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The research paper is a critical overview of Starbuck Cooperation which is a leading retailer, roaster and brand of specialty coffee in the entire globe. It had seventeen coffee shops back in 1978 and seventeen years down the line, the stores grew to a shocking 8,000. Currently, Starbuck operates 17,817 stores in 50 countries across the world, counting over 11,000 in the United States, about 800 in the UK, and close to 1000 in Canada (Weber, 2005). Its position in the world economy makes it to have a greater purchasing power, thus influencing coffee market.
Mission, values and ethics
The company's mission statement for the company, "To inspire and nurture the human spirit - one person, one cup and one neighborhood at a time" Starbuck does have environmental mission statement, "Starbucks is committed to a role of environmental leadership in all facets of our business" this later mission is fulfilled by the company's commitment to understanding environmental issues, coming up with innovative and flexible solutions, striving to buy, sell as well as using products deemed environmentally friendly, instilling environmental responsibility in corporate values and measuring as well as monitoring various company projects (Weber, 2005).
Among the shared values include providing a great work environment, recognizing that profitability is essential to future success, embracing diversity, treating others with respect and dignity, applying the highest quality standards for products and developing enthusiastically customers that are satisfied.
In terms of organization ethics, Starbuck exemplifies the company's six point mission statement. The mission statement is guiding principle and helps in decision making. Once a an applicant of a certain job has gone through screening process, both corporate culture and ethics of an organization are introduced. The investment made by the organization in training employees is designed in a manner that it reinforces the Starbucks' goals and mission, whilst the employees are socialized to the culture of the organization.
Organization Structure and Culture
According to Bryant, 2009, there has been some changes at the corporate level introduced by the CEO Mr. Schultz, by opening up positions that are new to focus on customers. amongst the these new, is a manager in global real estate design, charged with the responsibilities of communication, public affairs and corporate socialization. Michelle Gass is charged with the responsibility of global strategy, which ensures organizational transformation. Chet Kuchinad will have responsibility of heading the strategy of Human Resource, which involves the implementation store level positions that are new. The experience of customers, which involves merchandise and the design of stores, will be the duty of Harry Roberts. The responsibility of marketing and brand strategy will be charged to Terry Davenport. This will involve development of the product, and insight of consumers, on top of unification of Starbucks brand to its customers. The new positions are designed with the target of enhancing experience of customers by reconnecting with the wants of its customers.
The style of leadership exhibited in Starbuck Corporation is Laissez Faire with some aspects of democratic leadership style. Reviews and raises are used to motivate employees. The leadership style allows delegation of duties as individuals are assigned shifts by supervisors. Similarly, workers are provided with an opportunity and support to use and apply their creativity as well as empowered in making decisions.
In this kind of style, it is evident that the CEO leads with passion and he clearly knows where he wants to go. He has successfully instilled this notion to the employees. The company has shift supervisors that help run each shift as a "cash controller" Some stores has Assistant Managers to help the manager. Equality is the central focus in exercising their responsibilities. Starbuck is a very horizontal based company having positions of power, but hypothetically, each store communicate equally with all of the baristas.
Personnel and Motivational style
As suggested by Schulz & Yang, 1997 Starbuck has grown knowing that it is the workforce that has brought it this far and continue to do so. For this reason, the company has developed numerous ways of ensuring that employees are treated in the best way possible through respect as well as providing them motivational incentives and other packages. Once an applicant is selected, they are taken through thorough integration process that they will suit into the system. What follow is adequate training and education opportunities.
The workers are also known as partners to characterize the value of the relation and a terminology that has been used to motivate and empower active participation in ensuring the attainment of organizational goals and objectives. Starbucks has been showing appreciation to its full time and part time employees, by providing them with insurance in medical, dental and even vision. Other rewards include 401k plan, options of stock, reimbursement, and vacation on top of free coffee of course. Employees services and social activities are supported by the company by the use of profits resulted from Starbucks logo merchandise. All these coupled with flexible working conditions have been deemed motivational factors to Starbuck workforce. For this reason employee turnover is 250 percent lower than the industry average and customers are highly satisfied (Bryant, 2009).
Overall measurement of success
Starbuck has mastered the perfect way of measuring success. It is worth noting that the frequent surveys it carries in trying to capture the views of its employees and customers provide enough data from where success can be measured. From these surveys, being satisfied with the job, is amongst the attributing factors to company workers stability and to the financial successes of the company are brought out clearly through the survey. Similarly customers' satisfaction and loyalty are measured by this method (Schulz & Yang, 1997). Lastly, to measure financial success, the company through its finance department goes into greater efforts in critically analyzing financial data of the company.
It is worth noting that the company have in several occasions used the information concerning its success to make further improvements let say in creating a more motivated workforce, satisfied and loyal customers. All these are what have propelled the company to be a force in the entire world when it comes to beverage sale.
Reasons of Starbuck's Success
According to the information obtained from my extensive research one of the reasons contributing to the tremendous success of Starbucks is the secret of capitalizing on the opportunities that emanate from neuro-marketing which is basically the sale of a consistent and appealing sensory experience to its customers. Starbucks utilizes the effects of music, colors, and lighting as the wonderful aroma of coffee which dominates customer's senses at the moment of entering into the any Starbuck outlet. This kind of marketing as worked for the better of the company as many customers prefer to visit the company's outlets just because they get an excellent memorable experience. Most of the sensory experiences is obtained from retail environment and even if one decides to makes coffee at their homes it often doesn't taste as those served in the retail outlets (Gerry & Scholes, 2003).
Another reason for Starbuck success is the ability of its brand to leverage itself without much advertising and this is attributed to its ample beginnings where unlike most of its competitors which franchise but Starbucks retained ownership through locations that were corporately owned and this gave the company and advantage of not investing a lot of money in marketing. Also, Starbucks early leaders had exceptionally and inspirationally huge entrepreneurial visions which catapulted the levels of success of the company.
One of the major strengths that the company has is the good customer service where it spends as much time talking to customers as it takes to the employees and this creates more loyal customers as customers appreciates the way the employer accords respect to his employees. The high-quality customer experiences have kept customers purchasing from the company hence creating loyal customers and this has contributed to the wide expansion of the company.
The efforts by the company to make its employees happy and highly motivated are seen as a unique strength that it has kept the company succeeding. This has enabled the company to maintain a top shelf employee relations, Also, Starbucks offers high quality products which customers agrees to give the value of their money spend in purchasing from the company so its seen as a strength for its growth. The company's brand has become more responsible socially through better public relations, introduction of more fair trade product, by prioritizing on ethical sourcing practices a well its ability to improve the distribute profits to farmers.
The use of its loyalty schemes like Starbucks card, free music downloads and free re-fills have provided the company with a competitive edge to its price preposition hence able to maintain original customers as a rewarding their choice of shopping with the company.
The company gains its strength from its customers especially when one considers the availability of the essential tools that help improve human resource activities and such tools include the interview guide and training manuals (Pendergrast, 2001).
Roles of the Management in Companys Success
The company success came as a result of the management focusing on the customer service and employees satisfaction by maintaining an excellent employer-employee relation which makes workers happy and hence improving their performances. Starbucks success is attributed to its innovative leaders who involved other partners which supported their values e.g. ethical issues and by doing so their success was fostered trough combined efforts which worked to wards building a good rapport both with its customer's partners and the general public. Starbucks also succeeded in its ventures by ensuring that it promoted fair practices and payouts to its coffee farmers and all the partners that are involved with the company's operations (Gerry & Scholes, 2003).
Starbuck's management also ensured that knowledgeable employees who were aware of the company's products are employed. Such employees paid attention to details as they possess essential skills and personality hence are able to eagerly communicate the company's passion for coffee thus customers were consistently pleased. From the onset of the Starbuck the management has always preferred to open company -owned stores and avid franchising and this allowed the company to control fully its products, character and the strategic location of its outlets (Pendergrast, 200).The company's financial success is also attributed to its decisions to stress on its responsibilities to managing the environment s as well as customer care service. The leaders of the company don't fear engaging itself with the local communities directly as well as partnering with interested companies like Tazo which holds similar ethic and corporate standard.
Some of the major challenges facing Starbuck Company in the next five years include:
The possibility of the coffee market getting saturated due to entry of new competitors, growing competition from national brands, aggressive marketing resulting into price wars and promotions hence putting pressure on the profit margins as companies seek new ways to differentiating to its customers and cost save.
The company may also face rising cost of the raw material as a result of rising cost of coffee, labour, dairy products as wells as changes in exchange rates in the country.
Since most of the company's labour is provided by individuals who have not attained eighteen years of age, the issue may expose the company to claims of age discrimination and this may negatively affect sales on youth demographics. Finally, the expansion to too many stores may strain on the company's unique system and culture which might lower the profits of the company in the next five years.