History of Starbucks
Starbucks has globalized, and technology has helped in the process that the corporation is continuously renovating new ideas.
Starbucks opened in 1974 which was a single store in Seattle’s historic Pike Place Market. Howard Schultz bought the coffeehouse on 1987 and the expand eventually. Starbucks is well known for delicious coffee. However, people are going to Starbucks for the experience. It sounds cool to say aloud to your peers, coworker, or family members, “Hey, running to Starbucks.” Although they sell coffee is not the only options that they have. Starbucks has evolved from coffee to tea to having small sandwiches and having hot cocoa. Starbucks technology as well has improved. Starbucks has been enhanced by having a drive-thru, being on groceries stores, and have small stands in mall and hospitals. Starbucks has made a name of its own that the property rights has made globalization well known.
“With our partners, our coffee and our customers at our core, we live these values:
Creating a culture of warmth and belonging, where everyone is welcome.
Acting with courage, challenging the status quo and finding new ways to grow our company and each other.
Being present, connecting with transparency, dignity, and respect.
Delivering our very best in all we do, holding ourselves accountable for results.
We are performance-driven, through the lens of humanity.” cited from Starbucks website
The value that Starbucks is projecting is a sense of belonging to a community where everyone is welcome and share a common factor which is the love of coffee. Starbucks has created a trend that everyone can follow from serving at the meeting to share a latte among friends. The culture that Starbucks create is among their employee which they value their work because the company provides multiple opportunities to grow.
My friend Lyly worked at Starbucks a couple of years ago; she would mention that Starbucks was a great place to work because staffs were friendly, and the benefits were great. At the website the benefits are health coverage (medical, dental, vision, dependent care reimbursement, life insurance, disability, and accident coverage), stocks and savings, paid time off (two personal), on holidays (employees get ½ times their base rate), parental leave, education, commuter benefit, and partner assistance (Fund that help when on financial crisis like illness or death). Overall the benefits are great for employee and see the company values their employee and motivates them to care for the company and provide excellent service.
All employees received perks which are a pound of free coffee, 30% discount on store products, partnership discount with local business, free Spotify, recognition of value employee, Care program (10 backup care days for kids and adults), Matching gift program (contribution of financial gifts or time to eligible nonprofits), and discount on-site gym, daycare, and dry cleaning if partner with them. If that is not enough Starbucks pay a bonus to their employees. Starbucks has touched on today society common problems like daycare, discount, recognition at work, education, financial situation, and reward. Starbuck has won the 2018 – Most Ethical Companies., Military Employer, and Fortune World’s Most Admired Companies.
Millennium loves Starbucks because the company promotes transparency in their website. The Starbucks website detail on the company offers, careers, menu, blog, and company information. Starbucks technology has improved that even sales been high when the company release Mobile Order and Pay sales when up by 25% of all sales. The app reduces long line, ready to order, and promote quick and natural order. Starbucks made their store as a local coffee shop where you can work or study while providing Wi-Fi to anyone that would come to their store, is a great marketing strategy to buy a cup of coffee. Starbucks marketing strategy is that with the app the company sends promotion of new drink ideas. The coffee lover will try the new drinks and rate it, therefore creating word of mouth free marketing.
Starbucks expand internationally into China and other countries by adapting to their culture and seek customer’s needs. Jim Donald, CEO of Starbucks from 2005-2008, said “The peak time in China is not 7 to 10 in the morning, it is 4 to 6 in the afternoon. And there are also food preferences we had to adapt to. There is the holiday Yorkshire pudding that is big in the UK but does not work in New York. Breakfast sandwiches in Germany, for example, are made up with a hard roll with sausage and tomato and served cold. So, we listen hard to what our partners in a region say.” from article International IP Policy. Starbucks provides a health benefit and training their employee on the marketing, therefore is word of mouth is free marketing and more effective. Starbucks has trademarked their logo in several countries to avoid copycats. Starbucks applies for the Intellectual Protection laws which deal with protected and enforcing legal rights to inventions, designs, and artistic works. Starbucks must defend their trademark from competitors that want to copy their brand.
Starbucks uses the Industrial-organizational (I/O) models to seek weakness internally and externally in the company and competition. The company uses the model to look for opportunities to strengthen the company. One of Starbucks strengths is that through the many years it has created loyalty on its brand. Secondly, Starbucks has allocated their store at places where customers go daily. Sites that Starbucks has assigned their brand are in hospitals, malls, groceries, and every 5-mile radius from every local company. Thirdly, Starbucks has caught with technology that an app is easy to make a purchase. Their attractive industry is that although it can’t be a franchise, it can be licensed trade brand. Starbucks promotes innovations from customer and employees; they seek a way to improve the company to illustrate helping the community. Social media has been a great marketing promotion for Starbucks to have the sense of community connection were positive feedbacks and concern are address.
Starbucks Licensed Store
The cost fee is $315,000 to open a Starbucks licensed store; the company doesn’t want to Franchise. The company prefers to license to the concessionaire to keep control over the store and product quality. Starbucks will rent the brand name in other for small business owner earn a small profit.
Resource Base Model
Starbucks use Total Quality Management by providing top quality to their customer on the coffee product by using fresh bean coffee. Starbucks has dedicated helping farmers to overcome any challenges and invested over $100 million. Starbucks works closely with Farmer Support Center to improve productivity and sustainability and share any research with the farmer community and follow their practices. By 2025, Starbucks has agreed to plan 100 million trees to farmers.
Mission – Read Chapter 1
To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
Coffee retailers over 29,000 locations globally and the market cap of $82.67 billion by the end of 2018. Although, Starbucks is famous in their coffee brand it has expanded in tea, beer in some countries, and now into to the food industry. The reward program is one of the perks of being a loyal consumer and on birthday either a free coffee or discount on your order. “Starbucks announced its Q4 2018 earnings on Nov. 1, 2018. The company reported $6.3 billion in revenues this quarter, compared to $5.7 billion over the same period last year.” Cited from Investopedia website. The CEO Howard Schultz holds 33 million shares and 1.7 million through trust. Mellody Hobson president of Ariel Investments owns 246,000 shares and 283,146 shares through trust and member of board directors. John Culver president of Global Retail holds 366,402 shares, president of Starbucks in China and Asia-Pacific business. Clifford Burrow president of Siren Retail holds 248,225 shares he is overseeing Starbucks Roastery, Reserve, Teavana and Princi operations and seek supervisions in America. The shareholders are business people that carry a various degree and find ways of improving the company. In 2006 host an annual Supplier Summit in China which the focus was to develop work conditions promote a better product. The program gives an intake for suppliers and factories to express their concern and questions and work together for improvement. Starbuck provided technical training to suppliers and factories on their program and promised to have high-quality products ideally.
In conclusion, Starbuck company has cover internal and external strength and weakness. Starbuck stand strong only their mission to provide the great product by working as a team with vendors and employee.
- (n.d.). Retrieved from https://www.hg.org/intell.html
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- Responsibly Grown and Fair Trade Coffee. (n.d.). Retrieved January 16, 2019, from https://www.starbucks.com/responsibility/sourcing/coffee
- Starbucks: A Technology Pioneer. (n.d.). Retrieved from https://rctom.hbs.org/submission/starbucks-a-technology-pioneer/
- The Globalization of Starbucks and its Effect On the World – To Be Presented (Ryan Hart). (n.d.). Retrieved January 15, 2019, from https://siulaw.typepad.com/international_ip_policy/2011/09/the-globalization-of-starbucks-and-its-effect-on-the-world-to-be-presented-ryan-hart.html
- Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic management: Competitiveness and Globalization: Concepts and cases. Boston, MA: Cengage Learning.