This paper examines the current difficulties that Starbucks is encountering. Starbucks, a coffee store located in Seattle, is renowned for its mission of "inspiring and nurturing the human spirit" and its unique coffee experience. However, in recent years, the company has faced challenges due to the economic recession in 2007 and competition from Dunkin Donuts and McDonald's. Both competitors offer similar products at lower prices.
The text explains that Starbucks is facing challenges such as store closings and revenue loss. It suggests that by analyzing various factors like the organization, customers, leaders, and current downsizing, we can better understand how Starbucks ended up in this situation. The case study specifically looks into Starbucks' "people management" strategy and its cultural impact.
Founded in 1971 in Seattle, Starbucks has become a cultural phenomenon under the guidance of CEO Howard Schultz. The comp
...any now provides a unique collection of global music that is played and available for purchase. Their atmosphere, product showcases, and offerings embody diverse cultures and appeal to customers regardless of price.
The customer is drawn to Starbucks' diverse lifestyles, which encompass engaging discussions, studies, and enjoying the flavor of their products.
Starbucks is a retailer that specializes in selling coffees and teas, as well as food items and accessories. They distribute their products through multiple channels including retail stores and partnerships with establishments like Barnes and Noble bookstores, grocery stores, and warehouse clubs.
According to Starbucks (2012, p3), the company currently has a workforce of approximately 200,000 people. Its main markets include the United States, Canada, the UK, and Mexico. Additionally, Starbucks has experienced significant growth in international regions such a
Europe, the Middle East, Africa, and China/Asia Pacific (Starbucks, 2012, p 12). The opening of Starbucks' first store in India took place last year. In terms of competition, Starbucks faces challenges primarily from "quick-service restaurants and specialty coffee shops" (Starbucks, 2012 ,p.7).
Starbucks differentiates itself from its competitors through its premium coffee, convenient locations, and a strong emphasis on customer service and employee satisfaction (known as partners). The company targets consumers who value high-quality specialty coffees and teas at affordable prices, along with efficient service. The leadership structure at Starbucks resembles that of other global retailers, including a CEO, presidents, and senior vice presidents overseeing different divisions, as well as a CFO and a CIO. However, not all channels and markets within the company have leadership positions.
Starbucks stands out from other global companies by actively promoting the sharing of ideas for enhancing the company among its customers and partners. Numerous articles and case studies have examined Howard Schultz's leadership style, which has propelled Starbucks to its current market position. An interview with a Starbucks barista offered insight into how the company effectively oversees its extensive network of over 9,400 company-operated stores and manages a diverse workforce consisting of approximately 11,000 full-time employees, 60,000 part-time employees, and more than 7,400 individuals worldwide.
The company's intranet portal facilitates direct communication between partners and corporate leaders. Additionally, the same portal is used by corporate to communicate with stores. Through this platform, corporate informs stores about the company's direction, future goals, and provides barista training tools. This efficient utilization of the portal has resulted in significant cost savings for the company (Jadira, personal communication, June 21, 2013).
style="text-align: justify"> Schultz's goal was to ensure that Starbucks' growth would not compromise the company's culture and the shared aspiration of its leadership to maintain a small company mindset. Currently, he holds the positions of Chairman, President, and Chief Executive Officer at Starbucks. In fiscal year 2012, Starbucks implemented a three-region leadership structure (Starbucks, 2012, p 12) to strengthen the brand recognition, presence, well-being, and importance of Starbucks in each specific region. Within this framework, we will discuss the essential HR practices that Starbucks must uphold in order to preserve its renowned coffee experience and customer service.
Starbucks initially focused on its partners and customer service, considering its HR policies and practices as a valuable resource for growth. The recruitment process is essential in identifying individuals with potential to become partners, providing them training opportunities and the chance for advancement within the company. Starbucks also encourages employees to pursue their own path towards success.
"If you want to have the opportunity to make meaningful connections and have an impact every day, become a partner and work someplace truly great" (Starbucks: Your Special Blend- Rewarding our Partners, 2012). These practices are critical because satisfied employees who are now fully engaged as partners will extend that engagement to the frontline, resulting in excellent customer service. In conclusion, Starbucks is on a revitalized path to regaining its organizational effectiveness by refocusing on its customers and partners.
Returning to Starbucks' fundamental practices that have made it a leader is a positive step. The company embraces and acknowledges the diverse environment it operates in, while prioritizing its employees' basic human needs. Starbucks is heading in the
right direction, and as a customer, I am genuinely pleased. This case study has provided me with a deeper understanding of Starbucks and its values.
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