How Starbucks Is Changing the World Essay Example

expanded its offerings beyond just coffee beards and included equipment as well. Initially, customers did not have a space in the early stores where they could relax and enjoy their coffee beverages. However, this changed when Howard Schultz assumed his position at present-day Cataracts. Currently located at 1912 Pike Place since relocating from its original location, the company continues operations till today while providing customers with sit-back-and-enjoy spaces for their coffee experience. Schultz was captivated by the ambiance and hospitality of Italian coffee houses and aimed to replicate that experience in America.Cataract's mission statement extends beyond their stores and employees, encompassing the environment and suppliers they collaborate with.
Cataracts' website states that their goal is to become the top provider of high-quality coffee worldwide, while maintaining strong principles during expansion. They have six guiding principles that guide decision-making: fostering a respectful work environment, embracing diversity in business, maintaining excellence in sourcing and delivering coffee, ensuring customer satisfaction, making positive contributions to communities and the environment, and recognizing profitability's importance for future success.

Cataracts follows an environmental mission statement and guidelines on the Cataracts Wesley page. The company is committed to being an environmental leader in all aspects of its business. This includes activities such as understanding and sharing information about environmental issues, developing innovative solutions, promoting eco-friendly products, acknowledging fiscal responsibility for our environmental future, instilling environmental responsibility as a corporate value, measuring and monitoring progress on each project, and encouraging partners to join in this mission.

Our corporate governance consists of eleven directors. One of these directors is Mr. Howard Schultz - the founder and chairman of Cataracts. Mr. Schultz discovered a popular coffee bean store called

Cataracts while visiting Seattle in 1981 and joined them in 1982.Impressed by their dedication to selecting and roasting high-quality coffee beans and educating the public about coffee connoisseurship, he expressed interest in job opportunities with them upon returning to New York. Gradually gaining their attention despite initially being more enthusiastic about their company than they were about him, he finally convinced them to hire him as director of marketing and operations in 1982 after a year of persuasion. His visit to Italy made him realize the importance of coffee bars in Italian society, where such establishments were abundant on almost every street corner, serving exceptional espresso and acting as significant meeting spots for Italians. Inspired by this concept, Mr. Schultz desired to bring it back to Seattle but faced hesitation from the owners of Cataracts due to concerns regarding entering the restaurant business. Feeling frustrated, he decided to establish II Georgian - a successful coffee-bar business that enabled him to purchase Cataracts within a year for $3.8 million. As the company grew rapidly during the 1980s, Schultz remained focused on providing excellent coffee and building a company with soul. This commitment led to groundbreaking practices in the retail industry, including comprehensive health coverage for employees who worked at least 20 hours per week and benefits for unmarried spouses.Schultz introduced an employee stock-option plan and implemented initiatives to increase employee loyalty, resulting in a low turnover rate despite modest salaries. His motivation came from his father's struggles with low-paying jobs, leading him to create a company that valued and respected its employees.

According to Time Magazine's Builders & Titans, Schultz popularized coffee production in America without inventing

it himself. Starbucks greatly influenced the revitalization of declining U.S. coffee consumption and introduced affordable luxuries.

Starbucks recognized the importance of leading with compassion and shared values for success and profitability. Schultz envisioned Starbucks as a company rooted in values and passion. When customers enter any Starbucks store, they witness employees engaging with them and exuding happiness - this is known as the Third Place Experience.

Cataracts' primary goal goes beyond selling coffee; their focus is on creating a joyful experience. They have six guiding principles that evaluate decisions, five of which prioritize leading with both heart and mind to bring happiness.

Prioritizing people over profits is highly important for Schultz. Cataracts values their store partners as their most valuable asset, believing that maintaining trust and respect leads to the same treatment for customers.Cataracts prioritizes people, which leads to great experiences and profitability. The company's sixth guiding principle emphasizes profitability as the final consideration. Initially finding his interview experience unusual, Schultz later understood the significance of questioning values for success. By hiring employees who share the company's values, Cataracts fosters a culture of passion, trust, credibility, innovation, respect, and dignity. They invest in and support constant company reinvention by their partners to create a strong workplace environment. In fact, creating an excellent work environment and treating each other respectfully and dignifiedly is Cataracts' first guiding principle.

Over the years, Cataracts has received numerous awards for their commitment to these principles. From 2000 to 2006, they were named one of Fortune Magazine's "Ten Most Admired Companies in America." Additionally, from 2000 to 2007, Corporate Responsibility Officer Magazine recognized them as one of the "100 Best Corporate Citizens." As for workplace

satisfaction, Cataracts was listed as one of "The 100 Best Companies to Work For" from 1998 to 2000 and again from 2002 to 2007.

In terms of employee benefits, Cataracts provides a comprehensive package that requires employees to work a minimum of 20 hours per week. These benefits are also available for spouses regardless of their gender.The package provided by Cataracts includes healthcare benefits like medical, prescription drugs, dental and vision coverage. It also offers a retirement savings plan, stock options and discount stock purchase plan. Additionally, there is an income protection plan that includes life and disability coverage. Cataracts provides support for adoption assistance, management bonus program, referral programs, and resources for child and elder care.

In addition to these benefits, Cataracts has the "partner Markova" program which allows associates to learn more about their coffees and teas. This program also rewards partners with free coffee or tea products each week.

Cataracts places great importance on orientation and training programs for new partners in order to provide them with a solid foundation for career advancement opportunities. They offer various education programs such as Coffee Education and Learning to Lead which help baristas develop leadership skills.

Store operational training, effective Business and Communication training, as well as management practice training are all provided at the Support Center (SC). The SC offers classes on basic computer skills, conflict resolution, and management training.

Furthermore,Cataracts has summer internships available for undergraduate Juniors and seniors, as well as MBA students. The staff at Cataracts consists of two to six trained "baristas" who specialize in preparing espresso-based coffee drinks.The term "barista" now encompasses coffee sommeliers in certain circles. These individuals possess extensive knowledge about various

aspects of coffee, including preparation methods, blends, espresso quality, roast degree, equipment maintenance, and latte art. Employees who complete the Coffee Master course are identified by wearing black aprons labeled "Coffee Master" and receive education on different facets of the coffee industry such as tasting techniques, specifics of growing regions, roasting methods, and purchasing practices.

To maintain integrity within their organization, Cataracts has established a 24/7 helpline called Standards of Business Conduct. This helpline allows partners to ask questions or report concerns anonymously. All partners are expected to uphold Cataract's reputation for integrity by adhering to their core values and guiding principles. The company strongly believes that its employees play a vital role in defining the essence of the organization.

Cataracts aims to provide a flexible and progressive work environment that prioritizes respect and dignity among colleagues. They have been offering competitive wages and benefits for over two decades. Approximately 85 percent of their employees have health coverage through Cataracts or another source. Many partners at Cataracts also have the opportunity to own stock options, making them true partners in the business.

Furthermore, the company promotes open communication and provides various channels for employees to express their thoughts, opinions, and concerns.Cataracts believes that unions are unnecessary due to their favorable work environment, compensation, and benefits. However, they still acknowledge and respect their partners' right to organize if they believe it is necessary. Apart from offering a variety of coffee options, Cataracts also provides related products for loyal customers. Ultimately, the company's objective is to bring happiness to its customers. Attracting customers with a distinct green sign that reads "Cataracts Coffee," the store offers a calming atmosphere where individuals

can take a break from their busy lives. This ambiance is achieved through elements such as dark hardwood walls and floors, brick accents, iron details, warm red and green colors, and floor-to-ceiling windows. Soft instrumental music from Cataracts' collection plays in the background while customers have the option to sit on comfortable couches or chairs or at intimate tables. The kitchen furniture adds to the welcoming country kitchen feel. Outside seating includes spacious patio furniture adorned with embroidered Cataracts logos on large umbrellas capable of accommodating 4 to 6 people each. These carefully planned features aim to entice customers to spend more time in the store while increasing their overall spending.In addition, Cataracts provides a subscription-based wireless internet service for patrons to access using their laptops while enjoying the welcoming atmosphere inside the store, encouraging them to come back in the future. The store also has a drive-thru window for customers who are short on time. These carefully planned features create a joyful environment that leads to increased generosity and impulsive spending among customers, according to marketing research.

Upon entering a Cataracts store, customers can expect an exciting adventure with much more than just coffee. The extensive selection includes over forty different blends sourced from various regions around the world. Special blends are created by scientists at Cataracts headquarters in Seattle. Coffee is available in whole beans, ground beans, and convenient pods suitable for any occasion. For travelers staying at the Holiday Inn, pre-measured portion packs are offered so they can make one or two pots of coffee without having to settle for plain hotel-provided coffee. Bag sizes vary and flavors range from mild to extra

bold for serious caffeine addicts.

Not only does Cataracts offer coffee, but they also have a delightful tea selection for those who prefer it or are not in the mood for coffee. They provide various options of tea, including herbal teas in regular, decaffeinated, flavored, iced or hot varieties.Cataracts is not only known for its wide range of products, including muffins, scones, bagels, fresh fruits, oven toasted breakfast items, ice cream, fine Cataracts 14 chocolate, coffee mugs, espresso and regular coffee makers; but also for their philanthropic efforts. They sell plain water through their Ethos bottled water product as part of a humanitarian program that addresses clean water shortages in certain countries. Each bottle sold contributes $0.05 towards this cause. Additionally, Cataracts serves as a change agent in the market by utilizing its power and finances.

Not only do they have an extensive presence in the US with over 10k stores established and plans to open 10k more worldwide within four years starting from June 2006; but they also have a significant advantage over competitors like Dunking Donuts who have approximately half the number of locations. Other coffee retailers such as Caribou Coffee Company, Tim Horton's and Coffee Bean & Tea Leaf have significantly fewer stores compared to Cataracts.

To attract attention and customers effectively, Cataracts strategically places their stores on almost every street corner within close proximity to one another. This strategy has proven successful thus far.

Interestingly enough McDonald's is also entering the coffee market with their own line of gourmet coffees which are priced at half the cost compared to Cataract's prices in certain marketsAccording to the Indianapolis Business Journal, there are over 80 Cataracts locations

in greater Indianapolis. Additionally, Cataracts planned to open 17 new locations in Indiana for 2007, including rural areas like Angola, Auburn, Fayetteville, Gas City, and Shellfire. Carmela is an example where two Cataract locations are close together - one at Keystone Square Mall on the northwest corner of 16th street and Keystone Avenue and another nearby on the northeast corner of 16th street and Keystone Avenue. There are three other stores within a two-mile radius of these locations as well.

However, in January 2008, Cataracts announced that their original expansion plans would be scaled back due to declining or sub-standard revenues at their current global locations. The specifics of these cutbacks have not been disclosed yet. The Wall Street Journal suggests that instead of reducing grand openings, Cataracts should reconsider focusing on expansion in order to compete with rivals like McDonald's and Dunkin' Donuts. The Journal argues that scaling back could potentially hinder one of Cataracts' main advantages in the market - customer loyalty.

Customers might choose to combine their coffee consumption with Starboard's Indiana which has a direct connection to Cataracts research and competition. Indiana is viewed by Cataracts as an ideal market for testing new products due to its various store types such as malls, drive-ups, and retailers like Meijer and Target.In 2006, Cataracts dominated the retail coffee industry, generating over $6 billion in net revenues from its global stores. Their 2006 annual report revealed that their net earnings exceeded $564 million, showing a growth of more than $70 million compared to the previous year. Most of their revenue came from company-operated retail stores, while licensed stores contributed $860 million as a distant second. Despite

some short-term debt amounting to $700 million, the company maintains a healthy cash flow and avoids accumulating significant long-term debt.

However, Starboard faced challenges in 2007 as its sales declined by up to five percent. This decline was attributed to factors such as increasing costs of commodities like milk and gasoline, high distribution expenses, and expensive commercial rent for store locations. These escalating expenses combined with sluggish sales had a negative impact on the company's stock price. In January 2008, Starboard's stock dropped to $19.6 per share compared to $35.25 the previous year.

Customers perceive Starboard products as expensive when compared to cheaper alternatives like Dunkin' Donuts and McDonald's despite offering similar quality. However, there are no plans to lower prices at Starboard.Founder Howard Schultz taking charge again brings hope for overcoming financial challenges. Despite recent sales decline, Starboard has achieved impressive results considering its short time in the industry. What sets the company apart is its philanthropic efforts that align with six corporate values. In 2006, Starboard donated over $36 million (equivalent to 4% of pre-tax earnings) towards charitable causes worldwide. Additionally, employees contribute through volunteering with over 383,000 hours recorded through the Make Your Mark program. The commitment to making a positive impact extends to other aspects of operations as well. In 2006, the company significantly increased purchase of environmentally friendly post-consumer fiber cups for coffee, with 66 percent meeting this criteria. Furthermore, Starboard follows C.A.F.E. Practices to ensure sustainable coffee cultivation and improve farmers' lives globally; in 2006, 53 percent of their coffee purchases adhered to these practices. However, involvement with Fair Trade Certified Coffee could be improved as only 6 percent of UN-roasted

coffee purchases in 2006 were Fair Trade compliant, suggesting some farmers may be trapped in debt and poverty due to selling at lower prices than harvesting costsDespite criticism for their high prices, Starboard remains a leading company with its recognizable white cup, matching lid, and tan retroactive sleeve made mostly from recycled materials. This iconic logo represents the world's largest coffee giant. In the past, espresso-based beverages like latte and cappuccino were considered luxurious. However, multiple Starbucks locations can now be found within a three-mile radius of my home.

Cataracts, a local store that sells coffee beans and tea leaves, not only teaches customers how to order fancy drinks like "Event Skinny Cinnamon Dolce Latte," but also uses its resources to make a positive impact on society, human ideologies, and social responsibilities. Despite facing criticism for their high prices (up to five dollars for a hot beverage), it could be argued that this change is actually beneficial depending on the reasons behind such charges by the company.

Unlike many other capitalist businesses, Cataracts focuses on giving back to its associates, farmers, and all those involved in the company's success. They justify their high prices by investing money and resources into what they believe is social responsibility. Cataracts takes its mission statement seriously - aiming to contribute positively to communities and the environment.Cataracts, a company dedicated to social responsibility, showcases their commitment on their website (Source: http://www.Cataracts.Com/about/environment.Asp). They ensure fair prices are paid to independent farmers abroad who grow their products, surpassing industry averages. In 2006, coffee beans were purchased for $1.42 per pound, significantly higher than the average of $1.04 per pound (http://www.Trucks.Com/about/secretors/car.HTML). This fair pricing upholds

human rights and prevents child labor while maintaining excellence. Cataracts also provides high-quality health insurance to associates, including part-time employees. CEO Howard Schultz's personal experience drives this commitment as his father suffered an injury without insurance assistance, almost causing them to lose everything. Schultz ensures that health insurance benefits will always be available to employees during an interview on CBS' 60 Minutes (http://www.Cobwebs.Com).Moreover, Cataracts demonstrates a commitment to social responsibility and recognizes the significance of tackling global warming, as stated by scientists.