...Starbucks’ Strategy Assignment 1 By: Allen Jones Luna 28 October 2013 MGT 500: Modern Management Professor: Dr. Tony Muscia Suggest the key elements of Starbucks’ Organizational Culture that contribute to its success in a global economy. Indicate management’s role with creating and sustaining the organizational culture. Organizational culture has a significant impact on the overall performance of a company. Organizational culture is “the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments” (Barney, 1986). In this paper, I will examine the elements of Starbucks’ organizational culture that contributed to its success in a global economy, assess the effectiveness of its management decisions in providing innovative offerings for its customers, determine one key management competency, and speculate on whether the company would achieve long-term sustainability as a global leader in the coffee industry without the organization’s CEO, Howard Shultz. In the case of the success of Starbucks, its organizational culture has been driven and empowered by the founder and CEO, Howard Schultz. Howard wanted to expand the company and when he visited Italy prior to the overhaul of the original Starbucks he wanted to mirror the concepts of the coffeehouses in Italy. The key aspect to realize here is that organizational...
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...Starbucks’ Strategy 1. Suggest the key elements of Starbucks’ Organizational Culture that contribute to its success in a global economy. Indicate management’s role with creating and sustaining the organizational culture. Organizational culture has a significant impact on the overall performance of a company. Organizational culture is “the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments” (Barney, 1986). In this paper, I will examine the elements of Starbucks’ organizational culture that contributed to its success in a global economy, assess the effectiveness of its management decisions in providing innovative offerings for its customers, determine one key management competency, and speculate on whether the company would achieve long-term sustainability as a global leader in the coffee industry without the organization’s CEO, Howard Shultz. In the case of the success of Starbucks, its organizational culture has been driven and empowered by the founder and CEO, Howard Schultz. Howard wanted to expand the company and when he visited Italy prior to the overhaul of the original Starbucks he wanted to mirror the concepts of the coffeehouses in Italy. The key aspect to realize here is that organizational culture affects performance. Howard Schultz became the CEO of Starbucks in 1987. As an entrepreneur, he was influential in convincing investors to believe in his vision...
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... Introduction Starbucks has been leading the coffee shop market in more than 40 years now. It has always been the place to find the world's best coffees. Its first store was founded at Pike Place Market in Seattle, Washington, United States. It has given a positive outcome so they serve consumers all over the world. The success of Starbucks coffee had come this far because they expand their operation and services and didn't limit their products. They sell not just coffee but tea, pastries, frappuccino, beverages and smoothies as well. Starbucks is the largest coffee house company in the world ahead of UK rival Costa Coffee, with 22, 551 stores in 65 countries and territories, including 12, 739 in Canada, 1,117 in Japan and 830 in the United Kingdom. From Starbuck' founding in 1971 as Seattle coffee bean roaster and retailer, the company has expanded rapidly. Between 1987 and 2007, Starbucks opened on average two new stores every day. Starbucks had been profitable as a local company in Seattle in early 1980's but lost money on its late 1989's expansion into the Midwest and British Columbia. Its fortune did not reverse until the fiscal year of 1989-1990, when it registered a small profit of $812, 000. By the time it expanded into California in 1991 it had become it trendy. The first store outside the United States or Canada opened in Tokyo in 1996, and overseas stores now constitute almost one third of Starbucks' stores. The company planned to open a net...
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...1. Based on your experience as a coffee consumer, does Starbucks’ strategy as described in Concept & Connections 1.2 seem to set the company apart from rivals? Does the strategy seem to be keyed to a cost-based advantage, differentiating features, serving the unique needs of a niche, or some combination of these? What is there about Starbucks’ strategy that can lead to sustainable competitive advantage? Answer: I have to be honest I like my coffee but I don’t get why people are so fascinated with paying so much for coffee. That being said I will say that Starbuck definitely has set itself apart from its competitors. I know people whose day is just ruined if they don’t have their Starbucks coffee in the morning. I guess the reason they enjoy and like Starbucks is because Starbucks has quality products, with guidelines so detailed that they outline how much time it should take for their coffee to be prepared. I believe Starbucks uses a broad differentiation strategy because it focuses on a broader segment of the total coffee market. Starbucks strategy of continuing to grow their brand globally by increasing store locations in other countries and in the U.S coupled with offering non coffee products should allow them to sustain a substantial competitive advantage over its competition. 3. Elements of eBay’s strategy have evolved in meaningful ways since the company’s founding in 1995. After reviewing all of the links at the company’s investor relations site, which can be...
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... From a digital perspective, the Starbucks Digital Network (SDN) offers new, localized, and valuable content from the biggest names in news and entertainment. The SDN offers free subscriptions to The Economist, Wall Street Journal, for example. Brotman (Chief Digital Officer) states that SDN coupled with world class mobile platforms and the company’s in-house Wi-Fi strategy offers customers an experience second to none (Kanani, 2012). The company pays heed to customer preferences. For years Starbucks has maintained that dark roasts are much better than light rendering the business with the formidable task of convincing internal and external audiences that its lighter roast “Blonde” stood up to the company’s high standards. R&D revealed through the consumer research “sensory preference” map that 40% of U.S. coffee drinkers prefer lighter blends and dark roast drinkers fall within a small area on this map Starbucks seized the opportunity because it recognized a huge long-term growth prospect (Gertner, 2012). The company pays particular attention to its environments. When the economy took a downturn and employment sky rocketed, the company initiated its Starbucks’s Job for U.S.A program – an endeavor to sell wristbands as a way of fund raising for job creation initiatives in the most hard- hit communities (Gertner, 2012). Sustainability is one area that could the company could focus on. Here too the company is making head way. Starbucks...
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...on Starbucks’ Future Plans to Grow West Georgia Technical College 5/23/2015 Case 1: Howard Schultz on Starbucks’ Future Plans to Grow When Howard Schultz returned to the company as CEO in 2008 he realized there was a problem with the company's strategy in the recessionary environment. He uncovered major problems at Starbucks locations that had been open for less than 18 months. Schultz found out that many retailers we're managing their companies based on same store sales growth which focuses on sales of existing stores not new stores. This was making management compare themselves to other successful stores, and was causing them to find other ways to increase sales that were under minding the brands image and reputation. This is not a good strategy to have so Schultz stopped the reporting same store sales each month. To promote long-term growth Starbucks introduced new products and brands within its stores. Instead of selling their new products like VIA in grocery stores and drug stores they decided to sell it in its own stores first. Because of proving the success of the product first there was no need to pay stores to stock it on their shelves. This also helped new products prove their credibility among consumers. Starbucks also had a great success with its loyalty card program which accounts for one fifth of all store based transactions. This program encourages customers to purchase Starbucks products in grocery stores and drug stores by giving rewards. Starbucks also...
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...Starbucks’ Strategy Charlene McMickens Modern Management Dr. Christopher McGrath February 3, 2016 Introduction Organizational culture is the set of key values, beliefs, understandings, and norms shared by members of an organization (Daft, 2012). In this paper, I will examine the elements of Starbucks’ organizational culture that contributed to its success in a global economy and look into management’s role with creating and sustaining the organizational culture. I will next assess the effectiveness of the company’s management decisions in providing innovative offerings for its customers. Then I will look into determining one key management competency and indicate one way the competency is a good fit for the organizational culture. Lastly, I will evaluate Starbuck’s ability to achieve long-term sustainability as a global leader in the coffee industry without the organization’s CEO, Howard Schultz. Starbuck’s is a multinational company famously known for its coffee. Starbucks offers some of the world’s finest grown fresh roasted whole bean coffee. The company first opened in 1971, at the historic Pike Place Market in Seattle as one storefront. The Starbucks’ name is from the first mate in Moby Dick. In 1981, now CEO Howard Schultz first walked into a Starbucks store, his first cup of coffee had him intrigued and he joined it a year later. Starbucks maintains its great success by standing by its mission statement “to inspire and nurture the human spirit, - one person, one...
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......STARBUCKS PLANNING 1 To understand the relationship between strategic and financial planning we first need to determine both of their meanings. The definition of strategic planning states that it is a “systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them.” Strategic planning is a management tool that helps an organization focuses its energy, to ensure that members of the organization are working toward the same goals, to assess and adjust the organization’s direction in response to a changing environment. In short, strategic planning is a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it, with a focus on the future. (Adapted from Bryson’s Strategic Planning in Public and Nonprofit Organizations) From these definitions and quotes we can understand that strategic planning allows a company to develop goals easily so that they can keep the company prospering. Financial planning is similar to strategic planning because both types of plans are used to help the company reach its overall goals. The definition of financial planning states that it is “a comprehensive evaluation of an investor’s current and future financial state by using currently known variable to predict future cash flows, asset values, and withdrawal plans.” This definition helps us to understand...
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...goals, hiring the right people, standards on work ethics, pay rates, and time off offered to employees. These values are set by the owners and managers of the company. They are not defined in one day but created over years. Just as important as setting and defining values, is finding the right employees share these values. Starbucks maintains a desirable position with approximately 18,000 stores worldwide of which nearly 13,000 are in the North America and 255 are in New York City. Following is an exploration of the many ways that Starbucks aligns the organization’s values in their plans and actions. Evolution of Personal and Workplace Values The origins of personal values start at home with family and culture. As individuals grow, their values may change to incorporate new ideas. Workplace values start with individual values and then integrate the organization’s values to accomplish their duties. In today’s business world, an organization’s values are important to the culture and success of the company. A few important values anyone should live by include treating others with respect, treating customers as most important, and doing what is right. Starbucks Coffee Company is one of the most recognizable names in coffee. Few companies have experienced success...
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...Seattle is the place where Starbucks Coffee Company was headquartered. Starbucks have been the leading brand in the world with just one retail store at Seattle’s historic Pike Place Market. By selling the best quality coffee, providing high class customer service and related products, their main aim was to become the leading brand of finest coffee in market locally and internationally. Non retail channels such as United Airlines, Barnes, Marriot International and department stores were buying coffee and tea products from Starbucks as well. With not only selling of coffee, Starbucks had their own hand made beverages and a variety of sandwiches and salads in some markets. In relation to tea and coffee, items like coffee brewers, and espresso machines were included in Starbucks merchandise. These essay will first talks about Starbucks make or buy strategy. Following Starbucks make or buy strategy; we will look at their supplier selection and evaluation system. After looking at Starbucks supplier selection and evaluation system, we will be looking at Starbucks purchasing cost analysis. We will discuss possible issues Starbucks may face and come up with some recommendations to address these problems. Starbucks Make or Buy Strategy The current situation in Starbucks now is that they are buying their furniture from the company called Viesso. Viesso is well known for designing furniture for relaxation, working, studying, lounging, socializing and many more. Starbucks have been purchasing...
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...Strategic Management and Strategic Competitiveness Paul Warren Strayer University BUS 499 Dr. Hase November 2, 2014 Assess how globalization and technology changes have impacted the corporation you researched What is Globalization? How does it affect a company? What does it do for a country? What are some major benefits of going global? Who are the recipients of these benefits, if there are any? Let’s get started by answering the first question. “Globalization is the increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowledge across country borders” (Hitt, Ireland, Hoskisson, pg. 9. 2013). Starbucks, an American company headquartered in Seattle, Washington is one of the most global companies I know of with more than 20,000 stores in over 50 countries around the world. I have had the opportunity to enjoy the taste of home in at least 5 different countries, which are almost the same as home but more geared to the host country tastes. As you can see, going global allowed for expansion into different markets around the world, which in return lead to countries who supply products to reach those markets as well. For instance, Starbucks by coffee from places such as Africa, Latin America and Asia by doing so this creates jobs in those areas and increases export of goods. These are major benefits from all parties involved. Coffee drinker benefit the most as they...
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...Chapter 3 Information Systems, Organizations, and Strategy 129 TECHNOLOGY HELPS STARBUCKS FINO NEW WAYS TO COMPETE Starbucks is the world's largest specialty coffee retailer, with over 1,700 coffee shops in 55 countries. For years, Starbucks grew throughout the United States and internationally, opening franchises at an impressive rate. From 2002 to 2007 alone, the company tripled the number of stores it operated worldwide. Starbucks offers a unique experience: high-end specialty coffees and beverages, friendly and knowledgeable servers, and customerfriendly coffee shops. This was a winning formula for many years and enabled Starbucks to charge premium prices. During the economic downturn beginning in 2008, profits plunged. Customers complained that the company had lost its hip, local feel and had become more like a fast-foodchain. Many coffee drinkers went in search of cheaper alternatives from McDonald's and Dunkin' Donuts for their coffee fixes. Starbucks stock lost over 50 percent of its value by the end of 2008. Major changes were in order. Starbucks seized the opportunity to overhaul its business by using severaldifferent strategies simultaneously. First, the company has revamped its in-store technology and sought to integrate its business processes with wireless technology and the mobile digital platform. Also, rather than copy the practices of competitors, Starbucks pursued a more aggressive product differentiation strategy, intended to emphasize the high quality...
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...Price Objective 6 Place Objective 6 Promotion Objective 7 Marketing Strategies 7 Product Strategies 7 Price Strategies 7 Place Strategies 7 Promotion Strategies 7 Tactics and Action Plan 8 Product Action Plan 8 Price Action Plan 8 Place Action Plan 8 Promotion Action Plan 8 Monitoring Procedures 9 Introduction Throughout most of the 90s and early 2000s, Starbucks has expanded its vast empire and tightened its stranglehold on the brewed coffee and coffee drink marketplace. New Wave Coffee Company looks to make a name for itself with lower prices, quality over quantity, and by setting itself apart by become the premier destination for coffee. Mission Statement “World class customer service and world class products at a world class price while constantly serving the community.” The Product Through the Local Brew Initiative, New Wave Coffee Company purchases and distributes locally grown coffee beans and brews with a proceed going back to the local farmers. Due to the locality to each New Wave Coffee Company store, they are able to charge a fraction of what Starbucks and other places charge, while also giving back to each individual community. Consumer Product Classification The Local Brew Initiative cup of coffee will fall into the Shopping Offering classification of the three-way product classification system. By...
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...------------------------------------------------- Assignment 2 External and Internal Environments May 7, 2016 Lavoria riddick BUS. 499 Professor Beverly Williams May 7, 2016 Lavoria riddick BUS. 499 Professor Beverly Williams Assignment 2: External and Internal Environments Starbucks was founded in Seattle, WA in 1971, beginning with a single store in the Pike Place Market. The Starbucks name was inspired by the mermaid in the Moby Dick novel. It offered some of the best fresh-roasted whole bean coffee. According to starbucks.com, Starbucks set out to be a different kind of company from the beginning. Not only a company that celebrated the rich tradition of coffee, but also one that brought a feeling of connection amongst people. The idea was for it to be the common place between work and home. Today there are over 16,000 stores in 50 different countries (starbucks.com website). In this paper, I will discuss the segments of the external and internal environments influence on Starbucks. According to the text, the challenge to each firm is to scan, monitor, forecast, and assess the elements in each segment of the general environment to determine the effects on the company (Hitt, Ireland, Hoskisson 2013). The segments include demographic, political/legal, sociocultural, technological, global, and physical environment. The demographic segment considers the population’s size, age structure, geographic distribution, ethnic mix, and income distribution...
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...year 2010 Starbuck’s revenue increased to a record breaking 10.7 billion dollars; Starbuck’s operating income increased by 857 million dollars from fiscal in 2009 to 1.4 billion dollars. Starbucks full year margin of 13.3 percent represented the highest full year consolidated margin in Starbuck’s history (Schultz, 2011). Mr. Schultz stated that while driving Starbuck’s key financial metrics cause it to reach the company’s record levels. In fiscal 2010, we built upon the nearly $600 million of cost savings in fiscal 2009 while driving many of the key financial metrics to record levels (Schultz, 2011). Starbucks improved the effectiveness and efficiency of their supply chain in world-class levels. In the U.S. alone, the business, operating income and revenues are growing again, with their store partners elevating the Starbuck’s Experience. Internationally, the foundation of the Starbuck’s brand still remains consistent in 2010 the ideas and leaderships in local markets helped deliver record breaking financial performance, which set the international business up to be a profitable growth engine (Schultz, 2011). Starbucks offered significant cash award to eligible partners who contributed to Starbucks high performance in 2010, and was able to enhance the 401k plan program, as well. 2.) Assess the Mission Statement of the company in terms of how it aligns with what the company actually does....
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