Corporate Social Responsibility in the ICT Industry

Corporate Social Responsibility in the ICT Industry 1. Introduction ICT industry has experienced rapid growth characterised by strong competition in which companies are increasingly focussing in improving their core competencies such as innovation, marketing, and branding to maintain competitive advantage. Manufacturing and supply chain are usually outsourced to developing countries; leading to complex multi dimensional relationships between companies. To maintain operational efficiency companies a lot of times dont pay heed to environment and low power stakeholders such as employees, NGOs etc., and therefore lack a systematic CSR (corporate social responsibility) framework. According to a finding by Forrester Group (Figure 1), 34 % of organizations are now pursuing a CSR action plan and about 13% have already implemented one (Forrester, 2009). CESR framework enables identification of root causes of issues, establishes remedial processes and supports continual improvements. Companies already use business management systems (BMS) and utilizing CSR man agement standards such as ISO 26000 and ISO 14001 should not be difficult to adapt. These standards will act as performance indicators for companys CSR. Having an integrated approach towards business and CSR ensures companys long term viability by not only addressing environmental and societal issues but also developing business process, improving quality, and controllability. This paper will show that despite organizations being reluctant in realizing the not so visible returns by investing in CSER, it is increasingly becoming critical to incorporate the social and environmental strategies within the business structure. This paper analyses the major challenges, root causes for these challenges faced by ICT industry, and concludes by recommending a series of procedures that can be adopted by companies to ensure their viability and sustainability in the present and future. 2. Prevalent CSR issues in the industry The major CESR (corporate environment and social responsibility) issues identified in organizations, especially in developing countries that manufacture 45% of all ICT products are excessive working hours, worker health and safety, poor employer-employee relationship, e-waste and pollution (Janco Associates Inc., 2009). 2. 1 Poor employee engagement Many workers in the ICT industry, especially in the manufacturing sector, are hired regularly on short term contracts and laid off at the end of their term. Under this set up employers get away without hiring full-time employees; thereby, avoiding higher wages and benefits, which would have been incurred otherwise. This happens quite often in developing countries such as China and Philippines. This prevents workers from actively partaking in companies growth and decreases loyalty. In addition, the manufacturing industry is plagued with workers having to work mandatory overtime in order to meet high production demands at varying times. This requires flexible as well as long working hours for employees. In many developing countries, workers are threatened to be fired in case they do not comply with these work schedules. Long working hours can also be highly detrimental towards the morale of the workers and hurts the motivation of the labour force. 2.2 Health and safety issues (U.S. Geological Survey, 2008) Majority of electronic products manufactured by ICT industry contain some form of hazardous substances. Workers in developing countries are constantly exposed to these materials that pose significant risks to their health hazards. According to Ladou (1994), ICT manufacturing workers are exposed to more toxins than workers in the chemical or pesticide industry are. 2.3 Electronic Waste (E-Waste) One of the greatest environmental issues the ICT industry currently faces is inconsistent e-waste policies adopted not just by companies but governments across the world. http://www.pcij.org/blog/wp-content/uploads/2008/10/e-waste-dumping-routes-large.jpgFigure 2: Sources and destinations of e-waste Due to rapid technological developments and newer design models of cell phones, the average lifespan of a cell phone is only 18 months in OECD countries (U.S. Geological Survey, 2008). This creates tremendous amounts of e-waste generated that is exported in tonnes on a daily basis to developing countries. Many times this waste is exported under the category of workable conditions though it is dysfunctional. Many recyclers are not certified and do not follow environmental or social standards to recycle. Figure 2 identifies sources and destinations of most of e-waste. It is unsurprising to see that developed nations are using developing countries as their e-waste graveyard. Most companies use third party contractors, who form part of a nascent industry, to handle product disposal and recycling. 3. Root-causes of the challenges in the ICT sector Information and Communications Technology (ICT) companies are constantly bombarded by protests from the public, non-governmental organizations (NGOs) and governments with respect to their inattention towards social and environmental responsibilities. There are several reasons why these companies are unable to adequately execute their aforementioned responsibilities. The following paragraphs will highlight some of reasons and identify the root causes of the challenges ICT companies face in this regard (FIAS BSR, 2007). 3.1 Significant upfront costs without tangible benefits According to FIAS and BSR (2007), ICT companies are constantly challenged by issues of feasibility when considering an investment to promote their corporate social responsibility (CSR), due to the uncertain return on investment (ROI). Financial return through CSR is usually intangible and therefore difficult to keep a track of and measure, hence heightening the risk perceived by managers. However according to FIAS and BSRs (2007) survey, investments in CSR can result in lower employee attrition rates, increased process efficiency, healthier business relationship with customers and high influx of customers among other various benefits. Nevertheless, the perceived financial uncertainty inherent in CSR investments leads many companies to overlook the benefits highlighted by the aforementioned survey and simply regard it as a long term strategy with no guarantees. Some companies wait to become late adopters until the impact of CSR is tested and tried in their industry before incorporatin g it within their business model. 3.2 Heavy investments FIAS and BSR (2007) found out that companies implementation of a CSR strategy could increase costs by 3-5% or perhaps even more, in addition to costs incurred through the adoption of new equipment and technologies to promote better environmental or health and safety practices for example. As well, the management has to invest time, effort and other resources to perform training and develop internal policies. These factors add to the uncertainty and perceived burden of CSR investments and may further act as deterrents for companies to invest significant resources. 3.3 Complexities related to overtime Unmanageable excess overtime is one of the greatest CSR challenges ICT manufacturing suppliers face. According to FIAS BSRs survey (2007), a significant number of suppliers believe that they could fulfill all CSR expectations except excess overtime. The major reason behind this issue is overtime decisions are outside of the suppliers control. The manufacturing industry faces a lot of fluctuation in manufacturing demand that results in a lack of predictable product volumes. Other factors such as changes in the workforce, fluctuations in raw materials prices, evolving labour and environment laws, and even last minute changes in customer orders complicate this process. While companies do make efforts to responsibly manage workers work-life balance, in the case of suppliers that hire hundreds of thousands of workers, this process may well be extremely challenging. 3.4 Implementation of CSR expectations in supply chains The CSR efforts of multinational corporations (MNCs) can multiply significantly if they realize the importance of motivating and convincing all of their supply chain partners within the hierarchy to adopt responsibility towards the community and environment they operate in. However, this can be very challenging and companies typically feel responsible for only towards their next suppliers performance and are not aware of suppliers activities down the supply chain. MNCs outsourcing into developing countries bear the responsibility of ensuring that their suppliers conform to ethical values and international standards 4. Recommendations Leading organizations have embraced a leadership role in CSR initiatives because they realize that by investing in the community, the environment, and its internal resources they create cost savings, competitive advantages and continued growth (T Systems, 2009). Central to any companys success has been a very trusting working atmosphere that involves open communication between employees and management. Initiatives such as daycare services, preventive back pain workshops, support programs for smokers and subsidized healthy food and gym programs have helped in promoting active employee engagement. Various companies are actively involved in helping non-profit organizations with financial and non-financial measures. A lack of gender diversity, specifically women in the workforce is a constant challenge for the information and communication technology (ICT) industry as a whole as over 80% of the industrys workforce is male. Another issue is environmental awareness among employees, customers and its supply-chain. For example, employees may not be adopting proper recycling practices or cutting down on wastage. Customers may not be eager to adopt virtualization, which is a technology that enables more efficient server energy use, because of a fear of privacy breaches. Similarly, with regards to the supply chain, large e-waste problems may not be addressed adequately, leading to large amounts of waste due to constant hardware turnover that is irresponsibly disposed in the developing world, thereby contributing to pollution and possibly negative health outcomes. Great changes can be brought by adopting small initiatives throughout the industry by every company. Eventually these changes will become the norm of the industry and perhaps transform into standards and laws. Implementation of a split focus between environmental, and internal and external social initiatives is essential to satisfying all key stakeholders. The following table highlights some of the positive and negative aspects of adopting such an approach: PROS CONS Builds and maintains brand image Consolidates approach and addresses key areas of corporate concerns Can choose from a wide array of projects No catch-up required for upcoming industry/regulations for environmental/social practices Satisfies all stakeholders needs High resource needs Splitting corporate focus Takes focus away from customer acquisition Therefore as the table indicates, this option addresses both social and environmental factors; however it lessens the overall effect on both areas compared to if they were pursued individually. 4.1 Create an enabling ICT policy framework that incorporates a holistic CSR strategy within the business model Companies need to create and integrate a CSR strategy within their existing business model to be able to fully engrain CSR into their company. This strategy recognizes and addresses issues independently on a priority basis. Every company will find different issues it needs to address; for instance, a chemical processing plant will have to find the best possible way to dispose off waste responsibly, whereas, an electronics manufacturer will address the issue of toxic metals being used in production. Once the company is able to establish and adhere to its CSR mission, it then can communicate these values among its supply chain and members of the ICT industry. The goal is to adopt a strategy that maximizes sustainability in the following areas: brand image, stakeholder satisfaction, and long term viability. 4.2 Create incentives for suppliers Suppliers consider incentives from customers as being a strong motivator to improve their CSR performance. Therefore, companies should determine which incentives would help their suppliers perform better in meeting CSR expectations. Some examples of incentives could be a combination of longer contract terms, increased purchase volumes, higher prices and public recognition through awards and certificates. The amount of incentives can be linked to different levels of performance shown by the suppliers. Companies need to realize that providing these incentives may hurt their profits initially, but in the long run the advantages derived from better CSR performance, such as less need for monitoring, reliable supply chains, diminished risk to brand image, improved product quality, and better operated facilities, could potentially counter the initial reduction in profits. 4.3 Implement Standard industry-wide codes A common industry standard is essential to guide and monitor compliance for companies. Codes such as the Electronics Industry Code of Conduct are universally identified and accepted as being a tool to improve processes and methodologies. Additionally the presence of one industry standard increases documentation and reporting efficiency as there will be less duplication, inconsistency and confusion. 4.4 Conduct audits for improvement rather than compliance Companies perform audits merely as a responsibility to get over with. However, audits are to serve as a learning opportunity by identifying issues and areas for improvement. Audits should be able to not only tell companies the degree of compliance with the standards but also give a larger picture of companys fulfillment of its commitment to CSR. Following the audits company can arrange training sessions to remedy the weaknesses identified in the audits (FIAS BSR, 2007). 4.5 Involve and implement responses from all stakeholders In order to achieve this, companies can implement the CSR strategic process that TELUS has been able to utilize successfully. This process engages internal and external stakeholders to develop a CSR strategy that is continuously reviewed and realigned to achieve results. Involving stakeholders during various stages of strategy incorporation enables development of a wholesome strategy, which satisfies needs of all social and environment aspects. Typically, NGOs and environmentalists are not involved in companys CSR strategy framing, thereby, limiting companies performance in green sector. CSR 4.6 E-waste Management System With regards to e-waste management, the goal is to find a clean, economical and constructive means of disposal. As such, the adoption of an e-Market for Returned Deposit system similar to the model outlined by Kahhat, Kim et.al is recommended (Kahat, Kim, Xu, Allenby, Williams, Zhang, 2008). This system will consist of the development of a database that will act as a forum for suppliers and organizations looking for cheap, reusable and recyclable hardware. This database provides suppliers with an outlet to dispose of their grandfathered and unusable hardware in a responsible and economic way. As well, e-waste disposal companies (who meet WEEE standards) could access the forum to look for hardware that they may need. There could also be a separate section for donation to schools and non-profit organizations. The hope is that this forum will help shrink the digital divide and decrease pollution from e-waste. This site would be directly influencing their customers as well as their suppliers to dispose of their e-waste in a constructive and responsible manner while assisting in the further development of the communitys technological know-how, thereby shrinking the digital divide. Finally, companies can begin offering their expertise in environmental efficiencies in order to create an ethical supply chain. This process will start by educating suppliers and moving on to educating other organizations and may represent a future revenue stream. 4.7 Employee Engagement As part of an initiative to increase employee engagement while addressing companies strategy of socially responsible behaviour, the development of a cross-functioning CSR Task Force in every company is recommended. This groups mandate will be to initiate, develop and implement new CSR initiatives designed to enhance and add to the companys current CSR strategy. A senior management director, who will act as a facilitator for the committee, will champion this task force. Beyond this role, he or she will act merely as a symbolic head of the committee. The idea behind this arrangement is to ensure that upper management is kept abreast of homegrown ideas and developments and to make sure they remain engaged in the overall CSR strategy. Members of the task force will be employees selected from different functional areas of the company. Intra-company elections will be held on an annual basis to select a committee head (non-management), who will be the main driver and coordinator of new CSR ideas and strategies. By having non-upper management employees lead this task force, a way for employees to gain valuable leadership experience will be realized. Cisco Systems has implemented a similar program and to date they have experienced very successful results (Creary, 2010). This project allows Host Europe to engage its employees and involve them in a strategically important initiative all while reaping the benefits of new and innovative CSR ideas derived from a CSR think-tank at a low cost. Such a task force will also act as CSR consultants that hopefully will educate and help implement CSR strategies that mirror leading companies strategies up the supply chain. Depending on how the CSR consultants are received by suppliers, there is potential that this could become a new revenue stream as suppliers try to reach the customers position. In order to encourage engagement from all employees we suggest that, in conjunction with the newly appointment CSR Task Force, companies begin an employee efficiency reward system where employees are rewarded financially for the degree of environmentally efficient measures they take. These measures would be decided by the CSR team and could include anything from car-pooling to personal contribution to community programs geared at environmental clean-ups, to outside education of local businesses. Employeess CSR commitment can be measured in their annual performance review. At the end of the year, the CSR Task Force can vote on the top CSR performers at the company and bonuses can be given out to them. 4.8 Focus on Diversity To address the lack of female representatives in the ICT industry, companies can seek membership in local female associations like Organization of Women in International Trade (OWIT) and Association for Womens Rights in Development (AWID). These organizations concentrate on developing womens technical skills, offers networking opportunities, career guidance and increase awareness and interest in the field of ICT. Through these channels, companies can attract top students to through internships or executive hiring programs. Other senior female executives in the ICT industry can act as champions for the overall initiative by participating in information sessions, mentorship programs and initiatives like job shadowing. 4.9 Effective Human Resource Planning To ensure that the company has the right people in the right place at the right time, I would suggest the adoption of Strategic Workforce Planning (SWP) (Conference Board of Canada, 2009). This involves identifying hiring needs based on the projects companies plan to undertake in the next 3-5 years, evaluating their options to fill those positions based on skills, identifying gaps and finally developing a plan to tackle them. SWP will help companies meet talent needs based on different market conditions, account for new opportunities and projects that may be implemented in that timeline. The SWP incorporates initiatives that develop talent internally as well as develop a recruitment plan to attract external talent. 5. Conclusion CSR needs to be fundamentally integrated into business operations and relationships. In many companies, CSR is the absent link that could potentially help companies grow responsibly and sustainably along with its stakeholders. Increasingly CSR is becoming more and more critical to a companys success as customers become more aware of their surroundings. Deployment of CSR adds incredible value to a companys business while also supporting communities and the environment. Adopting CESR policies will also equip companies to readily conform to impending legislations and regulations and organizations will be well prepared to comply with standards. During the process of implementing these CSR initiatives, companies should start with easily adoptable features such as energy efficient usage of resources at work. Many of the recommendations made in this paper do not require extensive capital commitments; rather, attitudinal changes in the way companies operate. Other recommendations however, su ch as building energy efficient data centres and other ICT infrastructure, may require a considerable amount of time and financial investments (Fernando Okuda, 2009). Through partnership, organizations can encourage and support one another to adopt and adhere to their commitments. If systematically approached and consolidated, these initiatives will definitely provide companies with excellent and far-reaching improvements (T Systems, 2009).

A Dream?

The soft soil squeezed through the holes in my boots as I stood upon the sorrowful shore. The day was wild the clouds dark and heavy, taunted me with the threat of rain. The trees blew from side to side like flags waving in the breeze. The ocean not to far from where I stood, was beating upon the shore with military precision bearing deep into my soul. The forest stretched away from me, as far as I could see taunting me to enter into its hidden safety†¦ away from it all†¦ away†¦ from what I had done. My mind now centering painfully on the memories that sent me running to this droned hollow place, realizing what I had done†¦ the true horror of it, turned my mind psychotic while jumbled and baffled thoughts overloaded my memory†¦ it was plain even to me, I just didn't want to believe it†¦ but it was real, it was true. I stood there contemplating what I had done, thinking of everything that would happen to me†¦ everything I lost the moment I did it, It made me sick, it made my heart skip beats, I collapsed onto the mud at the edge of the forest. I almost fainted right there†¦ I looked into the dark tangle of forest knowing what I had to do. The forest taunted me yet more†¦ seeming to watch me†¦ stare at me, almost waiting for me to enter so it could devour me†¦ destroy me. In the distance I could see a small dim light tear through the black velvet night inside the forest. I watched as it grew nearer†¦ swaying from side to side, my heart beat faster and faster my thought becoming more rampant and wild. The light almost upon me now, knowing I should run†¦ but I couldn't†¦ I simply couldn't†¦ I froze, I could not move nor breath. My legs throbbed with pain, my feet bursted with soars, my mind was to wild to let me move. Suddenly the light came upon me, there stood a heavy, sturdy, strong looking man. His presence sent a chill of awe through my spine. I could not make out a face, he wore a thick overcoat, his body was motionless†¦ not a twitch†¦ nothing, he held a simple flashlight in his hand and nothing in the other. Some questions arose in my mind to what he was doing here†¦ unarmed, almost seeming completely unprepared except for his flashlight. Suddenly realizing just how much I should run I sprang to my feet and shot into the forest as if it was my only way to live, I stumbled through the branches and twigs while they tore away at my clothes and face, the clouds without any warning burst out in rain, I was soaked in an instant yet still found the strength to run on. I ran for what felt like an eternity, I turned to look if the man was behind me†¦ there was nothing†¦ not a glint of light†¦ nothing, just the sound of the rain beating down on the trees, hanging spindly on the leaves before dropping to the ground. I stared, wondering if the man had even attempted to chase after me†¦ after all, if he did he wouldn't have given up like that†¦ he would have at least stopped and looked for me with his flashlight†¦ but there was nothing. I laid there on the ground for a few moments to catch my breath, and turned to run again, as I stood to start running there he was†¦ the very same man†¦ with the very same light, in the very same clothes†¦ I felt a sharp pain of terror like a bullet ripping through my bones, I stood in silence for what seemed hours. The man raised his arm, flashlight in hand up to his face†¦ I screamed I almost fainted there but something inside me urged me to stay up. I could not believe who it was that stood before me†¦ I felt my blood freeze. I woke†¦ in my bed, with a cold sweat, I was tired, my legs ached. It was raining outside, the ocean waves still beat upon the shore with their same drone tune, I was sweating and out of breath. Was it real?†¦ or just a dream?

Integrative Running Case Study: Starbucks Essay

Starbucks A case analysis of Starbucks can provide a much closer look at the company, its strengths and weaknesses, as well as the company’s ability to do business on a global scale. In order to best analyze this company, a SWOT analysis, along with answers to the case study questions is provided below. Furthermore, a few recommendations are included that are brought to light by reviewing the facts of the Starbucks case study. This thorough investigation of the Starbucks company adds a rather complicated â€Å"flavor† to my favorite caramel macchiato that had never before been considered. Starbucks has been serving coffee domestically since the early 1970’s. After experiencing success in the domestic market, Starbucks entered the global marketplace, including opening its first stores in China in 1999. (Lamb, p.139) The company entered the Chinese marketplace knowing the vast opportunities that were available, but quite aware that many factors had to be accounted for in its marketing mix and product offering strategies. Cultural, political, and economic factors played important roles in discovering the best plan for delivering a lucrative coffee business to a land where the majority of consumers had never even had a cup of coffee. Partnering with local developers provided a safer market-entry strategy that Starbucks was ready to relinquish in 2006. After gaining several years of experiencing in the business environment of China, Starbucks embraced the chance to try its own hand at delivering a lucrative business operating in an environment that had many similarities to its domestic marketplace in the United States. A discussion of the strengths, weaknesses, opportunities,  and threats for the Starbucks company is provided to further understand its success in the global marketplace. Strengths: The decision Starbucks made to enter the Chinese marketplace wasn’t without extensive research. Starbucks had an already-existing marketing mix that was working well and generating large profits in its homeland. The knowledge and expertise found in the existing Starbucks employees were an important strength for the company as it planned its business venture in China. As a successful domestic coffee-seller and cafe business, Starbucks had funding and financial resources to work with when entering the foreign Chinese market. Furthermore, the reputation of Starbucks and its business growth and success certainly attracted additional funding from shareholders when taking the Starbucks brand globally. Weaknesses: Though Starbucks was a well-tested brand in its domestic market, Starbucks faced new market-entry obstacles. The idea of entering a foreign market on its own was not a wise decision, and therefore, Starbucks would have to rely on foreign partnerships to expand its brand globally. (Lamb, p. 140) This reliance on a partnership could be costly as profits are shared even though market-entry risks are lowered. The expense of making mistakes and learning from them, as well as creating a whole new marketing mix for Chinese consumers was certainly a costly investment. Opportunities: Even though entering the Chinese market would prove to have some obstacles, the company certainly realized the many opportunities that existed for creating its brand in China. Entering a market that consisted of consumers who had very little experience with coffee would leave Starbucks as a unique product with potential for elasticity in its pricing with very little competition from other â€Å"coffee† shops. Furthermore, changes in the Chinese youth’s view of collectivism was drastically changing as they focused more on individuality. (Lamb, p.139) This offered a similar environment to the domestic market in the United States. Additionally, the research Starbucks initiated would show that a specific need for a place for  people to gather together was in high demand in China. Starbucks knew that providing that experience combined with the distribution of â€Å"coffee† (a symbol of the modernizing of China) could provide a whole unique experience that youth would be quick to embrace. Similarly, economic success in the region proved the needs for disposable income for expensive coffee drinks could be met easily by the growing and expanding economy. Threats: Just as there are many opportunities when a company enters a whole new marketplace, there can also be many external threats as well. A booming economy that may at first seem ripe for market entry could change at any time, and prove devastating to the Starbucks China operation. Furthermore, political and legal factors could change just as swiftly and cause many problems for Starbucks as the company has no influence over these external factors. Similarly, social factors can always pose a threat as well. With a business focused on mainly the Chinese youth, any trend that in some way denounces or disqualifies Starbucks as a meaningful experience to the youth would cause a dramatic breakdown in the Starbucks marketing mix. A further analysis of Starbucks’ entry into the Chinese marketplace can be accomplished by investigating the questions at the end of the case study. 1. Many of the same environmental factors, such as cultural factors, that operate in the domestic market also exist internationally. Discuss the key cultural factors Starbucks had to consider as it expanded into China. Several cultural factors impacted Starbucks entry into the Chinese market. One such factor was the cultural reliance on mostly â€Å"tea† as a drink of choice among the Chinese. Starbucks knew that entering the market with a strategy of simply trying to sell various facets of coffee would be a challenge if not carefully executed in a way that would inspire and empower the consumers to actually stimulate the desire for coffee. A second cultural factor that enabled Starbucks to overcome the obstacle of the tea vs. coffee concern is that the Chinese people do not have much space in their homes etc. for gathering with their interest groups. Starbucks quickly determined that providing a need (such as space to â€Å"hang out†) would be an excellent way to offer its products in an environment that would be  providing a solution to the problem of having limited spaces to just be with friends. (Lamb, p.139) 2. Discuss the key political and legal factors Starbucks had to consid er in the Chinese marketplace. What are the risks of entering a country with these factors? What changes have occurred in China’s political and legal structure to the advantage of foreign companies? China is a communist country, and politically this type of government can be volatile. Any changes to the government and/or its officials could have fast and devastating effects on businesses operating in China. (Lamb, p.140) Legislation could be created overnight that may involve the removal of foreign businesses or simply make it impossible for them to compete in the Chinese market by placing restrictions on their allowable business practices. Although there are risks associated with entering a foreign market with uncontrollable political and legal factors, China has proven to have a political and legal structure that has been very conducive to foreign companies. Beijing entered the World Trade Organization in 2001, and since has provided economic stability as well as political stability to businesses. (Lamb, p.140) Legally, China has mandated that each family is allowed one child. This mandate has resulted in a shift of the normal â€Å"collective† view of communist consumers to a more â€Å"individualistic† view for young consumers, creating a very ripe environment for businesses that provide modernistic, Western-individualism style products and marketing mixes. 3. What demographic factors were important for Starbucks to understand in China? What were the demographics they decided to target? In order to enter the Chinese market, Starbucks had to consider demographic factors such as age and population in order to be successful. According to Lamb Starbucks initially focused on the economically upwardly mobile population, including 20-40 year olds. (Lamb, p.139) Finding much success there, Starbucks wanted to grow that success over time, and is strategically focused on the youth of the Chinese population since they have the economic backing of their families to support disposable needs, such as pricy cappuccinos. 4. What was the initial global-market strategy Starbucks employed to enter China? Discuss the advantages and disadvantages to this early strategy. How has their strategy changed since then and why? According to Lamb the initial global-market strategy Starbucks entered China with involved partnering with other businesses as a joint venture, along with authorizing local developers to use their brand. (Lamb, p.140) This strategy had an advantage of entering the market in a gradual way, and gaining the trust of the Chinese while simultaneously avoiding the added risk of entering the market on its own. The disadvantage of this style of market entry is seen in the profit margin for Starbucks. Joint ventures and partnerships do not share equally in profits (and Starbucks would need to work hard to find a management position in such ventures to make sure it could hold onto its profit margin as sales increased). Since then, Starbucks has bought out its partners and now individually owns its own stores. While this strategy is drastically different from its market-entry strategy, the company is now much more confident in how to do business effectively in China. Furthermore, the fact that Beijing entered the World Trade Organization has had a securing and positive economic and legal affect on foreign companies doing business alone in the Chinese marketplace. In lieu of the facts provided in the case study, it is possible to recommend additional ways in which Starbucks can continue to successfully operate in China. One such recommendation is for Starbucks to keep a very close watch on social media trends among the Chinese youth. Knowing that the Asian community is very embracing of social media, it is imperative that Starbucks maintain its reputation as â€Å"modern† and â€Å"forward-moving† by participating in the social media trends of the youth. A second recommendation for Starbucks is to provide social benefits to the communities in which it operates. Providing benefits to surrounding communities can help to establish a successful business relationship with local government officials as well as encouraging the trust of the local people. Furthermore, these philanthropic efforts can have an impact on the consumers of Starbucks products domestically as well. Domestic patrons can find value in these efforts of â€Å"doing good† for global communities and become encouraged to support the company with more purchases. In conclusion, the review of the Starbucks case study has been both  informative and interesting as I am a consumer of Starbucks myself. The knowledge gained here has certainly changed my thoughts from salivating for a simple caramel macchiato when I pass the Starbucks logo, to wondering where and how they do business elsewhere. References Lamb, C.W., Hair, J.F., Jr., McDaniel, C. (2011). Marketing (11th ed.). Mason, OH: South-Western.

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