The Rise and Success of Starbucks Millions of Americans these days depend on the glorious caffeine rich nectar provided to them daily by the local Starbucks chain store. With its humble roots firmly planted in Seattle, Washington, this little coffee shop has turned from a novel idea, into a veritable necessity for Americans on the go. The amazing success of Starbucks can be attributed, in part, to operational planning. Starbucks has become a well-known company for selling the highest quality coffee beans and best tasting coffee products. It was one of the first companies to realize that the real money to be made was in beverage retailing, not just coffee beans.
By utilizing their strengths, and capitalizing on trends, as well as periodically evaluating weaknesses and threats, this little coffee joint has become America’s most enjoyable place to get coffee. Like many other organizations, executives at Starbucks realized the importance of planning. Planning involves making sound business decisions and goals for the company, specific divisions, a store, and for individuals (Bateman-Snell, 2004, p. 108). Starbucks’ executives have defined their business with the mission statement to “establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow” (Starbucks mission statement). Executives have found various ways of increasing their market by examining alternative paths to conduct their business.
It’s not unusual to see people coming to Starbucks to chat, meet up or even work” (Starbucks). In addition to coffee Starbucks locations keep a customer base by offering free Wi-Fi, music, and partnerships with Barnes and Nobles throughout the country. Starbucks is aware that competition is gaining ground since many fast-food chains have upgraded their coffee menus trying to mimic their style. Also coffee-houses/shops are opening who have adopted the idea of community and become just as popular and profitable. The company realized it reached a plateau and needed to develop new marketing and strategies to be competitive, retain, and gain customers.
Organizational Culture In the text, Organizational Behavior, Stephen P. Robbins defines organizational culture as, "a system of shared meaning held by members that distinguishes the organization from other organizations" (2005). Starbucks has a very strong organizational culture and strives to maintain it. Everything centers on the organizational culture within Starbucks. While being a customer service-based company and understanding that the customer satisfaction and loyalty are what will make the company profitable, Starbucks takes a different approach to customer service than other companies. By hiring employees that fit in the organizational culture (ICFAI, 2005) and treating their employees well (Lefevere, n.d.), Starbucks brings in and retains customers through their happy employees.
India is one of the main sources of economic growth. Starbucks plans Starbucks plans to open its first store in India this year and also to begin to buy coffee from India (Bose, 2011). In India also one of the emerging markets around the world that becomes a country oriented spending. Due to the rapid economic development, the upper and middle classes are more able to spend money on coffee and other items that may not have been regarded as a necessity in the past. Coffee industry will grow at a fast rate and the company can accept the boundaries around the world will win the battle for market leadership among competitors.
Not only should Starbucks concentrate on expanding its footprint, but also continue to alter its stores. Rather than opening more dine-in restaurants, Starbucks should concentrate heavily on drive-thrus in urban and suburban areas. In addition, Starbucks is opening up express stores which are essentially walk-thrus in New York, Boston, and Seattle. This strategy is aimed at increasing the company’s store penetration into the coffee market. With the coffee markets, continuous growth, Starbucks must position itself as the most preferred coffee company.
In order to build and maintain their competitive advantage, Starbucks has used multiple support strategies. They have well designed stores that are visually pleasing and welcome everyone through firm infrastructure. Human resource management provides good benefits and helps with the college achievement plan, and internships. The company has expanded its technological developments by adding WiFi, phone charging stations, high-tech coffee machines, and developing a mobile app. Through procurement, Starbucks has been able to reorganize its supply chain, reduce costs, improve execution, and lay the foundation for future supply chain capability.
On their website, individuals are encouraged to express their experiences with Starbucks history, and the company strives to “personally” join in the discussions. • Smart Partnerships – Starbucks Coffee Company has been known to create strategic partnerships that demonstrate the fact that another way to grow your business is to partner smart. Over the years, the Starbucks Corporation has greatly increased sales just by using this strategy. • Innovation – Through the years, the Starbucks Coffee Company has been known to think up creative and innovative ideas to add to their products or services. They’ve added different flavors to their coffee, more food on their menu, and even became one of the firsts to offer internet capability in their stores.
All things considered, Starbucks has created different products that should capture different segments of the market and increase sales. Further adding to the product mix is Starbucks new licensing agreements for its products with a number of other companies. Generally, the main purpose of creating the licensing agreements is to improve distribution and production methods of Starbucks products. The agreement with Pepsi-Cola Company to produce and distribute bottled Starbucks products in grocery and warehouse club stores is an excellent example of this type of licensing agreement. This new product mix should ... ... middle of paper ... ...stic with today’s market, catering towards diversity by stating that the company, “embrace diversity as an essential component in the way we do business.” All things considered, the mission statement has most, if not all, of the characteristics of a good mission statement.
Apart from that, market penetration and market development strategies will enhance the strength through increase the sales and profitability of Starbucks. The way where Starbucks distribute the packaging of Starbucks instant coffee will definitely increase the sales besides satisfying customer demand. However, the guidelines to introduce an accurate mixing level of the coffee in a tea bag style to assist customer provide high quality coffee will definitely increase the sales.