Explosion In The British Petroleum Texas City Refinery Commerce Essay

Explosion In The British Petroleum Texas City Refinery Commerce Essay The explosion and fires incident in the British Petroleum Texas City refinery on 23 March, 2005 has been described and reviewed in this assignment. Investigation report revealed that the incident occurred during the startup of an isomerization (ISOM) process unit. It was reported that this incident resulted in huge impact on BP Company and its stakeholders. The impact of the incident has been critically commended with the support of several data. Fatalities and injuries on nearby trailers, onsite and offsite damage, post-incident emergency response, and economic losses were the major consequences of the explosion. Causes of the incident have been also examined in order to improve BP performance. Organizational and process safety inadequate was the major blame for the incident. Recommendations which may improve BP situation and help to avoid hazardous incident have been provided throughout the assignment. The improvement on process safety culture, organizational changes such as merger and acquisition, budget cutting and employees training at all levels, as well as the enforcement of more effective safety management systems have been suggested to improve BP performance. Lastly, a safe trailer placement policy has been proposed to avoid the risk of similar incident. British Petroleum Company and Texas City Refinery Background The British Petroleum (BP) refinery in Texas City, Texas is the third largest oil refinery plant in the U.S. On Wednesday, 23 March 2005 at 1:20p.m, an explosion and fires happened at the BP refinery in Texas City, Texas, 30 miles southeast of Houston. The BP refinery in Texas City has the great impact on the overall gasoline supply in the U.S. This oil refinery has the capability to produce about 10 million gallons of gasoline per day. This amount of production makes up about 2.5% of the gasoline sold in the U.S. Apart from producing gasoline, this BP refinery also produces diesel fuels, jet fuels, and chemical feed stocks. There are 29 oil refinery units and 4 chemical units cover its 1,200 acre plant. In BP refinery in Texas City, BP employs about 1,800 employees. While the explosion and fires occurred, about 800 contractor workers were onsite carrying turnaround activities. The site has had several alters in management at both the corporate and refinery stages from its commission ing to the date of the explosion incident (Kaszniak Holmstrom, 2008; U.S Chemical Safety and Hazard Investigation Board (CSB), 2005). Incident Description On 23 March, 2005, explosion and fires in BP Texas City refinery occurred during the startup of an isomerization (ISOM) process unit (Figure 1). On that morning, the raffinate splitter tower in the refinerys ISOM unit was restarted after it had been shut down for maintenance. During the startup of a section of the ISOM unit, flammable liquid hydrocarbons were pumped into a distillation tower for more than 3 hours without any liquid being removed by operations worker. This action was opposing to startup procedure instructions. The false signal provided by control instrumentation and critical alarms failed to alert the operator workers of the high level in the tower. As a result, unidentified by the operations worker, the distillation tower was overfilled and flammable liquid hydrocarbons overflowed into the overhead pipe at the top of the tower (Kaszniak Holmstrom, 2008; U.S CSB, 2005). As the overhead pipe filled with liquid hydrocarbons, the pressure at the bottom rose rapidly and resulted in the three emergency relief valves which used to protect the tower from high pressure opened for six minutes. A large quantity of liquid hydrocarbons then flowed from the discharge of safety relief valves to a blowdown drum with a vent stack open to the atmosphere. The blowdown drum and stack speedily overfilled with flammable liquid hydrocarbons, which resulted in geyser-like release out the 113-foot tall stacks (Figure 2) (Kaszniak Holmstrom, 2008; U.S CSB, 2005). According to CSB final report (2005), this blowdown system was a hazardous and outdated design. As the liquid hydrocarbons fell to the ground, some of the volatile liquid evaporated to form a flammable vapor cloud. The explosion and fires happened when the flammable vapor cloud was ignited most likely by an idling diesel truck positioned approximately 25 feet from the blowdown drum. The vapor cloud arrived at a wi de area which is evident by the burned area as shown in Figure 3 (U.S CSB, 2005). Figure 1. Raffinate section of isomerization ISOM process unit (U.S CSB, 2005) Figure 2. Raffinate splitter tower overfills and blowdown drum releases flammable liquid hydrocarbons to the atmosphere (U.S CSB, 2005) Figure 3. A post-explosion photo shows the burned area in and around the ISOM unit had the most severe fire damage while the red arrow points to the top of the blowdown stack (U.S CSB, 2005). Causes of Incident There are several key findings as the causes of this incident occurred in BP Texas City refinery after an investigation was conducted by BPs investigation team which coordinated with CSB, the U.S Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA), and the Texas Commission of Environmental Quality (TCEQ). The causes of the incidents are summarized as below, The BP board of Directors did not propose effective safety culture and major accident prevention programs. There were no member in charge of measuring and verifying the performance of BPs major accident hazard preventive programs (U.S CSB, 2005). Risk blindness (The Economists, 2006). For instance, BP did not take effective actions to halt the growing risk of a catastrophic event although several fatalities occurred in BP Texas City refinery prior to this incident (U.S CSB, 2005). BP was too much focused on the low personal injury rate at Texas City while the process safety management and safety culture had severe insufficiency (U.S CSB, 2005) Inadequate in BPs mechanical integrity program. This led to the failure of the process unit in BP Texas City refinery (U.S CSB, 2005). Overzealous cost-cutting strategies (Economist, 2006; Marketline, 2007a; U.S CSB, 2005). According to CSB final report (2005), BP Group executive managers had expenses cuts in the 6 years resulting in the Texas City disaster without measuring their impact on safety of the site (Economist, 2007; Process Engineering, 2007). The blowdown drum and the relief valve disposal piping were undersized and the relief valve system safety study was 13 years overdue (Process Engineering, 2007; US CSB, 2005). ISOM operators had been overstretched (Economist, 2007; US CSB, 2005). Insufficient in BPs operator training program (US. CSB, 2005). Impact of Incident on BP Company and its Stakeholders Explosion and fires in BP Texas City refinery resulted in several negative effects on BP Company and its stakeholders. Those effects include casualties and injuries, facility and equipment damage, offsite damage, post-incident emergency response and economic losses (US CSB, 2005). Stakeholders of BP who had been affected by this incident were as below, BP Company and its employees Employees of contracting firms which include Jacobs Engineering Group (J.E. Merit), Fluor Corp. and General Electric Co. Families of dead victims and injured workers in this incident Texas community Texas City BP stockholders The U.S citizens who use crude oil Casualties and injuries In the incident, it was reported that 15 contract employees of J.E. Merit, Fluor Corp. and General Electric Co. were killed and a total of 180 employees in the refinery were injured (U.S CSB, 2005). Investigation report revealed that those 15 casualties were due to the explosions impact on the nearby temporary office trailers where employees were having meetings. Of the 15 casualties, 11 of them were employees of Jacobs, Pasadena, Calif, which was contractor in BPs Texas City refinery. The 11 dead Jacobs workers include several managers, administrators and 4 female craft workers. 3 of the victims were employees of Fluor, Aliso Viejo, Calif, was contractor provided maintenance management services at the plant since 2001. The remaining contractor victim was employee of General Electric Co. whereas no BP employee was killed in the incident. Blunt force trauma, which most likely resulting from being hit by structural components of the trailers was the cause of the all 15 casualties. Duri ng the incident, there were approximately 2,200 contract employees and 1,100 BP employees working at the refinery plant. Table 1 shows the details of the 15 dead contractor employees (Powers Rubin, 2005; US CSB, 2005). Company Name Age Position J.E Merit Glenn V. Bolton 50 Planner-scheduler J.E Merit Lorena Lori G. Cruz 32 Instrument fitter-helper J.E Merit Morris R. King 57 Construction manager J.E Merit Arthur G. Ramos 59 Quality control technician J.E Merit Ryan Rodriquez 28 Craft superintendent J.E Merit James W. Rowe 48 Civil superintendent J.E Merit Linda M. Rowe 47 Tool room assistant J.E Merit Kimberly A. Smith 43 Field administrator J.E Merit Susan D. Taylor 33 Pipe fitter helper J.E Merit Larry S. Thomas 63 Project superintendent J.E Merit Eugene White 53 Safety supervisor Fluor Corp. Rafael Herrera 27 Quality control inspector Fluor Corp. Daniel Hogan 58 Quality control inspector Fluor Corp. Jimmy Hunnings 58 Quality control inspector General Electric Co. Larry Linsenbardt 58 Title not disclosed Table 1. Contractor employees who died in the incident (Powers Rubin, 2005) Additionally, 180 employees at the plant were injured, 66 of the victims had serious injuries and most of them were suffered multiple injuries. It was reported that lacerations, fractures, sprains, strains, punctures and second-and third degree burns were the typical combination of injuries occurred on victims. Those seriously injured had leave for works, medical treatment or constrained work activity. Of the 66 workers with serious injuries, 14 were BP employees while the others were contractor workers from 13 different firms. Moreover, report revealed that 114 employees were given first aid during the incident. Of those who were given first aid, 35 were BP employees while the rest were contract employees from 14 different contracting firms (U.S. CSB, 2005). Facility and equipment damage According to CSB final report (2005), the place within the ISOM unit which caused explosion, nearby trailer area, the adjacent catalyst warehouse as shown in Figure 4 and the adjacent parking areas suffered the most severe blast damage. The nearby metal warehouse which used to store catalyst and the satellite control room were heavily damaged (Powers Rubin, 2005; U.S CSB, 2005). Figure 4. Nearby trailers that sited west of the blowdown drum (pointed by red arrow) were destroyed (U.S CSB, 2005). Furthermore, it was found that about 70 vehicles surrounding the ISOM unit were damaged and numerous vehicles were destroyed (U.S CSB, 2005). Moreover, a total of 44 trailers sustained heavy damaged (Figure 5) and 13 trailers were totally destroyed by the blast pressure wave that propagated through the plant when the explosion and fires happened. Report also disclosed that a number of workers were injured in trailers as far as 479-foot away from the explosion (Kaszniak Holmstrom, 2008; U.S CSB, 2005). Additionally, adjacent buildings also were damaged by the blast pressure. The damage level on building was not as severe as those occurred on trailers. The damage on surrounding buildings included damaged doors, cracked walls, and broken windows, scattering of interior contents, damaged roofs and bent metal panels. Also, the explosion also damaged a total of 50 storage tanks although most tank farm was located more than 250-foot away from the ISOM unit. The damage on tanks included distorted tank shells, both the shell sides and the roofs. A number of tanks utilized to hold hazardous substances like benzene were found being damaged as well and this resulted in the hazardous substances vapors escaped to atmosphere (U.S. CSB, 2005). Offsite Damage CSB report disclosed that not only the buildings in the refinery were damaged but windows of some houses and business buildings which situated north of the refinery were broken as well. These damaged offsite buildings were located up to 3 quarters of mile away from the explosion (U.S CSB, 2005). Figure 5. Trailers in the vicinity of the ISOM unit were heavily damaged (Occupational Hazards, 2005). Post-Incident Emergency Response The emergency response teams in Texas City were one of the BP stakeholders affected by this BP refinery explosion. These emergency teams provided effective and rapid assistance for the injured people and recovered the fatalities. Texas City Industrial Mutual Aid System (IMAS) member companies helped with search and rescue and fire hose lines (U.S CSB, 2005) Economic Losses BP has set aside approximately $2 billion in compensation repairs, payouts and lost profit for settlement of the incident (Marketline, 2007a). According to The Justice Department and US Environment Protection Agency (EPA), in order to resolve Clean Air Act violations in Texas City refinery, BP Products North America has spent over $161 million after the explosion to control pollution in Texas City, improved monitoring and maintenance and enhanced its internal management practices in Texas City refinery. EPA also reported that $12 million was paid by BP on civil penalty and $6 million was spent on a supplemental project to decrease air pollution in Texas. For settlement issues, BP also converted 100 diesel public vehicles to vehicles that operate using liquefied or compressed natural gas in order to reduce the hazardous emissions like hydrocarbons, nitrogen oxides and particulate matter. Besides that, BP agreed to build 4 refueling stations for those converted public vehicles (Marketl ine, 2009). It was also reported that BP faced penalties with $92,000 from The US Occupational Safety and Health Administration (OSHA) for violations in the Texas City refinery (Marketline, 2007b). Moreover, to compensate the victims in the explosion, BP has incurred $1.6 billion (Economist, 2007). Likewise, BP faced reduction in its fourth quarter profit in 2006 due to the huge expenses on safety and integrity investments after the incident. It was reported that BPs fourth quarter profit fell 12% when compared to the last 3 quarters of 2005. Although BP achieved record profit for 2006; BP lagged behind that of its UK competitor Shell (Marketline, 2007c). BPs share price also trailed its rivals like Americans Exxon Mobil in 2006 (Economist, 2007). Recommendations Some recommendations to improve BP situation have been proposed after accessing the causes of the incident. Safety culture recommendation and trailer siting recommendation have been suggested to BP Company as follow, Safety culture recommendation Improve and emphasis more on process safety culture and performance through: Increase spending on safety assessment and maintenance Appoint an expert on safety management systems for at least 5 years to examine the safety progress in BP refineries. Incorporate process safety into management decision making at all levels Promote improved process safety through education and training employees at all levels Construct organizational changes that may improve process safety which include: Main organizational changes in refinery, for instance through mergers and acquisitions Policies changes like cost cutting and ensure consistency of policies Employees changes such as changes in staff experience and hire more workers to avoid work overloads. Reinforce safety management systems through enforcement of more valuable and effective programs, for instance: Mechanical integrity programs Risk management and analysis programs and Errors reporting and investigation programs Trailers siting recommendation Develop a novel trailers placement policy which contains practices to ensure the safe siting of trailers as below, Protect occupied trailers from accident exposure, for example, explosion pressure and heat Set up minimum safe distance requirements for trailer siting where is away from dangerous zones of process plants Assess the relocated trailers placement via novel risk analysis methodology Conclusion The explosion and fires occurred in BP Texas City refinery in 2005 resulted in huge impact on BP Company and its stakeholders. The effects of the incident included casualties and injuries which 15 contract employees were killed and 180 employees in the plant were injured, facility and equipment in the plant were damaged or destroyed, offsite houses and business buildings were damaged, assistance from emergency response teams in Texas City and economic losses. BP had has paid about $2 billion to compensate the repairs, payouts and lost profits and about $1.6 billion to compensate the victims. Moreover, BP was fined by EPA and OSHA for violations in Texas City refinery. BPs Q4 profit in 2006 also faced declination due to the explosion in Texas City refinery. The profit reduction not only affected BP Company but also BP stockholders. The incident also resulted in the financial performance of BP lagged behind its competitors. As part of settlement, BP also agreed to convert 100 diesel pu blic vehicles to vehicles that operate using liquefied or compressed natural gas. Furthermore, the incident has vast impact on the overall gasoline supply in the U.S as the gasoline production of this oil refinery makes up about 2.5% of the gasoline sold in the U.S. Safety culture recommendation and trailer siting recommendation have been given to improve BP situation. Even though compliance with practices in policies does not guarantee on avoidance of hazardous incident, non-compliance undoubtedly increases the risks. Also, enforcement of effective safety management systems is essential in all companies. Last but not least, employees safety training at all levels are very important to prevent the major incidents.

Essay --

Living with Lupus Lauren Choate College of the Mainland â€Æ' Lupus is a dangerous disease that can affect anyone. It has no cure and is known to affect 9 out of 10 adults. â€Å"Systemic lupus erythematosus (SLE), also called lupus, is a chronic inflammatory autoimmune disease characterized by unusual antibodies in the blood that target tissues of the body.† (Frazier & Drzymkowski, 2008) Autoimmune means that your immune system cannot tell the difference between foreign invaders and your body’s healthy tissues and creates autoantibodies that attack and destroy healthy tissue. These autoantibodies cause inflammation, pain, and damage in various parts of the body. Lupus affects each individual differently and it may be worse for one person than it is for another. My grandmother, Carolyn, was diagnosed with Systemic lupus erythematosus in her early forties. She suffered a long time before she was diagnosed with Lupus. â€Å"The worst part of my lupus is the flare-ups† Carolyn said, â€Å"It feels as if I am on fire sometimes and every single inch of my body hurts in the most awful way I have ev...

Coffee and Starbucks Essay

?Introduction Starbucks Corporation is an international coffee company and coffee house chain headquartered in Seattle, Washingston. Starbucks was founded in 1971, when three academicians, began a specialty coffee store called Starbucks Coffee, Tea and Spice in Seattle (Starbucks Corporation, 2009). In 1996, Starbucks operated its first international store expansion in Tokyo, Japan. With current approximately 19,500 stores in 58 countries (Location xcelerated, 2012), Starbucks is quickly becoming one of the best known brands and the largest specialty coffeehouse company in the world. The Market Demand of Coffee. The demand of coffee in the United States has rose 2 percent in 2011(Perez, 2011). Americans drank 77. 4 billion cups of coffee during a year (Perez, 2011). A statistics showed that â€Å"the average consumption among coffee drinkers in the United States is 3. 1 cups of coffee per day† (E-Imports, 2012). With gathering the information and statistics, it has proved the demand of coffee market in the US is extremely high. Also, the coffee market is the potential market for rivals entering into. Hence, Starbucks has to attain strong competitive advantages and market demand with its resources and capabilities. Starbucks’s Resources and Capabilities An organization has the ability to identifying and determining the competitive power of their resources and capabilities to create competitive advantage. Business resources are the productive input or competitive asset that is owned or controlled by the organization (Thompson, 2012). In the case of Starbucks, the resources and capabilities are coffee bean, store ambience, employee culture, and brands and reputations. Coffee Beans Coffee beans are the natural resources of Starbucks. They are one of the most valuable resources for coffee industry. Starbucks was a purveyor of specialty coffee – it has seemed top-notch coffee beans to produce high quality of coffee. High quality of coffee beans was usually sourced directly from coffee-producing countries, for instance Kenya, Guatemala and Indonesia. Starbucks was usually acquired the coffee bean at a premium price for suppliers who suited the Starbucks’ standards, socially and environmentally responsible farming. Starbucks has committed the long term contracts with the supplier in order to protect both party with the price and quality of coffee beans. The Starbucks’s coffee beans provided a sustainable competitive advantage in the face of active competition. It is due to the high quality and premium coffee beans sourced from other country were uncommon and costly to imitate for competitors. Store Design and Ambience Starbucks was positioned as a â€Å"third place† between beyond home and work with the store design and relaxing ambience. The design of store is provided a comfort and relaxing environment for its costumer. Each detail of likes the style of fixtures, the edges of countertops and the texture of slate floors was examined to enhance the unique ambience and mood of the Starbucks store. With blended the colorful banners and artworks, the merchandise displays, the music and the aromas, Starbucks has created an attractive, consistent and stimulating environment that provided comfort of a home for customer, excellent customer service and quality products as the concept of â€Å"third place theme† (Moon & Queich, 2003) cited by (Harveywallbanger, 2012). These elements made the Starbucks experience key in retaining its customers with the competitive advantage and capture new markets. The store design is valuable by providing a third place theme, a relaxing and conform atmosphere. Besides, it was rare design in United States as Starbucks is the first mover to replicate the Italian style coffee store. Competitors are difficult and costly to imitate as the Starbucks has an exclusive In-House architects and designers to ensure the right image and character for each store. Employee Culture A vital dynamic in Starbucks’s growth was the human resources, its employee. Starbucks has provided a great work environment around its employees, one of its most important resources and sources of sustainable competitive advantage (Gates et al. , 2011). Schultz believed that a plentiful employee benefits package was a key competitive advantage. Starbucks was the first company to offer all employees, even part-timer, were qualified to get healthcare benefits, participate in the Bean Stock program for stock option grants. Besides that, Starbucks has offered an extensive training program to each employee that includes a commitment to customer service experience and the knowledge of products (Balaban et al. , n. d). All employees of Starbucks were trained to have good customer experiences for retaining customers. For example, they were trained â€Å"just say yes† to customer requests. Starbucks’ approach towards employees benefited to company has maintained the turnover rate at 60-65 percent, while the other national industry turnover is about 150-400 percent a year. The plentiful employee benefit package provides a sustainable competitive advantage to Starbucks. It is added value to Starbucks because employees will have the better job performance due to the motivation and courage. It was rare as the Starbucks was the first company provided healthcare benefits and stock option plan. And also, it is costly to imitate for Starbucks’s competitors. Brand and Reputation Brand recognition and reputational are essential resources and capabilities to Starbucks’s competition advantage. According to Starbucks Strategy Fortune, â€Å"Starbucks store traffic has risen between 6 percent and 8 percent a year even in a down economy†. Starbucks reputation was growing mostly by word of mouth rather than spending on advertising. Schultz believed that opening numerous stores helped to build the brand to Starbucks by increasing awareness of the brand. On the other hand, Starbucks also strengthened its brand and reputation with Fair Trade Certified coffee and corporate social responsibility (CSR). The company collaborated with CARE and Conservation International to encourage environment responsible methods of growing coffee. These activities would be created the attention and attraction of its customers on the brand of Starbucks. Due with the strength of brand and reputation, Starbucks was achieved sustainable competitive advantages in the specialty coffee segment. Michael Porter’s Five Forces Model. One of the powerful and widely assessment tools of an organizations industry’s competitive forces is the five forces model, created by Michael Porter. This model embraces that the competitive forces affecting industry success go beyond rivalry among competing sellers and include four coexisting sources (Thompson, 2012). The Michael Porter’s five forces are the threat of entry, the threat of substitutes, the bargaining power of buyers, the bargaining power of supply and rivalry among competing sellers. I will identify the competitive environment of Starbucks in coffee industry by using Michael Porter’s Five Forces Model. 1) Industry Rivalry The industry competition among the existing firms is positioned at the center of Porter five forces model. Rivalry is gradually growing against Starbucks each year as the growing of industry. The growth of industry rivalry has increased due to introduce the new products into the market and differentiate products based on quality, service and selection (Gamble & Thompson, Jr. , 2011) cited by (Brown, 2011). With this point, Starbucks has introduced a new way of having premium coffee and new product of Frappuccino, was greatly differentiated from the competitors. Starbucks also served coffee with the highest freshness standards with FlavorLock bags. Starbucks compete to against two strong orgationation in the fast food industry who have operated coffee beverages and stepped into coffee market, McDonalds and Dunkin’ Donuts. The competitive threat distributed by McDonald’s to Starbucks was referring to the Consumer Reports magazine in 2008 , which rated that the McDonald’s the quality of coffee is better and the price is cheaper as compared to Starbucks. The industry’s growing has slowed down while the industry competition is increasing among existing firms. In short, the force of industry rivalry formed by the competition among coffees industry is characterized very strong. 2) The Threat of New Entrance The second competitive force of Porter’s model has significant differenced in the late of 80s and the recent competitive environment of Starbucks, is no barriers to entry. According to Porter (2008), barriers of entry are low in the specialty coffee industry. The coffee houses in the United States were about 585 in 1987 and 25000 in 2007. It showed that the new entrants of specialty coffee market was increasing speedily in 20 years. Besides that, the specialty coffee market had grown from $11. 5billion (2005) to $12. 27 billion (2006) in the United States. Due to the market demand growing rapidly, it was attracted a number of fast-food retailers, such company as McDonald and Dunkin’ Donuts. In addition, the product differentiation (included coffee selection, roasting and brewing) is considered weak. With these elements, it can be established that the threat of new entrants in coffee industry is moderate. However, Starbucks has a strong competitive advantage with a well-known brand and image, the quality service and diversity products, and a strong market in the segmentation. 3) The Threat of Substitutes Another competitive force of Porter’s model is the threat of substitutes. The force of substitutes is significant decreased in the coffee market. This is because, there are only little of substitutes product, such substitute as soft drinks, energy drinks and fruit juices. The principal substitution of products has posed a slight threat to coffee industry were carbonated soft drinks which introduced by the Pepsi and Coca-Cola company. In the past few years, studies have done that coffee has increasingly obtained the preference of consumer more than carbonated soft drinks. This is probably concentrated the healthy related with carbonated soft drinks, and evidenced that coffee is a relatively healthy preference. (Harding, 2000) cited by (Larson. , 2008) Based on the information and evidence, the threat of competitive substitute products is considered to be weak for Starbucks Corporation. 4) The Bargaining Power of Suppliers The bargaining power of supplier has changed in several ways through the widely growing in the coffee industry. Starbucks was purchased it premium coffee beans from the farmers that were numerous, small and unconnected during the late 1980s. In the recently years, coffee beans suppliers were joint by Fair Trade Certified coffee and acted like a large entity. Specialty coffee companies were making the coffee beans suppliers gradually important by seeking greater quality of coffee to compete the competitors in the market. The coffee beans suppliers today are more power, with increased joint and increased importance upon high quality coffee beans. Starbucks has work out with the coffee beans suppliers into continuing fixed-price commitments in order to ensure an adequate supply, which decreased the supplier bargaining power. (Larson, 2008) 5) The Bargaining Power of buyers. The last element of five forces model is the bargaining power of buyers. The force of the buyer’s bargaining power is defined to the buyer’s capability to force down prices, and seek for higher-quality products and services (Porter, 1998, p. 24) cited by (Larson, 2008). The bargaining power of buyer in specialty coffee segment is considered high, since two strong competitor of Starbucks, McDonalds and Dunkin’s Donuts have offered the lower prices. However, Starbucks has introduced the several new products and high quality of coffee, highly differentiated to maintain consumers satisfied and away from competitors in the coffee market. Thus, the buyer bargaining power has offset and became moderate. The Summary of Michael Porter’s Five Factor In summary, the coffee market faces very strong forces from the industry rivals but it obtains weak forces from the threat of substitutes. Besides, the other three forces are considered as moderate. Generally, the impact of the five forces is moderate in the specialty coffee industry. Therefore, Starbucks is able to obtain the ideal revenues in the coffee market with operated effectively and efficiently. Starbucks’ Generic Strategy. There are three successful generic competitive strategies that organizations can apply to achieve their competitive strategies, included overall cost leadership, differentiation and focus, defined by Michael Porter. Overall cost leadership strategy implies an organization to apply lower overall costs to attract consumers. The differentiation generic strategy contains the creation of service and product as being valuable and unique for the industry. Focus is the last generic strategy, which aims a certain market of a product line (Porter, 1998, p. 38) cited by (Larson, 2008). However, Starbucks are suitable the broad differentiation strategy of the five generic competitive strategies nowadays. This strategy allows Starbucks to serve a broader customer base with the differentiation of product and service (Grant, 2009) cited by (Brown, 2011). This approaches to retain and attract as many consumer with the generally product mix. Starbucks had the unique skills, products and services reputation with the distribution segment of specialty coffee industry. For instance, Starbucks was developed an icy-blend of dark-roasted coffee and milk, named Frappuccino. This drink was a hit with $54 million sales in the first year on the national market. In addition, the high-quality standards and strong employee culture of Starbucks were known well in the specialty coffee industry. The high-quality coffee beans are purchased from Fair Trade Certified, considered a differentiation product to other competitors. The employees of Starbucks were also trained to have strong customer experience. In the differentiation strategies, Starbucks have strengthened the brand and reputation for quality and creative flair. Starbucks’ Strategy Options. Starbucks is able to create three strategic options for sustaining competitive advantage and further growing the business by having evaluated its forces. The three strategic options for Starbucks are that diversification, expansion and merger. 1) Diversification The diversification of a business is that introducing new products and offering new services to the industry. There are two way of diversification for business, be related or unrelated. Starbucks is suited to attempt related diversification, reflecting more association with the specialty coffee industry. Schultz believed that the company has lacked on blockbuster products, only the variations of products. Starbucks has a successful product diversification in the history with launched coffee and tea beverages, brewing and serving equipment, roasted coffee beans, music and gifts. The introduction of savory products such as cake, donut and muffin is a successful diversification as it can be combined with the existing product and core product, coffee. The diversification strategy is a good option for enhancing Starbucks’ growth and competitive advantage. 2) Expansion. The expansion of an organization can be within a country and into an overseas market. Starbucks should reduce their expansion efforts in the United States and focus to expand its business into new countries to further internationalize it. The Economist stated, â€Å"While Starbucks has expanded so have its rivals. The firm’s home market seems to have reached saturation point. † With the rapid expansion, Starbucks is oversaturated in the United States. Therefore, this strategy option is suitable for Starbucks as the United States coffee market is reaching saturation point. If Starbucks has to go further growing and expanding, the international expansion is one of the best strategies for Starbucks. 3) Merger and Acquisition According to Investopedia, it defined as â€Å"a merger is an alliance of two organizations while an acquisition is the attaining of one organization by another. † The strategy of merger and acquisition sets out to accomplish the same goal, by increased broad customer base, market share and corporate strength of business. In the history, Starbucks has merged with Dreyer’s Grand Ice Cream to develop super premium ice cream and acquired a premium tea company, Tazo LLC. In the case study of Starbucks, there states that there were about 25000 coffee houses in the United States in 2007. The merger and acquisition of small specialty coffee retailers will enhances the market position, market share and competitive advantage of Starbucks. This is a strategy that will exploit opportunities whilst avoiding threats to further growing and expansion of Starbucks. Recommendations The first and most important process which Starbucks should take is to diminish the efforts expansion in the United States. According to Starbucks’ strategy Fortune, a new store will often cannibalize about 30% of the sales of a nearby Starbucks. The continuing aggressive of expansion in the United States by opening as many new stores of the same area is an act to cannibalize store sales. The reason why Starbucks should diminish their expansion plan is the coffee market has reached the saturation in the US. The overcapacity of expansion plans in a location will be met with failure to an organization. On the basis of all the evaluation and evidence referred for the strategy options, the recommendation is to further expand internationally. Starbucks can convey the remained investment into international development plans by reducing the expansion plans in United States. The expansion of international market offers a supreme target with three fundamental objectives. The first reason is the lack of awareness of coffee market in many countries which represent the prospective market share. For instance, Starbucks currently opens approximately 20,000 stores with 13,000 in the US and 7000 in foreign countries. The total coffee consumption per person in the US has lowered much than many countries, such country as Finland and Italy. With gathering the information, this proves that expand internationally, there is a massive coffee drinking population and potential market share to be selected. (Starbucks Corporation, 2008) cited by (Larson, 2008). Another reason that international expansion offers an ideal prospect is that the expansion of product innovation. For example, Starbucks has announced their Tazo tea brand into the Japanese market. And, Tazo was brought into the United States market as it was a successful trial in Japan. Tazo green tea has brought a success to Starbucks as it was a national drinks and showed that the power of brand in North America. Starbucks could have to evade the risk of brand reputation as more innovative products should run a trial in international markets. Since the markets have yet visible to Starbucks for a period time, it is possible to avoid a great risk with affecting the brand reputation. Therefore, Starbucks has great competitive advantage in the markets with expand intentionally. The last reason of international expansion is to increase the brand reputation. Building brand image is key factor to an organization as the brand will affects an organization’s sales and position in the market. For example, in case of Starbucks, the company has increased revenue from $7. 8 billion in 2006 to $9. 4 in 2007, along with an increase in brand value. In order to recover the exclusivity of Starbucks brand, Schultz would focus the expansion of international countries and slow down the expansion of the United States. Therefore, the international aggressive expansion will help to strengthen its brand image and regain a strong competitive advantage for Starbucks. In a nut shell, I am highly recommended a strategy decision to Starbucks is that expanding into international markets. International countries have represented the ideal potential market shares with the high demand of specialty coffee. By applying this strategy, Starbucks will continue to be the leader in the specialty coffee industry and further regain and strengthen its competitive advantage. Furthermore, it also gains the customer satisfaction in the international markets. International expansion is the way to move forward. Reference Balaban, S. et al. (n. d) â€Å"Management 600† Starbucks Coffee Company. http://cobweb2. louisville. edu/faculty/regbruce/bruce/cases/starbucks/starbucks. htm [Accessed on 7 April 2012]. Brown, H. (2011) â€Å"External Environmental Analysis of Starbucks and the Coffee Industry† Strategic Management MGMT 4340 http://www2. uhv. edu/chapao/MGMT4340/Samples/Project%20Sample%203. pdf [Accessed on 9 April 2012] E-Imports (2012) â€Å"Coffee Statistics† Espresso Business Solutions. http://www. e-importz. com/Support/specialty_coffee. htm [Accessed on 5 April 2012]. Gates, R. et al. (2011) â€Å"Strategy Analysis MGMT 562† http://freedownload. is/pdf/strategy-analysis-mgmt-562-2925711. html [Accessed on 6 April 2012]. Harveywallbanger. (2012) â€Å"Starbucks’ Customer Retention Strategies 89† HubPages.http://harveywallbanger. hubpages. com/hub/Starbucks-Customer-Retention-Strategies [Accessed on 6 April 2012]. Heavey, J. (2012) â€Å"Starbucks a Strategic Report†Scribd. http://www. scribd. com/doc/27614539/Starbucks-a-Strategic-Report-by-James-Heavey [Accessed on 8 April 2012]. Larson, R. (2008) â€Å"Starbucks a Strategic Analysis† Past Decisions and Future Options http://coe. brown. edu/documents/StarbucksaStrategicAnalysis_R. Larson_honors_2008. pdf [Accessed on 8 April 2012]. Location Excelerated (2012) â€Å"How many Starbucks are they? † Location Excelerated. http://loxcel. com/sbux-faq. html.

A Literary Analysis of The Lottery by Shirley Jackson - Free Essay Example

Sample details Pages: 2 Words: 699 Downloads: 3 Date added: 2019/08/02 Category Literature Essay Level High school Tags: The Lottery Essay Did you like this example? The main idea of this story was the lottery, how they decided on who got chosen and what would happen to that person. From this paper I am expecting to fully understand the short story and why the things happened for. I will be researching different websites over the story and stating the reasons on why The Lottery was doing those things. By the end of this paper I hope to accomplish more research and helpful statements to understand the story. Shirley Jackson was born in 1916 in San Francisco, California. She had a highly controversial and famous tale about a village that had an annual death ritual. She also wrote novels as The Haunting of Hill House and We Have Always Live in the Castle but died in 1965 due to heart failure. (BIOJACK) The Lottery became one of the most significant short stories when it came out and had many readers confused due to the lack of words to express anything that was going on. Towards the end the story ends violently and it raised question on to why they would do those things. Don’t waste time! Our writers will create an original "A Literary Analysis of The Lottery by Shirley Jackson" essay for you Create order The story is upon that once a year everyone gathers around in the square to see who will win the lottery. Which it isnt much as a win but a sacrifice because you get stoned. The villagers including the children participate in it the adults will be the ones picking out the black box while the children get stones to participate in the stoning a person. If your husband or wife didnt show up the villagers will ask how come they didnt come. Then as the story went on at the end Tessie Hutchinson wins the lottery. Everyone grabs stone and she finds it unfair because she was picked. The villagers didnt have a clue why they did this but the only reason they did it was because it was a tradition and they dont want to get rid of it. As reading the story some lines that stood out was eventually made a great pile of stones in one corner of the square and guarded it against the raids of the other boys(Jackson 2) and some imagery was the black box, stones and how the villagers knew everything that was going on in each others lives. The story theme was that it conveys tradition and that most of them knew what was going on because it was their first time in doing this. Half of them wouldnt listen to the instructions because they already knew what was going on and what they will do as it states in the story. Old Man Warner is a character that is filled with fear because he doesnt want the tradition. The ending of the story also is very visual because your gathered in the center of the square and youre picking a slip of paper out of a black box, if you end up with a black spot on it the you were the chosen one. The person was being stoned for not a valuable reason, Tessie was just as innocent as if any other person got chosen. Shirley Jackson shows the importance and meaning of carrying a tradition in the story. All they will do was if they stoned someone to death the town will get a blessing with a fertile crop. In the beginning of the story you never would of thought that at the end someone will die because of the words and expressions that were used. She stated in the story clear and sunny with the fresh warmth of a full summer day; the flowering was blossoming profusely and the grass was richly green.(Jackson 1) You could have thought it was about someone waking up in the summer, going to work, buying a lottery ticket and ended up winning but not stoned to death. Those words she used was a great way to use to not go straight into the story because then theyre will not be a reason for her writing that story unless it was just to tell people that they were being stoned if you won. She also states how many people live there and other details of the town.