Starbucks Case Study: Tax Avoidance and Business Strategies in the UK

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ACADEMIC AND PROFESSIONAL SKILLS
(Case study on Starbuck Company)
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Contents
Executive summary.....................................................................................................................................3
Introduction.................................................................................................................................................4
1.1 Revenue.............................................................................................................................................5
1.2 The industry and sector......................................................................................................................5
1.3 Public relation....................................................................................................................................6
1.4 Shareholders......................................................................................................................................7
Conclusion...................................................................................................................................................8
Recommendation.........................................................................................................................................9
References.................................................................................................................................................10
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Executive summary
Starbuck is a renowned company that deals with coffee beans. It is the largest company in the
UK. In UK Reuters news agency published news and report that Starbuck Company cannot
shows their earning to the UK government. According to the news Starbuck Company during the
14 years of this business, it is only paid 8.6 million in taxes.
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Introduction
Starbucks is dealing in whole beans coffee, it was established in 1971, Washington. It provides a
high quality of whole beans coffee services to their customers. Starbucks has main aims and
objectives to provide product innovation, provides services quality and retail expansion for the
long term services in Washington. Starbucks has main headquartered in Seattle and it is focused
on its customers. It provides a good quality of services and product to their customers as well as
proper satisfaction to their customers. The main and important target of Starbucks to expand its
business in the whole world as well as chooses the more segments and increase the product
position in the market. The Starbucks Company has other aims and objectives that establish its
leading brand in the coffee sector or market. Starbuck has an effective manager for managing
their management and providing quality services to its customers in the market. Starbucks can
divide their internal and external services for providing their better services in the market; it
divided into two parts retail and specialty for customer’s satisfaction. Government of the US
provides the licensing agreement to provide food services to their customers. In Starbucks,
customers enjoy the unique and quality services in Washington. Starbucks provides comfort and
relaxation to its customers. According to the Reuters news agency published news and report
which is investigating the major tax reports avoidance by Starbucks in the UK. According to this
report, Starbuck Company cannot show its financial report to the UK government and its hiding
their earning in the UK market.
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1.1 Revenue
According to the Reuters news agency published the news that first 14 years of Starbucks paid an
only 8.6 million tax to the government of UK but starting years of Starbucks sales was 3 billion
in coffee, so Starbucks did not shows their more profit during these years it is avoidance the
income from the government of UK. This report describes the Starbucks internal and external
structure of Starbucks Company that it generates the more operating profits but it shows only
minimum income and profits in front of the government of UK, Starbucks Company respond to
the criticism towards the UK government and their taxation policies.
Impacts of avoidance of Tax
According to the Reuters news agency that news directly impacts the business of the Starbucks
Company. The government of the UK takes legal actions towards the business of Starbucks
Company. According to the news, it directly harms the stakeholders of Starbuck Company as
well as impacts on the employees of Starbuck Company in the UK. According to the news over
the past three years, Starbuck Company not shows its profit as well as no income but KFC paid
more tax of 36 million in the UK government.
1.2 The industry and sector
According to the news the Starbucks deals in the coffee beans and it is increasing their market
segmentation in the UK market. It is subdividing a market segment in a different group for
providing customer satisfaction in the UK. It has a great market share and public relation in the
UK market. Starbuck Company increases its market share in the UK market and it cannot show
their income to the UK government. According to the Reuters news agency, Starbuck Company
is the biggest coffee retailer in the world. Nowadays it has opened 10,000 coffee shops in the UK
market as well as other countries too.
Targeted markets
 Starbuck Company has the main aims and objectives to target the primary market for
increasing the more income and profits in the UK Markets. In the UK market, Starbuck
Company increasing the ranges of customers towards their products and services. It is
designing effective strategies to attract the customers towards their services and
maximize the income and profit in the market. Starbuck Company focuses on teenage
customers and couple customers for increasing the ranges of customers in the UK
Market. Starbuck Company target provides a high quality of technology for providing the
quality of product and services to their customers and provides more satisfaction to their
customers. Starbuck Company targets the teen audience for achieving their target and
success in the UK market. Starbuck Company wants to expand its business to other
countries and attract the customers towards their product and services by effective design
of advertisement in the UK market. Starbuck Company adopts the effective strategies to
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attract the customers and get the opportunities to changing their structure of management
according to the generation.
Competitor’s analysis of Starbuck Company
 According to the Reuters news agency, Starbuck Company is a renowned company but it
has more competitors in the market who deals in the same product and services in the UK
market. Dunkin Donuts is the biggest competitors of Starbuck Company which provides
the best products and services to their customers. Dunkin Donuts introduced their more
product and services for competitions with the Starbuck Company in the UK markets.
The core competence of Starbuck Company has the skills and ability to provide more
satisfaction to their customers. Starbuck Company provides supreme customers services
as well as it builds their personal relationship with their customers. Starbuck Company
implementing the new strategy to thrashing its competitors in the UK market as well as
approach the internal and external suppliers of the business to expanding their business in
the international market.
Industry demand
 In the UK market, there is more demand for Starbuck Company which provides proper
satisfaction to their customers. It provides a high quality of product and services in the
UK market. Starbuck Company uses the advances technology for attracting the customers
towards their product and services in the UK market. Starbuck Company increasing
employment in the UK market as well as increasing its profit margin in the UK market.
Starbuck Company maintains its quality of services in the UK market, so it is increasing
the market demand as well as their revenue. Starbuck Company increasing its distribution
channels for providing the best services to their customers and increasing their industry
demand in the UK market. Starbucks uses effective distribution channels for attracting
customers towards their products and services in the UK market.
1.3 Public relation
Starbucks Company maintains the Public relation practices in the UK market, it provides the
quality services to their public so itself and public both promoting their business in the UK
market. Starbucks maintains the community relations for representation their operations and
activities towards the local people and families. Starbuck Company increases the social
relationship for increasing the goodwill in the market. It focuses on the more satisfaction of
product and services to their customers as well as it directly interacts with their customers for
understanding their choices and providing quality product and services in the UK markets.
Starbuck uses the simple communication for proper interaction with customers and maintains the
public relation in the UK markets as well as it uses the important communication tool for
building the relationship with their customers and their employees too.
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Starbucks has stiff competition in the UK markets, but it maintains its quality and public relation
for increasing their income and revenue in the international and domestic markets. The aim of
Starbuck Company to maintain the public relation that builds the understanding between
customers and employees of Starbuck Company. Public relation makes positive images in the
market; they are also promoting the business of Starbuck Company. Starbuck Company provides
an effective advertisement to its customers for high attention and great customer services to their
customers. Starbuck Company attracts new customers through effective advertising for more
profit and revenue in the UK market.
1.4 Shareholders
Starbuck Company is improving their strategies for attracting more shareholders in the UK
market. Starbuck Company needed more efforts to maintain the relationship with coffee farmers
due to many issues of tax avoidance in the UK market. Starbuck Company increases its practices
to attracting more shareholders in the UK markets as well as maintains their social responsibility
efforts for increasing their demand in the UK market. There various shareholders of Starbuck
Company are following;
Employees: - Starbuck Company has to improve their working condition, job security and higher
wages to their employees. Starbuck Company has to provide higher wages to stay with them and
increasing the working performance in the UK market. It provides advanced technologies to
improve their working capacity and performance in the Starbuck Company.
Customers: - Starbuck Company considers the customers top shareholder, it provides a high
quality of product and services to increase their interest in their product and services after the tax
issues. Starbuck Company implements the new policies for communication with customers and
understanding their feeling towards their product and services as well as providing the proper
satisfaction to their customers. It is increasing the friendly nature and relation with their
customers to stay with them as a shareholder.
Suppliers: - Starbuck Company maintains the relationship with farmers and their international
suppliers for proper supplying the product to the Starbuck Company. It is increasing the social
responsibility program for increasing the interest in the Starbuck Company product and services
in the UK market.
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Conclusion
After concluding this report that Reuters news agency published the news against the Starbuck
Company because of avoidance of taxation in the UK government and shows the comparison
with KFC in the UK market. According to the report, it is directly impacting the business of the
Starbuck Company and reducing the interest of shareholders and their employees from Starbucks
Company. Avoidance the taxation policies that reducing the market segmentation of Starbuck
company in the UK market as well as it cannot focus on the new strategies and their product
services. Starbuck Company has to increase their interaction and maintains the relationship with
customers for providing the proper satisfaction and high quality of services in the UK markets.
Starbuck Company maintains its brand and goodwill in the UK market. According to the Reuters
news agency provides the 14 years of Starbuck company news to their customers and UK
governments.
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Recommendation
Starbuck Company provides the 14 years income and revenue data to their UK government for
implementing the new strategies and new markets segmentations in the UK markets. Starbuck
Company has to increase its share in the UK market for attracting their shareholders towards
their product and services. Starbuck Company has to increase its outlets for providing more
satisfaction to their customers as well as it has to adopt the new advanced technologies for
increasing the performance of their employees in the UK market. Starbuck Company increases
its growth opportunities in Tea and fresh juices to their customers.
Starbuck Company maintains the relationship with its customers and shareholders for increasing
the growth of the company. Starbuck should expand their business outside the boundaries and
provides its quality services to other customers. Starbuck Company implements new strategies to
thrashing their competitors who deal in the same product and services in the UK markets.
Starbuck Company uses different channels to attract the customers towards their quality product
and services in the markets. Starbuck Company uses the mobile application for ordering the
product and services and reducing the time of customers. The mobile application provides better
services to their customer and it will use the mobile application at home and order the product.
Mobile application helps the customers for payment and order the product and services in the
UK markets.
Starbuck Company would be more investing in an effective advertisement for their product and
services. Starbuck Company would not be increasing their rates and prices of product and
services to attracting the customers as well as providing the quality product and services in the
future. Starbuck Company has to expand its business on the international level for more income
and increasing revenue in the world.
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References
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