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Starbucks Coffee Company
Starbucks Coffee Company
Starbucks coffee company is a leading roaster and retailer of specialty coffees. It has its base in Seattle and has many stores within the U.S and internationally. The objective of starbucks is the establishment of Starbucks as the most recognized and respected brand of coffee in the world. For this goal to be achieved, starbucks continues to expand its retail operations by selectively pursuing other opportunities so that they can leverage and grow the company’s brand by the introduction of a variety of new products (Balaban, s & Kieta, C. (2008
Starbucks aims to enter more and more foreign countries. Among countries that Starbucks may consider venturing into is Italy. The initial idea to set up starbucks was from the Italian coffee tradition which was infused with the leisure approach found in Seattle. Despite the fact that the idea came from Italy, Italy has been considered a mountain that starbucks is yet to climb; even though Italy does not mean so much from an entirely pure business perspective (Faris, S 2012) This paper therefore examines the challenges that may be faced by Starbucks as reputational risks when the company attempts to enter the Italian market. It will also determine if any, the strategic advantages that starbucks has to enter the Italian market. Finally the paper will identify how competitor’s marketing strategies inform and influence Starbucks’ entry into this new market.
Starbucks has not entered into the Italian market yet, no starbucks outlet is anywhere in Italy especially at a very crucial time when Starbucks views its global expansion as a great key to its future growth. It is virtually impossible for one to walk into any European city and not find any Starbucks.Though Italy represents the height of coffee culture across the world and is termed as the gold standard which all other countries measure it also represents a reputational risk for starbuck’s entry. Even though the evolution of starbucks was due to the absorbance of the Italian coffee tradition, its structure is based around the American society. This is despite the fact that it was inspired on the Italian culture, hence, it is a probability that the sturbuck’s model would not fly in Italy. Italy can be viewed as a very good market with a big potential of entry owing to the fact that Italians love coffee. However there is no form of presence whatsoever of starbuck in Italy even though it’s founding was inspired right there in Italy.
The reputational risk posed in Italy is that the coffee market is famously crowded and fragmented. In Italy there are nearly 136,000 espresso bars, this number is roughly eight times the number of starbuck’s stores all over the world ( Alini, 2012).Proof is found just across the piazza from Caffe Miani which has been known as the areas prime location of coffee bars. There is presence of MacDonald’s with their fast growing McCafes which are becoming the fastest growing part of MacDonald’s Italian business. This McCafes have an Italian style bar that serves expressos, cappuccionos and other pastries and pies.
Apart from Caffe Miani and McCafe is another establishment Arnold coffee. This is a major challenge that starbucks faces in trying to address the occupational risks that they face in Italy. It has opened six locations five in Milan and one in the major airport in Verona. They are even set to open more and more shops in the next five years. The presences of all this shops pose an occupational risk for the entry of Starbucks and in particular Arnold Coffee’s presence poses a challenge to starbucks as it tries to overcome the occupational risk of entry into Italy. Another challenge that they face is the fact that the Italians are very choosy when it comes to their coffe.this is a very difficult aspect since starbuck has to ensure that the coffee they will offer is up to the Italians expectations or their normal coffee which they are used to.
Sturbacks strategic entry.
Unless starbuck decides to develop a correct strategic entry into the Italian market then it would fail. The people in Italy would be very reluctant to abandon their traditions and hence the risks of a failure may outweigh by a very big margin the possible rewards of succeeding in the market. In Italy there are very few places where they offer the comfort of sitting down with a book or laptop as one sips their coffee. Starbuck therefore has a potential of offering a place where people can hang out and sells coffee.Starbuck has registered tremendous success since it is not just selling coffee but rather a charming experience. Therefore this can pose as a strategic entry into the Italian market since starbuck will offer a home outside the home, an office away from ones boss and also a place to sit and chat and read as they take their preferred beverage.
Even if the Italians are picky about their coffee, they can be open to companies like starbucks that offer them a new and slower way of experiencing their coffee (Innovation Zen, 2006)
Competitors marketing strategies
Starbucks marketing strategies play a big role in informing and influencing starbuck’s entry into the new market. They can inform starbucks on what the Italians expect from starbucks if it will be able to enter into Italy. Their marketing strategies give clear information to starbucks on the likes and preferences of the Italians when it comes to their coffee. Their competitors pose a challenge in their entry, because these competitors have adopted similar structure and practices of starbucks. Arnold Coffee is starbuck’s imitator who have taken advantage and capitalized on the absence of Starbucks. The business model of Arnold Coffee is on the basis of starbucks, at some point it even had a logo that was in violation of starbucks trademark. Their set up has no much difference as starbuck, they give room for people to study and even their menu features American drip coffee, shakes and caramel macchiatos (Faris,S 2012).they have also adopted paper cups that they use to serve their customers.starbuck should not even enter Italy not unless they find a local partner since its market is highly fragmented than fear of measuring up to the strong coffee culture in Italy.
References
Alini, E. (2012).Italy meets starbucks. Retrieved November 9, 2012 from http://www2.macleans.ca/2010/10/28/italy-meets-starbucks/Innovation Zen (2006).Why starbucks is not present in italy.Retrieved November 9,2012 from http://innovationzen.com/blog/2007/01/15/why-starbucks-is-not-present-in-italy/Faris ,S.(2012).BloombergBusinessweek. Grounds Zero: A Starbucks-Free Italy.Retrieved November 9,2012 from http://www.businessweek.com/magazine/grounds-zero-a-starbucksfree-italy-02092012.html
Faris,S.(2012).BloombergBusinessweek. Grounds Zero: A Starbucks-Free Italy.Retrieved November 9,2012 from http://www.businessweek.com/magazine/grounds-zero-a-starbucksfree-italy-02092012.html#p3Balaban ,s & Kieta ,C. (2008).Starbucks coffee company. Retrieved November 9, 2012 from http://cobweb2.louisville.edu/faculty/regbruce/bruce//cases/starbucks/starbucks.htm
Starbucks Coffee Company Analysis
Starbucks Coffee Company Analysis
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Introduction
Starbucks Coffee Company is the largest retailer and roaster of specialty coffee in the world. It was established in 1971 by three partners in the US and has since then spread its operations in over 50 countries globally. It expanded tremendously and tripled its stores between 2002 and 2007 from 5,886 to 15,011 respectively (Starbucks, 2010a). However, its rapid expansion was altered by the recent economic crisis that peaked in 2008. Despite this, this company continued to focus on its expansion goal into the international market. Strong and persistent focus on international sales led to significant growth and expansion of this company during the subsequent years. During the second quarter of 2010, for instance, Starbucks’ profits increased eightfold to $217.3 million (Starbucks, 2010a). Currently, this company has more than 1700 stores in various locations in the world. It distributes its products in terms of stores and does not sell franchises. Apart from specialty coffee, this company owns other two brands namely; Tazo Tea and Seattle’s Best Coffee. This paper examines the external and the internal environments affecting the performance of this company. It also analyzes the key stakeholders of this company and their relationships to the company.
PESTEL Analysis
The following PESTEL analysis will examine in brief the factors of the external environment that affect the performance of this Starbucks namely economic, environmental, political, legal issues, social and technological factors.
Political Environment
One of the political factors affecting the performance of Starbucks is trade restrictions in terms of tariffs and other non-tariff barriers placed by various countries across their international borders. Most countries in which Starbucks operate are signatories of various agreements such as the G20, the APEC and the CAIRNS GROUP of agriculture. However, many of them still place some forms of trade restrictions. Strict and coercive trade barriers may adversely affect the ability of this company to source the best beans and to export its output to over 50 countries in which it operates (news.bbc. co.uk). Also, this may adversely affect its reputation, sales and competitiveness in the global market.
Secondly, political stability in the countries where this company operates is an important issue. A country may be friendly to foreign investors, but political instability may still adversely affect the operations of this company. A good example is Egypt where recent political instabilities altered the operations of this Starbucks (Starbucks, 2012). In Israel, Starbucks was forced to put off all of its operations. This adversely affected its strategy for expansion into the international market. Generally, political environment is unfavourable to some extent and presents threats to this company.
Economic Environment
The stability of the US dollar is a vital issue to the operations of Starbucks. Weak monetary policies, for instance may lead to a decline in the dollar rates in comparison to other currencies (Oxford University Press, 2010, p. 48). The company may, as a result, incur higher costs of its vital inputs such as coffee, milk and sugar. This may force the company to pass the extra cost to the consumer, which may put at risk its reputation, sales and competitiveness.
The recent economic crisis that peaked in 2007 and 2008 led to increased unemployment rates in many countries. For instance, the number of unemployed persons in Britain rose thrice-fold to 2.5 million by 2010 (National Coffee Drinking Trends, 2011). This also adversely affected income distribution in most nations where Starbucks operates. Consequently, most people who could afford to purchase the company’s expensive specialty coffee were now unable to purchase it and saw it as a luxury. This led to decline of sales in various locations, hence adversely affecting the expansion plan of this company. This implies that economic environment is somehow unfavourable to Starbucks.
Changes in tastes and preferences in the target market affect the performance of Starbuck. Recent information indicates that consumers in America are increasingly changing tastes in favour of specialty coffee (Politico, 2011). This has favourable impact to this company as it has opened an opportunity for expansion of sales and market share increase. The company speculates the trend of ‘Americanization’ which has been spreading rapidly across developing nations will make it easier for the company to boost its sales in those markets. Also, the push by governments in western countries to adopt healthy eating habits and avoid obesity might require this company to include some new items in its menu in line with these interests. Generally, as Politico, (2011) notes, social influences are favourable to this company.
Technological environment
Technological advancement has been changing at an average pace in the food and beverage industry. However, for business organizations to achieve success, they need to follow technological trends consistently and exploit any opportunity that may result from any change or advancement in technology. According to Technorati (2011), Starbucks adopted the recently introduced phone payments system which helps to reduce long queues during peak times. Technological advancement has led to a new platform in form of social media where business enterprises relate with consumers and share ideas and experiences with them. Business organizations are now able to acquire useful data such as consumer interests, tastes and preferences and responses to organizational products and services. Starbucks has exploited this opportunity by creating accounts in the social media sites such as FunSpace and FaceBook where it runs forums to discuss important issues with consumers and communities (Technorati, 2011). Generally, technological advancement has favourable impacts on the operations and performance of Starbucks.
Environmental issues
Non-governmental Organizations and other groups in most countries where Starbucks operate have incredible abilities to force organization to change their practices and comply with various rules and regulations. Often, they influence organization through boycotts and lobbying. They target intangible assets of business organizations such as tarnishing organizational reputation and brand image. However, Starbucks works with various pressure groups such as Fair-Trade movement which help to improve its reputation and image in the international market (National Coffee Drinking Trends, 2011, p. 49). Hence, environment influences are favourable to this company.
Legal Influences
According to National Coffee Drinking Trends (2011, p. 49), most countries tend to provide protection in various ways to indigenous firms from takeover and unfair competition. Legal issues such as national protection and monopoly laws are likely to affect Starbucks due to its size and expansion strategy in the international market. For instance, India protects its domestic firms through a policy that requires that no foreign firms can own 51 percent in a merger with local companies (Starbucks, 2012). Such protection policies are also available in other nations in various magnitudes. The more such measures are put in place, the more the expansion plan of Starbucks is altered. This indicates that legal influences have unfavourable impact on this company.
In summary, PESTEL analysis shows that influences of various factors of the external environment are balanced given that technological, social and environmental influences are favourable, while legal, environmental and political factors pose a threat to this company. Although Starbucks can’t control the external environment, its strengths tend to counteract the PESTEL analysis due to its flexibility to change (by closing a large number of stores in order to adopt) and ability to quickly exploit emerging opportunities.
SWOT Analysis
The following is a summary of Starbucks’ strengths, weaknesses, opportunities and threats.
Strengths
One of the strengths of Starbucks relates to its brand image. According to Bohm (2009), Starbucks is one of the few firms in the cafe industry whose market awareness strategies have been successful. This company has been able to stir up consumer interest in its products while preserving its brand name at the same time. This company has been consistent in delivering positive consumer experience. This conveys a message to consumers that their visits to the company’s cafes and consumption of its products are an ‘experience’ rather than just another brand of coffee from another company. The recent change of the company’s logo indicates that Starbucks is confident that the public is aware of its brand and follows the likes of Nike and Macdonald who are widely identifiable by their logos alone. Secondly, Starbuck has a unique strategy that increases its ability to enter into new locations and open new stores that are close to each other. The company evaluates the performance of all the new stores and closes those that fail to meet set achievements (Bohm, 2009, p. 84). Therefore, the company only retains the stores that are profitable.
Additionally, Starbucks enjoys from its valuable and motivated workers. As Starbucks (2010b) explains, the cafe industry is highly dependent on the staff, their attitudes and their ability to provide customers with valuable services. Starbucks’ employees work as a team and collaborate at all levels to bring out the best results. The company constantly engages the workers in training through seminars and workshops to provide them with essential skills needed for the industry. Consequently, they provide customers with exceptional services. According to Starbucks (2010b), this explains the fact that this company has a low level of employee turnover rate. Generally, these strengths provide a favourable impact to Starbucks.
Weaknesses
One of the weaknesses of Starbuck is its overreliance on the home market. Though the American market has been responding positively in the recent years, Starbucks’ overreliance in it leaves it vulnerable to changes that might occur in the future such as changes in disposable incomes and recession (Politico, 2011). Secondly, the aggressive expansion strategy of Starbuck has an adverse effect to its reputation. This company has recently been engaging in takeovers and acquisitions of coffee houses in various parts of the world as part of its expansion plan. But it closes stores that are deemed not to be profitable, a move that is not supported by local residents. According to Politico (2011), this has led to boycotts and creation of sites such as ihatestarbucks.com. The residents argue that the move by this company to close stores lead to erosion of local culture and environment.
Opportunities
According to Bohm (2009, p. 86), business organizations seeking to expand into the international market look for countries with attractive opportunities. As noted earlier, Starbucks has successfully been able to increase its presence in the international market over the past years through penetration in new markets in the world. Recently, this company has been planning to expand to attractive markets such as India that will help to increase opportunities for revenue growth. Such opportunities are supported by anti-protectionist policies that are being adopted by numerous nations the world recently. This will assist this Starbacks to secure the best inputs.
Another opportunity is the increasing market for coffee in America as a result of changes in consumer tastes and preferences. According to Bohm (2009, p. 86), the market for expensive organic coffee in America has been increasing rapidly. This has provideed an opportunity for Starbucks to expand its operations in this market and to acquire a bigger market share.
Threats
Even though Starbuck does not face stiff competition from specialty coffee sector, it has been facing high level of competition from restaurants and other big shops that sell coffee. For instance, this company has been facing stiff competition from MacDonalds which sells quality coffee at a lower price (National Coffee Drinking Trends, 2011, p. 53).
The Swot analysis shows that Starbucks has more strengths and weaknesses than opportunities and threats. The analysis however indicates that this company is balanced given that its strengths and opportunities are favourable while its threats and weakness are unfavourable. The company has an opportunity to change its strengths into opportunities.
Stakeholder Analysis
Starbucks’ key stakeholders include customers, employees, suppliers and shareholders. According to Lawrence and Weber (2011, p. 74), Starbucks has always been committed to provide its customers with quality specialty coffee. They practice fair trade and provide impressive services to customers that give them as a sense of belonging. Employees of this company fully engage with customers to learn and respond to their requests and interests. The company is committed to providing customers with healthy food with low level of calories such as reduced fats breads. They also entice customers by offering them gift cards and other gift items such as mugs and cups with the company’s logo. In response, consumers in many pars of the world have developed loyalty to the product of this company.
Starbucks’ employees are treated well, as partners of the organization. This company has established the Recognition Awards Employee Benefits Package that provides of various gifts for workers in recognition for good performance. They are offered attractive salary and benefits. The company also provides free training to its employees to equip them with valuable skills needed in the cafe industry (Lawrence & Weber, 2011, p. 75). The coffee master program and the servant leadership workshops are examples of career development programs sponsored by the company to support employee training.
Additionally, Starbuck has always been committed to ensure that they attain a level of success that rewards the shareholders. They allow the shareholders and new investors to purchase and sell shares of Starbucks common stock Dividends (Lawrence & Weber, 2011, p. 75). They pay shareholders’ dividends on its common stock at specific set rates on quarterly basis. Starbucks also ensures that there is fare trade between them and suppliers. They encourage coffee farmers to adopt measures that help to protect the environment. They also train them to develop business skills by compelling them to be accountable for their business activities. However, suppliers are required to put in place safety measures for workers that will lead to fair and human working conditions. They are also required to protect the rights of workers through addressing child labour and discrimination and complying with minimum wage requirements.
Conclusion
In conclusion, The PESTEL analysis for Starbuck has shown that the influences of external factors is balanced with social, technological and environmental factors being favorable while legal, environmental and political pose threats to this company. The SWOT analysis shows that the company has more strengths and weaknesses compared to opportunities and threats. Having assessed both internal and external environments of Starbucks and their impacts on the performance of this company, it can be concluded that this company has an opportunity to continue expanding into untapped markets.
References
BBC.co.uk (2010) ‘Starbucks’ profits jump as sales climb’
Viewed 21st April,2013, http://www.bbc.co.uk/news/business-11699561
Bohm, A. (2009), The SWOT Analysis, GRIN Verlag, Copenhagen
Lawrence, A. and Weber, J. (2011). Business and Society Stakeholders, Ethics, Public Policy.
13th ed. McGraw-Hill Companies, Inc. New York,
National Coffee Drinking Trends. (2011) ‘National Association of Coffee. Starbucks Coffee
Company.’ Viewed 21st April 2013, www.starbucks.com
Oxford University Press (2010). PESTEL analysis of the macro-environment, Oxford University
Press
Politico (2011) ‘Starbucks CEO rethinks,’ Viewed 21st April 2013,
http://www.politico.com/news/stories/0311/51727.html#ixzz1aOXYdpe9>
Starbucks (2009) ‘Annual report,’ Viewed 21st April 2013,
<http://media.corporateir.net/media_files/irol/99/99518/SBUX_AR.pdf>
Starbucks (2010a) ‘Company Profile,’ Viewed 21st April 2013
http://assets.starbucks.com/assets/company-profile-feb10.pdfStarbucks (2010b) ‘Recognition’ Viewed 21st April 2013
http://assets.starbucks.com/assets/starbucks-recognition-jan2010.pdf
Starbucks (2012) ‘Facts about Starbucks in Middle East,’ Viewed 21st April 2013 <
http://news.starbucks.com/article_display.cfm?article_id=200>
Technorati (2011) ‘Starbucks pay-by-phone,’ Viewed 21st April 2013,
<http://technorati.com/technology/article/new-starbucks-pay-by-phone-will/>
Starbucks Research Paper
STARBUCKS
COMPANY ANALYSIS
NAME:
COURSE:
INSTRUCTOR:
DATE:
Table of Contents
TOC o “1-3” h z u 1.0 Introduction/Background PAGEREF _Toc372636946 h 22.0 Starbucks Environment PAGEREF _Toc372636947 h 32.1 Furniture/Decoration inside Starbucks PAGEREF _Toc372636948 h 32.2 Music of Starbucks PAGEREF _Toc372636949 h 33.0 Marketing PAGEREF _Toc372636950 h 43.1 Advertisement PAGEREF _Toc372636951 h 43.2 Starbucks’ Gift Cards/E-Cards PAGEREF _Toc372636952 h 53.3 Technology of Starbucks PAGEREF _Toc372636953 h 54.0 Social responsibility: PAGEREF _Toc372636954 h 64.1 Global Responsibility PAGEREF _Toc372636955 h 64.2 Community PAGEREF _Toc372636956 h 74.3 Environment PAGEREF _Toc372636957 h 85.0 Conclusion PAGEREF _Toc372636958 h 8References PAGEREF _Toc372636959 h 10
1.0 Introduction/BackgroundStarbucks Coffee Company is the largest retailer and roaster of specialty coffee in the world. It was established in 1971 by three partners in the US and has since then spread its operations in over 50 countries globally (Seaford & Brooks, 2012). It expanded tremendously and tripled its stores between 2002 and 2007 from 5,886 to 15,011 respectively. However, its rapid expansion was altered by the recent economic crisis that peaked in 2008. Despite this, the company continued to focus on its expansion goal into the international market. Strong and persistent focus on international sales led to significant growth and expansion of this company during the subsequent years. During the second quarter of 2010, for instance, Starbucks’ profits increased eightfold to $217.3 million. Currently, this company has more than 1700 stores in various locations in the world. It distributes its products in terms of stores and does not sell franchises (Gossage, 2011). Apart from specialty coffee, this company owns other two brands, namely, Tazo Tea and Seattle’s Best Coffee. The company has also invested in the music industry and has been offering various music products and services to customers. This paper presents an analysis of Starbucks through the following topics:
Starbucks environment
Furniture/Decoration inside the company,
Music of Starbucks (background music and how they market the music)
Marketing strategies
Advertisement strategies
Use of Gift Cards/E-Cards
The company’s Technology)
Social responsibility
Global Responsibility,
Community
Environment
2.0 Starbucks Environment2.1 Furniture/Decoration inside StarbucksStarbucks’ stores have small, circular chairs and tables that are designed to occupy minimum space. This makes it appear as if there are no empty seats and customers dining alone do not feel or appear lonely. As Simmons (2012) explains, round tables are more informal and comfortable for customers. According to Simmons (2012), Starbucks decorates store interiors to reflect appearance of surrounding neighborhoods. Depending on the character of the surrounding neighborhood, Starbucks selects themes for decoration from: heritage (factory-inspired lighting, metal stools, tile floors or stained concrete and worn wood); artisan (hand-polished woodwork, factory casement glass, masonry walls and exposed steel beams); and regional modern (culturally relevant fabrics and bright, light-filled spaces) (Simmons, 2012).
2.2 Music of Starbucks
Starbucks uses music to create an environment that entertains customers. As Simmons, (2012) explains, the company believes that listening to great background music while sipping coffee heightens customer’s enjoyments. The company has invested heavily in entertainment and has even established a music division called Starbucks Entertainment. Starbucks has also been selling compact discs since 1995 (Hajdu, 2006). The company expanded its investments in the music industry in 1999 after acquiring a music company called Hear Music. Today, Hear Music is the sound of the company. Hear Music has bee partnering with famous and emerging artists to provide variety of music to Starbuck’s customers. Hear Music’s compilations and hand-selected CDs are featured in the company’s cafes around the world, at the four Starbucks Hear Music Coffeehouses and online. In 2006, Starbucks teamed up with Apple Inc. and established Starbuck’s section of Apple’s iTunes, offering video downloads and music. The company has also established wireless communication between some of its stores and Apple through AT & T Wi-Fi technology. This implies that customers with computers can download music while listening in the Starbucks stores (Simmons, 2012). Generally, music is one of the key entertainments that coffee lovers enjoy at Starbucks.
3.0 Marketing3.1 Advertisement
Starbucks uses various strategies to advertise its products and services. One of the main marketing strategies used by the company is in-house advertising within the company’s stores. The company has established a unique network that provides unique entertainment and news through its free in-store Wi-Fi service. As well, Starbuck advertises its products and services through the media, mainly through newspapers and televisions. The company has also been advertising its products and services through the internet (Bussing-Burks, 2009). For instance, Starbucks has established a website where they give descriptions of their products and services. The web page is designed in a way that allows visitors to share their experience of Starbucks products and services and to post their own product and service preferences. Starbucks has also been utilizing social media sites such as FaceBook, FunSpace and Twitter to advertise its products and services. For instance, the company has opened a FaceBook account through which they interact with millions of customers who share their experiences of the company’s products and services. The company has also been sending informative messages to consumers through mobile phones and emails (Bussing-Burks, 2009). The main goal of Starbucks in utilizing the above strategies is to gather enough information regarding consumer preferences and to use that information in improving their products and services. Apart from enhancing customer experience, Starbucks focuses on promoting its brand across the globe, to establish binding relationships with customers and to enhance customer loyalty (Bussing-Burks, 2009).
3.2 Starbucks’ Gift Cards/E-CardsStarbuck has established a program which allows customers to load money in terms of dollars into Starbuck cards to be used for future purchases (Gordon, 2011). The amount of money loaded into the card is a prepayment for products and services offered Starbucks stores and in other participating stores, such as Tezo, Teavana and Evolution fresh stores. As part of the program, the company has established Starbucks Card eGift which allows customers to buy and send virtual Starbucks Card through email and social sites. Customers can make purchases using Paypal, debit card or credit card account. The cards make it easier and more convenient for customers to purchase Starbucks’ products and services (Gordon, 2011). Starbucks uses this program mainly to enhance customer experience and loyalty.
3.3 Technology of StarbucksTechnological advancement has been changing at an average pace in the food and beverage industry. However, for business organizations to achieve success, they need to follow technological trends consistently and exploit any opportunity that may result from any change or advancement in technology. According to Technorati (2011), Starbucks adopted the recently introduced phone payments system which helps to reduce long queues during peak times.
The use of Starbucks Card is another example of how Starbucks has been taking advantage of advancement in technology. Technological advancement has led to a new platform in form of social media where business enterprises relate with consumers and share ideas and experiences with them. Business organizations are now able to acquire useful data such as consumer interests, tastes and preferences and responses to organizational products and services (Gossage, 2011). Starbucks has exploited this opportunity by creating accounts in the social media sites such as FunsPace and FaceBook where it runs forums to discuss important issues with consumers and communities (Technorati, 2011).
4.0 Social responsibility:4.1 Global Responsibility
Starbucks is one of companies operating in the global market that have been responsible when dealing with all stakeholders. Starbucks’ key stakeholders include customers, employees, suppliers, shareholders and governments. According to Lawrence and Weber (2011), Starbucks has always been committed to provide its customers with quality specialty coffee. They practice fair trade and provide impressive services to customers that give them as a sense of belonging. Employees of this company fully engage with customers to learn and respond to their requests and interests. The company is committed to providing customers with healthy food with low level of calories such as reduced fats breads. They also entice customers by offering them gift cards and other gift items such as mugs and cups with the company’s logo. In response, consumers in many pars of the world have developed loyalty to the product of this company.
Starbucks’ employees are treated well, as partners of the organization. The company has established the Recognition Awards Employee Benefits Package that provides of various gifts for workers in recognition for good performance. They are offered attractive salary and benefits. The company also provides free training to its employees to equip them with valuable skills needed in the cafe industry (Lawrence & Weber, 2011). The coffee master program and the servant leadership workshops are examples of career development programs sponsored by the company to support employee training.
Additionally, Starbuck has always been committed to ensure that they attain a level of success that rewards the shareholders. They allow the shareholders and new investors to purchase and sell shares of Starbucks common stock Dividends (Lawrence & Weber, 2011). They pay shareholders’ dividends on its common stock at specific set rates on quarterly basis. Starbucks also ensures that there is fare trade between them and suppliers. They encourage coffee farmers to adopt measures that help to protect the environment. They also train them to develop business skills by compelling them to be accountable for their business activities. However, suppliers are required to put in place safety measures for workers that will lead to fair and human working conditions. They are also required to protect the rights of workers through addressing child labour and discrimination and complying with minimum wage requirements.
However, Starbucks has in the past been accused of evading paying corporate taxes in various countries in Europe, an issue that could have an adverse effect on its reputation in the European market (Kole, 2011). Recently, this company has bowed to pressure from the UK government authorities to pay taxes from 2013 henceforth. It is vital for Starbucks should be compliant to such government requirements in all countries where it operates to avoid damaging its image.
4.2 CommunityStarbucks has enhanced its reputation to the community as a team player. In all places where it does its business, Starbucks has always been striving to make positive contributions to the communities. The company has been contributing by offering employment opportunities to neighboring communities (Ruzich, 2008). Starbuck’s offers a sizeable work force to volunteer in various community services. In 2007, for instance, the company’s workforce, partners and customers in Canada and United States logged 320,000 volunteer hours. The company has plans to increase its contribution to community services. By 2015, Starbucks expects to have capacity contribute more than 1 millions hours of community service annually across the globe. Starbucks has also been providing support to neighboring communities and has been addressing areas such as poverty elimination, literacy and environment (Ruzich, 2008).
4.3 EnvironmentEnvironmental sustainability is one of the key objectives of Starbucks. Since 1992, the company has been establishing innovative ways of minimizing waste from their operations. The company has also been recycling waste products, as a way of reducing environmental pollution. They company has also established “green teams” that develop and implement environmental sustainability initiatives (Lawrence & Weber, 2011). However, concerns have been raised since Starbucks customers often leave shops with their cups and dispose them off in the streets, hence creating a lot of waste. As National Coffee Drinking Trends (2011) explains, cups should be made up of material that is as degradable as possible
5.0 ConclusionIn conclusion, Starbucks is one of the successful retailers of coffee at global scale. The success of the company stems from its innovative business and marketing strategies that enhance customer experience. Furniture in the company’s store is designed in a way that makes customers feel more comfortable and less lonely. Decorations are mainly designed based on the characters of the neighboring communities. The company uses a combination of strategies to advertise its products to customers. The use of Starbucks Card is one of the innovative marketing strategies used by the company to enhance customer experience and loyalty. The company has been taking advantage of improvement in technology by adopting the latest technology available in the food and beverage industry to enhance customer experience. As noted in the analysis, Starbucks is one of the companies operating at global scale that have been showing responsibility to stakeholders. The company has also been showing responsibility when dealing with neighboring communities and through active involvement in environmental sustainability. However, the company needs to avoid engaging in issues that could damage its reputation, such as tax evasion. Also, the company needs to consider making cups using material that is as degradable as possible.
ReferencesBussing-Burks, M. (2009). Corporations that changed the world. Carlifornia: ABC
CLIO
Gordon, R. (2011, March 16). Bracing pae for Starbuck’s CMO. Spotlight, 22-23.
Gossage, B. (2011). Howard Schultz, on Getting a Second Shot. Inc, 33,(3) 52-54
Hajdu, D. (2006, August, 7). The Music of Starbucks. The New Republic, 21-23
Simmons, J. (2012). The Starbucks Story: How the brand changed the world. New York:
Marshall Cavendish International Asia Pte Ltd
Kole, W. J. (2011), Go east as European Union. Retrieved from
Expands,http://community.seattletimes.nwsource.com/archive/?date=20040409&slug=neweurope11
Lawrence, A. & Weber, J., (2011). Business and Society Stakeholders, Ethics, Public Policy.
13th ed. NY: McGraw-Hill
National Coffee Drinking Trends. 2013., ‘National Association of Coffee. Starbucks Coffee
Company, Retrieved from www.starbucks.com
Ruzich, C. M. (2008). For the Love of Joe: The Language of Starbucks. The Journal of Popular
Culture, 41(3), 428-442
Seaford, B. C. & Brooks, B. W. (2012). Starbucks: Maintaining a clear position. Journal of the
International Academy for Case Studies,18(3), 39-57
Technorati 2011. Starbucks Pay-by-Phone, Retrieved from
<http://technorati.com/technology/article/new-starbucks-pay-by-phone-will