Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Case 2: Starbucks Mission: Social Responsibility and Brand
Strength 81
CASE 62
Starbucks Mission:Venti Social Responsibility
and Brand StrengthStrategy
CASE NOTES FOR INSTRUCTORS:
Students will likely have strong opinions regarding Starbucks. Many may be committed patrons who
view Starbucks as a socially responsible company committed to green practices and free-trade coffee.
Others might dislike Starbucks because it is a large chain that pushes out smaller local competitors.
Another possible reason students may be opposed to Starbucks are its prices, which are higher than
many of its competitors. Starbucks seems to be able to justify its higher prices because the company
sells more than just coffee—it sells an experience. Starbucks patrons can order specialty drinks and
hang out in what founder Howard Schultz envisioned to be the “third place” to be after home and work.
Love it or hate it, Starbucks has been very successful at branding.
Starbucks has had a profound influence on the U.S. coffee market. Before Starbucks came onto the
scene, people perceived coffee as an uninteresting product largely consumed by older people in the
United States. It did not have the “cool” factor or the cache that it does today. Starbucks entry in the
market largely changed how Americans consumed coffee—and what they thought about coffee shops. It
all started in the cold, gray climate of Seattle—the perfect setting for launching an appealing, warm,
international beverage. Starbucks emphasized quality while service and location became a critical issue.
In spite of its popularity, Starbucks faltered during the most recent recession, when many customers cut
back on discretionary purchases. This prompted the return of founder Howard Schultz as CEO. Schultz
implemented a restructuring process at Starbucks and closed hundreds of stores. He sought a return to
the value that initially made Starbucks a great company: quality. Today Starbucks is once again thriving
and expanding internationally.
No matter what one thinks of Starbucks, it is more involved in social causes and the care of its workers
than many comparable chains. Starbucks is committed to employee well-being, as one can see in its
employee health care system. Howard Schultz made employee health care a priority after watching his
father struggle with injuries because he had no access to employee health care or worker’s
compensation.
The company also has a history of giving to charities that affect its primary stakeholders. As part of its
commitment to ethics and sustainability, the company launched its Shared Planet website, which
communicates to interested stakeholders all of the company’s ethics and sustainability initiativesinvests
in programs for farmers across the world, including providing small loans to farming families. The
company is a large purchaser of Fair Trade Certified coffee and has partnered with Conservation
International since 1998 to promote sustainable agricultural practices.
In spite of its professed commitment to caring for workers and for social causes, such a large company
always will be subject to criticism. From complaints that Starbucks pushes smaller competitors out of
markets, to criticisms that some of its coffee drinks are excessively fatty and caloricit failed to pay taxes
in the United Kingdom for 14 out of 15 years, Starbucks is facing many challenges. For instance,
disposable cups pose a problem as the company strives to become more eco-friendly, and personal
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Case 2: Starbucks Mission: Social Responsibility and Brand
Strength 82
tumblers have not become as popular among patrons as Starbucks hoped. Starbucks is also no stranger
to political controversy, such as its announcement that it would hire 10,000 refugees over a five-year
period after President Donald Trump instituted a travel ban on seven majority-Muslim nations.. In light
of some of its weaknesses, instructors may ask students whether they feel that Starbucks deserves its
image as a socially responsible brand.
QUESTIONS AND DISCUSSION
1. Why do you think Starbucks has been so concerned with social responsibility in its overall
corporate strategy?
It should be obvious from examining the history of Starbucks that Schultz, the founder, was
concerned with social responsibility from the very beginning. Because he made it an original core
value of the company, it has remained a deeply ingrained part of the Starbucks culture. Starbucks
also recognizes the benefits of customers perceiving Starbucks as a socially responsible company.
2. Is Starbucks unique in being able to provide a high level of benefits to its employees?
Students should understand that, while Starbucks does provide very good benefits to most of its
workers, this is not exactly unique. While lauding Starbucks is fine, it is true that many comparable
sized chains do not treat their workers as well as Starbucks. For instance, many chains do not
3. Do you think that Starbucks has grown rapidly because of its ethical and socially responsible
activities or because it provides products and an environment that customers want?
Students’ answers to this question could provoke serious debate in class. If Starbucks had a poor
record in its activities, it would suffer from diminished reputation, which could lead to lower profits
and reduced customer loyalty. However, many customers likely go to Starbucks, not because of its
social mission, but because they like the coffee or the coffee shop atmosphere. Many customers
likely began frequenting Starbucks because the locations are convenient and continue to go as long
ADDITIONAL RESOURCES
For an overview of Starbucks’ Global Responsibility strategy andglobal responsibility and
commitments, instructors may want to direct students to Starbucks’ Global Responsibility
Report, available online to download at:
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Case 2: Starbucks Mission: Social Responsibility and Brand
Strength 83
https://news.starbucks.com/news/starbucks-2014-global-responsibility-report.global
responsibility website at https://www.starbucks.com/responsibility.
An extra benefit to employees that Starbucks has started offering is the chance to go back to
earn a bachelor’s degree at Arizona State University. The following link gives more information
about the Starbucks College Achievement Plan: http://www.starbucks.com/careers/college-plan.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license
distributed with a certain product or service or otherwise on a password-protected website for classroom use.
