April 29, 2014
Business and Society
Report 1
-Company Analysis-
Mission, Vision, & Values:
Starbucks mission statement, vision, & values seem to go hand in hand with their
commitment to being socially responsible. The company has a firm belief and is included
in their mission statement that “Starbucks can – and should- have a positive impact on the
communities they serve. “One person, one cup and one neighborhood at a time”.
(Starbucks, 2014). Included in this commitment is a strong and dedicated vision to include
all aspects of the Starbucks business. A direct quote from the company website that
communicates this multifaceted vision says, “That together we will elevate our partners,
customers, suppliers and neighbors to create positive change. To be innovators, leaders and
contributors to an inclusive society and a healthy environment so that Starbucks and
everyone we touch can endure and thrive.”(Starbucks, 2014.) The company has a vision to
grow even larger in size and expand to more locations, while at the same time being able
to use this large scale “for the good.” The values of such a large company are incorporated
in every employee no matter what the job may be. They want to instill these values in their
employees so that it directly reflects their strong commitment to quality products, customer
service, comfortable environment, and appreciation of their neighborhoods. Starbucks
values all of their employees, and emphasizes the importance of all of their positions in the
company, referring to them as “partners.”
Corporate Culture:
The corporate culture of Starbucks is truly unique and hard to replicate. They are able to
successfully embrace diversity and encourage their employees to “be themselves.” It is
expected that all employees are to always treat one another with “respect and dignity, and
it is explicitly expected that everyone is to hold one another to this standard. They
encourage their partners to become their personal best, and try and inspire them to grow as
people. At Starbucks, they “strive to create a culture that values and respects diversity and
inclusion. Their goal is to build a diverse workforce, increase competencies, shape a
culture of inclusion and develop a diverse network of suppliers. Their welcoming work
environment encourages partners to engage with one another and make Starbucks a place
they look forward to.”(Starbucks, 2014). While attaining locations abroad, they insist on
hiring locals so that they are able to keep the values and cultures of each society, making it
easier for communication and acceptance as well. They are committed to being
environmentally conscience, and are proud to say that they ethically source all of their
coffee beans. There is potential to be promoted within the company, and can easily move
to different locations because they have a universal standard for all of their drinks. If you
work 20 or more hours per week, you qualify for various benefits packages that can be
customized to tailor specific wants and needs. Customers are to be treated with the upmost
respect, and baristas are obligated to fix any mistake that they may have made on an order.
They are in compliance with Equal Employment Opportunity laws, and consider EEO “the
law.”
Organizational Structure:
The executives of Starbucks oversee the corporate from its headquarters in Seattle,
Washington. District managers oversee groupings of stores within their region. And they
report directly to the corporation of Starbucks. Every store is overseen by a store manager,
who has a collection of supervisors that act as managers when the store manager is not on
duty. The rest of the employees are called baristas.
Short history
1971- Starbucks was founded by Gordon Bowker, Jerry Baldwin, and Zev Siegel. It sold
fine roasted whole coffee beans in Seattle.
1982- Starbucks started providing coffee to fine restaurant and espresso bars.
1984- First Starbucks coffeehouse in Seattle, where the first Starbucks Caff Latte was
served.
1988- Full health benefits provided to employees. Opened 33 stores
1994- Opens first drive-thru location. Opened 425 stores
1996- Starbucks began selling bottled Frappuccino. They opened the first coffeehouse
outside of the United States in Japan, then Singapore. Opened a total of 1,015
1998- Starbucks opened stores in Philippines, England, Malaysia, New Zealand, Taiwan
and Thailand. A total of 1,886 stores
By 2005, Starbucks has opened stores in over 30 countries. It also acquired Ethos Water
and Tazo Tea. It opened farmer Support Center in San Jose and Costa Rica. It introduced
ethical coffee-sourcing guidelines developed in partnership with Conservation
International.
2006- Starbucks promoted the industry’s first paper beverage cups containing
post-consumer recycled fiber. Total number of stores is 12,440
2009- Launched Starbucks VIA™ Ready Brew Coffee. Starbucks launched Starbucks
loyalty program and Starbucks Card mobile payment. Total stores: 16,635
2013- Starbucks strengthens ethical sourcing efforts with new coffee farming research and
development center in Costa Rica. Number of stores is 19,767
Size of the Company:
Starbucks is the largest coffee chain in the world with currently 20, 891 stores operating in
over 60 countries. “Starbucks employed approximately 182,000 people worldwide as of
September 29, 2013. In the US, Starbucks employed approximately 137,000 people, with
129,000 in company-operated stores and the remainder in support facilities, store
development, and roasting and warehousing operations. Approximately 45,000 employees
were employed outside of the US, with 43,000 in company-operated stores and the
remainder in regional support operations. The number of Starbucks employees represented
by unions is not significant.”(Starbucks, 2014). Starbucks currently owns all of their
roasting facilities which are about five in total. They have various distribution,
warehousing and manufacturing facilities that are located mainly in the US, and most of
them are leased. They also lease administration offices, storage locations, regional and
district offices, and training facilities worldwide. (Starbucks, 2014).
“Partner Positions”
Starbucks currently employs roughly 182,000 people in various positions worldwide.
Some of the positions include:
Retail; Barista, Supervisor, Asst. Managers, Store Managers, District Managers, Regional
Directors
Corporate Careers; HR, Legal, Marketing, Store Development & Design, Etc.
Manufacturing & Distribution; Roasting Plants, Distribution Centers, Etc.
Products & Services:
Starbucks offers a large variety of products and services. They offer coffee houses that
include comfortable seating and complimentary Wi-Fi, as well as a drive-thru for
convenience in some locations. They have the capacity to fulfil large orders and offer
delivery at some locations too. Some of the products that are offered include:
· “Coffee: More than 30 blends and single-origin premium coffees.
· Handcrafted Beverages: Fresh-brewed coffee, hot and iced espresso beverages,
Frappuccino® coffee and non-coffee blended beverages, Starbucks Refreshers, smoothies
and teas.
· Merchandise: Coffee- and tea-brewing equipment, Verismo System™ by Starbucks®,
mugs and accessories, packaged goods, music, books and gifts.
· Fresh Food: Baked pastries, sandwiches, salads, salad and grain bowls, oatmeal, yogurt
parfaits and fruit cups.
· Alcoholic Beverages at participating locations
Consumer Products Include:
· Coffee and Tea: Whole bean and ground coffee (Starbucks and Seattle’s Best Coffee
brands), Starbucks VIA® Ready Brew, Starbucks® K-Cup® portion packs, Starbucks®
and Teavanna® Verismo™ pods, Tazo® tea filterbags, and tea latte concentrates.
· Ready-to-Drink (RTD): Starbucks® bottled Frappuccino® coffee drinks, Starbucks
Discoveries® chilled cup coffees, Starbucks Discoveries® Iced Café Favorites™,
Starbucks Iced Coffee, Starbucks Doubleshot® espresso drinks, Starbucks Doubleshot®
Energy+Coffee drinks; Starbucks Refreshers™ beverages, Evolution Fresh bottled juices,
Tazo® bottled iced and juiced teas.” (Starbucks, 2014).
SWOT ANALYSIS
Strengths
1. No. 1 brand in coffeehouse segment and the largest coffeehouse chain in the world: The
company operates over 20,000 coffeehouses in 60 countries, which makes it the largest
coffeehouse chain in the world. Starbucks has a strong brand reputation associated with
quality coffee and excellent customer service.
2. “Starbucks experience”: One of the strongest advantages Starbucks has is the experience
it delivers to its customers with perfectly blended coffee, premium music, friendly staff
and warm atmosphere, which results in incomparable customer service by meeting the
customer’s five senses.
3. Employee management: Starbucks offers its employees an extensive range of benefits
and a pay rate higher than offered by competitors.
Weaknesses
1. Coffee beans price is the major influence over firm’s profits: Starbuck’s profitability and
its coffee price is influenced by the prices of coffee beans, which is a commodity and
cannot be controlled by Starbucks due to weather conditions and many other influences.
Starbucks cannot estimate the price of its coffee and company’s profitability.
2. Negative publicity: The corporate keeps receiving negative publicity regarding its poor
efforts of becoming greener company and tax evasions
3. Product pricing: Starbucks offers great coffee and customer experience but that results
in high price of its products. In comparison, McCafe premium coffee was price lower than
Starbucks coffee and was better evaluated.
Opportunities
1. Extending supplier network: Starbucks doesn’t grow its own coffee beans but has to buy
them from various suppliers, which are mainly clustered in South America, Arabia or
Africa. For Starbucks to ensure critical supplies for its operations in Asia, reduce the
dependence of good or bad harvests in Africa and South America and to save on shipping
costs, Starbucks has to extend its supplier network.
2. Expansion to emerging economies: There are great opportunities for coffeehouses in
China and India, in which Starbucks has comparably a small number of restaurants.
3. Increase product offerings. The business could expand the number of coffeehouses that
offer wine and beer, plus adding some new products and services to reach broader
customer group. Such as Fair Trade Products
Threats
1. Trademark infringements: Starbucks coffeehouse is often involved in cases over illegal
