Thursday, December 12, 2019
Report on Starbuck
Question: Write a report on "Starbuck is a United State based company". Answer: Starbuck is a United State based company founded in 1971, having a single store I Seattle. Since then, it has offered the worlds finest fresh roasted whole beans coffee. The companys mission is to inspire and nurture the human spirit one person, one cup and one neighbourhood at a time. The mission statement itself indicates that the company not only celebrate coffee and the rich tradition but also bring a feeling of connection. Presently, the company has 15000 stores around 50 countries (Wu 2013). Howard Schultz joined Starbuck as a CEO in 1982 of marketing and retail operations. The mission statement itself reflects the concern for the society by the company. Corporate Social Responsibility (CSR) is an important part of any business organization. The company tries to link the product of the company with the society in a healthy way. They try to involve in activities that keep the social environment and business healthy. Starbuck has been always successful in CSR activities. It has made the corporate strategy with special concern for CSR activities. The company has always been involved in activities that have linkage with social, environmental and economic perspectives (Wu 2013). Starbuck have succeeded in business by making the long term corporate strategy inclined with its CSR activities. It has developed innovative ways of producing, distributing and reaching customers to reduce the damages caused to the environment. The company has provided value-based services to its customers without causing damage to the society and environment. The concern of Starbuck to CSR activity was mainly to connect its product with the society and touch the heart of the people by taking care of their health through CSR activity. Starbuck sells coffee, which is generally a drink that touches the heart and mind of a person. It brings the energy back in them and influences their living style. Active sale of such a product is possible only if the product is close to ones heart. Starbuck have understood it and connected its corporate strategy with the CSR activity to give more practical approach to its product. Starbuck has a created CSR department at the end of 1999 which is specia lly concerned with the activities that has less impact on the environment, that gives more support to the employees, customers and communities (Busch and Moreno 2014). In 1992, Starbuck has introduced a mission statement for the environment to clearly state the companys goals and objectives regarding the environment To follow the guidelines for protecting environment, Starbucks started reducing waste by adopting the process of recycling, energy conservation and propagating green team initiatives to educate its partners towards protecting environment. Further the company has tried to innovate a new way of producing disposable cups so that it can be entirely decomposed. It has introduced a plastic cup that can be used for 30 times and has thus reduced the deposition of 4 billion cups into the environment (Weiss 2014). Starbuck was concerned with CSR in its overall corporate strategy because it wanted to touch the heart of the common people as it was selling the product of a common people. Further the company had to develop its link with the farmers to obtain high quality coffee beans. The linkage can be better developed by showing concern for the farmer community who were more in need of social development. In this regard, the company has tried to build positive relationship with small coffee suppliers by setting Starbucks Coffee and Farmer Equity Practices (CAF) that gives a guideline for the buyers to be socially responsible and ensures preferential status of buying. Starbucks take care of it coffee farmers and pay them premium prices so that they can make profit and support their families in a better way (Weiss 2014). Linking of corporate strategy to CSR activity can also be seen by the companys involvement in social development program such as building of health clinics, schools and other infrastructure that helps the coffee growers to life a better and productive life.. In this way, the company has earned the trust and honesty of the coffee growers and assured the good quality coffee seeds. The company has also tried to support the farmers by providing farmer support centres which gives technical support and training to them so that high quality coffee seeds can be produced. Starbuck has also donated huge amount of loans to the farmers and to the farmer support programs to ensure production of high quality coffee beans. Through such activity, company is achieving twin objective, first satisfying its mission and earning high profit with providing quality product to the customer and second, meeting the CSR need by being socially responsible (Turban et al. 2016). Further, Starbuck has attached itself with CARE, which is a worldwide development and relief foundation, to help the coffee origin countries with donations. The company has invested in projects like health and sanitation, clean water system, literacy efforts and other projects for the welfare of the farmers of the society. In this way, the company is meeting its long term goal of getting quality coffee beans at a lesser price and creating the customer market for good quality coffee by helping the country to improve the standard of living of the people (Shaw 2016). The company has also taken proactive measures to enhance employability in United States by partnering with the government to establish Create job program for USA people. Through the program, funds are provided to Community Development Financial Institutions that further provide funds to housing projects, community centres, small businesses and other projects that enhance the productivity of the country and helps in growth and development (Busch and Moreno 2014). Hence Starbuck strategy of linking CSR with corporate policies has been a prudent step towards attaining long term goals of success and development (Tu 2012). No, Starbucks is not unique in providing high level of benefits to its employees. There are many more well established companies that provide similar high quality benefits to its employees, such as Google, Costco, Face book, Adobe, Epic Systems, Intuit, USAA, Chevron, Salesforce.com, Monsanto, Genentech and several other companies (Busch and Moreno 2014). Starbuck have always considered maintaining a good work environment in the office. The company believes in valuing its workers and give top priority to establish good working environment. Starbuck has provided one of the best health care facilities to its employees. The company believes in providing a work environment where the company and the employees share their vision and contribute effectively for the welfare of the company as well as for the employees. Howard Shultz, the CEO of the company was the first person to admit personal interactions in the company centres. He believed that they are in people business serving coffee and not in coffee business serving people (Stinson 2014). Health of the employees has been one of the priority areas of concern by the company. One of the best health insurance has been provided by the company to the employees. The company has established a program called Thrive Wellness for the employees. It offers several ways and resources to assist the employees in bringing wellness in their lives. It is done through several programs on weight loss, exercise, smoking cessation and other similar programs that help the employees to incorporate wellness in their lives. Starbuck has excelled its relation with the employees and has become a role model for the industry of fast food with respect of employee benefits (Servaes and Tamayo 2013). Providing good benefits to the employees is the key to sustain good employees with the company that will always make the company climb the trajectory of growth and development. Many organizations make policies that do not provide much benefit to the employees. According to them, there organization cannot afford to provide high class benefit to the employees because of their scale of production. However, they fail to realize that if they are unable to retain good employees due to lack of good employee benefit program then the company growth may touch the bottom line and they may go backward in their growth process. Hence providing employees benefit is always recommended by the big companies as in long run, it will take the company to the path of growth and development (Sebhatu and Enquist 2014). Besides the scheme of health insurance there are other schemes which are desired by the employees. They are retirement plan, disability insurance, and others. The employee benefit schemes make the employees more productive and efficient. When the employees are happy and satisfied, they work more efficiently and the company gains from their work. According to the law, the organization should provide the basic benefits to the employees. Some of the basic benefits are workers compensation requirement should be met Retirement plans, life insurance plans, health insurance plans sick leave benefits, earned leave benefits and casual leave should be provided to the employees. In todays competitive world most of the benefits are provided by the good companies to retain good employees. The companies who do not provide the benefits have large attrition rates and is not able to retain good employees (Preuss 2013). According to United State Law, there is a Federal Family and Medical Leave Act (FMLA) which allows the employees to go for 12 week off to attend to the serious conditions of health of any family member or of the employees. In some states the employers above 50 should be given benefits under the family and medical leave act. However in some states the organization need to give benefit to only few employees (Pedersen 2015). Starbucks has been operating in more than 70 countries across the world. Every country law system has some laws to protect the employees benefits in an organization. Starbucks has maintained the laws in each country and has given the best of the employee benefits scheme to its employees. The company treats its employees as partners. It provides them total pay package called as Your special blend which is tailored made according to the requirement of the employees. The employees get all the benefits and wide range of perks and assistance. The special blend includes health coverage for the dependents and also for the domestic partners, bonuses and discounted stock purchase options (Schneider and Schmidpeter 2012). Starbuck also provides its partners an opportunity to complete his education and attaining the university degree with the reimbursement of the tuition fees by the company. For military service members, this benefit was extended for their children and spouse. Starbuck operates in large number of countries which are different in their culture and values. The company has been able to successfully establish its unit with satisfied employees by adopting the policy of diversity and inclusion. The company aims to built a diverse workforce, develop a diverse network of suppliers, shape the culture of inclusion and increase its competencies. All this is achieved by satisfying the employees of different cultural in terms of the benefits provided by the company and customised the benefits according to the countrys culture (Michelli 2013). The company believes in the policy of inclusion by providing inclusive growth to the employees through investing in programs for the growth and development of the employees. Starbuck is one of those companies whose growth and success stories are linked with the performance and contribution of its partners and employees. The company has always given priority to its employees growth which has indirectly brought growth to the company. The secret of its success in every country and great brand value is the trustworthy employees whose sincerity and hard work are earned by the company by providing them all the benefits that the employees desires and required. However, its not the only company that has provided the best of the benefit to the employees, but all big and successful companies believes in keeping their employees happy so that they give their best to the company and the company give them the best of the benefits (Madhani 2015). Starbuck is one of those successful companies which has experienced the taste of success not alone but along with its employees, customers and suppliers. The company has believed in providing the benefits of success to its employees in the form of employee benefit schemes, to its customers in the form of best quality products and services at the reasonable price and to its suppliers, by giving them best of the deal and keep them happy so that they do not go to the competitors and spoils the relationship with Starbuck (Ling 2014). Starbuck has not only acted in a responsible manner towards the society by including CSR activity in its process of production but also have been ethical in its business practices. Along with this, the company has provided best of the products to the customer and has provided the pollution free environment for the customers. Hence, the success of Starbuck is not confined to any one of its policies but is the result of all the combination of its policies towards environment, employees, customers and suppliers (Korschun et al. 2014). Starbuck has started back in 1970s with one store in Seattle but today it owns more than 15000 stores in more than 70 countries. Such a success cannot be achieved without a long vision for success. The company has always given importance to its customers, employees, society and environment (Gerhardt et al. 2015) The shop of Starbucks is always located at places where it can attract a huge number of crowds. The company believes in giving local donations to pull the customers in Starbucks. The donations are given for the benefits of the society and for the wellbeing of the inhabitants. They generally donate according to the requirement of the country. In some country like Africa, the company has donated the money for increasing the education facilities because it believes that literacy has the power to create hope for the underprivileged children. It has given enough fund for social development and for the benefits of the under privileged children. The CEO of the company, Schultz, has used the royalties from the book written by him, to develop a foundation that has provided grants to non-profit literacy group, has sponsored the young writers and organized programs for helping underprivileged children with educational expenses (George and Anandkumar 2015). The company has taken several proactive measures to remove unemployment problem in the United States by providing unemployment funds to the government for helping the unemployed with new jobs and some earnings. Along with its role towards society welfare, the success behind the company is also its prudence relation with its competitors. It has developed several more products like accessories of coffee, such as water, tea, muffins, buns, cakes and other products. To maintain its competitive advantage in the market, the company has done several acquisitions of small companies, like, Bay Bread, a small bakery shop, Evolution fresh, a juice brand, La Boulanga, a bakery brand and others. The company has also started offering good quality of sandwiches and wraps for the customers along with the expresso coffee for quick breakfast (Gavin 2013). Further, Starbuck has also taken care of its brand value by giving its logo a new look. Initially, the logo of Starbuck reflected that the company only sells coffee but later it has changed its logo to pass the message to the customers, that along with coffee, other items are also kept. The working of brand value is vital for reaching the customers heart along with the policies of the company (Chua and Banerjee 2013). The company has always tried to satisfy the customer along with its social and ethical roles. It upgraded its coffee brewing machine and introduced several drinks and food items for budget conscious people and health conscious people. The company always focused on its core product, i.e. coffee. It produced several varieties of coffee and innovated different flavours and taste of coffee. Further, the company has tried taking care of the health of the buyers by controlling the amount of calories in the product. It shows the companys concern for the problem of obesity. The company also focused on the quality of coffee and the environment of the shops where coffee are to be provided. It has always tried to keep the atmosphere cosy and cool so that the customer does not only take coffee in the shop but also spend some leisure time for relaxing from the pressure of work. The company also provided free internet service in their stores for the customers. These are some of the strategy of the company along with the main strategy of CSR activities, business ethics and environmental protection (Cheng et al. 2014). The company has achieved immense growth and has brought financial success to its shareholders. Along with other roles of Starbucks, it has always thought of maximising Shareholders wealth and not the companys wealth. It is one of the known strategies of a successful corporate to propagate the maximization of Shareholders Wealth which if achieved, will automatically maximise companys wealth. The company has built its reputation and goodwill due to the quality of its product. However, it does face criticism that it has pushed other coffee companies out of the market. The company has a large international market that gets affected during recession time. The company always tries to hold the market share during recession by meeting the exact needs of the customer and let the customer be fully satisfied to come back in its shop (Aiello and Dickinson 2014). Starbuck success story is not limited to its social and ethical values. Neither it is limited to its practices in favour of environment. It has many other folds, like its treatment to the customer, suppliers and its steps towards protection of environment. Further, the strategy towards designing of the logo, towards the maximization of share holders wealth and other related areas have together brought success to the company (Busch and Moreno 2014). References Aiello, G. and Dickinson, G., 2014. Beyond authenticity: a visual-material analysis of locality in the global redesign of Starbucks stores. Visual Communication, 13(3), pp.303-321. Busch, W. and Moreno, J.P., 2014. Banks New Competitors: Starbucks, Google, and Alibaba. Harvard Business Review. Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), pp.1-23. Chua, A.Y. and Banerjee, S., 2013. Customer knowledge management via social media: the case of Starbucks. Journal of Knowledge Management, 17(2), pp.237-249. Gavin, D., 2013. Starbucks Exceptionalism: An Institutional Ethnographic Exploration of Coffee Culture in America. Journal of Psychological Issues in Organizational Culture, 4(3), pp.44-58. George, J. and Anandkumar, V., 2015. Branding in China: Lessons from the Foreign Brand Success and Failure Stories. Available at SSRN 2695066. Gerhardt, S., Hazen, S., Lewis, S. and Hall, R., 2015. Entrepreneur Options:" Franchising" vs." Licensing"(Mcdonald's vs. Starbucks and Chick-Fil-A). ASBBS E-Journal, 11(1), p.80. Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), pp.20-37. Ling, L.W., 2014. A Study on the Successful Strategies (Strategic Management and Marketing Strategies) of Starbucks Hong Kong: A Case Study. Madhani, P.M., 2015. Optimal Compensation Management: An Organizational Culture Perspective. Michelli, J., 2013. Leading the Starbucks Way: 5 Principles for Connecting with Your Customers, Your Products and Your People. McGraw Hill Professional. Pedersen, E.R.G. ed., 2015. Corporate social responsibility. Sage. Preuss, L., 2013. Corporate social responsibility. In Encyclopedia of corporate social responsibility (pp. 579-587). Springer Berlin Heidelberg. Schneider, A. and Schmidpeter, R., 2012. Corporate social responsibility. Verantwortliche Unternehmensfhrung in der Praxis, Berlin ua. Sebhatu, S.P. and Enquist, B., 2014. Are Corporate Governance and Corporate Social Responsibility having a role for sustainable Service Business?: An explorative study of IKEA, Starbucks and H M. In The 17th QMOD conference, September 3-5, Prague Tjeckien. Servaes, H. and Tamayo, A., 2013. The impact of corporate social responsibility on firm value: The role of customer awareness. Management Science, 59(5), pp.1045-1061. Shaw, W., 2016. Business ethics: A textbook with cases. Cengage Learning. Stinson, L., 2014. With Stunning New Stores, Starbucks Has a New Design Strategy: Act Local. Wired, January, 8. Tu, Y.T., Wang, C.M. and Chang, H.C., 2012. Corporate brand image and customer satisfaction on loyalty: An empirical study of Starbucks Coffee in Taiwan. Journal of Social and Development Sciences, 3(1), pp.24-32. Turban, E., Strauss, J. and Lai, L., 2016. Introduction to Social Commerce. In Social Commerce (pp. 3-22). Springer International Publishing. Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers. Wu, C.L., 2013. The Research of Brand Image, Experiential Marketing, Customer Satisfaction and Customer Loyalty-Example of Starbucks Coffee.