbucks is one of the
best brands of Beverage Company that exists in the world. The three factors combine to
provide Starbucks with an opportunity to maintain its reputation in the business market.

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Definition of B2C Markets
B2C markets can be defined as the markets where the business organizations sell the
products and provide a wide range of services to the end users or customers. The products
and services provided by the business organizations are done directly without the use of any
medium in between them (Pai et al. 2015). The following types of market have both an online
and offline presence but B2C is generally used to determine the online mode of business
communication. B2C business played a key role in the large-scale development of the
commercial use of internet starting from the 1990’s era. The final customer in the B2C circle
is the consumer with a B2C business (Liu et al. 2017). Retail stores, other business
organizations like coffee shops, housecleaning services and restaurants are examples of B2C
markets. The sales cycle of the B2C markets are shorter than the other markets. For example
a customer looking for a particular product can easily search a website for that product
analyzes the reviews of the product and order it after careful determination (AlSheikh,
Shaalan and Meziane 2017). The purchases are made on an emotional basis and on the basis
of product and the price. The consumers often get confused if the products arrive to them
after a long process of different steps. This report will define the business model of Starbucks
and analyze the decision of the company to make it a B2C firm instead of B2B firm. The
benefit of the company will also be described in the report. The company is providing 30
blends of coffee, handcrafted beverages, brewing equipments, coffee mugs, and fresh foods
like sandwiches, salad, oatmeal and fruit cups.
Discussion
Difference between B2C and B2B firms and Markets
There is always a difference between the B2B and B2C markets as marketing to
business and marketing to consumer requires different approaches. However, both of the

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marketing targets the end users or the customers both of them have very deep differences
(Ghuman and Mann 2017). The B2B market is based more on logic rather than any emotion.
The cost of the sale for a business-to-business market is much more expensive and costly
compared to that of a business to consumer market. The business-to-business transaction
takes into consideration the involvement of more and more people in the business fold
(Iankova et al. 2017). People have a common feeling that the only difference between these
markets is the scale of the products and the size. On the other hand, in case of business-to-
communication system, there are no people working in between the business products and the
customers. All the products are directly sold to the customers. Some of the most common
differences are as follows:
Purchase Decisions are made by a committee in B2B
The purchases in a B2B market are much larger and involve the spending of a lot of
money. These are used by many a persons in the company. Therefore, a larger group decides
on the type of the product to be purchased by the company (Kim and Chun 2018). While in
case of B2C market, lots of money are not invested and as the products are directly sold to
customer, it does not need a larger section to take decision like the B2B firms.
Business Models of Traditional firms in B2C markets
The term B2C or business to consumer is a marketing model that particularly deals
with the company and consumer directly and there is no existence of other businesses in
between them. This is the main difference in between the B2C and the B2B business model.
Under the B2C model, most of the companies are direct deals with the consumers and they
become very popular in 1990. Michael Adrich has propounded the conception of this model
in the year 1979 where he has mentioned professing all the commercial transaction directly to
the consumers. In case of traditional firms, this model has extended the idea of shopping at
malls, eating at restaurants and pay-per-view processes (Liu et al. 2017). Starbucks is a

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perfect example of the B2C market as it offers its brewery to the customers directly. The
company is very popular for its good products and customer service. However, the concept of
the commercial transaction has been changed after the rise of internet system and this B2C
marketing model has introduced a custom of selling goods through the internet. Starbucks has
also changed its market segmentation process and introduced an option to serve the products
to the customers directly through online.
The traditional marketing aspect of B2C model can be termed as ‘Brick and Mortar’
and according to this model, the companies directly communicated with the consumers in the
form of street-side business (Joseph 2015). There were certain advantages in the Brick and
Mortar business schedule and response from the customers were high under this business
schedule. It was believed by the people that face-to-face interactions are more effective
compare to the other kinds of transaction. However, the situation has begun to be changed
after the invasion of the internet and the traditional model of B2C business has found it
difficult to compete with the web businesses like Amazon and Flip kart. It has been noticed
that near about 72% consumers are like to give a trial before buying any product (Ghuman
and Mann 2017). Therefore, Brick and mortar model is ideal for them. Instant gratification
has been made under this traditional business model of B2C. However, the operating cost of
this traditional model is very high and this portion has become one optimist point of web-
based market portals like Amazon.
Generation Z and their Characteristics
Characters like Generation Y, Generation Z, and Net Zen are certain demographic
cohort used to denote certain specific characters. Generation z is the successor of the
generation Y and much comfortable with current technologies and becomes a hard competitor
in respect of older staffs or cohorts (DaSilva and Trkman 2014). Generation Z is based on
mobile communication and it becomes more popular with the youths. By the wave of various

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social media, texting becomes the most effective communication mode of this generation.
The generation that has born from the year of 1995 is specifically known as Generation Z. It
is noteworthy to state that the considering the importance of Generation Z, Starbucks has
introduced an app so that the new generation can place an order or look into the menu option
directly from their mobile phone.
There are certain characteristics observed in Generation Z that can be categorized as
follows:
 The most obvious characteristic of Generation Z is that the followers of this
technology have different consumption habits compared to other generations.
According to an exclusive study made in the year 2015, it has come into the lights
that this generation is changing their taste over the media consumption habit.
 The second characteristics of this generation are that the followers of this
generation are not interested about products, they are interested in the experience
(Turner 2015). It has been found that the expectation level of this generation is
quite depending on various brands and the level of experience is also quite high
compared to the other generations. They are regarded as the most sophisticated
generation of all the times.
 Most of the followers of this generation are tech savvy and they can transform the
daily realities into digital basis (Ozkan and Solmaz 2015).
 They are giving much concentration over the global brands and borderless reality.
 Due to their strong attributive nature towards different kind of technologies,
generation Z are more flexible in the workplaces and they sustained the capacity to
work remotely.
 The traditional marketing skills have not attracted this generation and they are
looking for visual marketing tactics (Levit 2015). The skill set of this particular

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generation relies on the strategic application of the resources and the manner in
which knowledge can be implemented for the purpose of gaining an advantage in
the market. This helps in increasing the opportunities to be employed by reputed
organizations.
 The work life of the customers and the Gen Z people fluctuate based on the amount
of money they are receiving at work. Most of the time it is seen that the Gen Z
prefers to earn money by spending less time and effort in the workplace. This
casual nature is another characteristic that defines the people of this generation.
 The knowledge of the Gen Z people circulates around various types of information
that they receive in the market. This is mainly derived from the excess use of
internet and social media that provides the people with instant updates about the
occurrences in the market.
Thus, it can be said that the Gen Z population of the society form the core customer
base of Starbucks. The skill, knowledge and the work done by these people consist of the
target market of the company. Starbucks needs to identify the Gen Z along with other
customers so that it can overcome certain factors that may hinder the progress of the
company.
For example, the social factors of the company are identified keeping in mind the CSR
activities that are undertaken by it. The Generation Z customers form the core components in
the society and based on the responses provided by these customers in the social media,
Starbucks can manage its business. This can help Starbucks to continue with the social
welfare and the innovative nature of the business that it usually provides. The Gen Z can even
help in maintaining the changes in the organization. The recruitment of the Gen Z people can
help Starbucks to continue with making innovation in the company and rely on the
application of technology.

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Starbucks may certain challenges in the business market that may include the
application of changes in the organization and on the response of the people. The change in
the market may result mainly because Starbucks have to change the position of the business.
For example, the response received from the US market may be different from the response
received from the UK market. The responses of the customers in the two countries may vary
based on the tastes, preferences and the price of the product. For example, people in the UK
prefer tea to coffee, thereby; a Starbucks store in the UK may not generate the required sales
than it does in the US. Thus, the company can rely on the Gen Z community to ensure that
the business is run in a proper manner and no constraints are faced even with the change in
environment.
The process by which innovation takes place in traditional B2C product and service
firms
Source: (Jones et al., 2018)
Two conditions present in the business and marketing model of B2C are traditional part
and current part. The traditional part of the model is known as Bricks and Mortar. This model
depends on the face-to-face interaction with the consumers and concentrates on the consumer

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satisfaction broadly (Pee 2016). It has been observed that most of the consumers are preferred
to try the goods or products before buying the same. In this process, they get the option of
alternatives regarding their chosen articles. The traditional model of B2C has earned
popularity and has started to introduce certain kinds of techniques with an intention to expand
its business segmentation. However, the process of innovation regarding this model can be
pointed out as follows:
I. There are certain consumer-related problems cropped up during the goods
purchasing. In certain circumstances, it can be observed that the buyers are getting
confused before buying a product and situation becomes different to them. Therefore,
it is important to identify the problems and chalk out effective strategies with an
intention to make this dilemma as an opportunity (Sturiale and Trovato 2015).
Asking questions regarding the problem can be a good option for the B2C marketers
to identify the problems.
II. After a problem has been identified, a solution of the same will become very
necessary. Searching for proper information is very important to this effect. The
Bricks and Mortar model keens to attract the customer with all possible assistance by
interacting with them directly. However, it is the duty of the marketer to present their
brands before them and maintain clarity to the consumers over the products.
III. The customers become too much aware of the products and they have studied before
placing their order to the marketer. Additionally, as the marketing model of
traditional B2C is based on direct interaction with the customers, it is necessary to
keep the alternative products in stock (Pee 2016). This will give a chance to the
consumers to make a differentiation in between the products and ensure their
decisions.

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IV. It is required for the traditional marketers to give necessary concentration over the
innovation. An attempt has been taken to develop the capabilities of firms with a
view to providing clear understanding regarding the firms. Service firms can be
termed as an economic agent that works for meeting the demands of the consumers.
Further, the firms operate as a repository of knowledge. Therefore, innovations are
required to take place for the development, operation, management and transaction
capabilities.
V. The greatest consequence of the innovations is the rise of electrical commerce or e-
commerce and that opens a new era of B2C marketing where the consumers can
choose their products on an online basis and get a huge number of alternatives
regarding the product. It is obvious to state that this new technologies of the B2C
model have been originated from the traditional services and it comes to light
through different innovations.
Nature of innovation in Starbucks
Innovation is required to ensure that Starbucks maintains its reputation in the market
and provide customers with an opportunity to satisfy the customers by meeting their
requirements. At this stage, it is necessary for Starbucks to maintain innovation based on the
demands of the customers. The age of customer innovation is one of the trending factors that
help in determining the innovative paradigm with the customers. The effective application of
the Procter and Gamble innovation is essential to develop a relationship with the customers.
According to Sturiale and Trovato (2015), the Procter and Gamble innovation model can help
in providing more satisfaction to the customers.
Some of the innovative tactics developed by Starbucks included the introduction of the
digital-based ordering as well as the delivery system. In the modern world, this is one of the
most innovative processes of Starbucks as it helps in reaching customers that reside in a

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distant place from the physical stores. Apart from these other innovations introduced by the
company includes setting up partnerships with popular music companies to entertain
customers. Partnership with Apple music and Spotify create attention among the customers
particularly directed at the young audience.
Starbucks open business model includes a simple strategy of making the brand
popular. The brand of the company is made popular by investing less in its promotion so that
the finance of the company can be saved for a future purpose. Pee (2016) was of the opinion
that the company provides employees with an enjoyable atmosphere for work. This includes
providing opportunities to the employees to continue with the type of work, which satisfies
customers and thereby increase the reputation of the company. Employees of Starbucks are
treated more as partners in the organization than casual work force.
Starbucks generates its ideas by being involved in crowd sourcing. The company
builds its strategies on social platforms such as Facebook, Twitter, Pinterest and so on. About
70,000 ideas provided by the customers were implemented in the company during its initial
year. As the popularity increased, Starbucks managed to develop brand loyalty as well as
increase the number of ideas to 190,000 in the years that followed. Therefore, the company
developed ideas based on products, involvement and experience with the in-store and so on.
In this case, some of the success stories of Starbucks can be listed. This includes the
introduction of Cake Pops, K-Cups, sugar-free syrups and mochas.
Starbucks also engages in crowd funding activities in the region of its business.
Starbucks helps in conducting CSR activities for the development of the society. One such
initiative for crowd funding of Starbucks is the Create Jobs for the USA. This includes
providing employment opportunities every people residing in the USA. Such initiative is one

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of the best in the socially responsible activity undertaken by the company and thus provides
an increase in the reputation of the company among the society.
Issues faced by the company previously:
The company has to face many issues on previous occasions that make the
development process of the company more complex. In 2004, the company had to face
serious labor dispute and had to provide £2000 million as a form of wage to the workers. The
company has to suffer for labor dispute all over the world too. In 2008, the company has to
face trouble as the company has opened an outlet in England without obtaining any previous
permission from the authority. The company has to face the great dilemma in Israel and had
to send a portion of their profit to the army. However, the company has somehow able to
avoid all the problems and take certain steps for developing its business. The management
decided to talk clearly with the labor unions and arrange for a fair settlement. The disputes
were thus cleared after a large number of meetings and discussions involving the
management of the organization, the labor union, and the stakeholders.
Present issues:
The company has to face certain current issues too. The marketing criteria of the B2C
model have been changed and the idea of online techniques has been introduced. This has
enhanced the possibility of competition and popularity of mobile applications is in demand to
the generation Z. further, a demand regarding the change in taste has been made by the
consumers. The workers of the company have also agitated against the policy of the company
to them.
However, the company is able to avoid all the problems and implemented various
rules for securing the interest of the labors. The company has developed an application so that
the consumers can place their order directly from the mobile phone and they need not come

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to the shop for that. The use of Mobile technology and social media promotional measures
can help the organization to reach out to the generation Z and increase their brand value. The
more popularity the company will gain socially, the more success it will enjoy.
Differences:
The difference in between open and closed innovation:
The term open innovation has been propounded by Henry Chesbrough and has been defined
as a process that allows the firms to use different kinds of external and internal ideas with an
intention to advance their technology. On the other hand, in closed innovation, certain
processes are taken to make a control over the firms (Pee 2016).
In case of open innovation, ideas are shared and all the tasks are performed on together basis.
A strong social collaboration has been made in this case. However, opposite views and
working criteria are taken in case of closed innovation.
Open innovation is based on the theory of optimism. It concentrates on the sharing of bright
minds and creativity of a person. On the other hand, closed innovation is based on the
pessimism and does not support the theory of sharing minds and creativity.
The difference in between old and new innovation:
The main differences between old and new innovation are as follows:
Old innovations are stable and linear in nature; whereas the new innovations are quite
volatile;
Old innovations are slow and predictable; new innovations are fast and unpredictable;
Old innovations are not fit for the present situation; whereas the new innovations are made to
deal with the present situation;

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Old innovations do not match up with the current problems or marketing criteria. They are
not applicable to the online marketing process; on the other hand, new innovations are
particularly based on the ideas that can be preferable for the online marketing system
(Manzini, Lazzarotti and Pellegrini 2017).
Use of Crowdsourcing by different firms
Crowdsourcing is a business model by which an individual or an organization is
obtaining information from a larger group or other leading institutions. It imitates the process
of outsourcing to the certain extent but it is different than the outsourcing. It is based on
public group and a mix bottom-up process can be observed in this case. However,
crowdsourcing is known for its cheap rate; effectively know process, diversity, and flexibility
(Arganda-Carreras et al. 2015).
The process of crowdsourcing is being used in many firms and it has been used in different
ways. In the era of the nineteenth century, Denison Olmsted has introduced the process of
crowdsourcing in Astronomy. He had obtained certain information from the meteorologist
department and completed a series of a scientific breakthrough on the basis of that
information. Crowdsourcing has been used in energy system research also. In case of the
energy system, large datasets are required and crowdsourcing is the perfect module in this
case. In case of genealogical research, the application of crowdsourcing is an old manner.
Much data are required to be gathered on this subject to come to a solution and the practice
has been going on since long. Crowdsourcing is increasingly applied in the modern
journalism. Stories from different sources are necessary for a single news article. Various
investigations are being made by the journalists to make news evidence-worthy (Prpić et al.
2015). Crowdsourcing is the most appropriate module in this case. The word knowledge and
style of the vocabulary can be changed, altered or developed by applying crowdsourcing and
therefore a lean over this style has been developed in case of linguistics. In case of public

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policy, the system of crowdsourcing is termed as citizen sourcing. The term was for the first
time applied in the conference of Oxford University in 2014 for policy assessment regarding
virtual labor markets. Documents are required to be collected in case of public
administration.
Adaptability of the traditional B2C firms in the modern marketing environment
The traditional form of B2C market is known as brick and mortar marketing. The
main theory of the model is based on face-to-face interaction with the customers. However,
certain approaches are adopted to modernize the traditional marketing model and apply the
same to the current shopping experience. Advertising is the most effective approach in case
of traditional B2C firms (Brown et al. 2017). Magazine covers, paper clippings, and catalogs
can be used as an effective approach in this case. In certain circumstances, it has been
observed that the bricks and mortar model posted their advertisement on the internet and
providing advertisement there. There are certainly other approaches too that increase the
adoptability traditional B2C firms in the modern marketing environment. When
advertisement has been given on the internet, the same process has been known as bricks and
clicks. In this process, the bricks and mortars businesses are selling their product under a
brand name and the whole process is continued on an online basis. In this process, the
customers are getting lots of alternatives and they can choose their proper products. Certain
services need the physical presence of the customers and they like to give a trial before
purchasing the product. However, amendments are required within the process of traditional
B2C marketing and the techniques are required to be modified as per the market demand. The
visual merchandisers have created eye-captivating displays with an intention to attract the
customers (Dimitrova 2016). The consumers through the internet are making most of the
sales nowadays and all the internet base sales have followed the rules of business to
consumer scheme. In certain circumstances, it has been observed that the policy of traditional

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market is playing the certain important role in the arena of new technology. The business idea
of both the traditional and present B2C markets is quite similar and the face-to-face
interaction process of both the marketing styles is helping them to obtain the trust of the
consumers. The online marketing sites are certain examples of the B2C market and these sites
are following the traditional rules of the B2C market. Therefore, it may be stated that the
form of marketing has been changed but the process and style of the market have remained
indifferent.
Implications for Organizational Structure
The business model criteria have begun to be changed with the modern technology of
dot.com and the massive growth of online commerce service. It has been observed that this
change has created a certain impact on the organizational structure of the companies. The
main objective of a business to consumer marketing is to counteract with the consumers on
the basis of face-to-face interaction (Formentini and Taticchi 2016). It has been observed that
any business organization following the rules of the business to consumer marketing wants to
catch the eyes of the customers by providing various offers that make them feel safe and
benefitted through marketing. However, in recent times, the process of the B2C market has
been changed and new techniques are applied in this regard. With the innovation of new
technologies, many commercial organizations are promoting their brands through online
basis and it has been observed that this dot.com services have provided many facilities to the
customers. Therefore, huge demand has been made in favor of the online market and the
process of e-commerce has created a significant impact on the organizational structure of the
current business. In case of new B2C market culture, the consumer does not have to come to
the store; they can choose their products on an online basis and can place an order through
the site. This process is quite time-consuming in nature and the main motto of the business
has also been fulfilled. The brand architecture has also been changed in this case along with

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this. A huge amount of product is being stored in the websites that helps the customers to buy
the perfect product for them and customers can exchange the products easily.
The process by which new firms and Business Models have emerged work with external
groups
In the modern society, the newly incorporated firms and the business organizations
are making out their own plan with an objective to gain certain crucial points. Therefore, a
change has been observed regarding the operational structure of the organizations. However,
it has been observed that there are many theories that can define the endogenous difference in
the firms; however, most of them are quite complex in nature that makes the reasons for
change hardly understandable (Stadtler 2015). After the rise of the internet, the concept of
marketing has been changed and a tendency has been observed in case of the new firms to be
working with the external groups such as online communities and users. The dot.com
technology has effectively verified the changes regarding the product marketing and the idea
of face-to-face interaction for the customers have set to be changed. Therefore, the companies
are bound to work with new business models and a dramatic shift in the computer and
telecommunication industry has been noticed. However, to achieve the main motto of
business, the companies are required to change its organizational and operational structure.
Further, an appropriate value should be given to the technological innovations so that the
firms can work on a parallel basis. The companies should give proper concentration over the
value migration and constrain firm-level innovations. According to Blank (2013), the
essential elements of the modern business firm is to tandem with the external business
environments. The profit of a company is depending on the value migration that helps an
industry to customize its product and functional structure so that the company can go with
their newly generated policies (Kotabe and Helsen 2014). The demand regarding the online
marketing has been enhanced and the consumers especially the internet users and online

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communities prefer this modern approach to business. Therefore, the companies are required
to implement customer-oriented programs in this case.
Implications of new firms in Organizational Structure, leadership and innovation
process
The term organizational structure denotes coordination in an organization and the role
of the team for achieving the goal and objectives of an industry. The standard of
communication and employment relations are quite depending on the organizational structure
and therefore, every company is required to implement proper plans for maintaining the
organizational structure of the company (Dessart, Veloutsou and Morgan-Thomas 2015). In
case of a newly generated company, this thing is quite important. However, a gradual change
has been observed regarding the marketing criteria of a newly incorporated company and it
becomes obvious to restructure the organizational criteria and bring a change in the
leadership program. In case of Brick and Mortar business process, a company or firm has to
follow up different kinds of commercial structure and in that system, the customer has to
come in the shop, choose their own product and collect the product hand-to-hand basis (Scott
2015). However, with the ultimate growth of the internet marketing, the consumers are not
required to go to the market for buying a product. They can place their order on the internet,
choose their own product there, and get an option of free home delivery from the respective
site. This business idea has changed the completely commercial concept of B2C. Further, the
modern business idea on e-commerce has brought a change in case of leadership also.
Competition has been observed in the case of the online marketing process as many
companies are trying to achieve the customer demand for their products and therefore,
capable leadership is required in this aspect (Chaffey and Ellis-Chadwick 2016). The
business idea is an inevitable part of this case and the firms are required to generate
innovative ideas to this aspect.

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CRITICAL THINKING FOR CONTEMPORARY BUSINESS ISSUES
Implications for Organizational Structure of traditional firms
The traditional B2C firms are known as Brick and Mortar where the physical presence
of the structure is the most important element. Retail stores and the factories are the suitable
examples of traditional B2C firms. The traditional firms are quite different compared to the
newly incorporated firms where physical presence does not matter. Therefore, it is obvious to
state that huge differences can be observed in case of traditional and new B2C firms. In case
of Starbucks, the similar B2C model can be observed. However, a tendency has been noticed
in case of the traditional market to coordinate with the current internet users and online
communities (Kingsnorth 2016). Many traditional markets are promoting online customer
care service to attract the views of the customers. For an example, companies like Walmart
and Best Buy have already generated this idea and the customers can try their products at the
branches of the brick and mortar stores. Similarly, Starbucks has also launched their apps for
facilitating the production of its business and met the demand of the consumers. Further,
many customers like to buy their products by touching the product first and they get an
opportunity to combine the social interaction with shopping (Olson et al. 2018). Customer
service also plays an important feature in this case. The face-to-face interaction helps the
customer believe the potentiality of the business and they will invest their money in the shop.
Due to the physical existence, necessary changes are required in the case of leadership (Baker
2014). It has been observed that the customers are getting a product at a cheaper price
through online and therefore, necessary price amendments have to be made by the traditional
companies to this aspect.
Conclusion
To sum up, it can be stated that the B2C market is operating its business in two ways:
either in the form of brick and mortar or through online basis and Starbucks has followed all

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essential rules of B2C. It has also been observed that both the sub-models such as offline and
online process have certain pros and cons that are facing them in case of marketing
segmentation. However, it should be bored in mind that the organizational structure and
leadership skills of both the markets are different. Traditional markets profess its business
through physical existence, where new businesses are based on the concept of online idea
where physical existence does not matter. All the information of the company has been
derived from the company’s profile and the data collection process is secondary in nature.
However, the modern generation is much more depending on the online market as they get
the products at cheap rate and they get a lot of option there. Therefore, traditional B2C firms
are required to change their structure to attract the interest of the generation Z.

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