Starbucks Organizational Functions
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Jun 23, 2020
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About This Presentation
This was a research assigned by the respected Faculty of Bangladesh University of Professionals to study the organizational function of a renowned organization where we studied Starbucks.The team under my leadership accomplished this research.
Slide Content
MANEGERIAL FUNCTION PRACTICES
OF
STARBUCKS
OF
STARBUCKS
STARBUCKS
Principle of Management
ALD 1102
Submitted By
Name Roll Marks
Md. Rabiul Alam Redoy 2025171024
Moshiuzzaman Chayon 2025171004
Farhan Faysal 2025171100
Nayeem Hossain 2025171002
Shawrea Reme 2025171070
Md. Abu Bakar Siddque Tanvir 19251026
Batch: 2020
Section: B
Semester: 1
st
Supervisor
Takrima Jannat
Lecturer
Department of Business Administration in Marketing
Faculty of Business Studies (FBS)
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka-1216
Date of Submission: 10 June 2020
Principle of Management
ALD 1102
Submitted By
Name Roll Marks
Md. Rabiul Alam Redoy 2025171024
Moshiuzzaman Chayon 2025171004
Farhan Faysal 2025171100
Nayeem Hossain 2025171002
Shawrea Reme 2025171070
Md. Abu Bakar Siddque Tanvir 19251026
Batch: 2020
Section: B
Semester: 1
st
Supervisor
Takrima Jannat
Lecturer
Department of Business Administration in Marketing
Faculty of Business Studies (FBS)
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka-1216
Date of Submission: 10 June 2020
LETTER OF TRANSMITTAL
Date: 10 June
2020
The Course Instructor
Principle of Management
Faculty of Business Studies (FBS)
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka-1216
Subject: Term Paper on Analyzing the Managerial Function Practices.
Dear Faculty,
We, the students of the faculty of Business Studies, Department of Marketing,
are pleased to conclude this report on ‘Analyzing the Managerial Functions
Practices of Starbucks’. This letter marks the submission of our term paper.
We ensure you that we have put all of our collective efforts to ensure our work
is of a superior quality. We hope you acknowledge the dedication and the
devotion we have shown towards this paper. However, we understand that our
work is not perfect, and thus we welcome any and all the criticism you have of
our work.
Sincerely,
Md. Rabiul Alam Redoy (Team Leader)
On behalf of all the members of the team (Puppet Masters)
Department of Business Administration in Marketing
Faculty of Business Studies (FBS)
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka-1216
Date: 10 June
2020
The Course Instructor
Principle of Management
Faculty of Business Studies (FBS)
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka-1216
Subject: Term Paper on Analyzing the Managerial Function Practices.
Dear Faculty,
We, the students of the faculty of Business Studies, Department of Marketing,
are pleased to conclude this report on ‘Analyzing the Managerial Functions
Practices of Starbucks’. This letter marks the submission of our term paper.
We ensure you that we have put all of our collective efforts to ensure our work
is of a superior quality. We hope you acknowledge the dedication and the
devotion we have shown towards this paper. However, we understand that our
work is not perfect, and thus we welcome any and all the criticism you have of
our work.
Sincerely,
Md. Rabiul Alam Redoy (Team Leader)
On behalf of all the members of the team (Puppet Masters)
Department of Business Administration in Marketing
Faculty of Business Studies (FBS)
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka-1216
ACKNOWLEDGEMENT
Firstly, we would like to thank the almighty for blessing us with the ability to
successfully complete the dedicated task.
Secondly, this research paper is made possible through the help and support
from everyone, including parents, teachers, family and friends.
Lastly, we would like to thank our instructor for her most support and
encouragement for giving us this research. This gives us the experience on how
to cooperate and engage ourselves in a serious project. We would like to thank
her for granting us this opportunity to go deep within a company and conduct
the survey-based on which this report exists.
Firstly, we would like to thank the almighty for blessing us with the ability to
successfully complete the dedicated task.
Secondly, this research paper is made possible through the help and support
from everyone, including parents, teachers, family and friends.
Lastly, we would like to thank our instructor for her most support and
encouragement for giving us this research. This gives us the experience on how
to cooperate and engage ourselves in a serious project. We would like to thank
her for granting us this opportunity to go deep within a company and conduct
the survey-based on which this report exists.
DECLARATION
We hereby declare that the report titled “Managerial Function Practiced by
STARBUCKS” is a product of our collective efforts under the guidance of the
course Teacher, Takrima Jannat. The report has been submitted to the faculty of
Business Studies, Department of Marketing, at Bangladesh University of
Professionals. This report is a particular fulfillment of the 1
st
semester Final
Examination, 2020 for the course Principle of Management (Course code: ALD
1102)
We further declare that the work projected in this report has not been previously
submitted in this or any other Institute.
Place: Mirpur Cantonment, Dhaka.
Date: 10/06/2020
Signature of The Team Leader
We hereby declare that the report titled “Managerial Function Practiced by
STARBUCKS” is a product of our collective efforts under the guidance of the
course Teacher, Takrima Jannat. The report has been submitted to the faculty of
Business Studies, Department of Marketing, at Bangladesh University of
Professionals. This report is a particular fulfillment of the 1
st
semester Final
Examination, 2020 for the course Principle of Management (Course code: ALD
1102)
We further declare that the work projected in this report has not been previously
submitted in this or any other Institute.
Place: Mirpur Cantonment, Dhaka.
Date: 10/06/2020
Signature of The Team Leader
SUPERVISOR’S CERTIFICATE
It is Certified that the work incorporated in the report titled “Managerial
Function Practiced by STARBUCKS” submitted by Md. Rabiul Alam Redoy
(Leader), Moshiuzzaman Chayon, Farhan Faysal, Nayeem Hossain, Shawrea
Reme and Md. Abu Bakar Siddque Tanvir is an academic work consisting of
authentic and rational data carried out by the students under my supervision and
guidance at Bangladesh University of Professionals, Mirpur Cantonment,
Dhaka-1216.
No part of this report has been formed on the basis of the research of any other
Institute.
I further certify that the materials obtained from other secondary sources have
been duly acknowledged in this report.
Takrima Jannat
Lecturer
Department of Business Administration in Marketing
Faculty of Business Studies (FBS)
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka-1216
Bangladesh
It is Certified that the work incorporated in the report titled “Managerial
Function Practiced by STARBUCKS” submitted by Md. Rabiul Alam Redoy
(Leader), Moshiuzzaman Chayon, Farhan Faysal, Nayeem Hossain, Shawrea
Reme and Md. Abu Bakar Siddque Tanvir is an academic work consisting of
authentic and rational data carried out by the students under my supervision and
guidance at Bangladesh University of Professionals, Mirpur Cantonment,
Dhaka-1216.
No part of this report has been formed on the basis of the research of any other
Institute.
I further certify that the materials obtained from other secondary sources have
been duly acknowledged in this report.
Takrima Jannat
Lecturer
Department of Business Administration in Marketing
Faculty of Business Studies (FBS)
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka-1216
Bangladesh
EXECUTIVE SUMMARY
This paper was prepared in order to illustrate the analysis of the managerial function
practiced in any renowned organization. The organization which is focused in this paper is
STARBUCKS. The paper was created by analyzing various information, data, graph, charts
and researches. The collected information was then analyzed and illustrated using tabulations
and graphical representation.
This report aims to strategically based evaluate Starbucks past and current situation and
future position of this largely successful company.
Starbucks is a global company operating in the coffee retail market since 1972. The company,
which has positioned itself as a seller of premium coffee products, has greatly expanded its
market position and presence in the past two decades.
The internal position of Starbucks is strong, indicating that the company excels in utilizing
strengths to create competitive advantages. Core strengths of the company are its excellent
brand image, customer service, supply chain management, and financial position. With the
help of the latter capabilities, Starbucks is able to retain its market leadership position,
improve the ability to open new stores at top-sites, and mitigate volatilities in global coffee
The internal position of Starbucks is strong, indicating that the company excels in utilizing
strengths to create competitive advantages. Core strengths of the company are its excellent
brand image, customer service, supply chain management, and financial position. With the
help of the latter capabilities, Starbucks is able to retain its market leadership position,
improve the ability to open new stores at top-sites, and mitigate volatilities in global coffee
bean prices.
Starbucks apparently undisputed market leadership position can be credited to the company’s
clever product diversification and an acquisitions and alliances expansion strategy. In
response to changing consumer needs and demand, Starbucks has evolved from a mere seller
of coffee products to full-fledged chain “restaurant”, offering not only coffee products but
also other beverages, foods, and merchandise. Starbucks adopted the generic strategy of
differentiation, the goal is to make the company dissimilar from other competitors,
emphasizing on the Starbucks Experience and premium coffees.
Despite of the positive market position, the company faces challenges in the short and
medium terms. Those challenges emanate from the very way of growth of the company and
its competitors around the world. The analysis also shows that Starbucks is well-positioned to
confront expected changes in the industry. The company is advised to continue key strategies
on corporate level: aggressive expansion strategy through acquisition and alliance primarily,
product development/positioning strategies for niche markets and retrenchment strategies for
unprofitable product lines.
This paper was prepared in order to illustrate the analysis of the managerial function
practiced in any renowned organization. The organization which is focused in this paper is
STARBUCKS. The paper was created by analyzing various information, data, graph, charts
and researches. The collected information was then analyzed and illustrated using tabulations
and graphical representation.
This report aims to strategically based evaluate Starbucks past and current situation and
future position of this largely successful company.
Starbucks is a global company operating in the coffee retail market since 1972. The company,
which has positioned itself as a seller of premium coffee products, has greatly expanded its
market position and presence in the past two decades.
The internal position of Starbucks is strong, indicating that the company excels in utilizing
strengths to create competitive advantages. Core strengths of the company are its excellent
brand image, customer service, supply chain management, and financial position. With the
help of the latter capabilities, Starbucks is able to retain its market leadership position,
improve the ability to open new stores at top-sites, and mitigate volatilities in global coffee
The internal position of Starbucks is strong, indicating that the company excels in utilizing
strengths to create competitive advantages. Core strengths of the company are its excellent
brand image, customer service, supply chain management, and financial position. With the
help of the latter capabilities, Starbucks is able to retain its market leadership position,
improve the ability to open new stores at top-sites, and mitigate volatilities in global coffee
bean prices.
Starbucks apparently undisputed market leadership position can be credited to the company’s
clever product diversification and an acquisitions and alliances expansion strategy. In
response to changing consumer needs and demand, Starbucks has evolved from a mere seller
of coffee products to full-fledged chain “restaurant”, offering not only coffee products but
also other beverages, foods, and merchandise. Starbucks adopted the generic strategy of
differentiation, the goal is to make the company dissimilar from other competitors,
emphasizing on the Starbucks Experience and premium coffees.
Despite of the positive market position, the company faces challenges in the short and
medium terms. Those challenges emanate from the very way of growth of the company and
its competitors around the world. The analysis also shows that Starbucks is well-positioned to
confront expected changes in the industry. The company is advised to continue key strategies
on corporate level: aggressive expansion strategy through acquisition and alliance primarily,
product development/positioning strategies for niche markets and retrenchment strategies for
unprofitable product lines.
TABLE OF CONTENTS
1. Introduction
1.1. Statement of The Problem
1.2. Origin of The Study
1.3. Objective of The Study
1.4. Scope of The Study
1.5. Limitation of The Study
2. Organization Profile
2.1. Background of The Organization
2.2. Corporate Information
2.3. Organizational Structure
2.4. Branch Hierarchy
2.5. Products of Starbucks
3. Planning
3.1. Vision and Mission
3.2. Strategizing
3.2.1. Global Strategy
3.2.2. Competitive Strategy
3.2.3. Quality Strategy
3.2.4. Process Strategy
3.2.5. Layout Strategy
3.2.6. Inventory Strategy
3.3. Goals and Objectives
4. Organizing
4.1. Importance
4.2. Designing Jobs
4.3. Grouping of Work
4.4. Establish Hierarchy
4.5. Culture
4.6. Social Network
5. Leading
5.1. Leadership
5.2. Decision Made
5.3. Communications
5.4. Group/Teams
5.5. Motivation
6. Control
6.1. System/Process of Starbucks
6.2. Performance Standard
6.3. Corrections Made
6.4. Strategic Human Resource
7. Data Analysis and Findings
7.1. Data Analysis
7.2. Major Findings
8. Recommendation & Conclusion
8.1. Recommendation
8.2. Conclusion
9. References
1. Introduction
1.1. Statement of The Problem
1.2. Origin of The Study
1.3. Objective of The Study
1.4. Scope of The Study
1.5. Limitation of The Study
2. Organization Profile
2.1. Background of The Organization
2.2. Corporate Information
2.3. Organizational Structure
2.4. Branch Hierarchy
2.5. Products of Starbucks
3. Planning
3.1. Vision and Mission
3.2. Strategizing
3.2.1. Global Strategy
3.2.2. Competitive Strategy
3.2.3. Quality Strategy
3.2.4. Process Strategy
3.2.5. Layout Strategy
3.2.6. Inventory Strategy
3.3. Goals and Objectives
4. Organizing
4.1. Importance
4.2. Designing Jobs
4.3. Grouping of Work
4.4. Establish Hierarchy
4.5. Culture
4.6. Social Network
5. Leading
5.1. Leadership
5.2. Decision Made
5.3. Communications
5.4. Group/Teams
5.5. Motivation
6. Control
6.1. System/Process of Starbucks
6.2. Performance Standard
6.3. Corrections Made
6.4. Strategic Human Resource
7. Data Analysis and Findings
7.1. Data Analysis
7.2. Major Findings
8. Recommendation & Conclusion
8.1. Recommendation
8.2. Conclusion
9. References
Chapter 1: Introduction
1.1. Statement of the Problem
The area of the concern was the Managerial functions such as Planning, Organizing, Leading
and Controlling of any renowned national and international organization. The foundation of
the study was based on the evaluation of a survey related to the role and engagement of CEO,
Managers and staff of the selected organization.
Different organizations possess different approach towards the factors concerning Planning,
Organizing, Leading and Controlling. This factors play a strong pivotal role, as this are the
backbone of an organization.
The practice of P-O-L-C framework can be traced back thousands of years. The Egyptian
constructed the Pyramid, Alexander the Great employed to coordinate activities during his
military campaign etc. An organization which holds the P-O-L-C framework are likely to
succeed in the market. Planning involves setting objectives and determining a course of
action for achieving objectives. Organizing involves developing an organizational structure
and allocating human resources to ensure the accomplishment of objectives. Leading involves
the growth of an organization. And Controlling involves ensuring that performance does not
deviate from standards.
Organization lacking in any of the principle of P-O-L-C framework will face challenges in
maintaining effective work flow and the organization will fail with time.
1.2. Origin of the Study
The team was assigned the task to analyze the managerial function practices of any renowned
national or international organizations. The student was instructed to include planning,
organizing, leadership style and controlling of the selected organization. The study includes
information regarding the planning, organizing, leadership style and the controlling process
of that Organization.
1.3. Objective of the Study
The study of the paper consists of three part: Introduction & information of the organization,
P-O-L-C of the organization and analyzing the organizations data reflecting the managerial
functions.
Understanding the importance of Planning, Organizing, Leading and Controlling.
Learning the process of how to rebuild a business if fails.
Analyzing the managerial process, finding major worries and give recommendations.
1.1. Statement of the Problem
The area of the concern was the Managerial functions such as Planning, Organizing, Leading
and Controlling of any renowned national and international organization. The foundation of
the study was based on the evaluation of a survey related to the role and engagement of CEO,
Managers and staff of the selected organization.
Different organizations possess different approach towards the factors concerning Planning,
Organizing, Leading and Controlling. This factors play a strong pivotal role, as this are the
backbone of an organization.
The practice of P-O-L-C framework can be traced back thousands of years. The Egyptian
constructed the Pyramid, Alexander the Great employed to coordinate activities during his
military campaign etc. An organization which holds the P-O-L-C framework are likely to
succeed in the market. Planning involves setting objectives and determining a course of
action for achieving objectives. Organizing involves developing an organizational structure
and allocating human resources to ensure the accomplishment of objectives. Leading involves
the growth of an organization. And Controlling involves ensuring that performance does not
deviate from standards.
Organization lacking in any of the principle of P-O-L-C framework will face challenges in
maintaining effective work flow and the organization will fail with time.
1.2. Origin of the Study
The team was assigned the task to analyze the managerial function practices of any renowned
national or international organizations. The student was instructed to include planning,
organizing, leadership style and controlling of the selected organization. The study includes
information regarding the planning, organizing, leadership style and the controlling process
of that Organization.
1.3. Objective of the Study
The study of the paper consists of three part: Introduction & information of the organization,
P-O-L-C of the organization and analyzing the organizations data reflecting the managerial
functions.
Understanding the importance of Planning, Organizing, Leading and Controlling.
Learning the process of how to rebuild a business if fails.
Analyzing the managerial process, finding major worries and give recommendations.
1.4. Scope of the Study
After a thorough analysis of the collected information, we can find out the Managerial
function and strategies of STARBUCKS. After tabulating and graphing, the answers will be
easily comparable. We can also get an idea about the corporate structure and branch
hierarchy of the organization and their working ethics.
1.5. Limitation of the Study
Several limitations were encountered during the preparation of the entire paper. For much
more accurate result we could have surveyed local customers and Baristas. But we weren’t
able to do so as Starbucks is not present in Bangladesh and it’s hard to find real customers.
After a thorough analysis of the collected information, we can find out the Managerial
function and strategies of STARBUCKS. After tabulating and graphing, the answers will be
easily comparable. We can also get an idea about the corporate structure and branch
hierarchy of the organization and their working ethics.
1.5. Limitation of the Study
Several limitations were encountered during the preparation of the entire paper. For much
more accurate result we could have surveyed local customers and Baristas. But we weren’t
able to do so as Starbucks is not present in Bangladesh and it’s hard to find real customers.
Chapter 2: ORGANIZATIONAL PROFILE
2.1. Background of The Organization
Starbucks, American company that is the largest coffeehouse chain in the world. Its
headquarters are in Seattle, Washington.
The first Starbucks coffee shop:
1971--- Starbucks opens first store in Seattle’s Pike Place Market.
Starbucks was founded by Jerry Baldwin, Gordon Bowker, and Zev
Siegl, opening its first store in 1971 near the historic Pike Place
Market in Seattle. The three Starbucks founders had two things in
common; they were all coming from academia, and they all loved
coffee and tea. They invested and borrowed some money to open
the first store in Seattle and named it “Starbucks” after the first
mate in Herman Melville’s classic novel Moby Dick.
Alfred Peet, a coffee-roasting entrepreneur, was a major inspiration to the founders of
Starbucks. Peet was a Dutch immigrant who had begun importing fine Arabica coffees into
the United States during the 1950s. In 1966 he opened a small store, Peet’s Coffee and Tea,
in Berkeley, California, that specialized in importing first-rate coffees and teas. Peet’s
success encouraged the Starbucks founders to base their business model on selling high-
quality coffee beans and equipment, and Peet’s became the initial supplier of green coffee
beans to Starbucks. The partners then purchased a used roaster from Holland, and Baldwin
and Bowker experimented with Alfred Peet’s roasting techniques to create their own blends
and flavors.
2.1. Background of The Organization
Starbucks, American company that is the largest coffeehouse chain in the world. Its
headquarters are in Seattle, Washington.
The first Starbucks coffee shop:
1971--- Starbucks opens first store in Seattle’s Pike Place Market.
Starbucks was founded by Jerry Baldwin, Gordon Bowker, and Zev
Siegl, opening its first store in 1971 near the historic Pike Place
Market in Seattle. The three Starbucks founders had two things in
common; they were all coming from academia, and they all loved
coffee and tea. They invested and borrowed some money to open
the first store in Seattle and named it “Starbucks” after the first
mate in Herman Melville’s classic novel Moby Dick.
Alfred Peet, a coffee-roasting entrepreneur, was a major inspiration to the founders of
Starbucks. Peet was a Dutch immigrant who had begun importing fine Arabica coffees into
the United States during the 1950s. In 1966 he opened a small store, Peet’s Coffee and Tea,
in Berkeley, California, that specialized in importing first-rate coffees and teas. Peet’s
success encouraged the Starbucks founders to base their business model on selling high-
quality coffee beans and equipment, and Peet’s became the initial supplier of green coffee
beans to Starbucks. The partners then purchased a used roaster from Holland, and Baldwin
and Bowker experimented with Alfred Peet’s roasting techniques to create their own blends
and flavors.
Howard Schultz and Starbucks:
In 1981 Howard Schultz, a sales representative for Hammar-plast, a
Swedish company that made kitchen equipment and housewares
from which Starbucks bought drip-coffee makers, noticed how large
the company’s orders were, which prompted him to pay it a visit.
Schultz was so impressed that he decided to pursue a career at
Starbucks, and he was hired as the head of marketing in 1982.
Schultz noticed that first-time customers sometimes felt uneasy in the stores because of their
lack of knowledge about fine coffees, so he worked with store employees on developing
customer-friendly sales skills and produced brochures that made it easy for customers to learn
about the company’s products.
Schultz’s biggest idea for the future of Starbucks came during the spring of 1983 when the
company sent him to Milan to attend an international housewares show. While in Italy, he
was impressed with the country’s cafés, and he thought of doing something similar in
Starbucks. However, Baldwin and Bowker were not enthusiastic about Schultz’s idea, as they
did not want Starbucks to deviate much from its traditional model of business. They wanted
Starbucks to remain strictly a coffee and equipment seller and not turn into a café that served
espressos and cappuccinos.
Important Twist: Seeing that he would not be able to persuade Baldwin
and Bowker to embrace the café idea, Schultz left Starbucks in 1985
and started his own coffee chain called Il Giornale, which was an
immediate success, quickly expanding into multiple cities.
In March 1987 Baldwin and Bowker decided to sell Starbucks, and
Schultz was quick to purchase the company. He combined all his
operations under the Starbucks brand and committed to the café concept for the business,
with additional sales of beans, equipment, and other items in Starbucks stores. The company
entered into a meteoric period of expansion that continued after the company went public in
1992. In 1996 it began opening stores outside North America, and Starbucks soon became the
largest coffee-house chain in the world. By the early 21st century, Starbucks had a presence
in dozens of countries around the globe and operated over 30,000 stores. It began selling food
in its cafés in 2003. Schultz was replaced as CEO by Kevin Johnson in 2016 and as chairman
by Myron Ullman in 2018.
Jerry Baldwin, Gordon Bowker, and Zev Siegl
In 1981 Howard Schultz, a sales representative for Hammar-plast, a
Swedish company that made kitchen equipment and housewares
from which Starbucks bought drip-coffee makers, noticed how large
the company’s orders were, which prompted him to pay it a visit.
Schultz was so impressed that he decided to pursue a career at
Starbucks, and he was hired as the head of marketing in 1982.
Schultz noticed that first-time customers sometimes felt uneasy in the stores because of their
lack of knowledge about fine coffees, so he worked with store employees on developing
customer-friendly sales skills and produced brochures that made it easy for customers to learn
about the company’s products.
Schultz’s biggest idea for the future of Starbucks came during the spring of 1983 when the
company sent him to Milan to attend an international housewares show. While in Italy, he
was impressed with the country’s cafés, and he thought of doing something similar in
Starbucks. However, Baldwin and Bowker were not enthusiastic about Schultz’s idea, as they
did not want Starbucks to deviate much from its traditional model of business. They wanted
Starbucks to remain strictly a coffee and equipment seller and not turn into a café that served
espressos and cappuccinos.
Important Twist: Seeing that he would not be able to persuade Baldwin
and Bowker to embrace the café idea, Schultz left Starbucks in 1985
and started his own coffee chain called Il Giornale, which was an
immediate success, quickly expanding into multiple cities.
In March 1987 Baldwin and Bowker decided to sell Starbucks, and
Schultz was quick to purchase the company. He combined all his
operations under the Starbucks brand and committed to the café concept for the business,
with additional sales of beans, equipment, and other items in Starbucks stores. The company
entered into a meteoric period of expansion that continued after the company went public in
1992. In 1996 it began opening stores outside North America, and Starbucks soon became the
largest coffee-house chain in the world. By the early 21st century, Starbucks had a presence
in dozens of countries around the globe and operated over 30,000 stores. It began selling food
in its cafés in 2003. Schultz was replaced as CEO by Kevin Johnson in 2016 and as chairman
by Myron Ullman in 2018.
Jerry Baldwin, Gordon Bowker, and Zev Siegl
2.2. Corporate Information:
Wake up and smell the coffee -- Starbucks is everywhere. The world's #1 specialty coffee
retailer, Starbucks has more than 29,300 coffee shops in 80 countries. The shops offer coffee
drinks and food items, as well as roasted beans, coffee accessories, and teas. Starbucks
operates more than 15,300 of its own shops, which are located mostly in the US, while
licensees and franchisees operate roughly 14,000 units worldwide (including many locations
in shopping centers and airports). In addition, Starbucks markets its coffee through grocery
stores, food service customers, and licenses its brand for other food and beverage products.
The US accounts for the majority of Starbucks' revenue.
2.3. Organizational Structure:
Starbucks is one of the largest coffee shop chains in the world and one of the main reasons
for its success is its wonderful organization structure. It is a company organization structure
which determines is management, leadership, communication and of course success and
Starbucks is a good example of how divisions and responsibilities must be separated and
placed within a company.
The company has a matrix organizational
structure which is a mix of several features
which are functional organization,
geographic divisions, teams and product
based divisions.
Functional structure:
This structure of Starbucks organization or hierarchy is a structure which indicates to a
grouping based on the business function. According to this structure, the CEO is placed at the
top followed by different departments performing different tasks. Some of the main
Starbucks Company
Hierarchy
Functional
Structure
Geographic
Division
Product Based
Decision
Teams
Wake up and smell the coffee -- Starbucks is everywhere. The world's #1 specialty coffee
retailer, Starbucks has more than 29,300 coffee shops in 80 countries. The shops offer coffee
drinks and food items, as well as roasted beans, coffee accessories, and teas. Starbucks
operates more than 15,300 of its own shops, which are located mostly in the US, while
licensees and franchisees operate roughly 14,000 units worldwide (including many locations
in shopping centers and airports). In addition, Starbucks markets its coffee through grocery
stores, food service customers, and licenses its brand for other food and beverage products.
The US accounts for the majority of Starbucks' revenue.
2.3. Organizational Structure:
Starbucks is one of the largest coffee shop chains in the world and one of the main reasons
for its success is its wonderful organization structure. It is a company organization structure
which determines is management, leadership, communication and of course success and
Starbucks is a good example of how divisions and responsibilities must be separated and
placed within a company.
The company has a matrix organizational
structure which is a mix of several features
which are functional organization,
geographic divisions, teams and product
based divisions.
Functional structure:
This structure of Starbucks organization or hierarchy is a structure which indicates to a
grouping based on the business function. According to this structure, the CEO is placed at the
top followed by different departments performing different tasks. Some of the main
Starbucks Company
Hierarchy
Functional
Structure
Geographic
Division
Product Based
Decision
Teams
departments in the company are the HR department, the finance department, the marketing
department and others.
Geographic divisions:
The organizational structure of the company also includes the geographic divisions. At the
moment, the company has three main geographic divisions for the global market and they are
China and Asia Pacific, Americas and Europe, Middle East, Russia and Africa. Each of the
geographic divisions in the company has a Vice President and this means that the managers’
report to two of their superiors who are the geographic head and the functional head. This
very feature makes way for closer managerial support for geographic needs.
Product based divisions:
Another division in the organization structure is the product based division. This is the
division which addresses product lines. For example, the company is divided into various
product parts like the coffee and related products, baked goods and other merchandise like
mugs. This structure ensures that there is a proper focus on each of the products and things
remain streamlined.
Teams:
There are various teams used in different parts of Starbucks coffee’s organization structure.
This is the lowest level of hierarchy in Starbucks since most teams work at lower levels.
Every firm has teams which are organized to serve the purpose of delivering goods as well as
services to the customers. This structural arrangement ensures that the company is always
capable to provide effective and efficient service to its clients and customers.
2.4. Branch Hierarchy:
Today Starbucks
is the largest
coffeehouse
company in the
world, with
30,626 retails or
also known as
Branches. There
is a general
Hierarchy
designed for this
Branches to
control and
manage the
branches easily.
department and others.
Geographic divisions:
The organizational structure of the company also includes the geographic divisions. At the
moment, the company has three main geographic divisions for the global market and they are
China and Asia Pacific, Americas and Europe, Middle East, Russia and Africa. Each of the
geographic divisions in the company has a Vice President and this means that the managers’
report to two of their superiors who are the geographic head and the functional head. This
very feature makes way for closer managerial support for geographic needs.
Product based divisions:
Another division in the organization structure is the product based division. This is the
division which addresses product lines. For example, the company is divided into various
product parts like the coffee and related products, baked goods and other merchandise like
mugs. This structure ensures that there is a proper focus on each of the products and things
remain streamlined.
Teams:
There are various teams used in different parts of Starbucks coffee’s organization structure.
This is the lowest level of hierarchy in Starbucks since most teams work at lower levels.
Every firm has teams which are organized to serve the purpose of delivering goods as well as
services to the customers. This structural arrangement ensures that the company is always
capable to provide effective and efficient service to its clients and customers.
2.4. Branch Hierarchy:
Today Starbucks
is the largest
coffeehouse
company in the
world, with
30,626 retails or
also known as
Branches. There
is a general
Hierarchy
designed for this
Branches to
control and
manage the
branches easily.
2.5. Products of Starbucks:
In 1994, Starbucks bought The Coffee Connection, gaining the rights to use, make, market,
and sell the "Frappuccino" beverage. The
beverage was introduced under the
Starbucks name in 1995 and as of 2012,
Starbucks had annual Frappuccinos sales
of over $2 billion. The company began a
"skinny" line of drinks in 2008, offering
lower-calorie and sugar-free versions of
the company's offered drinks that use
skim milk, and can be sweetened by a
choice of natural sweeteners artificial
sweeteners or one of the company's sugar-free syrup flavors.
Other Popular Drinks of Starbucks are given below:
Iced Caramel Cloud
Macchiato
Caffè Mocha
Mocha Frappuccino
Strawberry Acai
Starbucks Refreshers
Pink Drink
Strawberry Frappuccino
Iced White Chocolate
Mocha
Starbucks Cold Brew
Nitro Cold Brew
Cold Brew with Salted
Cream Cold Foam
Iced Caramel Macchiato
Mocha Cookie Crumble
Frappuccino
Caramel Frappuccino
Iced Guava White Tea
Cappuccino
Almondmilk Honey Flat
White
Dark Roast
Blonde Roast
Medium Roast
Nitro Cold Brew with
Salted Honey Cold Foam
Caffè Americano
Vanilla Bean Crème
Frappuccino
Flat White
Iced Coconut Milk Latte
Mango Dragon fruit
Starbucks Refreshers
Iced Golden Ginger Drink
Honey Citrus Mint Tea
Iced Green Tea
Iced Cocoa Cloud
Macchiato
Dragon Drink
Chai Latte
Nitro Cold Brew with
Sweet Cream
Caramel Ribbon Crunch
Frappuccino
Iced Pineapple Matcha
Caffè Latte
Iced Peach Green Tea
Lemonade
Grande
Caffe Mocha Venti
White Chocolate Mocha
Tall
White Chocolate Mocha
Grande
White Chocolate Mocha
Venti
Freshly Brewed Coffee
Tall
Freshly Brewed Coffee
Grande
Freshly Brewed Coffee
Venti
Cinnamon Dolce Latte
Tall
Cinnamon Dolce Latte
Grande
Cinnamon Dolce Latte
Venti
Caramel Macchiato Tall
Grande
Caramel Flan Latte Venti
Teavana Oprah Cinnamon
Chai Tea Latte Tall
Teavana Oprah Cinnamon
Chai Tea Latte Grande
Teavana Oprah Cinnamon
Chai Tea Latte Venti
Flat White Tall
Skinny Peppermint Mocha
Tall
Skinny Peppermint Mocha
Grande
Skinny Peppermint Mocha
Venti
Pumpkin Spice Latte
(Limited Time) Tall
Pumpkin Spice Latte
(Limited Time) Grande
Pumpkin Spice Latte
(Limited Time) Venti
In 1994, Starbucks bought The Coffee Connection, gaining the rights to use, make, market,
and sell the "Frappuccino" beverage. The
beverage was introduced under the
Starbucks name in 1995 and as of 2012,
Starbucks had annual Frappuccinos sales
of over $2 billion. The company began a
"skinny" line of drinks in 2008, offering
lower-calorie and sugar-free versions of
the company's offered drinks that use
skim milk, and can be sweetened by a
choice of natural sweeteners artificial
sweeteners or one of the company's sugar-free syrup flavors.
Other Popular Drinks of Starbucks are given below:
Iced Caramel Cloud
Macchiato
Caffè Mocha
Mocha Frappuccino
Strawberry Acai
Starbucks Refreshers
Pink Drink
Strawberry Frappuccino
Iced White Chocolate
Mocha
Starbucks Cold Brew
Nitro Cold Brew
Cold Brew with Salted
Cream Cold Foam
Iced Caramel Macchiato
Mocha Cookie Crumble
Frappuccino
Caramel Frappuccino
Iced Guava White Tea
Cappuccino
Almondmilk Honey Flat
White
Dark Roast
Blonde Roast
Medium Roast
Nitro Cold Brew with
Salted Honey Cold Foam
Caffè Americano
Vanilla Bean Crème
Frappuccino
Flat White
Iced Coconut Milk Latte
Mango Dragon fruit
Starbucks Refreshers
Iced Golden Ginger Drink
Honey Citrus Mint Tea
Iced Green Tea
Iced Cocoa Cloud
Macchiato
Dragon Drink
Chai Latte
Nitro Cold Brew with
Sweet Cream
Caramel Ribbon Crunch
Frappuccino
Iced Pineapple Matcha
Caffè Latte
Iced Peach Green Tea
Lemonade
Grande
Caffe Mocha Venti
White Chocolate Mocha
Tall
White Chocolate Mocha
Grande
White Chocolate Mocha
Venti
Freshly Brewed Coffee
Tall
Freshly Brewed Coffee
Grande
Freshly Brewed Coffee
Venti
Cinnamon Dolce Latte
Tall
Cinnamon Dolce Latte
Grande
Cinnamon Dolce Latte
Venti
Caramel Macchiato Tall
Grande
Caramel Flan Latte Venti
Teavana Oprah Cinnamon
Chai Tea Latte Tall
Teavana Oprah Cinnamon
Chai Tea Latte Grande
Teavana Oprah Cinnamon
Chai Tea Latte Venti
Flat White Tall
Skinny Peppermint Mocha
Tall
Skinny Peppermint Mocha
Grande
Skinny Peppermint Mocha
Venti
Pumpkin Spice Latte
(Limited Time) Tall
Pumpkin Spice Latte
(Limited Time) Grande
Pumpkin Spice Latte
(Limited Time) Venti
Toasted Graham Latte (Limited
Time) Tall
Toasted Graham Latte (Limited
Time) Grande
Toasted Graham Latte (Limited
Time) Venti
Frappuccino, Refreshers & Iced
Coffee
Iced Coffee (with or without
Milk)
Iced Coffee (with or without
Milk) Grande
Iced Coffee (with or without
Milk) Venti
Iced Coffee (with or without
Milk) Trenta
Caramel Frappuccino Mini
Caramel Frappuccino Tall
Caramel Frappuccino Grande
Caramel Frappuccino Venti
Salted Caramel Mocha
Frappuccino (Limited Time)
Venti
Cool Lime or Very Berry
Starbucks Refreshers Tall
Cool Lime or Very Berry
Starbucks Refreshers Grande
Cool Lime or Very Berry
Starbucks Refreshers Venti
Cool Lime or Very Berry
Starbucks
Lemonade Grande
Teavana Shaken Iced Tea Peach
Green Tea Lemonade Venti
Teavana Shaken Iced Tea Peach
Green Tea Lemonade Trenta
Teavana Shaken Iced Black Tea
Lemonade Tall
Teavana Shaken Iced Black Tea
Lemonade Grande
Teavana Shaken Iced Black Tea
Lemonade Venti
Teavana Shaken Iced Black Tea
Lemonade Trenta
Evolution Fresh Grande
Bakery
Ham & Cheese Savory Foldover
Wheat Spinach Savory Foldover
Pepperoni & Tomato Savory
Foldover
Cheese Danish
Butter Croissant
Chocolate Croissant
Blueberry Scone
Banana Nut Bread
Iced Lemon Pound Cake
Morning Bun
Chocolate Chip Cookie
Double Chocolate Chunk
Brownie
Pumpkin Scone (Limited Time)
Pumpkin Cream Cheese Muffin
(Limited Time)
Washington Apple Pound Cake
(Limited Time)
All Day Breakfast
Hearty Blueberry Oatmeal
Bacon & Gouda Breakfast
Sandwich
Sausage & Cheddar Breakfast
Sandwich
Spinach & Feta Breakfast Wrap
Reduced Fat Turkey Bacon
Breakfast Sandwich
Slow Roasted Ham & Swiss on
Croissant Bun
Double Smoked Bacon, Cheddar
& Egg on Croissant Bun
(Limited Time)
Lunch & Anytime Snacks
Protein Bistro Box
Cheese &Fruit Bistro Box
Omega-3 Bistro Box
PB&J on Wheat Bistro Box
Turkey Rustico Panini
Turkey Pesto Panini
Ham & Swiss Panini
Chicken Santa Fe Flatbread
Chicken BLT Salad Deli
Sandwich
Roasted Tomato & Mozzarella
Panini
Chicken Artichoke Panini
(Limited Time)
Old Fashioned Grilled Cheese
Edamame Hummus Wrap
(Limited Time)
Thai Style Peanut Chicken Wrap
(Limited Time)
Salted Caramel or Birthday
Cake Pop
Salted Caramel
Time) Tall
Toasted Graham Latte (Limited
Time) Grande
Toasted Graham Latte (Limited
Time) Venti
Frappuccino, Refreshers & Iced
Coffee
Iced Coffee (with or without
Milk)
Iced Coffee (with or without
Milk) Grande
Iced Coffee (with or without
Milk) Venti
Iced Coffee (with or without
Milk) Trenta
Caramel Frappuccino Mini
Caramel Frappuccino Tall
Caramel Frappuccino Grande
Caramel Frappuccino Venti
Salted Caramel Mocha
Frappuccino (Limited Time)
Venti
Cool Lime or Very Berry
Starbucks Refreshers Tall
Cool Lime or Very Berry
Starbucks Refreshers Grande
Cool Lime or Very Berry
Starbucks Refreshers Venti
Cool Lime or Very Berry
Starbucks
Lemonade Grande
Teavana Shaken Iced Tea Peach
Green Tea Lemonade Venti
Teavana Shaken Iced Tea Peach
Green Tea Lemonade Trenta
Teavana Shaken Iced Black Tea
Lemonade Tall
Teavana Shaken Iced Black Tea
Lemonade Grande
Teavana Shaken Iced Black Tea
Lemonade Venti
Teavana Shaken Iced Black Tea
Lemonade Trenta
Evolution Fresh Grande
Bakery
Ham & Cheese Savory Foldover
Wheat Spinach Savory Foldover
Pepperoni & Tomato Savory
Foldover
Cheese Danish
Butter Croissant
Chocolate Croissant
Blueberry Scone
Banana Nut Bread
Iced Lemon Pound Cake
Morning Bun
Chocolate Chip Cookie
Double Chocolate Chunk
Brownie
Pumpkin Scone (Limited Time)
Pumpkin Cream Cheese Muffin
(Limited Time)
Washington Apple Pound Cake
(Limited Time)
All Day Breakfast
Hearty Blueberry Oatmeal
Bacon & Gouda Breakfast
Sandwich
Sausage & Cheddar Breakfast
Sandwich
Spinach & Feta Breakfast Wrap
Reduced Fat Turkey Bacon
Breakfast Sandwich
Slow Roasted Ham & Swiss on
Croissant Bun
Double Smoked Bacon, Cheddar
& Egg on Croissant Bun
(Limited Time)
Lunch & Anytime Snacks
Protein Bistro Box
Cheese &Fruit Bistro Box
Omega-3 Bistro Box
PB&J on Wheat Bistro Box
Turkey Rustico Panini
Turkey Pesto Panini
Ham & Swiss Panini
Chicken Santa Fe Flatbread
Chicken BLT Salad Deli
Sandwich
Roasted Tomato & Mozzarella
Panini
Chicken Artichoke Panini
(Limited Time)
Old Fashioned Grilled Cheese
Edamame Hummus Wrap
(Limited Time)
Thai Style Peanut Chicken Wrap
(Limited Time)
Salted Caramel or Birthday
Cake Pop
Salted Caramel
Chapter 3: Planning
3.1. Vision and Mission:
Starbucks Vision:
“Treat people like family, and they will be loyal and give their all.”
The vision statement is articulated around the concept of family, loyalty, and generosity.
What it means from the business standpoint is that Starbucks is a place where people spend a lot
of time. Therefore, it has to feel like a second home.
Starbucks Mission:
“To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”
As specified in its annual report its mission is to provide the so-called Starbucks Experience,
consisting in “superior customer service and a seamless digital experience as well as clean and
well-maintained stores that reflect the personalities of the communities in which they operate,
thereby building a high degree of customer loyalty.”
Starbucks has almost fourteen thousand licensed stores and over fifteen thousand company-
operated stores. In 2018, 80% of its revenues came from the company-operated stores
3.1. Vision and Mission:
Starbucks Vision:
“Treat people like family, and they will be loyal and give their all.”
The vision statement is articulated around the concept of family, loyalty, and generosity.
What it means from the business standpoint is that Starbucks is a place where people spend a lot
of time. Therefore, it has to feel like a second home.
Starbucks Mission:
“To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”
As specified in its annual report its mission is to provide the so-called Starbucks Experience,
consisting in “superior customer service and a seamless digital experience as well as clean and
well-maintained stores that reflect the personalities of the communities in which they operate,
thereby building a high degree of customer loyalty.”
Starbucks has almost fourteen thousand licensed stores and over fifteen thousand company-
operated stores. In 2018, 80% of its revenues came from the company-operated stores
3.2. Strategizing
Strategizing involves being aware of and analyzing what competitors are doing; thinking
about how changes in the external environment, such as changes in technology or
government regulations, impact the organization
3.2.1. Global Strategy:
Retail formula of Starbucks is same in all over the world. There is no change in retail system
and operates in same way throughout the world where Starbucks have its businesses.
Advertisement of Starbucks product play very important role and have strong instrument in
the success of business. The important thing of advertisement of Starbucks is that that
advertisement changes by country to country according to their trend, culture, customs etc.
means there is no standardization of advertisement so in this way Starbucks Advertisement is
more effective.
3.2.2. Competitive Strategy:
Starbucks needs no formal introduction as it is the largest coffee company in the whole
world. Starbucks seeks to provide a connected customer experience to build and maintain a
long term relationship.
Starbucks was ranked 7th in Fortune’s annual list of “100 Best Companies to Work for” in
2008. A decade later in 2018, it is still listed as one of the best places to work for.
Starbucks also introduced the Starbucks Rewards Card that provides a host of benefits. This
entices customers returning to make purchases, building loyalty.
Strategizing involves being aware of and analyzing what competitors are doing; thinking
about how changes in the external environment, such as changes in technology or
government regulations, impact the organization
3.2.1. Global Strategy:
Retail formula of Starbucks is same in all over the world. There is no change in retail system
and operates in same way throughout the world where Starbucks have its businesses.
Advertisement of Starbucks product play very important role and have strong instrument in
the success of business. The important thing of advertisement of Starbucks is that that
advertisement changes by country to country according to their trend, culture, customs etc.
means there is no standardization of advertisement so in this way Starbucks Advertisement is
more effective.
3.2.2. Competitive Strategy:
Starbucks needs no formal introduction as it is the largest coffee company in the whole
world. Starbucks seeks to provide a connected customer experience to build and maintain a
long term relationship.
Starbucks was ranked 7th in Fortune’s annual list of “100 Best Companies to Work for” in
2008. A decade later in 2018, it is still listed as one of the best places to work for.
Starbucks also introduced the Starbucks Rewards Card that provides a host of benefits. This
entices customers returning to make purchases, building loyalty.
Starbucks’ uses the finest beans for its coffee. Company personnel often travel frequently in
search of suppliers that meet its standards. In addition, Starbucks also purchased Certified
Organic coffee and Fair Trade certified coffee.
3.2.3. Quality Strategy:
At the core of Starbucks’ business strategy is quality. It is a
premium brand that sells only premium quality products. It is
also the main point of differentiation that the brand has
adopted.
The Arabica coffee that the company sources is different
from the normal Arabica and Starbucks is also very picky
about its beans. Experts taste thousands of cups daily to
ensure maximum flavor and highest satisfaction from coffee.
3.2.4. Process Strategy:
Modules combined for many output options (many cup types & same cap type)
Repetitive operations
Just-in-Time inventory
Fixed, well-known costs, due to experience
Specialized equipment (coffee machines, customized blenders, etc.)
Well-trained staff (Starbucks’ policy to train coffee specialists)
3.2.5. Layout Strategy:
The layout of branches is also
very important strategy for
Starbucks.
search of suppliers that meet its standards. In addition, Starbucks also purchased Certified
Organic coffee and Fair Trade certified coffee.
3.2.3. Quality Strategy:
At the core of Starbucks’ business strategy is quality. It is a
premium brand that sells only premium quality products. It is
also the main point of differentiation that the brand has
adopted.
The Arabica coffee that the company sources is different
from the normal Arabica and Starbucks is also very picky
about its beans. Experts taste thousands of cups daily to
ensure maximum flavor and highest satisfaction from coffee.
3.2.4. Process Strategy:
Modules combined for many output options (many cup types & same cap type)
Repetitive operations
Just-in-Time inventory
Fixed, well-known costs, due to experience
Specialized equipment (coffee machines, customized blenders, etc.)
Well-trained staff (Starbucks’ policy to train coffee specialists)
3.2.5. Layout Strategy:
The layout of branches is also
very important strategy for
Starbucks.
3.2.5. Inventory Strategy:
The techniques that Starbucks company use it to manage their inventory are
1) JIT 2) MRP
Corporate Level: Reduce their price by producing a new product of coffee using cheaper
beans or may come out with special discounts promotions to increase the sales.
Business Level: Starbucks can effectively pursue Focus-Based Strategy in conjunction with
differentiation or cost leadership based strategy.
Functional Level: Advertisement can develop through internet that services convinced for
users to access, give the brochures, do road shows, so that public come to know more about
Starbucks details.
3.3. Goals and Objectives:
Starbucks’ objective is to maintain themselves as one of the most recognized and respected
brands in the world.
To achieve this goal:
Disciplined in the expansion of the retail store base, primarily focused on growth in
countries outside of the US.
Leveraging the experience gained through the traditional store model, by offering
consumers new coffee products in multiple forms, across new categories, and through
diverse channels.
The techniques that Starbucks company use it to manage their inventory are
1) JIT 2) MRP
Corporate Level: Reduce their price by producing a new product of coffee using cheaper
beans or may come out with special discounts promotions to increase the sales.
Business Level: Starbucks can effectively pursue Focus-Based Strategy in conjunction with
differentiation or cost leadership based strategy.
Functional Level: Advertisement can develop through internet that services convinced for
users to access, give the brochures, do road shows, so that public come to know more about
Starbucks details.
3.3. Goals and Objectives:
Starbucks’ objective is to maintain themselves as one of the most recognized and respected
brands in the world.
To achieve this goal:
Disciplined in the expansion of the retail store base, primarily focused on growth in
countries outside of the US.
Leveraging the experience gained through the traditional store model, by offering
consumers new coffee products in multiple forms, across new categories, and through
diverse channels.
Chapter 4: Organizing
4.1. Importance
Organizing is the process of defining and grouping activities, and establishing authority
relationships among them to attain organizational objectives.
Organizing creates the framework needed to reach a company's objectives and goals. Each
organization has its own external and internal environments that define the nature of the
relationships according to its specific needs. Organizing is the function that managers
undertake to design, structure, and arrange the components of an organization’s internal
environment to facilitate attainment of organizational goals.
Imoertance
of
organizing
Clarity in
Working
Relationship
Benefits of
Specialization
Optimum
Utilization of
Resources
Adoption to
Change
Development
of Personnel
xpansion and
Growth
Effective
Administration
4.1. Importance
Organizing is the process of defining and grouping activities, and establishing authority
relationships among them to attain organizational objectives.
Organizing creates the framework needed to reach a company's objectives and goals. Each
organization has its own external and internal environments that define the nature of the
relationships according to its specific needs. Organizing is the function that managers
undertake to design, structure, and arrange the components of an organization’s internal
environment to facilitate attainment of organizational goals.
Imoertance
of
organizing
Clarity in
Working
Relationship
Benefits of
Specialization
Optimum
Utilization of
Resources
Adoption to
Change
Development
of Personnel
xpansion and
Growth
Effective
Administration
4.2. Designing Job
Job design involves the conscious efforts to organize tasks, duties and responsibilities into a
unit of work to achieve certain objectives.
Starbucks is one of the largest coffee shop chains in the world and one of the main reasons
for its success is its wonderful organization structure. It is a company organization structure
which determines is management, leadership, communication and of course success and
Starbucks is a good example of how divisions and responsibilities must be separated and
placed within a company.
The job design or Organization Job Chart of Starbucks is shown below.
Job design involves the conscious efforts to organize tasks, duties and responsibilities into a
unit of work to achieve certain objectives.
Starbucks is one of the largest coffee shop chains in the world and one of the main reasons
for its success is its wonderful organization structure. It is a company organization structure
which determines is management, leadership, communication and of course success and
Starbucks is a good example of how divisions and responsibilities must be separated and
placed within a company.
The job design or Organization Job Chart of Starbucks is shown below.
4.3. Grouping of work
It’s not very easy to control a huge organization like Starbucks without the works been split
and groups are made to accomplish those individual tasks.
On December 1, 2016 a new format of Starbucks
organizational structure was announced according to which
Kevin Johnson, president and COO and member of the
Starbucks Board of Directors, would expand his
responsibilities and assume the role and responsibilities of
president and chief executive officer, effective April 3, 2017
The grouping of work has been done in Starbucks by Three steps. One is controlling the head
office, second is Regional controlling and third is Branch controlling.
4.4. Establish Hierarchy
The hierarchy of the corporate structure facilitates top-down monitoring and control, with the
CEO at the top.
The hierarchy feature of Starbucks Coffee’s organizational structure refers to grouping based
on business function. For example, the company has an HR department, a finance department
and a marketing department. These departments are most pronounced at the top levels of
Starbucks’s corporate structure, such as at the corporate headquarters. This characteristic is
hierarchical.
Howard Schultz
Executive Chairman
35Senior
Vice
President
12Executive
Vice
Presidents
2 Group
President
3
President
CEO Starbucks
Japan
CEO Starbucks
China
CEO
Starbucks
Australia
CEO
Starbucks
Europe
Kevin Johnson
President & CEO
It’s not very easy to control a huge organization like Starbucks without the works been split
and groups are made to accomplish those individual tasks.
On December 1, 2016 a new format of Starbucks
organizational structure was announced according to which
Kevin Johnson, president and COO and member of the
Starbucks Board of Directors, would expand his
responsibilities and assume the role and responsibilities of
president and chief executive officer, effective April 3, 2017
The grouping of work has been done in Starbucks by Three steps. One is controlling the head
office, second is Regional controlling and third is Branch controlling.
4.4. Establish Hierarchy
The hierarchy of the corporate structure facilitates top-down monitoring and control, with the
CEO at the top.
The hierarchy feature of Starbucks Coffee’s organizational structure refers to grouping based
on business function. For example, the company has an HR department, a finance department
and a marketing department. These departments are most pronounced at the top levels of
Starbucks’s corporate structure, such as at the corporate headquarters. This characteristic is
hierarchical.
Howard Schultz
Executive Chairman
35Senior
Vice
President
12Executive
Vice
Presidents
2 Group
President
3
President
CEO Starbucks
Japan
CEO Starbucks
China
CEO
Starbucks
Australia
CEO
Starbucks
Europe
Kevin Johnson
President & CEO
Hierarchy of Organizations organizing Team is Given:
Functional Hierarchy of Starbucks:
CEO
Board of
Director
Upper
Management
Regional (Middle
Manager)
Store Manager
Shift Supervisor
Clerk Supervisor
Baristas
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
StarbuckFunctional Hierarchy
Functional Structure
Gepgraphic Division
Product Based Division
Teams
Functional Hierarchy of Starbucks:
CEO
Board of
Director
Upper
Management
Regional (Middle
Manager)
Store Manager
Shift Supervisor
Clerk Supervisor
Baristas
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
StarbuckFunctional Hierarchy
Functional Structure
Gepgraphic Division
Product Based Division
Teams
4.5. Culture
Upon hearing the word Starbucks, an image of their logo easily comes to mind. The
Starbucks Logo is widely known throughout the world and represents a twin-tailed mermaid,
known as Siren in Greek mythology. The Starbucks logo is so well known that the company
removed the company's name from around the logo and people can still easily recognize the
logo as Starbucks brand. Also notice that the logo is green. To me this represents Starbucks
commitment to the environment and reducing waste.
The organizational culture of Starbucks is well-known for its role in recycling. The company
is committed to reducing waste and shrinking its environmental footprint, therefore images
associated with recycling also represent the culture of Starbucks.
As seen in the "Anatomy of a Cup" photo on the right, Starbucks paper cups are made of 10%
post-consumer recycled content.
The photo of the napkin shows that Starbucks napkins are made of recycled cups, and even
encourages customers to recycle.
4.6. Social Network
It would be an understatement to say that Starbucks is killing it on social media. The iconic
coffee chain is one of the most engaging brands online. Look at a few of the eye-popping
Starbucks social media statistics:
37.2 million Facebook likes
11.9 million Twitter followers
16 million Instagram fans
153K YouTube subscribers
Facebook
Starbucks added 710,000 new Facebook followers in comparison to 53,500 fans that the
average Restaurant & Cafe Page from North America gained. Quite interestingly, Starbucks
posted only 158 times on Facebook during the time period, i.e. 3 times a week on average.
So, how do they manage to engage their audience with their ‘less is more’ strategy?
The answer being – they know what their customers want. From Zombie Frappuccinos to
Pumpkin Spice Latte, Starbucks has managed to create a cult following for their various
offerings. Even though the brand does not post that often, whenever they do, there is a frenzy
Upon hearing the word Starbucks, an image of their logo easily comes to mind. The
Starbucks Logo is widely known throughout the world and represents a twin-tailed mermaid,
known as Siren in Greek mythology. The Starbucks logo is so well known that the company
removed the company's name from around the logo and people can still easily recognize the
logo as Starbucks brand. Also notice that the logo is green. To me this represents Starbucks
commitment to the environment and reducing waste.
The organizational culture of Starbucks is well-known for its role in recycling. The company
is committed to reducing waste and shrinking its environmental footprint, therefore images
associated with recycling also represent the culture of Starbucks.
As seen in the "Anatomy of a Cup" photo on the right, Starbucks paper cups are made of 10%
post-consumer recycled content.
The photo of the napkin shows that Starbucks napkins are made of recycled cups, and even
encourages customers to recycle.
4.6. Social Network
It would be an understatement to say that Starbucks is killing it on social media. The iconic
coffee chain is one of the most engaging brands online. Look at a few of the eye-popping
Starbucks social media statistics:
37.2 million Facebook likes
11.9 million Twitter followers
16 million Instagram fans
153K YouTube subscribers
Starbucks added 710,000 new Facebook followers in comparison to 53,500 fans that the
average Restaurant & Cafe Page from North America gained. Quite interestingly, Starbucks
posted only 158 times on Facebook during the time period, i.e. 3 times a week on average.
So, how do they manage to engage their audience with their ‘less is more’ strategy?
The answer being – they know what their customers want. From Zombie Frappuccinos to
Pumpkin Spice Latte, Starbucks has managed to create a cult following for their various
offerings. Even though the brand does not post that often, whenever they do, there is a frenzy
around it. The brand posted more photos than any other type of content and they had the
highest engagement as well.
The photo content mostly involved updates about their latest products. Some of Starbucks’
popular drinks are seasonal and the beverage’s periodic recurrence generates major buzz on
their social media. These posts are bright, colorful and quirky, an image that the brand
maintains throughout its Facebook page. The 84 photo posts generated more than 4.2 million
likes and 547K shares.
Twitter
Starbucks definitely understands the importance of engaging on Twitter. Not just the fact that
they have nearly 12 million followers, they ‘get’ social media. Twitter has become an
extremely convenient platform for customer service. Starbucks mainly uses Twitter to engage
with their audience. They tweeted 57,000 times and added 134,000 new followers. On
average they sent 155 tweets per day with 99% of their tweets being replies, which gives an
indication of what they value the platform for.
The proactive tweets by the brand showcased their products, predominantly through fan-
submitted images. But, they used different content for Twitter, avoiding cross-posting on
multiple channels. They also effectively used different types of media, like photo collages
with witty headlines, videos and gifs
Instagram
The tables have turned for social media, as brands like Starbucks are making products
specifically designed for Instagram. Their photogenic, vibrant, Instagram-friendly Unicorn
Frappuccino was an instant hit on the platform.
In 2017, Starbucks enjoyed a 26% growth in followers as it gained nearly 3.3M new
followers. They posted 240 posts of which more than 77% were photos. Starbucks regularly
posts pictures of its products, but usually in unique and attractive settings. Colorful lifestyle
posts that capture the essence of coffee culture, along with witty captions and artsy stop-
motion videos of its products, creates a consistent imagery for the brand. Their product-
centered posts are one of the most engaging types of content on Instagram, as detailed in our
latest study.
highest engagement as well.
The photo content mostly involved updates about their latest products. Some of Starbucks’
popular drinks are seasonal and the beverage’s periodic recurrence generates major buzz on
their social media. These posts are bright, colorful and quirky, an image that the brand
maintains throughout its Facebook page. The 84 photo posts generated more than 4.2 million
likes and 547K shares.
Starbucks definitely understands the importance of engaging on Twitter. Not just the fact that
they have nearly 12 million followers, they ‘get’ social media. Twitter has become an
extremely convenient platform for customer service. Starbucks mainly uses Twitter to engage
with their audience. They tweeted 57,000 times and added 134,000 new followers. On
average they sent 155 tweets per day with 99% of their tweets being replies, which gives an
indication of what they value the platform for.
The proactive tweets by the brand showcased their products, predominantly through fan-
submitted images. But, they used different content for Twitter, avoiding cross-posting on
multiple channels. They also effectively used different types of media, like photo collages
with witty headlines, videos and gifs
The tables have turned for social media, as brands like Starbucks are making products
specifically designed for Instagram. Their photogenic, vibrant, Instagram-friendly Unicorn
Frappuccino was an instant hit on the platform.
In 2017, Starbucks enjoyed a 26% growth in followers as it gained nearly 3.3M new
followers. They posted 240 posts of which more than 77% were photos. Starbucks regularly
posts pictures of its products, but usually in unique and attractive settings. Colorful lifestyle
posts that capture the essence of coffee culture, along with witty captions and artsy stop-
motion videos of its products, creates a consistent imagery for the brand. Their product-
centered posts are one of the most engaging types of content on Instagram, as detailed in our
latest study.
Chapter 5: Leading
Leading is the third step that is accomplished by communicating, motivating, inspiring, and
encouraging employees towards a higher level of productivity. Controlling is the final
function of management in which the manager, once a plan has been carried out, evaluates
the results against the goals
5.1. Starbucks` Leadership Development
Starbucks Coffee Company has an issue in leadership development. Leadership development
is a very important issue in all the organization. Starbucks is an American global coffee
company. On 30 March 1971, three partners that are Jerry Baldwin, Zev Siegl, and Gordon
Bowker are the first Starbucks opened in Seattle, Washington.
In 1982, Howard Schultz was joins the
Starbucks. He was visits Milan’s famous
espresso bars when he on a business trip in Italy.
Their popularity and culture were impressed by
Howard Schultz and he sees their potential in
Seattle. Starbucks expand beyond Seattle in
1990s. Starbucks Coffee Company now is the
largest coffeehouse in the world. They are began
selling fresh roasting, high-quality coffee bean
and roasting accessories. Starbucks is having
their store in 61 countries including the Western
country and Asian country. (Starbucks Coffee
Company, 2009)
Starbucks apply the drive in the early leadership theory. Leaders of Starbucks are set out a
high effort level in their organization. Their leaders have self-confidence so that many
followers look to them for an absence of self-doubt. Howard Schultz is an intelligence leader
in Starbucks. He was intelligence to gather, synthesize, and a lot of information to solve
problem and make a correct decision. Starbucks also apply a Path-Goal Theory.
Starbucks mission is to inspire and nurture the human spirit. They always provide a good
quality of their coffee. For their partner, they always respect and dignity together to hold each
other to that standard. They also always full of humanity in their stores even just for a
moment so that their customers are enjoy. They are takes their responsibility to be a good
neighbors and enjoy the success that rewards their shareholders. (Starbucks Coffee Company,
2009)
Build a Starbucks as the most recognized and respected brand in the world is the company’s
objective. Starbucks Coffee Company is plans to continue rapidly spread their retail
operations and its manager’s executive teams will hire exceptional people who willing to
work for excellent results, meanwhile reward and promote those individuals who are commit
to move our company forward. Starbucks Corporation will always increase their specialty
Leading is the third step that is accomplished by communicating, motivating, inspiring, and
encouraging employees towards a higher level of productivity. Controlling is the final
function of management in which the manager, once a plan has been carried out, evaluates
the results against the goals
5.1. Starbucks` Leadership Development
Starbucks Coffee Company has an issue in leadership development. Leadership development
is a very important issue in all the organization. Starbucks is an American global coffee
company. On 30 March 1971, three partners that are Jerry Baldwin, Zev Siegl, and Gordon
Bowker are the first Starbucks opened in Seattle, Washington.
In 1982, Howard Schultz was joins the
Starbucks. He was visits Milan’s famous
espresso bars when he on a business trip in Italy.
Their popularity and culture were impressed by
Howard Schultz and he sees their potential in
Seattle. Starbucks expand beyond Seattle in
1990s. Starbucks Coffee Company now is the
largest coffeehouse in the world. They are began
selling fresh roasting, high-quality coffee bean
and roasting accessories. Starbucks is having
their store in 61 countries including the Western
country and Asian country. (Starbucks Coffee
Company, 2009)
Starbucks apply the drive in the early leadership theory. Leaders of Starbucks are set out a
high effort level in their organization. Their leaders have self-confidence so that many
followers look to them for an absence of self-doubt. Howard Schultz is an intelligence leader
in Starbucks. He was intelligence to gather, synthesize, and a lot of information to solve
problem and make a correct decision. Starbucks also apply a Path-Goal Theory.
Starbucks mission is to inspire and nurture the human spirit. They always provide a good
quality of their coffee. For their partner, they always respect and dignity together to hold each
other to that standard. They also always full of humanity in their stores even just for a
moment so that their customers are enjoy. They are takes their responsibility to be a good
neighbors and enjoy the success that rewards their shareholders. (Starbucks Coffee Company,
2009)
Build a Starbucks as the most recognized and respected brand in the world is the company’s
objective. Starbucks Coffee Company is plans to continue rapidly spread their retail
operations and its manager’s executive teams will hire exceptional people who willing to
work for excellent results, meanwhile reward and promote those individuals who are commit
to move our company forward. Starbucks Corporation will always increase their specialty
sales and other operations, introduce of new products for Starbucks brand and development
of new distribution channels to achieve their goals.
Leadership principle apply in Starbucks Company:
Howard Mark Schultz (born July 19, 1953) is an American businessman and writer. He is
best known as the chairman and CEO of Starbucks who creates the Starbucks concept. The
Starbucks name is now synonymous with coffee. It had been developed in various ways
where the name itself stands out by its own. Brands and trademarks are gained by the quality
of services and contribution given by the committees to build a great company.
Transform a small coffee shop to what it is today would not have been possible without its
strong operations management and innovations. Howard is an entrepreneur who believes in
strong operations management and having a central focus for everyone in the company to
follow. Howard is well aware that develop a business successfully involves not only make
use of impactful marketing strategy
but also emphasis on manage an
efficient operation management
system as well. This is Howard
long-term vision and he aims to
lead a small coffee shop to walk
toward around the world. It shows
Howard possesses the drive traits,
is a leader who has a relatively high
desire for achievement attitude in
leading his business.
Based on the efficiency business
plan and useful organization
functional plan, it helps Starbucks create a nearly monopoly in the coffee industry. First, set
objective and charting the organization path is an extremely essential primary step to achieve
organization objective. Starbucks mission statement state “Establish Starbucks as the premier
purveyor of the finest coffee in the world while maintaining our uncompromising principles
while we grow.” This mission statement creates a complete and obvious organization
objective that helps executive management and Starbucks’ partners to maintain the highest
service quality and well-known name of the company with respect to the operation process. It
also allows Starbucks to adapt in today’s new market trends and new regulation. The large
market share is clearly evidence of an overall operating system that is performing by
Starbucks at its highly efficient rate.
Implement those objectives by Starbucks means the organization should focus on sustaining
the energy level need to maintain the business strategy as well as its everyday operations.
These everyday operations can range from top executives creating financial reports for
decision-making purposes to the frontline employee who is preparing one of Starbucks many
drinks. Howard and his top executives provide a clear picture on Starbucks organization
objective, it is easy understand and manipulate by employees, then all the employees can be
getting tasks done effectively and efficiently throughout the daily operation process. Howard
of new distribution channels to achieve their goals.
Leadership principle apply in Starbucks Company:
Howard Mark Schultz (born July 19, 1953) is an American businessman and writer. He is
best known as the chairman and CEO of Starbucks who creates the Starbucks concept. The
Starbucks name is now synonymous with coffee. It had been developed in various ways
where the name itself stands out by its own. Brands and trademarks are gained by the quality
of services and contribution given by the committees to build a great company.
Transform a small coffee shop to what it is today would not have been possible without its
strong operations management and innovations. Howard is an entrepreneur who believes in
strong operations management and having a central focus for everyone in the company to
follow. Howard is well aware that develop a business successfully involves not only make
use of impactful marketing strategy
but also emphasis on manage an
efficient operation management
system as well. This is Howard
long-term vision and he aims to
lead a small coffee shop to walk
toward around the world. It shows
Howard possesses the drive traits,
is a leader who has a relatively high
desire for achievement attitude in
leading his business.
Based on the efficiency business
plan and useful organization
functional plan, it helps Starbucks create a nearly monopoly in the coffee industry. First, set
objective and charting the organization path is an extremely essential primary step to achieve
organization objective. Starbucks mission statement state “Establish Starbucks as the premier
purveyor of the finest coffee in the world while maintaining our uncompromising principles
while we grow.” This mission statement creates a complete and obvious organization
objective that helps executive management and Starbucks’ partners to maintain the highest
service quality and well-known name of the company with respect to the operation process. It
also allows Starbucks to adapt in today’s new market trends and new regulation. The large
market share is clearly evidence of an overall operating system that is performing by
Starbucks at its highly efficient rate.
Implement those objectives by Starbucks means the organization should focus on sustaining
the energy level need to maintain the business strategy as well as its everyday operations.
These everyday operations can range from top executives creating financial reports for
decision-making purposes to the frontline employee who is preparing one of Starbucks many
drinks. Howard and his top executives provide a clear picture on Starbucks organization
objective, it is easy understand and manipulate by employees, then all the employees can be
getting tasks done effectively and efficiently throughout the daily operation process. Howard
and his partner apply path-goal theory in manage employees which means the effective leader
clarify the path to help their followers get from where they are to the achievement of their
work goals and make the journey along the path easier by reduce roadblock and pitfalls.
Starbucks executive management is to make sure most routine operation activities such as
taking orders and doing monetary transactions are running competently and guide those
employees step by step to make sure organization daily operation is going smoothly. This
highly efficiency service performance tends to retain highly satisfy and trusting customer to
Starbucks.
A content workforce maintains by Starbucks lead to fewer partners leave the corporation.
Howard is a leader has a democratic style which involves their employees in decision
making, always encourages employee’s participation in deciding work methods and goals. It
means, employees at different department are allows to have a say in what is improper for
their business practice and tend to suggest other effective method to improve current
situation. This leading concept tend to increase manager stability which enables the store to
do a much better job of recognize the managerial problem, meanwhile uses those unexpected
situation as an opportunity to coach employees.
Since, Starbuck Company has coffee shops in every state of America and in 36 countries
around the globe. Therefore, Starbucks leader need to have specific job-relevant knowledge
in manage the global corporate. As an effective leader, Howard and his top executives needs
to have a high degree of knowledge about the company culture, industry, employee’s
characteristics and technical matters because those in depth knowledge allows leaders to
make well-inform decisions and to understand the implication of those decision. (Robbins.
Decenzo, &Coulter, M.2012) It is a crucial step for Howard and his partners in manage a firm
by understands organizational culture in different retail outlets and listening to their
employees who may have different background and different perspective toward their job.
Starbucks stores which can retain the same managerial employee and non-managerial
employees have the ability to offer a more personalize service to regular customers and will
be more familiar with the appropriate procedures to create the drinks request. Besides that,
Howard is not only emphasis in train employees with the “hard skills” of make the various
coffee drinks, but also highlight the “soft skills” involve in how to interact with customers. It
could be a simple action as creating eye contact or smile. This is how Howard led Starbucks
by use minimum amount of organization input to gain a maximum amount of organization
output.
In order to maximize profit and maintain Starbucks market place in coffee industry, Howard
and his partners need to understand how to make something as fast as possible while
minimizing errors in management process. This has permit Starbucks to stay ahead of other
competitors and let Starbucks endure a large market share in the coffee industry for the
longest time.
After we complete Starbucks Coffee Company research, we have learned a lot of theories
about the leadership. That is the early leadership theories, democratic style, Fiedler
contingency model, situational leadership theory and path-goal theory. From those theories,
we are learning how to become an effective leader in the organization. Besides that, we also
clarify the path to help their followers get from where they are to the achievement of their
work goals and make the journey along the path easier by reduce roadblock and pitfalls.
Starbucks executive management is to make sure most routine operation activities such as
taking orders and doing monetary transactions are running competently and guide those
employees step by step to make sure organization daily operation is going smoothly. This
highly efficiency service performance tends to retain highly satisfy and trusting customer to
Starbucks.
A content workforce maintains by Starbucks lead to fewer partners leave the corporation.
Howard is a leader has a democratic style which involves their employees in decision
making, always encourages employee’s participation in deciding work methods and goals. It
means, employees at different department are allows to have a say in what is improper for
their business practice and tend to suggest other effective method to improve current
situation. This leading concept tend to increase manager stability which enables the store to
do a much better job of recognize the managerial problem, meanwhile uses those unexpected
situation as an opportunity to coach employees.
Since, Starbuck Company has coffee shops in every state of America and in 36 countries
around the globe. Therefore, Starbucks leader need to have specific job-relevant knowledge
in manage the global corporate. As an effective leader, Howard and his top executives needs
to have a high degree of knowledge about the company culture, industry, employee’s
characteristics and technical matters because those in depth knowledge allows leaders to
make well-inform decisions and to understand the implication of those decision. (Robbins.
Decenzo, &Coulter, M.2012) It is a crucial step for Howard and his partners in manage a firm
by understands organizational culture in different retail outlets and listening to their
employees who may have different background and different perspective toward their job.
Starbucks stores which can retain the same managerial employee and non-managerial
employees have the ability to offer a more personalize service to regular customers and will
be more familiar with the appropriate procedures to create the drinks request. Besides that,
Howard is not only emphasis in train employees with the “hard skills” of make the various
coffee drinks, but also highlight the “soft skills” involve in how to interact with customers. It
could be a simple action as creating eye contact or smile. This is how Howard led Starbucks
by use minimum amount of organization input to gain a maximum amount of organization
output.
In order to maximize profit and maintain Starbucks market place in coffee industry, Howard
and his partners need to understand how to make something as fast as possible while
minimizing errors in management process. This has permit Starbucks to stay ahead of other
competitors and let Starbucks endure a large market share in the coffee industry for the
longest time.
After we complete Starbucks Coffee Company research, we have learned a lot of theories
about the leadership. That is the early leadership theories, democratic style, Fiedler
contingency model, situational leadership theory and path-goal theory. From those theories,
we are learning how to become an effective leader in the organization. Besides that, we also
learn about the ways to lead all the employees and manage the whole organization well by
using all the theories we are study.
Starbucks Coffee Company now is already predominating the leadership theory very well in
their organization. Starbucks apply many types of theories of leadership in their organization.
The leaders of Starbucks are leads their employees in a good environment and respect to each
other’s. The employees are doing their work probably and always follow the instruction by
the leaders. Thus, the organization’s operation system will become more completely and
smoothly
5.2 Decision Made:
Starbucks Coffee Company’s business success is linked to the proper application of the 10
decisions of operations management (OM). These 10 decisions refer
to the different areas of operations where the firm’s management
must address specific business objectives. As a global business,
Starbucks addresses these 10 decisions of operations management
through different approaches and policies. For instance, the company
applies its Coffee and Farmer Equity program in supply chain
management. Starbucks cafés also exhibit the firm’s organizational
culture as a way of optimizing quality of service. Thus, Starbucks has
integrated strategies for streamlining the 10 decisions of operations management.
A. Design of Goods and Services: Starbucks emphasizes premium design for its goods and
services. The premium character is linked to the company’s broad differentiation generic
strategy, along with its premium pricing strategy. Other firms, such as manufacturers, are
also involved in the design of some goods like Starbucks mugs. In this decision area of
operations management, Starbucks
ensures that its goods and services reflect
the firm’s high end brand image.
under the Starbucks Coffee and Farmer
Equity (CAFE) program. Premium
quality service is ensured through servant
leadership and a warm friendly culture. In
this decision area of operations
management, Starbucks implements high
quality to align with the firm’s premium
brand image
B. Quality Management: Starbucks also uses the premium character in quality management.
For instance, the company carefully sources its coffee beans from coffee farmers who comply
with Starbucks quality standards. The firm also prefers to buy coffee from farmers certified
under the Starbucks Coffee and Farmer Equity (CAFE) program. Premium quality service is
ensured through servant leadership and a warm friendly culture. In this decision area of
using all the theories we are study.
Starbucks Coffee Company now is already predominating the leadership theory very well in
their organization. Starbucks apply many types of theories of leadership in their organization.
The leaders of Starbucks are leads their employees in a good environment and respect to each
other’s. The employees are doing their work probably and always follow the instruction by
the leaders. Thus, the organization’s operation system will become more completely and
smoothly
5.2 Decision Made:
Starbucks Coffee Company’s business success is linked to the proper application of the 10
decisions of operations management (OM). These 10 decisions refer
to the different areas of operations where the firm’s management
must address specific business objectives. As a global business,
Starbucks addresses these 10 decisions of operations management
through different approaches and policies. For instance, the company
applies its Coffee and Farmer Equity program in supply chain
management. Starbucks cafés also exhibit the firm’s organizational
culture as a way of optimizing quality of service. Thus, Starbucks has
integrated strategies for streamlining the 10 decisions of operations management.
A. Design of Goods and Services: Starbucks emphasizes premium design for its goods and
services. The premium character is linked to the company’s broad differentiation generic
strategy, along with its premium pricing strategy. Other firms, such as manufacturers, are
also involved in the design of some goods like Starbucks mugs. In this decision area of
operations management, Starbucks
ensures that its goods and services reflect
the firm’s high end brand image.
under the Starbucks Coffee and Farmer
Equity (CAFE) program. Premium
quality service is ensured through servant
leadership and a warm friendly culture. In
this decision area of operations
management, Starbucks implements high
quality to align with the firm’s premium
brand image
B. Quality Management: Starbucks also uses the premium character in quality management.
For instance, the company carefully sources its coffee beans from coffee farmers who comply
with Starbucks quality standards. The firm also prefers to buy coffee from farmers certified
under the Starbucks Coffee and Farmer Equity (CAFE) program. Premium quality service is
ensured through servant leadership and a warm friendly culture. In this decision area of
operations management, Starbucks implements high quality to align with the firm’s premium
brand image.
C. Process and Capacity Design: Process and capacity efficiency is one of the contributors
to Starbucks’ success. The company’s processes are highly efficient, as observable in its
cafés. Also, Starbucks optimizes capacity and capacity utilization by designing processes to
meet fluctuations in demand. For example, processes at the firm’s cafés are flexible to adjust
personnel to a sudden increase in demand during peak hours. In this decision area of
operations management, Starbucks aims to maximize cost-effectiveness though efficiency of
workflows and processes.
D. Location Strategy: Starbucks’ location strategy focuses on urban centers, especially those
with large middle and upper class populations. Most of its cafés are in densely populated
areas. Also, Starbucks occasionally uses strategic clustering of cafés in the same geographic
area to gain market share and drive competitors away. This decision area of operations
management shows that Starbucks emphasizes areas with affluent consumers who could
afford its premium priced products.
E. Layout Design and Strategy: The layout design of Starbucks cafés maximizes workflow
efficiency. It also supports a warm and friendly ambiance to match the company’s
organizational culture. This layout strategy does not maximize space utilization for tables and
seats because Starbucks’ focus is on premium customer experience, which involves higher
prices for more leg space in the cafés. In this decision area of operations management,
Starbucks prioritizes customer experience over space utilization
F. Job Design and Human Resources: Starbucks’ human resource management integrates
organizational culture in all areas of the business. This organizational culture involves the
employees-first attitude that cares for Starbucks workers. Also, at the cafés, the company uses
work teams of baristas. In other parts of the organization, Starbucks uses functional positions,
such as HRM positions and inventory management positions, with less emphasis on work
teams. In this decision area of operations management, the focus is on ensuring that the
Starbucks culture is woven into every job, while satisfying basics on technical specifics of
tasks.
G. Supply Chain Management: Starbucks Coffee’s supply chain is global, although
majority of the company’s coffee beans come from farmers in developing countries. The
company’s strategy for its supply chain involves diversification of suppliers to ensure
stability of supply. Starbucks also uses its Coffee and Farmer Equity (CAFE) program to
select and prioritize suppliers. This program uses criteria for ethical practices, including
emphasis on sustainability. Thus, in this decision area of operations management, Starbucks
integrates ethics and corporate social responsibility with supply chain efficiency.
H. Inventory Management: Inventory management at Starbucks is linked with the firm’s
supply chain and various facilities. At the cafés, inventory management involves office
automation and manual monitoring. In Starbucks’ supply hubs, automation is more
comprehensively used. The company aims to minimize stock out and ensure continuous
supply of coffee beans to its cafés. Starbucks addresses this decision area of operations
management by focusing on supply adequacy and automation.
brand image.
C. Process and Capacity Design: Process and capacity efficiency is one of the contributors
to Starbucks’ success. The company’s processes are highly efficient, as observable in its
cafés. Also, Starbucks optimizes capacity and capacity utilization by designing processes to
meet fluctuations in demand. For example, processes at the firm’s cafés are flexible to adjust
personnel to a sudden increase in demand during peak hours. In this decision area of
operations management, Starbucks aims to maximize cost-effectiveness though efficiency of
workflows and processes.
D. Location Strategy: Starbucks’ location strategy focuses on urban centers, especially those
with large middle and upper class populations. Most of its cafés are in densely populated
areas. Also, Starbucks occasionally uses strategic clustering of cafés in the same geographic
area to gain market share and drive competitors away. This decision area of operations
management shows that Starbucks emphasizes areas with affluent consumers who could
afford its premium priced products.
E. Layout Design and Strategy: The layout design of Starbucks cafés maximizes workflow
efficiency. It also supports a warm and friendly ambiance to match the company’s
organizational culture. This layout strategy does not maximize space utilization for tables and
seats because Starbucks’ focus is on premium customer experience, which involves higher
prices for more leg space in the cafés. In this decision area of operations management,
Starbucks prioritizes customer experience over space utilization
F. Job Design and Human Resources: Starbucks’ human resource management integrates
organizational culture in all areas of the business. This organizational culture involves the
employees-first attitude that cares for Starbucks workers. Also, at the cafés, the company uses
work teams of baristas. In other parts of the organization, Starbucks uses functional positions,
such as HRM positions and inventory management positions, with less emphasis on work
teams. In this decision area of operations management, the focus is on ensuring that the
Starbucks culture is woven into every job, while satisfying basics on technical specifics of
tasks.
G. Supply Chain Management: Starbucks Coffee’s supply chain is global, although
majority of the company’s coffee beans come from farmers in developing countries. The
company’s strategy for its supply chain involves diversification of suppliers to ensure
stability of supply. Starbucks also uses its Coffee and Farmer Equity (CAFE) program to
select and prioritize suppliers. This program uses criteria for ethical practices, including
emphasis on sustainability. Thus, in this decision area of operations management, Starbucks
integrates ethics and corporate social responsibility with supply chain efficiency.
H. Inventory Management: Inventory management at Starbucks is linked with the firm’s
supply chain and various facilities. At the cafés, inventory management involves office
automation and manual monitoring. In Starbucks’ supply hubs, automation is more
comprehensively used. The company aims to minimize stock out and ensure continuous
supply of coffee beans to its cafés. Starbucks addresses this decision area of operations
management by focusing on supply adequacy and automation.
I. Scheduling. Starbucks uses automated and manual scheduling approaches for its various
business activities. The company also applies flexible schedules for management personnel.
This decision area of operations management relates with Starbucks in terms of the firm’s
objective of streamlining processes, while allowing some degree of flexibility among
management positions in the organization.
J. Maintenance. Starbucks maintains its physical assets through dedicated teams of
employees trained for maintaining facilities and equipment, as well as third parties that offer
maintenance services. These third parties include local businesses that provide equipment
tune-ups for Starbucks cafés. In addition, the company maintains its human resource capacity
through training and retention strategies that include relatively high compensation. Thus,
Starbucks addresses this decision area of operations management through the involvement of
café personnel, dedicated maintenance teams, and third-party service providers.
5.3 communication:
Starbucks CEO Howard Schultz taught me a valuable lesson in communication skills—what
you stand for is more important than what you make. Let me explain.
This month Starbucks celebrates its 40
th
anniversary. Starbucks opened its first Seattle store
on March 30, 1971. Today the coffee chain has more than 17,000 locations around the
world. I interviewed Schultz several years ago for a
book about how inspiring leaders communicate their
vision to customers and employees. When I look back
at the transcript from that interview, I see that Schultz
used the word “passion” more often than he said,
“coffee.” But isn’t Starbucks a coffee company?
According to Schultz, “Starbucks is the quintessential
experience brand and the experience comes to life by their people. The only competitive
advantage we have is the relationship we have with their people and the relationship they
have built with their customers.”
Starbucks doesn’t sell coffee. It sells human connection. This makes a big difference in how
Schultz articulates the vision behind the brand.
Howard Schultz is responsible for turning Starbucks into the experience we know
today. After a trip to Italy in the 1980s, he returned to America dedicated to recreating the
espresso bar culture. When Schultz pitched the idea to investors, he didn’t say, “We’re going
business activities. The company also applies flexible schedules for management personnel.
This decision area of operations management relates with Starbucks in terms of the firm’s
objective of streamlining processes, while allowing some degree of flexibility among
management positions in the organization.
J. Maintenance. Starbucks maintains its physical assets through dedicated teams of
employees trained for maintaining facilities and equipment, as well as third parties that offer
maintenance services. These third parties include local businesses that provide equipment
tune-ups for Starbucks cafés. In addition, the company maintains its human resource capacity
through training and retention strategies that include relatively high compensation. Thus,
Starbucks addresses this decision area of operations management through the involvement of
café personnel, dedicated maintenance teams, and third-party service providers.
5.3 communication:
Starbucks CEO Howard Schultz taught me a valuable lesson in communication skills—what
you stand for is more important than what you make. Let me explain.
This month Starbucks celebrates its 40
th
anniversary. Starbucks opened its first Seattle store
on March 30, 1971. Today the coffee chain has more than 17,000 locations around the
world. I interviewed Schultz several years ago for a
book about how inspiring leaders communicate their
vision to customers and employees. When I look back
at the transcript from that interview, I see that Schultz
used the word “passion” more often than he said,
“coffee.” But isn’t Starbucks a coffee company?
According to Schultz, “Starbucks is the quintessential
experience brand and the experience comes to life by their people. The only competitive
advantage we have is the relationship we have with their people and the relationship they
have built with their customers.”
Starbucks doesn’t sell coffee. It sells human connection. This makes a big difference in how
Schultz articulates the vision behind the brand.
Howard Schultz is responsible for turning Starbucks into the experience we know
today. After a trip to Italy in the 1980s, he returned to America dedicated to recreating the
espresso bar culture. When Schultz pitched the idea to investors, he didn’t say, “We’re going
to build a chain of coffee shops that serve great tasting coffee.” Remember, “coffee” isn’t
what the business stands for. Instead he said, “We’re going to build a third place between
work and home.” The latter is a far more interesting and compelling conversation.
5.4 Teams
What is work team?
A small number of people with complementary skills who hold themselves mutually
accountable for pursuing a common purpose, achieving performance goals and improving
interdependent work processes. Starbucks team members are a team because each member is
essential for the functions of Starbucks everyday tasks. (McWilliams, A. 2010)
Team norms:
Team norms is the standards of behavior which
encourages contribution from all team members,
Starbucks has the most progressive employees in the
world, and they have the “Leave no one behind” policy.
Starbucks encourage their workers to contribute by the
time they start working, while in the training, they are
taught to communicate within the groups, with the people in their teams. This gets effective
when Starbucks encourages people to contribute by giving them rewards for being able to
what the business stands for. Instead he said, “We’re going to build a third place between
work and home.” The latter is a far more interesting and compelling conversation.
5.4 Teams
What is work team?
A small number of people with complementary skills who hold themselves mutually
accountable for pursuing a common purpose, achieving performance goals and improving
interdependent work processes. Starbucks team members are a team because each member is
essential for the functions of Starbucks everyday tasks. (McWilliams, A. 2010)
Team norms:
Team norms is the standards of behavior which
encourages contribution from all team members,
Starbucks has the most progressive employees in the
world, and they have the “Leave no one behind” policy.
Starbucks encourage their workers to contribute by the
time they start working, while in the training, they are
taught to communicate within the groups, with the people in their teams. This gets effective
when Starbucks encourages people to contribute by giving them rewards for being able to
work in a group, people who are working full time are rewarded with some extra pay, and
other types of reward. By using norms, Starbucks has increased the power within their teams,
and are able to create stronger teams.
Team selection:
Team selection is referring that when people trying to have a
mixture so that are member does not feel isolated. Teams
should be made up of a range of personalities with
collectivist rather than individualist. To achieving a common
purpose, Starbucks’s trying to get every “partners” involved.
Making each team member feel like they are a part of a
family, and not just a number.
Team conflict (cognitive conflict):
Team conflict is a discussion of idea; Argue about an
idea; Conflict about other member’s ideas creates
discussion involving all team members. Team suffer
from cognitive conflict (which means when
employees start to have different ideas and they
disagree about each individual’s opinions.) and
affective conflict. Cognitive conflict can produce improvements in team performance while
affective conflict (which means employees are attacking each other.) is associated with
declines in team performance. And what Starbucks does is that they not just build an
agreement, they usually get an agreement. In Starbucks industries, employees are called
“partners” and after employees are hired, they are given more training and knowledge of how
to be a part of Starbuck’s team.
Team size:
Team size is pointing out that very small or large teams may not
perform as well as team with 6 to 9 members. The principle of
other types of reward. By using norms, Starbucks has increased the power within their teams,
and are able to create stronger teams.
Team selection:
Team selection is referring that when people trying to have a
mixture so that are member does not feel isolated. Teams
should be made up of a range of personalities with
collectivist rather than individualist. To achieving a common
purpose, Starbucks’s trying to get every “partners” involved.
Making each team member feel like they are a part of a
family, and not just a number.
Team conflict (cognitive conflict):
Team conflict is a discussion of idea; Argue about an
idea; Conflict about other member’s ideas creates
discussion involving all team members. Team suffer
from cognitive conflict (which means when
employees start to have different ideas and they
disagree about each individual’s opinions.) and
affective conflict. Cognitive conflict can produce improvements in team performance while
affective conflict (which means employees are attacking each other.) is associated with
declines in team performance. And what Starbucks does is that they not just build an
agreement, they usually get an agreement. In Starbucks industries, employees are called
“partners” and after employees are hired, they are given more training and knowledge of how
to be a part of Starbuck’s team.
Team size:
Team size is pointing out that very small or large teams may not
perform as well as team with 6 to 9 members. The principle of
Starbucks is that they try to make a smaller team, they believe in that the smaller team will
create a better work.
Team recognition:
Team recognition will occur when people feel guilty if
their team is recognized and they have not contributed.
Starbucks team members are a team because each
member is essential for the functions of Starbucks
everyday tasks. Awards are presented to active partners
who reach long time of continuous (uninterrupted) service with Starbucks Coffee Company.
5.5 Motivation
Motivation is psychological because employees would like to invest themselves in the
company they work so that they can have shares of benefits. For most people, motivation in
the job is related with the salary. But not only salary is important but also there are some
factors that need to be done within the job environment. Motivation is also based on the
happiness to work according to my research shopping. Starbucks is the coffee house and
drink sales is also dependent on the staff. If staff is happy and do customer service efficiently
then customer will come back for the next time. Because of that businesses can get more and
more loyal customers. Motivated
employees think that their work is
special and they are willing to do what
managers said and can make more
profits for the company. As a manager,
they need to know about their staffs
and has the ability and skills to manage
their staff. They need to make a plan
first which is followed by organizing,
motivating, measuring the results, reviewing and making daily targets. Starbucks know that
business is always dependent on the customer requirements and satisfaction as well as staff
create a better work.
Team recognition:
Team recognition will occur when people feel guilty if
their team is recognized and they have not contributed.
Starbucks team members are a team because each
member is essential for the functions of Starbucks
everyday tasks. Awards are presented to active partners
who reach long time of continuous (uninterrupted) service with Starbucks Coffee Company.
5.5 Motivation
Motivation is psychological because employees would like to invest themselves in the
company they work so that they can have shares of benefits. For most people, motivation in
the job is related with the salary. But not only salary is important but also there are some
factors that need to be done within the job environment. Motivation is also based on the
happiness to work according to my research shopping. Starbucks is the coffee house and
drink sales is also dependent on the staff. If staff is happy and do customer service efficiently
then customer will come back for the next time. Because of that businesses can get more and
more loyal customers. Motivated
employees think that their work is
special and they are willing to do what
managers said and can make more
profits for the company. As a manager,
they need to know about their staffs
and has the ability and skills to manage
their staff. They need to make a plan
first which is followed by organizing,
motivating, measuring the results, reviewing and making daily targets. Starbucks know that
business is always dependent on the customer requirements and satisfaction as well as staff
motivation. Therefore, Starbucks support their staffs with good atmosphere and some other
rewards, such as
Bean stock option scheme
partner discount
pension scheme
free products
competitive salary
voluntary benefits
loyal service
Valuing employees
Starbucks has realized to build trust and respect. The company value its employees by
committing to their success, providing their goals and interesting atmosphere for them to
work in and it increase employee motivation.
rewards, such as
Bean stock option scheme
partner discount
pension scheme
free products
competitive salary
voluntary benefits
loyal service
Valuing employees
Starbucks has realized to build trust and respect. The company value its employees by
committing to their success, providing their goals and interesting atmosphere for them to
work in and it increase employee motivation.
Chapter 6: CONTROL
6.1. System / Process of Starbucks
Starbucks Coffee Company first opened in 1971 in Seattle’s historic pike place market
neighborhood (Starbucks Coffee Company ,2012, p1). Their mission is “to inspire and nurture
the human spirit- one person, one cup and one neighborhood at a time’’ (Starbucks Coffee
Company, 2012, p1)
Starbucks – concept -store
Starbucks Mission Statement
1. Coffee – It has always been about high quality.
2. Partners- Treat each other with respect and dignity, create a place where they can be
themselves.
3. Customers- Starbucks Partners connect with, laugh with, and uplift the lives of
customers.
4. Stores- Customer feels the sense of belonging to Starbucks.
5. Neighborhood – All partners will take the responsibility to be good neighborhood
around people in Starbucks.
6. Shareholders- Enjoy the kind of success that rewards their shareholder as delivering in
each of these areas.
6.1. System / Process of Starbucks
Starbucks Coffee Company first opened in 1971 in Seattle’s historic pike place market
neighborhood (Starbucks Coffee Company ,2012, p1). Their mission is “to inspire and nurture
the human spirit- one person, one cup and one neighborhood at a time’’ (Starbucks Coffee
Company, 2012, p1)
Starbucks – concept -store
Starbucks Mission Statement
1. Coffee – It has always been about high quality.
2. Partners- Treat each other with respect and dignity, create a place where they can be
themselves.
3. Customers- Starbucks Partners connect with, laugh with, and uplift the lives of
customers.
4. Stores- Customer feels the sense of belonging to Starbucks.
5. Neighborhood – All partners will take the responsibility to be good neighborhood
around people in Starbucks.
6. Shareholders- Enjoy the kind of success that rewards their shareholder as delivering in
each of these areas.
6.2. Performance Standard
Working at big company, such as Starbucks, people some time doesn’t have the idea
whether they are making a big effect on the company, or even how are they doing a good
job at their workplace. One of the ways of knowing that is to do a performance appraisal.
A performance appraisal is a process of assessing how well employees are doing their
jobs. Most employees and managers intensely dislike the performance appraisal process,
however it is highly crucial in the workplace. In human resource planning, performance
appraisals are used for career planning and for making termination decisions. Companies
with poor performance appraisal systems face tremendous problems. Performance
appraisals are used as a basis for compensation, promotion and training decisions.
There are two stages to do a
performance appraisal. First is to
measure the job performance, second is
to share the feedback with the
employees. Here at Starbucks, they use
something called the customer comment
card as a way to measure the job
performance of their employees.
Customer comment card is a survey questions answered by Starbucks customers about
their thoughts on both Starbucks employees and services, and the products. This is a good
way to measure the employees’ job performance because it is a very objective way.
Generally, customers don’t know the employees personally. So, when customers share
their thoughts about the employees, who the employee is will not matter to their opinion
about the job performance. In many Starbucks in Jakarta, managers usually gives bonuses
to employees that have scored great—more than 70 out of 100 in the customer comment
card. Managers and retail employees (baristas and cashiers) are also measuring each
other’s performances simply by doing an observation of how their workmates are doing at
work.
Starbucks joins a growing trend among major consumer goods and tech corporations who
are choosing to innovate on the human capital curve by equalizing compensation
packages before being
required by law, as is the
case in Iceland, Germany
and the United Kingdom.
Starbucks's decision to
include transparent pay
discussions signals a
larger shift in how major
corporations in the
United States can
approach equal pay
Working at big company, such as Starbucks, people some time doesn’t have the idea
whether they are making a big effect on the company, or even how are they doing a good
job at their workplace. One of the ways of knowing that is to do a performance appraisal.
A performance appraisal is a process of assessing how well employees are doing their
jobs. Most employees and managers intensely dislike the performance appraisal process,
however it is highly crucial in the workplace. In human resource planning, performance
appraisals are used for career planning and for making termination decisions. Companies
with poor performance appraisal systems face tremendous problems. Performance
appraisals are used as a basis for compensation, promotion and training decisions.
There are two stages to do a
performance appraisal. First is to
measure the job performance, second is
to share the feedback with the
employees. Here at Starbucks, they use
something called the customer comment
card as a way to measure the job
performance of their employees.
Customer comment card is a survey questions answered by Starbucks customers about
their thoughts on both Starbucks employees and services, and the products. This is a good
way to measure the employees’ job performance because it is a very objective way.
Generally, customers don’t know the employees personally. So, when customers share
their thoughts about the employees, who the employee is will not matter to their opinion
about the job performance. In many Starbucks in Jakarta, managers usually gives bonuses
to employees that have scored great—more than 70 out of 100 in the customer comment
card. Managers and retail employees (baristas and cashiers) are also measuring each
other’s performances simply by doing an observation of how their workmates are doing at
work.
Starbucks joins a growing trend among major consumer goods and tech corporations who
are choosing to innovate on the human capital curve by equalizing compensation
packages before being
required by law, as is the
case in Iceland, Germany
and the United Kingdom.
Starbucks's decision to
include transparent pay
discussions signals a
larger shift in how major
corporations in the
United States can
approach equal pay
6.3. Corrections Made
While Schultz will remain the Chairman of the Board, this indicates a change of
operational focus at Starbucks. Schultz will shift his efforts to the company’s premium
segment, Starbucks Reserve Roasters and Starbucks Reserve Retail stores, as the
company looks to expand these businesses globally.
In 2010, Starbucks reported annual sales revenues $2.6 billion (Starbucks Annual Report,
2011), which was huge turnover from the past 3years during the crisis. U.S sales
increased by 8%, driven by 5% increase in traffic. But the question is how, did this
happen? The first step taken by CEO Howard Schultzs was to accept full responsibility of
their own mistakes of the leadership team. Schultz believed in "owning reality was
critical to expediting change". He says that once leaders identify the problem and take
responsibility for it, they save time in making up excuses to cover up goof ups and can
take an immediate course of action in turning things around for their business. Another
point, to be considered that helped Starbucks was, that leaders of the company should be
involved at every level to ensure success. Building a relationship with your employees in
the company helps the business prosper, says Bruce and Pepitone (1999). This is exactly
what Starbucks did. They spent $30million during the financial hardships and took each
and every one of their 10,000 store managers to New Orleans for a conference of the
company. Moreover, before the conference, each store in-charge was asked to do 5 hours
of community service to show their commitment to customer service by doing it
themselves.
Starbucks had to rebuild their customer relationships and the trust the customers had in
them before the economic crisis. Starbucks now had to ensure and show the world, the
consistency and quality would be cared for. Starbucks introduced many ideas like “My
Starbucks Idea”, which would ensure a direct relationship with the customer. Starbucks
also cut costs, which were approximately $581 million, by improving efficiency, reducing
waste etc. which all led to very high levels of satisfaction from customers. But more
importantly,
Starbucks main
success for their
comeback was
their need to care
for customers and
their satisfaction.
Introducing
various ideas, like
the Free Wi-Fi,
carrying out the
corporate social
responsibility and
advertising helped them "redo the look" of Starbucks. Earning its customers back, became
a necessity and Starbucks wasn't compromising on it.
While Schultz will remain the Chairman of the Board, this indicates a change of
operational focus at Starbucks. Schultz will shift his efforts to the company’s premium
segment, Starbucks Reserve Roasters and Starbucks Reserve Retail stores, as the
company looks to expand these businesses globally.
In 2010, Starbucks reported annual sales revenues $2.6 billion (Starbucks Annual Report,
2011), which was huge turnover from the past 3years during the crisis. U.S sales
increased by 8%, driven by 5% increase in traffic. But the question is how, did this
happen? The first step taken by CEO Howard Schultzs was to accept full responsibility of
their own mistakes of the leadership team. Schultz believed in "owning reality was
critical to expediting change". He says that once leaders identify the problem and take
responsibility for it, they save time in making up excuses to cover up goof ups and can
take an immediate course of action in turning things around for their business. Another
point, to be considered that helped Starbucks was, that leaders of the company should be
involved at every level to ensure success. Building a relationship with your employees in
the company helps the business prosper, says Bruce and Pepitone (1999). This is exactly
what Starbucks did. They spent $30million during the financial hardships and took each
and every one of their 10,000 store managers to New Orleans for a conference of the
company. Moreover, before the conference, each store in-charge was asked to do 5 hours
of community service to show their commitment to customer service by doing it
themselves.
Starbucks had to rebuild their customer relationships and the trust the customers had in
them before the economic crisis. Starbucks now had to ensure and show the world, the
consistency and quality would be cared for. Starbucks introduced many ideas like “My
Starbucks Idea”, which would ensure a direct relationship with the customer. Starbucks
also cut costs, which were approximately $581 million, by improving efficiency, reducing
waste etc. which all led to very high levels of satisfaction from customers. But more
importantly,
Starbucks main
success for their
comeback was
their need to care
for customers and
their satisfaction.
Introducing
various ideas, like
the Free Wi-Fi,
carrying out the
corporate social
responsibility and
advertising helped them "redo the look" of Starbucks. Earning its customers back, became
a necessity and Starbucks wasn't compromising on it.
6.4. Strategic Human Resource
Starbucks realized early on that motivated and committed human resources were the key
to the success of a retail business Therefore the company took great care in selecting the
right kind of people and made an effort to retain them. Starbucks relied on its baristas and
other frontline staff to a great extent in creating the ‘Starbucks Experience' which
differentiated it from competitors
Starbucks hired people for qualities like adaptability, dependability and the ability to
work in a team. The company often stated the qualities that it looked for in employees
upfront in its job postings, which allowed prospective employees to self-select themselves
to a certain extent. Having selected the right kind of people, Starbucks invested in training
them in the skills they would require to perform their jobs efficiently. Starbucks was one
of the few retail companies to invest considerably in employee training and provide
comprehensive training to all classes of employees.
The recruitment motto of Starbucks is “To have the right people hiring the right
people.”
Starbucks hire people for qualities like adaptability, dependability and the ability
to work in a team. They invest in training employees in the skills they would
require to perform their jobs efficiently.
Black aprons displaying the title “Coffee Master” are worn by employees who
have completed the coffee master course, which educates employees in coffee
tasting, growing regions, roasting, and purchasing.
Employees were rigorously trained, completing at least 25 hours of coursework on
topics.
Important Things in HRM of Starbucks
Compensation
Hiring
Performance Management
Organizational
Development
Safety
Wellness
Benefits
Employee Motivation
Communication
Administration
Training
Starbucks realized early on that motivated and committed human resources were the key
to the success of a retail business Therefore the company took great care in selecting the
right kind of people and made an effort to retain them. Starbucks relied on its baristas and
other frontline staff to a great extent in creating the ‘Starbucks Experience' which
differentiated it from competitors
Starbucks hired people for qualities like adaptability, dependability and the ability to
work in a team. The company often stated the qualities that it looked for in employees
upfront in its job postings, which allowed prospective employees to self-select themselves
to a certain extent. Having selected the right kind of people, Starbucks invested in training
them in the skills they would require to perform their jobs efficiently. Starbucks was one
of the few retail companies to invest considerably in employee training and provide
comprehensive training to all classes of employees.
The recruitment motto of Starbucks is “To have the right people hiring the right
people.”
Starbucks hire people for qualities like adaptability, dependability and the ability
to work in a team. They invest in training employees in the skills they would
require to perform their jobs efficiently.
Black aprons displaying the title “Coffee Master” are worn by employees who
have completed the coffee master course, which educates employees in coffee
tasting, growing regions, roasting, and purchasing.
Employees were rigorously trained, completing at least 25 hours of coursework on
topics.
Important Things in HRM of Starbucks
Compensation
Hiring
Performance Management
Organizational
Development
Safety
Wellness
Benefits
Employee Motivation
Communication
Administration
Training
Chapter 07: Data Analysis and Findings
7.1. Data Analysis
Financial Results for FY 2017:
Starbucks results for fiscal 2017 continued to demonstrate the strength of its global business
model, and its ability to successfully make disciplined investments in its business and
partners. Consolidated total net revenues increased 5% to $22.4 billion, primarily driven by
incremental revenues from 2,320 net new store openings over the past 12 months and a 3%
growth in global comparable store sales. Consolidated operating income declined $37
million, or 1%, to $4.1 billion. Operating margin declined 110 basis points to 18.5%,
primarily due to increased partner investments, largely in the Americas segment,
restructuring and impairment charges and the absence of the 53rd week, partially offset by
sales leverage. Earnings per share of $1.97 increased 4% over the prior year earnings per
share of $1.90. Americas revenue grew by 6% to $15.7 billion, primarily driven by
incremental revenues from 952 net new store openings over the last 12 months and
comparable store sales growth of 3%, which was driven by the success of premium food
offerings coupled with innovation across coffee and tea beverage platforms. In China/Asia
Pacific segment, revenues grew by 10% to $3.2 billion, primarily driven by incremental
revenues from the opening of 1,036 net new stores over the past 12 months and a 3% increase
in comparable store sales. Starbucks continues to execute on its strategy of repositioning the
EMEA segment to a
predominantly licensed
model. As a result of this
strategy, EMEA
revenues declined $111
million to $1.0 billion,
or 10%, primarily driven
by the absence of
revenue related to the
sale of Germany retail
operations in the third
quarter of fiscal 2016
and unfavorable foreign
currency translation.
Channel Development
segment revenues grew by 4% to $2.0 billion, primarily driven by increased sales through
international channels and sales of packaged coffee, foodservice and single-serve products.
Graph: Starbucks` financial performance Source: Starbucks` 10-K, 2017
7.1. Data Analysis
Financial Results for FY 2017:
Starbucks results for fiscal 2017 continued to demonstrate the strength of its global business
model, and its ability to successfully make disciplined investments in its business and
partners. Consolidated total net revenues increased 5% to $22.4 billion, primarily driven by
incremental revenues from 2,320 net new store openings over the past 12 months and a 3%
growth in global comparable store sales. Consolidated operating income declined $37
million, or 1%, to $4.1 billion. Operating margin declined 110 basis points to 18.5%,
primarily due to increased partner investments, largely in the Americas segment,
restructuring and impairment charges and the absence of the 53rd week, partially offset by
sales leverage. Earnings per share of $1.97 increased 4% over the prior year earnings per
share of $1.90. Americas revenue grew by 6% to $15.7 billion, primarily driven by
incremental revenues from 952 net new store openings over the last 12 months and
comparable store sales growth of 3%, which was driven by the success of premium food
offerings coupled with innovation across coffee and tea beverage platforms. In China/Asia
Pacific segment, revenues grew by 10% to $3.2 billion, primarily driven by incremental
revenues from the opening of 1,036 net new stores over the past 12 months and a 3% increase
in comparable store sales. Starbucks continues to execute on its strategy of repositioning the
EMEA segment to a
predominantly licensed
model. As a result of this
strategy, EMEA
revenues declined $111
million to $1.0 billion,
or 10%, primarily driven
by the absence of
revenue related to the
sale of Germany retail
operations in the third
quarter of fiscal 2016
and unfavorable foreign
currency translation.
Channel Development
segment revenues grew by 4% to $2.0 billion, primarily driven by increased sales through
international channels and sales of packaged coffee, foodservice and single-serve products.
Graph: Starbucks` financial performance Source: Starbucks` 10-K, 2017
Analysis of Starbucks` Competitors with Key Performance Ratios:
Table: Key performance ratios for Starbucks and its competitors, FY 2017 Source: 10-K`s, 2017
In the group of Starbucks` competitors, five companies were chosen, two of which are a more
direct competition (McDonald` and Dunkin` Brands), and three of which are an indirect
competition (Chipotle Mexican Grill, Darden Restaurants and Yum! Brands). Some metrics
that were chosen for the analysis are industry specifics, like average sales per square feet of
stores, while some are more generally used, like return on invested capital. It can be seen
from the table that Starbucks has the highest average sales per square feet of stores, highest
four year CAGR revenue growth, highest ROIC and ROIC adjusted for operating leases,
highest ROE, as well as interest coverage ratio, which shows how many times can the
company cover its interest expense with its operating income. The most important metrics in
this analysis are revenue growth and ROIC adjusted, since a company`s return on invested
capital and its revenue growth together determine how revenues are converted to cash flows
and earnings. That means the amount of value a company creates is governed ultimately by
its ROIC, revenue growth, and ability to sustain both over time2. Starbucks has shown it can
produce the highest return for its investors among its competitors, as well as sustain a high
growth rate despite its size. Also, as will later be shown, weighted average cost of capital for
Starbucks was calculated to be about 8%, much lower than ROIC adjusted, meaning that
Starbucks is creating value for its owners above their opportunity cost, increasing its total
value. As was already said, ROIC was adjusted for operating leases. Since company’s don`t
have to include the value of their operating leases in their assets and liabilities on the balance
sheet, leases become a source of off-balance sheet financing, and thus the amount of capital
invested in the company is seemingly smaller. This can distort financial ratios of return and
debt, making them higher. The process of including the value of operating leases on the
Table: Key performance ratios for Starbucks and its competitors, FY 2017 Source: 10-K`s, 2017
In the group of Starbucks` competitors, five companies were chosen, two of which are a more
direct competition (McDonald` and Dunkin` Brands), and three of which are an indirect
competition (Chipotle Mexican Grill, Darden Restaurants and Yum! Brands). Some metrics
that were chosen for the analysis are industry specifics, like average sales per square feet of
stores, while some are more generally used, like return on invested capital. It can be seen
from the table that Starbucks has the highest average sales per square feet of stores, highest
four year CAGR revenue growth, highest ROIC and ROIC adjusted for operating leases,
highest ROE, as well as interest coverage ratio, which shows how many times can the
company cover its interest expense with its operating income. The most important metrics in
this analysis are revenue growth and ROIC adjusted, since a company`s return on invested
capital and its revenue growth together determine how revenues are converted to cash flows
and earnings. That means the amount of value a company creates is governed ultimately by
its ROIC, revenue growth, and ability to sustain both over time2. Starbucks has shown it can
produce the highest return for its investors among its competitors, as well as sustain a high
growth rate despite its size. Also, as will later be shown, weighted average cost of capital for
Starbucks was calculated to be about 8%, much lower than ROIC adjusted, meaning that
Starbucks is creating value for its owners above their opportunity cost, increasing its total
value. As was already said, ROIC was adjusted for operating leases. Since company’s don`t
have to include the value of their operating leases in their assets and liabilities on the balance
sheet, leases become a source of off-balance sheet financing, and thus the amount of capital
invested in the company is seemingly smaller. This can distort financial ratios of return and
debt, making them higher. The process of including the value of operating leases on the
balance sheet is called capitalization of operating leases and it will be done for Starbucks,
since most Starbucks` stores are under operating leases and a huge amount of assets and debt
is off Starbucks` balance sheet.
Expenses and Cash Flow Projection:
Expense and cash flow line items, which include Cost of sales including occupancy cost,
Other operating expenses, Depreciation and amortization, General and administrative
expenses and Depreciation and amortization on CFS, were projected as percentage of
revenue. Projections were made either by following an observed trend or by taking the
average of historical numbers. Store operating expenses were projected as operating expenses
per company-operated store, and two cases were also set up in this projection, separate from
the growth cases. In the Base case, operating expenses per store follow the observed
increasing historical trend, while in the Upside case, this trend reverses to historical average.
CAPEX was projected as CAPEX per change in company-operated stores, and two cases
similar to cases for store operating expenses were set up. In the Base case, CAPEX per newly
opened company-operated store continues to increase, while in the Upside case, it reverts to
historical average. The reason for setting these cases for expenses is, as will be shown later,
due to huge negative impact on price per share if the increasing trend in expenses and
spending per store continues. Detailed assumptions and projections can be found in
Appendix.
Graph: Total operating expenses and their CAGR per case
since most Starbucks` stores are under operating leases and a huge amount of assets and debt
is off Starbucks` balance sheet.
Expenses and Cash Flow Projection:
Expense and cash flow line items, which include Cost of sales including occupancy cost,
Other operating expenses, Depreciation and amortization, General and administrative
expenses and Depreciation and amortization on CFS, were projected as percentage of
revenue. Projections were made either by following an observed trend or by taking the
average of historical numbers. Store operating expenses were projected as operating expenses
per company-operated store, and two cases were also set up in this projection, separate from
the growth cases. In the Base case, operating expenses per store follow the observed
increasing historical trend, while in the Upside case, this trend reverses to historical average.
CAPEX was projected as CAPEX per change in company-operated stores, and two cases
similar to cases for store operating expenses were set up. In the Base case, CAPEX per newly
opened company-operated store continues to increase, while in the Upside case, it reverts to
historical average. The reason for setting these cases for expenses is, as will be shown later,
due to huge negative impact on price per share if the increasing trend in expenses and
spending per store continues. Detailed assumptions and projections can be found in
Appendix.
Graph: Total operating expenses and their CAGR per case
Starbucks net revenue:
This statistic shows the revenue of Starbucks worldwide from 2003 to 2019. In
2019, Starbucks' revenue amounted to approximately 26.51 billion U.S. dollars.
SWOT Analysis of Starbucks:
Starbucks is the world’s largest
coffeehouse chain, operating over
20,000 locations worldwide. Since
the chain’s foundation in Seattle in
1971, Starbucks has been serving up
hot and cold beverages as well as
snacks. More recently, this
transnational company has expanded
into selling branded products such as
packaged coffee beans, coffee
machines, mugs and other gifts.
Analyzing Starbucks with the help of
a SWOT matrix will show what the
future might have in store for this
world-famous corporation.
This statistic shows the revenue of Starbucks worldwide from 2003 to 2019. In
2019, Starbucks' revenue amounted to approximately 26.51 billion U.S. dollars.
SWOT Analysis of Starbucks:
Starbucks is the world’s largest
coffeehouse chain, operating over
20,000 locations worldwide. Since
the chain’s foundation in Seattle in
1971, Starbucks has been serving up
hot and cold beverages as well as
snacks. More recently, this
transnational company has expanded
into selling branded products such as
packaged coffee beans, coffee
machines, mugs and other gifts.
Analyzing Starbucks with the help of
a SWOT matrix will show what the
future might have in store for this
world-famous corporation.
Strengths:
Brand image
Premium quality
Excellent customer service
Weaknesses:
High priced products
Imitation by others
Opportunities:
Expansion in the emerging markets
Diversification of the product mix
Cobranding or partnership with other brands
Threats:
Heavy competition from the rival brands
Consumer trends
Imitation of its premium products
7.2. Major Findings
Starbucks’ failure in Australia 2008:
Starbucks on Tuesday admitted defeat in the race to win a large slice of the Australian coffee
market when the US chain said it would close 61 “underperforming” stores out of its total
Australia portfolio of 84.
The decision by Starbucks to downsize its Australian business is a setback for the Seattle-based
chain’s international ambitions.
Starbucks, which operates more than 15,000 coffee shops globally, this month said it would
close about 600 stores in the US and cut as many as 12,000 jobs. The coffee chain said at the
Brand image
Premium quality
Excellent customer service
Weaknesses:
High priced products
Imitation by others
Opportunities:
Expansion in the emerging markets
Diversification of the product mix
Cobranding or partnership with other brands
Threats:
Heavy competition from the rival brands
Consumer trends
Imitation of its premium products
7.2. Major Findings
Starbucks’ failure in Australia 2008:
Starbucks on Tuesday admitted defeat in the race to win a large slice of the Australian coffee
market when the US chain said it would close 61 “underperforming” stores out of its total
Australia portfolio of 84.
The decision by Starbucks to downsize its Australian business is a setback for the Seattle-based
chain’s international ambitions.
Starbucks, which operates more than 15,000 coffee shops globally, this month said it would
close about 600 stores in the US and cut as many as 12,000 jobs. The coffee chain said at the
time it expected to take pre-tax charges of $328m to $348m related to the US closures, resulting
in a net cash outflow after tax benefits of about $100m.
The chain has been the victim of an ill-fated push in Australia, a market it only entered in 2000.
Starbucks was snubbed by many Australians who have grown up on a diet of quality European-
style coffee introduced in the last century to Australia by immigrants, especially from Italy.
Howard Schultz, Starbucks chief executive, said on Tuesday that no other international markets
need to be addressed in the same manner as Australia. “While this decision represents business
challenges unique to the Australian market, it in no way reflects the strong state of Starbucks
business in countries outside of the United States.”
Although it only arrived in Australia recently, Starbucks expanded quickly there. Australia is
of a similar geographic size to the US but the island continent supports less than a tenth of the
US’s population.
Starbucks said it would close most of its country and regional stores and focus on the three
large urban centers of Sydney, Melbourne and Brisbane.
The closures will result in 685 job losses.
“We are well into the implementation phase of transforming Starbucks and we believe that this
difficult, yet necessary, decision to close stores in Australia will help support the continued
growth of our international business,” Mr. Schultz added. Since he this year resumed the role
of CEO at the group, he built into a global chain in the 1990s, Mr. Schultz has pledged to
reinvigorate Starbucks’ US operations, arguing that a dip in service standards had contributed
to declining traffic at a time of slowing consumer demand.
It has announced several initiatives aimed at improving customer experience, including a new
blended coffee and a loyalty programmed for its Starbucks stored-value cards.
Starbucks failed in Israel:
In 2001, Starbucks opened its first outlets in Israel. However, just two years later, in 2003, they
were nowhere to be found.
For most people living in the west, it’s hard to even imagine that a huge corporation like
Starbucks can fail.
in a net cash outflow after tax benefits of about $100m.
The chain has been the victim of an ill-fated push in Australia, a market it only entered in 2000.
Starbucks was snubbed by many Australians who have grown up on a diet of quality European-
style coffee introduced in the last century to Australia by immigrants, especially from Italy.
Howard Schultz, Starbucks chief executive, said on Tuesday that no other international markets
need to be addressed in the same manner as Australia. “While this decision represents business
challenges unique to the Australian market, it in no way reflects the strong state of Starbucks
business in countries outside of the United States.”
Although it only arrived in Australia recently, Starbucks expanded quickly there. Australia is
of a similar geographic size to the US but the island continent supports less than a tenth of the
US’s population.
Starbucks said it would close most of its country and regional stores and focus on the three
large urban centers of Sydney, Melbourne and Brisbane.
The closures will result in 685 job losses.
“We are well into the implementation phase of transforming Starbucks and we believe that this
difficult, yet necessary, decision to close stores in Australia will help support the continued
growth of our international business,” Mr. Schultz added. Since he this year resumed the role
of CEO at the group, he built into a global chain in the 1990s, Mr. Schultz has pledged to
reinvigorate Starbucks’ US operations, arguing that a dip in service standards had contributed
to declining traffic at a time of slowing consumer demand.
It has announced several initiatives aimed at improving customer experience, including a new
blended coffee and a loyalty programmed for its Starbucks stored-value cards.
Starbucks failed in Israel:
In 2001, Starbucks opened its first outlets in Israel. However, just two years later, in 2003, they
were nowhere to be found.
For most people living in the west, it’s hard to even imagine that a huge corporation like
Starbucks can fail.
However, predictions and reality often don’t match in the business world. Let’s understand
why the international coffee chain was rejected in Israel.
Starbucks Had to Stick to One City
Starbucks’ Coffee, As Well as Culture, Didn’t Appeal to the Israeli Customers
Coffee Was Treated Like Oil
Proximity to Italy Was an Advantage for Local Cafe Owners
Israel’s Market Was Too Small for Starbucks
Conclusion:
It’s wise to choose a local partner when you venture into foreign territory. But remember,
choose the right local — not just any local who’s willing to invest their money into your
business, which might seem very tempting at the time.
Starbucks should have formed a business alliance with someone who was aware of the Israeli
coffee culture and consumer psyche.
Long term strategy plans of STARBUCKS:
*Starbucks wants to make all its equipment smart and interconnected. It will mean less
technical duties for the staff and more time and focus given to the customers.
*The company will increase the number of cashless coffee shops around the world (currently
there are only two cashless Starbucks stores - in Seattle and Seoul).
*Starbucks plans to hire 25,000 veterans and military spouses by 2025, and 10,000 refugees
by 2022 in 75 countries.
*As part of the Sustainable Coffee Challenge and a commitment to plant one billion coffee
trees, Starbucks will provide farmers with 100 million trees by 2025.
*Starbucks aspires to serve 100% ethically sourced coffee and, by connective work with
other companies in the industry, Starbucks hopes for coffee to become the first sustainable
agricultural product in the world.
*Thanks to scaling the Mercato lunch programmed - the Starbucks food donation initiative
operating across America - in the next five years it will be possible to sell or donate 100% of
Starbucks food in American stores.
*In the next few years, 80% of Starbucks store growth will be drive-through. This will
mainly affect the suburbs of middle and South America. The company’s drive-through
locations already have a 25-30% higher revenue than the typical coffee shops in city centers.
*Starbucks’ in-app payment system is forecasted to be the leader in the proximity payment
platform competition through 2022.
why the international coffee chain was rejected in Israel.
Starbucks Had to Stick to One City
Starbucks’ Coffee, As Well as Culture, Didn’t Appeal to the Israeli Customers
Coffee Was Treated Like Oil
Proximity to Italy Was an Advantage for Local Cafe Owners
Israel’s Market Was Too Small for Starbucks
Conclusion:
It’s wise to choose a local partner when you venture into foreign territory. But remember,
choose the right local — not just any local who’s willing to invest their money into your
business, which might seem very tempting at the time.
Starbucks should have formed a business alliance with someone who was aware of the Israeli
coffee culture and consumer psyche.
Long term strategy plans of STARBUCKS:
*Starbucks wants to make all its equipment smart and interconnected. It will mean less
technical duties for the staff and more time and focus given to the customers.
*The company will increase the number of cashless coffee shops around the world (currently
there are only two cashless Starbucks stores - in Seattle and Seoul).
*Starbucks plans to hire 25,000 veterans and military spouses by 2025, and 10,000 refugees
by 2022 in 75 countries.
*As part of the Sustainable Coffee Challenge and a commitment to plant one billion coffee
trees, Starbucks will provide farmers with 100 million trees by 2025.
*Starbucks aspires to serve 100% ethically sourced coffee and, by connective work with
other companies in the industry, Starbucks hopes for coffee to become the first sustainable
agricultural product in the world.
*Thanks to scaling the Mercato lunch programmed - the Starbucks food donation initiative
operating across America - in the next five years it will be possible to sell or donate 100% of
Starbucks food in American stores.
*In the next few years, 80% of Starbucks store growth will be drive-through. This will
mainly affect the suburbs of middle and South America. The company’s drive-through
locations already have a 25-30% higher revenue than the typical coffee shops in city centers.
*Starbucks’ in-app payment system is forecasted to be the leader in the proximity payment
platform competition through 2022.
Chapter 8: Recommendation & Conclusion
8.1. Recommendation
Recommendation:
Starbucks needs to bring some improvements and advancements in the company to keep its
market position stable and strong.
For this, few recommendations are given below:
Introduce diversification in products and services offerings. This will help strengthen
their position.
Bring innovation and technological advancements in the company to deal with the
rising competition and imitation.
Resolve the issues with the social activists that oppose international market players.
Reduce prices of the products to attract more customers and increase the affordability
for all classes of consumers.
Implement creative marketing campaigns, promotional activities, and branding
strategies.
Contribute to community development, participate in Corporate Social Responsibility
(CSR), and sustainability practices.
Starbucks biggest growth is in its International segment. The emerging markets of Brazil,
India, China, South Africa and Mexico with a growing middle-class population continue to
offer significant opportunities to add new stores and serve more customers. At the same time,
while presuming its product quality and strong brand, Starbucks should improve its inventory
and production strategies to reduce the unit price, in order to reduce the threat from imitation.
Last but not the least, Starbucks has great growth opportunities in Tea and Fresh Juice
products mix. They should build up these products along the same line of their core coffee
products. Also as consumer tastes and lifestyle shift towards more snacks and beverages
options, Starbucks should tailor its menu’s and expand to give healthier product offerings in
its mix
8.2. Conclusion
To sum up, Starbucks is undoubtedly the most successful companies in the world. Their
“dignity and respect and a good production of goods and services connected with the
treatment of links between workers used a simple strategy.” Important factors t was to bring
success to Starbucks to distinguish from others.
8.1. Recommendation
Recommendation:
Starbucks needs to bring some improvements and advancements in the company to keep its
market position stable and strong.
For this, few recommendations are given below:
Introduce diversification in products and services offerings. This will help strengthen
their position.
Bring innovation and technological advancements in the company to deal with the
rising competition and imitation.
Resolve the issues with the social activists that oppose international market players.
Reduce prices of the products to attract more customers and increase the affordability
for all classes of consumers.
Implement creative marketing campaigns, promotional activities, and branding
strategies.
Contribute to community development, participate in Corporate Social Responsibility
(CSR), and sustainability practices.
Starbucks biggest growth is in its International segment. The emerging markets of Brazil,
India, China, South Africa and Mexico with a growing middle-class population continue to
offer significant opportunities to add new stores and serve more customers. At the same time,
while presuming its product quality and strong brand, Starbucks should improve its inventory
and production strategies to reduce the unit price, in order to reduce the threat from imitation.
Last but not the least, Starbucks has great growth opportunities in Tea and Fresh Juice
products mix. They should build up these products along the same line of their core coffee
products. Also as consumer tastes and lifestyle shift towards more snacks and beverages
options, Starbucks should tailor its menu’s and expand to give healthier product offerings in
its mix
8.2. Conclusion
To sum up, Starbucks is undoubtedly the most successful companies in the world. Their
“dignity and respect and a good production of goods and services connected with the
treatment of links between workers used a simple strategy.” Important factors t was to bring
success to Starbucks to distinguish from others.
Starbucks is a pure example of an organization which achieve its success through maintaining
a clean P-O-L-C frame work. The Planning of the organization and the way it organizes its
management system is the backbone of Starbucks. It also contains great leaders and leading
process to lead the organization upfront as a result controlling becomes easy.
Starbucks has the future rapid growth, apparently, Starbucks is to be successful and
promising. However, the keys to success in tomorrow’s environment and may not apply to
the global market. Defense and competitive position grows tight no competitors off fending
to keep the internal and external changing strategies unique, valuable and leadership
capabilities and resources, not products or services themselves more proactive response based
on the building requires. Starbucks for leadership in domestic and foreign markets despite a
tough opponent for the good for granted, it should not. And the future fate of Starbuck will
have strategic ability to protect and be strong, standing offset their weaknesses, according to
the need to avoid threats and take advantage of opportunities. Starbucks wants to define
current and future requirements as well as it could remain under the more exciting growth
issues and continue to be prosperous.
Chapter 9: References
https://notesmatic.com/2018/10/starbucks-business-model-and-strategy/
https://www.britannica.com/topic/Starbucks
https://www.starbucks.com/about-us/company-information/starbucks-company-
timeline
https://theorg.com/org/starbucks
https://stories.starbucks.com/
http://panmore.com/starbucks-coffee-generic-strategy-intensive-growth-strategies
https://medium.com/better-marketing/why-starbucks-failed-in-israel-7f0421c4ecd4
https://notesmatic.com/2016/09/starbucks-corporation-swot-analysis-2016/
https://medium.com/@arora.abhi/4-reasons-starbucks-failed-in-australia-f9efb125faeb
https://www.fool.com/investing/2019/09/19/3-reasons-starbucks-growth-isnt-over.aspx
https://www.bloomberg.com
https://www.forbes.com
a clean P-O-L-C frame work. The Planning of the organization and the way it organizes its
management system is the backbone of Starbucks. It also contains great leaders and leading
process to lead the organization upfront as a result controlling becomes easy.
Starbucks has the future rapid growth, apparently, Starbucks is to be successful and
promising. However, the keys to success in tomorrow’s environment and may not apply to
the global market. Defense and competitive position grows tight no competitors off fending
to keep the internal and external changing strategies unique, valuable and leadership
capabilities and resources, not products or services themselves more proactive response based
on the building requires. Starbucks for leadership in domestic and foreign markets despite a
tough opponent for the good for granted, it should not. And the future fate of Starbuck will
have strategic ability to protect and be strong, standing offset their weaknesses, according to
the need to avoid threats and take advantage of opportunities. Starbucks wants to define
current and future requirements as well as it could remain under the more exciting growth
issues and continue to be prosperous.
Chapter 9: References
https://notesmatic.com/2018/10/starbucks-business-model-and-strategy/
https://www.britannica.com/topic/Starbucks
https://www.starbucks.com/about-us/company-information/starbucks-company-
timeline
https://theorg.com/org/starbucks
https://stories.starbucks.com/
http://panmore.com/starbucks-coffee-generic-strategy-intensive-growth-strategies
https://medium.com/better-marketing/why-starbucks-failed-in-israel-7f0421c4ecd4
https://notesmatic.com/2016/09/starbucks-corporation-swot-analysis-2016/
https://medium.com/@arora.abhi/4-reasons-starbucks-failed-in-australia-f9efb125faeb
https://www.fool.com/investing/2019/09/19/3-reasons-starbucks-growth-isnt-over.aspx
https://www.bloomberg.com
https://www.forbes.com
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