The Background and Peculiarities of Starbucks Corporation

Introduction

Starbucks corporation is an American multinational chain of coffee shops that started in Seattle, Washington on the 31st of March in 1971.

It was founded by Zev Siegl, Gordon Bowker and Jerry Baldwin who were three university friends that really liked coffee. They were inspired by the novel “Moby Dick” and by the sea; that’s where the logo of Starbucks came from. It represents a siren that calls people to grab a cup of coffee and the green color represents freshness and growth. In this report I will give a brief summary about Starbucks coffee’s CEO and his leading style. Also, I will discuss Starbucks coffee’s organizational culture, social responsibility, the company’s global strategies and operations.

BODY

Kevin Johnson is an American businessman and a software engineer. He first worked at IBM during late 1980’s, then worked in global technical support at Microsoft. He also worked as a chief executive of Jupiter Networks from September 2008 to January 2014. He joined Starbucks in September 2009 as a board member. He was appointed chief operating officer for two years. Since 2017, Kevin Johnson is the CEO of Starbucks.

He has a big role in the growth of Starbucks; he implemented many changes including mobile ordering and pickup. He also made a global distribution deal with Nestle in the US and China. Due to a terrible incident with two black men in Philadelphia Starbucks, Kevin made anti-bias trainings for management and new hires mandatory. Moreover, the CEO opened centers and research labs to test new products and equipment ideas.

He was named one of Seattle’s most influential people of 2018 In Seattle magazine for partnering Starbucks and Mary’s place and supporting homeless families. Kevin Johnson prioritizes employees by encouraging them to become part of the company’s growth. He also started an internal program to help employees start their own projects. His open-minded approach encouraged professionals to be innovative and collaborative.

Starbucks has a very recognizable organizational culture through its values, customs, traditions and behavior in the organization’s context. The employees work as partners in a warm and friendly ambiance; they also interact with customers. Starbucks includes several organizational culture dimensions. The first one is to pay attention to details, employees work with precision and pay attention to details. The second one is people orientation; managers make decisions by taking into consideration their effect on people and the third dimension is team orientation because all the work is in teams and not individuals.

Starbucks cares about making a positive social or environmental impact. Their social responsibility is based on three points: community, ethical resourcing and the environment.

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They help providing education, work opportunities and making difference in peoples’ lives. Moreover, they give training opportunities for youth and have a very big military commitment. They hired 25,000 veterans and military spouses in 2018. To be as environmentally friendly as possible, Starbucks is employing the dark green approach and is committed to recycling and conserving water and energy. This has a very good impact on the company.

Starbucks is operating in 76 countries in more than 24,000 stores all over the globe; in Africa there are shops in Egypt, South Africa, Morocco and Tunisia. In Europe, in the United Kingdom, Turkey, Germany, France, Spain, Poland, Ireland, Switzerland, Netherlands and other countries. Also in Asia, in China, Japan, South Korea, Thailand and other countries. They opened their first international store in Tokyo in 1996. Starbucks coffee’s global attitude is very centralized beneath its CEO but all the company’s international activities are operated by a subsidiary named Starbucks Coffee International Inc. This subsidiary develops all businesses outside the United Sates. This shows that Starbucks is taking a polycentric approach to staffing.

Starbucks is using the concentration strategy as a main growth strategy for the company. Its main growth strategy is based on increasing the number of stores, not just dine-in restaurants but also drive-thrus in the outer edges of urban and suburban areas. Also, through licensing for merchandise and franchising in some countries such as Dominican Republic. But that’s not the only growth strategy that Starbucks uses. It concentrates on expanding its global reach by entering more countries especially in the middle east and Africa. Moreover, Starbucks Coffee uses product development as a secondary growth strategy by creating new products to gain more revenues.

The SWOT analysis is a strategic management tool that assesses the strengths, the weaknesses, opportunities and the threats related to the business and its internal and external environment. The SWOT analysis of Starbucks considers the strengths and weaknesses inherent in operations in the coffee, the coffeehouse and related business. It also considers the opportunities and the threats related to the competitive landscape.

Starbucks coffee’s strengths are its strong brand image because the company has a growing population of loyal customers which adds to the stability of the coffeehouse of the business. Also it has an extensive global supply chain because Starbucks coffee’s suppliers are carefully selected based on the quality of coffee beans. Moreover, its moderate diversification through subsidiaries which minimizes the effect of market and industry risks. Starbucks coffee’s weaknesses are its high price points, because it limits the company’s market share especially in areas with lower incomes. Also, its generalized standards for most products because it limits the flexibility of the coffee and the coffeehouse chain business. The third weakness is the imitability of its products.

Starbucks coffee’s opportunities are expansion in developing markets because it increases the revenues. Also, business diversification which helps improve the company’s long-term stability. Starbucks coffee’s threats are competition involving low-cost coffee sellers because there are other coffee shops that serve similar products with lower prices. Also, the imitation of the products. Last but not least, the independence of coffeehouse movements.

CONCLUSION

In conclusion, the background of Starbucks Corporation reveals that it has a strong leadership position in the market, a suitable work environment, innovation commitment and organizational financial sustainability. Starbucks continues to accelerate its international presence, and as a result it continues to be one of the top leaders in the coffee industry and customer oriented organization.