Case Study Martin Textile Starbuck - 1000 Words

Q1. What constitutes operation for your organization of which you are a member, or your place of business? Q2. Why is globalization seen as a panacea to world problems by some and an instigator of problems by others? What responsibilities should corporations have toward the country in which they operate? To their country of origin? CASE STUDY 1 MARTIN TEXTILES Question 1 Economic cost The production cost that is labour cost if Martin Textile shift its production to Mexico will be reduced to less than USD2 per hour as compared to wage rate paid to its unionised New York plant(USD12.50 per hour) and non unionised textile plant in southeastern US(USD8 to USD10 per hour). The production too will be able to avoid cost disadvantage†¦show more content†¦Starbucks will only play minor role in the market. b. Licensing format would not give Starbucks the tight control over management, marketing and strategy in the licensee firm’s country in order to maximize its profitability. Under licensing agreement, control over marketing, strategy and decision making will be done by liscensee firm. Where normally the decision made is for the benefit and profit of licensee firm. c. Although Starbuck could license its product its real competitive advantage comes from its management skills and marketing capabilities which are often not amenable to licensing. Licensee firm may not be able to be as efficient as the firm could it self. As a result the licensee firm may not be able to fully exploit the profit potential inherent in foreign market. Question 4 Starbuck realised that pure licensing agreement would not give Starbuck the control needed to ensure Japanese licensee followed it succesfull formula, therefor the company had established a join venture with Sazaby Inc in Japan. Starbuck first foreign direct investment. After Japan, the company embarked on aggresive foreign investment program by purchasing Seattle Coffee, a British company chain, opened stores in Taiwan, China,Singapore,South Korea and Malaysia. Starbucks expand aggresively to Switzerland by entering join venture with a Swiss company Bon Appetite Group. Starbucks license its format to the Swiss company byShow MoreRelatedStrategic Management and Ikea9925 Words   |  40 PagesThe purpose of this assignment is to identify the critical issues from the given case study about â€Å"IKEA - how the Swedish retailer became a global cult brand†. This was an abridge version of the article from Business Week Online issued on 14th November 2005, in Helsinborg - Sweden. IKEA is famous for its affordable furniture which consumers are required to assemble for themselves (Appendix 1). According to the case, IKEA is in a critical situation. 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