In bid to remain in the market and still be competitive, a company may be involved in different ways that make them have the desired competition. One of the ways that a company may get involved in is breaking the antitrust laws, though it is against the laws of the land. Antitrust laws’ are laws that are meant to keep in competition between different firms in the market. The government is also instrumental in making sure that there are the regulations in the market that encourage competition.
Starbucks Coffee Company is one of the largest coffee retail businesses in the world. Since the company is one of the biggest companies in the world, it is used to control the market that is inexistence (Simon, 2009). However, this may change in case a new company may rise and bring much competition that Starbucks Coffee Company is not used to. The company may in turn open options of getting involved in mergers and acquisition so as to minimize the risk of losing the market, or even reducing the prices of their products that they are much in control of. Forming a cartel would mean that the organization still retains the image it has, as well as reducing the competition that may be in existence. The government has the responsibility of ensuring that there is the needed competition in the market, and so as to maintain this, it may be forced to act in a way to ensure this does not exist. By ensuring that they supervise these mergers, the government certifies that the general public will not be denied their right of enjoying quality prices for the product they are enjoying. Sometimes, the government may even prohibit the mergers that are planned to take place so as to ensure that the competition still in existence.
One of the ways that Starbucks Coffee Company can provide external benefit is by ensuring that they observe the public health issues in existence in the region. They would do this by making sure that their products are quality and are manufactured in such a way that they do not cause any harm to the consumers of the same. Another way that Starbucks Coffee Company can get involved in provision of benefit externality is ensuring that they provide safety to their consumers, especially in their entertainment part of their organization. The company can also start an educational institution that would offer learning to the society. The same may be extended to the point that the poor in the society are offered a chance to access the institution by offering scholarship to them. In the same way, the company can also have cost externality to them. By polluting the environment through the production of their products, Starbucks Coffee Company can cause cost externality. Failure to take the responsibility of keeping a conducive environment may lead to the company imposing a strain to the environment. One of the other ways that the company may cause cost eternity is by imposing social hazards in the environment. By undervaluing the pension fund of the workers in the organization, the company can have a push of these costs to other organizations. In turn, this may result to a scenario where there exists moral hazard. It is also notable that coffee can be addictive in nature; the fact that individuals would get addicted to this beverage and failure to take it as a problem to them is a mistake (Simon, 2009). When such a scenario happens, a cost externality arises. The government can be instrumental in solving this problem. Among the various options available to them is ensuring that there are various policies in place that ensures that for operations of any business to occur, they should have a certain standard. Having certain standard laws ensures that the company takes the responsibility of the externalism that is in existence and the ones that are involved in causing to the environment to be polluted. In the case of Starbucks Coffee Company, to avoid any pollution, the company would be encouraged on using environmental friendly production instruments.
It is of importance for the government to be involved as a buyer in the market economy. The government has the responsibility of doing this due to two different perspectives; the government perspective, and the business perspective. For one, the government will get involved in the market economy in bid to control the quality of the products that are being produced in the market. Just like any other buyer, when the government is involved it would get to know whether the products are of the underlined quality it requires them to have at every given time. It is like getting involved in a way of ensuring that the cost externals that are in existence are minimized. From the business perspective, the government would be involved in the market economy as a way of promoting competition in the market. As a way of ensuring that there is rise and growth of local industries, the government can get involved in buying the products of the companies that are in existence as a way of promoting them. Involvement of the government may also be as a way of redistributing income to the other players and sectors of the economy. Such initiative of the government ensures that there is growth of various business and sectors of the economy. Being a buyer in various sectors can be a way of fueling development and growth that is needed in the economy.
Starbucks Coffee Company can get involved with the government in various ways. One of the ways is partnering with the government in ensuring that there is recycling of some of the products in the environment. The company can also get to a bigger market when selling to the government (Pham-Gia, 2009). The government may provide a big market of the company products and also increased their productivity levels. Another benefit that might come with selling the products to government is that as long as they maintain the level of productivity that the government desires, there is no risk of another company coming up and offering competitions since the government uses tenders in buying their products. Though there may be existence of the benefits of selling the products to the government the draw backs are not also in lack. At times, changes to the products may not be welcome by the government. Having changes in the products may be a problem as such is only welcome to other consumers who are usually rational of the products in provision. On the perspective of the government buying from Starbucks Coffee Company, it may be of benefit to them. To start with, they are assured of consistency of provision of the products available to them and also they are assured of quality of the products offered to them as the organization has a reputation of offering quality products (Simon, 2009). Buying from Starbucks Coffee Company would also be a way of ensuring that the government meets its objective of distribution of income. The drawback to such a move is that the government may not be promoting other companies that may be small in the region and there is a risk that the company may become a monopoly in future.
The company may consider engaging in a merger with other companies. In case the company may feel that there is unnecessary competition or even need to control the market, the company may engage in a merger. Though such a move may come with some benefits, and also some other risks come with it. One of such risks is trading in the stock exchange, especially if the other company has shares that have a lower value that the ones of Starbucks Coffee Company. Some of the shareholders may not be up to the move and may result in selling their shares. However, there are many benefits that come with formation of mergers. For one, it means that there is less competition in the market and the much needed research is not required like before. The money that would have been used in that activity would be directed to do other activities. Moreover, there is also the benefit of having a wider market as the other firm has an already established market. The government may not always welcome an existence of a merger. It is usually the desire of the government for the public to enjoy fair prices and keep the competition in the market. The two companies may not merge since the government may fail to support such an exercise, if it feels that the general public runs the risk of being exploited.
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