A cup of coffee, that’s all it is? This business, rather than being founded by a big business conglomerate as we might expect, but Starbucks was actually founded in 1971 in Seattle, Washington by Jerry Baldwin, Zev Siegl, and Gordon Bowker, three students at the University of San Francisco. It was a single store offering coffee beans and a coffeemaker. But now, Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington and it is estimated that since 1987 an average of 2 new Starbucks locations is opened every day. In addition, as the largest coffeehouse in the world, Starbucks is seen to be the main representation of the United States' second wave of coffee culture.
It was announced in December 2016 that Howard Schultz would step down as CEO of Starbucks, and later in April 2017 that he had personally recruited Johnson to be his successor. Kevin R. Johnson is an American businessman and software engineer who became the fourth CEO in Starbucks history.
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As the global coronavirus pandemic has brought companies to a standstill, Kevin showed how great a disturbance handler he was, when everything hits an unexpected roadblock, Kevin took charge. He posted a clear letter to all U.S. employees, appointing his company's strategy for the next months in response to the current pandemic, Covid-19. In addition, that letter showed that Kevin was also an absolute figurehead. As he mentioned in his letter “I am proud of all Starbucks partners, and how you have shown up in support of one another and in support of the communities we serve. You are the heartbeat of Starbucks, and you have demonstrated why our company is resilient.” He was able to communicate effectively with internal contacts and be a source of inspiration for them.
'The impact of COVID-19 varies across communities, and decisions will need to be made locally, with our field leaders, store managers, and local health experts.' said Kevin in a letter to his partners, by that he showed that Kevin acted as a free rein leader. He gave complete freedom to his subordinates for making decisions. Additionally, he announced that field leaders would have access to a special tool to help inform their decisions. He did not use power, but he did maintain contact with them.
Culture acts as an anchor, which maintains a solid brand base. Starbucks ’ community is different. It brews the best coffee and that too is brewed with a human touch, respect, and love. Shared values are at the heart of Starbucks ' lifestyle and culture. Starbuck’s shared values embrace equality, accountability, ethics, integrity, and inclusion. Moreover, it is even as good at keeping its employees happy as its customers. It has focused on creating a culture of warmth and belonging where everyone from employees, regardless of their role, to customers can feel welcomed and are referred to as partners to form a sense of unity. It created an environment of inclusion and non-discrimination.
“Giving more than we take from the planet.” was one of the fundamental believes at Starbucks. They are committed to offering high-quality, ethically purchased, and responsibly produced products, and by 2025, the coffee retailer plans to have 10,000 environmentally friendly stores worldwide, this is the new 'Starbucks Greener Stores' initiative-showing an activist (Dark Green) Approach.
The purchasing perspective of generations has shifted consumer focus to social responsibility especially when it comes to the environment. Studies showed that customers are steadily willing to spend more when they recognize their investments would lead to a positive impact on the environment. Moreover, the impact isn’t all external. It was shown that employees feeling confident about the CSR program of their company increased their expectations to remain with their present employer and their commitment to the organization. Commitment includes a vast variety of optimistic beliefs, including how many employees like their organization, make personal sacrifices for the organization, and see their own success linked to the success of the organization.
An orientation towards growth was obvious since Starbucks started. It is the largest coffeehouse company in the world with more than 31,256 stores across the globe now.
Starbucks seems to be pursuing a general and global strategy, where they get products from their domestic market and sell them internationally with only minimum local customization. Besides, many managers at Starbucks are geocentric they pay very close attention to “what best is what is effective, regardless of origin”. Also, Starbucks used three main different entry mode strategies to internationalize: joint venture, licensing, and Strategic Alliance.
Starbucks in 2019 announced it was partnering with Uber Eats to expand its delivery in the United States, and the most recent partnership Starbucks announced on 25th of Feb 2020 was with Nestle, “Starbucks and Nestlé announced another collaborative innovation as a result of the global coffee alliance, the launch of Starbucks Premium Instant Coffee, available in Japan, China, Europe, Latin America, and the Asia Pacific.”,
Starbucks is trying to compete successfully only within a single industry. It relied heavily on concentration strategies to become dominant players. It did not limit itself to selling coffee, but also selling coffee beans and even selling beans in grocery stores. This allowed consumers who do not visit their coffee-houses to reach the products of Starbucks. Thus, Starbucks used market development which involves taking existing products and trying to sell them within new markets.
This Starbucks SWOT analysis shows how the world's largest coffee chain is leveraging its strategic advantages to keep rising so effectively across the globe.
One of its main strengths is its strong brand image, in the food and beverage industry, Starbucks is the most popular, powerful, and strongest brand. As Interbrand ranking showed it had a brand value of $11.7 Billion. Nevertheless, one of its main weaknesses is a recall of products, where Starbucks has recollected many in-demand products over the years which can have a negative impact on the company's brand identity and induce a loss of customer base.
Besides, Business diversification and Products Specifications act as the main opportunity for Starbucks, where it can further expand its business operations and its company activities to boost overall revenue growth. Also, producing products as per the customer preferences in the specific target market is also a profitable opportunity. However, competition with low-cost coffee sellers is a major threat. Starbucks’ offerings are more expensive than other coffee shops or products and these high prices reduce affordability for the consumers, which threatens the future’s stability of Starbucks.
In conclusion, looking at the outstanding rate of growth and achievements, I believe that was accomplished with the right strategies and decisions, from the friendly culture to the effective production stage. Also, the freedom the manager gave for his employees globally helped in having a great reputation worldwide as it maintained what was suitable locally. Starbucks aimed not only for a profit but also for satisfaction for both, internally and externally, employees and customers.
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