As one of a leading company dealing with coffee drinks, Starbucks is faced with a myriad of ethical issues. Primarily, the organization is guided by utilitarianism. Initially, the company commenced as a single store in Seattle, Washington DC in 1971 but later expanded and currently it owns more than seventeen thousand stores in different parts of the globe. The company has a strategy of coming up with coffee shops an aspect that has made the smaller coffee shops of other businesses to close shop. In fact, at one point Starbucks was sued by the smaller coffee shops for using anti-competitive ways to get them out of business. Notably, the suit stated that Starbucks was issuing samples of their coffee just in front of premises of the competitors’ shops, an aspect that made the company attract and take a significant portion of its competitors’ customers and in the process making the business to make supernormal profits. The company also tries as much as it can to buy all the nearby coffee shops in an attempt to gain a monopolistic control of the coffee business (Blowfield, 2003).
Utilitarianism ethics is based on the notion that happiness has to be first when handling an ethical situation. The core aim of any business, Starbucks included is to grow, expand and increase its customers’ base so that it can make profits. As such, Starbucks strategy builds on a direct competition where it goes for customers of its competitor firms at their doorstep. The decision is good for Starbucks since it enables the company to expand its customers’ base and in the process build its brand image and gain more profits. Additionally, the company tries as much as it can to acquire any nearby coffee shop with the aim of avoiding competition. Through such a move, the company will gain utility since coffee customers, including those with a predilection for the competitors’ firms’ coffee will have no option other Starbucks (Jones, Forsythe & Kemp, 2015).
While all business should come up with strategies to enhance their profits, they should ensure that the strategies that they employ are ethical and do not negatively impact on competitor enterprises. The move by Starbucks to offer free samples of its coffee in from of its rival firms is indeed unethical. Although the strategy will make the business “happy” due to an increase in the number of customers and profits, it is unethical, and it forces its rival firms to close shops. If business desires to be gain a monopolistic control of a sector, then it should embrace ethical approaches in designing its strategies. For instance, Starbucks would lower the prices of its coffee and ensure that it is cheaper as compared to its rivals and it will certainly attract more clients.
Blowfield, M. (2003). Ethical supply chains in the cocoa, coffee and tea industries. Greener Management International, (43), 15.
Jones, I. M., Forsythe, L. M., & Kemp, D. J. (2015). Dumb Starbucks: Parody or Clever Marketing Ploy? a Teaching Case. Journal of the International Academy for Case Studies, 21(6), 337.