Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Starbucks organizational development
Problems faced by Starbucks
Starbucks expansion strategy
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Starbucks organizational development
Starbucks initially was a small structure, run by three partners in a small shop in Seattle. The company then was restricted to selling only whole bean and ground coffee. It was typically a top down structure were the three people in the top management were the decision makers. In 1984, when Schultz suggested the idea of selling coffee and expresso drinks, the directors of Starbucks rejected the idea, in spite of the fact that the move would have made more profit for the company. This displayed the rigidity of the management towards any changes in the business. After taking over the operation of Starbucks in 1987, Schultz decided to expand the company's business. The next few years brought some positive changes to Starbucks. Starting with 17 stores in 1987, the company quickly expanded by opening stores in Chicago and Portland. With this period of expansion, Schultz hired some experienced people to help him manage the growth plans. In 1989, Schultz hired Howard Behar, who was familiar with opening and running several retail stores. A year later, Schultz brought in Orin Smith as the Chief Finance and Operations Officer. Both Behar and Smith were highly experienced in the industry and helped Schultz build the company's infrastructure.[1] The new structure of Starbucks was flat and it encouraged competitive ideas from all levels of the company. This necessarily depicted a lateral coordination c... ... middle of paper ... ...ffman Neilson(2008), Strategy & Business http://www.relationalcapitalgroup.com/knowledge-center/TheBaristaPrinciple.pdf 2) Shultz, H. (2008) Starbucks makes organizational changes to enhance customer experience. Retrieved March 13, 2008, from, http://www.starbucks.com/aboutus/pressdesc.asp?id=831 3) George, J. and Jones, G. (2005). Understanding and Managing Organizational Behavior. (4th ed.)Upper Saddle River, NJ: Pearson Prentice Hall. 4) Gulati Hoffman Neilson, Strategy & Business, 2008 http://www.relationalcapitalgroup.com/knowledge-center/TheBaristaPrinciple.pdf 5) Barbero, Martin, Starbucks goal: Recapture its early buzz, Jan 2008. http://www.iht.com/articles/2008/01/30/business/sbux.php 6) Hoovers Database http://premium.hoovers.com/subscribe/co/overview.xhtml?ID=ffffrhkchrhhyjjrfk
Starbucks Corporation is one of the world's largest coffee roaster, marketer, and retailer of coffee. In 1971, three entrepreneurs, Jordan Bowker, Zev Siegel, and Jerry Baldwin opened first Starbucks store in Seattle, WA. In 1982, Howard Schultz joined Starbucks as a marketing director. He came up with the idea to make Starbucks a coffee house chain but Starbucks founders rejected the idea and he left the company in 1985. Later, Schultz started his own coffee bar named “Il Giornale”. In a couple of years, he was able to buy Starbucks Corp. from its original owners. He renamed his coffee bars "Il Giornale" as Starbucks. In 1987, Starbucks opened its first store outside the Seattle in Vancouver and Chicago. In 1996, Starbucks opened its first international store in Tokyo, Japan. [1,2]
In 2002, unexpected findings of a market research showed problems regarding customer satisfaction and brand meaning for Starbucks customers. The situation was unacceptable for a company whose overall objective is to build the most recognized and respected brand in the world. Starbucks was supposed to represent a new and different place where any man would relax and enjoy quality time, alone or with others. But the market research showed that in the mind of the consumers, Starbucks brand is viewed as corporative, trying to expand endlessly and looking to make lots of money. This huge gap between customers' perception and Starbucks' values and goals called for immediate action.
Founded in 1971 at Seattle’s Pike Place Market, Starbucks Coffee, Tea and Spices, as it was originally called, has been “brewing-up” its famous blends in over 43 countries, including the United States. Now called Starbucks Coffee Company, business isn’t just about the coffee and tea anymore. Starbucks has its own line of bottled water, handcrafted beverages, fresh food, entertainment, merchandise and a Starbucks Card. The company has received numerous awards for their outstanding business practices. Fortune Magazine has ranked them as one of “The Best 100 Companies to Work For” in 1998, 2000, 2002, and 2008 (Starbucks, 2008). The Starbucks Experience provides consumers and the general public a direct line a of business communication. From friendly baristas to press releases from CEO Howard Schultz, Starbucks keeps its “partners” informed.
When Shultz took over, this started the beginning of a new era. He spent all his time at the stores trying to make every thing perfect in every way. He started with the employees, making the environment so friendly for every type of coffee lover.
Starbucks began with Jerry Baldwin, Zev Siegel, and Gordon Bowker in Seattle, Washington in 1971. At that time they called it Starbucks Coffee, Tea, and Spice. Their respective love for coffee and tea from around the world inspired them to venture out of their respective disciplines. With the success of a similar establishment in the San Francisco Bay Area, Bowker, Baldwin and Siegel figured they could also build such success in Seattle. With their individual investment of $1,350 and $5000 in loans, Starbucks began. Much credit goes to Alfred Peet a Dutch Immigrant who opened Peet's Coffee and Tea in Berkeley, California in 1966. Having visited Peet's store numerous times, Bowker Siegel and Baldwin learned the art of dark roasting coffee the European way to bring out its full flavor. Starbucks started out as a coffee bean and tea retailer. By the early 1980s, Starbucks had four stores in the Seattle area and Zev Siegel left the partnership after suffering burnout. Jerry Baldwin took over day-to-day management and Gordon Bowker stayed as an owner with other outside interests. All that changed in 1981 when Howard Schultz entered the picture. Schultz visited Starbucks out of curiosity due to the fact that they were selling so many of his company's products. Schultz worked as a vice president and general manager for a Swedish company based in the United States that made stylish kitchen equipment and coffeemakers. Schultz was so impressed with Starbucks, that by the time he returned to New York, he had decided to become a Starbucks. In 1982, Schultz became the head of marketing and oversaw the retail stores. Schultz came with many innovating ideas for Starbucks that was rejected by Baldwin and Bowker, but he never gave up. Between 1987 2003 Starbucks went from seventeen stores to seven thousand two hundred and twenty-five stores one thousand six hundred of which are in foreign countries.
Gordon Bowker, Jerry Baldwin and Ziv Siegl founded Starbucks in 1971. Their goal was to sell the finest quality whole beans and ground coffees (Starbucks timeline and history, 2004). In 1982, Starbucks had grown to five stores and started serving coffee to restaurants and espresso bars. Harold Schultz was employed as the director of retail operations and marketing. Harold Schultz convinced the founders of Starbucks to open a downtown Seattle coffee bar, which opened in 1984. With the success of Seattle coffee bar, Schultz left Starbucks to start his own company named Il Giornale. In 1987, Il Giornale acquired Starbucks retail operations for 4 million dollars. In addition, Il Giornale changed its name to Starbucks Corporation and opened locations in Chicago and Vancouver, B.C. (Starbucks timeline and history, 2004).
1982: Howard Schultz joins Starbucks as director of retail operations and marketing. Starbucks begins providing coffee to fine restaurants and espresso bars.
One of the main problems that Starbucks is facing at the present time is the ability to maintain national competitive advantage (Monash South Africa, 2014). Due to their local demand conditions, Starbucks tries to satisfy all customers by trying “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks Corporation, 2014). Local demand conditons consist of a company trying satisfy needs of their closest customers and expanding their competitive advantage by upgrading their strategic management policies (Monash South Africa, 2014).
The year 1987 was the year of Starbucks and the start of the coffee industry’s revolution. Howard Schultz, owner of Il Giornale coffee shop, was a firm believer in selling not just coffee beans, but coffee drinks as well. He bought Starbucks for around 3.5 million dollars and changed all of his Il Giornale shops to Starbucks. Schultz was on a mission to spread Starbucks everywhere. A new shop was opened every day all over the United States and other countries. The new brand squashed Mom and Pop competition as well as other coffee shop brands. This huge expansion started in the early 1990s and continued into the 2000s. He focused on keeping the original values of selling whole coffee beans rather than pre-ground.
Starbucks is a worldwide company, known for is delicious brews of coffee and seasonal varieties of tasty drinks for any occasion. Starbucks opened with two main goals, sharing great coffee with friends and to help make the world a little better. It originated in the historic Pike Place Market of Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker. The creation of Starbucks’ name came from the seafaring tradition of early coffee traders and the romance evoked from Moby Dick. At the time, this individual shop specialized in the towering quality of coffee over competitors and other brewing services enabling its growth to becoming the largest coffee chain in Washington with numerous locations. In the early 1980s, the current CEO Schultz saw an opportunity for growth in the niche market. After a trip to Italy he brought back the idea of a café style environment of leisure and social meetings to the United States we now see in Starbucks locations today. Schultz ultimately left Starbucks to open his own coffee shop, Il Giornale which turned out to be a tremendous success. Fast forward a year later, Schultz got wind that Starbucks was going to sell all their components of Starbucks including their stores and factories, he immediately acquired the funds to buy Starbucks and linked both operations. Within five years he was able to open more than 125 stores starting in New England, Boston, Chicago, and gradually entered California. He wanted Starbucks to be a franchise system based on the mission of telling the truth and emphasize the quality,
In March of 1971, Starbucks opened its first location in Seattle Washington’s Pike Place Market. The owners Jerry Baldwin, Zev Siegel, and Gordon Bowker had no intentions of serving coffee but a place to sell coffee beans and coffee machine equipment. After ten years of selling beans and machines, Howard Schultz was hired as Director of Retail Operations. He decided it was best to start selling and serving coffee. The owners had not been convinced on selling and serving coffee, so Howard decided to leave and start his own business called II Giornale (a chain of coffee bars) in 1986 (Coffee, n.d.).
An in-depth analysis of Starbucks’ process for strategic renewal serves an excellent reference for studying the essential elements of successful change. Relative to the learning objectives articulated in the portfolio rubrics (“Course Documents” n.d.), three important reasons emerge from preliminary study for analyzing the Starbucks process for change. First, although the change process that guided Starbucks’ recovery toward a more sustainable business model closely parallels Lewin’s three-stage model of planned change (Schein, 1996), Schultz’s passion for his company added one important dimension – a visionary context for change (Schultz, 2011). The embedding of Schultz’s new vision into the change process created ...
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.
Preliminary Starbucks – one of the fastest growing companies in the US and in the world - has built its position on the market by connecting with its customers, and creating a “third place” beside home and work, where people can relax and enjoy themselves. It was the motto of Starbucks’ owner Howard Schultz and, mostly thanks to his philosophy, the company has become the biggest coffee drink retailer in the world. However, within the new customer satisfaction report, there are shown some concerns, that the company has lost the connection with customers and it must be taken some steps to help Starbucks to go back on the right path regarding customer satisfaction. I will briefly summarize and examine issues facing Starbucks. Starting from there, I will pick the most important issue and study it from different positions.
The strategic vision that Howard Schultz had for Starbucks was "Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow". This s...