Starbucks Found in a Crisis

Abstract

During the beginning of this year, Starbucks faced a crisis management situation where their reputation was likely to be tamed by it. The crisis management team for Starbucks, executed their crisis plan almost immediately after the incident went viral. Organizations around the world, prepare for moments like these where they must act quickly and efficiently.

During this analysis, I will examine the underlying causation for the crisis, along with a stakeholder analysis, an evaluation of the organizations response to the crisis and I will evaluate the effectiveness and define whether other tactics might have been appropriate.

The analysis, will point out in detail the recovery, learning experiences, and benefits to this crisis. Lastly, I will mention any intermediates that were taken into consideration that possibly assisted in managing the relationship between stakeholders.

The American coffee corporation Starbucks is second home to many individuals. Most have depended on their delicious heartwarming coffee since they opened; especially on those rush hour mornings everyone faces. However, the ardent purveyors of coffee whose mission is “to inspire and nurture the human spirit” (Starbucks, 2018), would soon face an organizations worst nightmare, a crisis. The welcoming coffee house found themselves in a crisis after the arrest of two African-American men who simply waited for a friend to arrive.

The incident occurred in Philadelphia, where the gentlemen decided to not order anything until their friend arrived and used the restroom as well. The manager asked the individuals to leave since they were not purchasing any items; they refused and were then arrested by authorities. The news quickly spread when a customer by the name of Melissa DePino, live-tweeted the whole confrontation. At that moment, there was no point-of-no return for the managers’ action. Without a doubt, racism is a sensitive topic; however, Starbucks had to face the consequences with a crisis management.

Stakeholder Analysis

To achieve project goals and ensure success to overcome a crisis, an organization needs stakeholders. In this case, chairman Howard Schultz, immediately stepped up and apologized on behalf of the manager and the entire company. Some commended Starbucks for their effort and for the way they went about handling this crisis, while others criticized its response as a damage control to protect their image. Protest and boycotts were conducted outside of the Philadelphia Starbucks following the incident that occurred. The power of social media is not one to be underestimated. Stakeholders expect a top-notch provision and respect from the gecko when engaging with any organization or business.

Customers were concerned that racism was an issue that would be foreseen at Starbucks and that situations like the one in Philadelphia would repeat. A few even assumed that the experience would somehow be curved into a PR opportunity for Starbucks. There is no doubt, that when a crisis is upon an organization, a PR opportunity will always arise from the situation. The way the organization goes about handling the experience is most important alongside being truthful. After reading multiple articles on the matter, the chairman appeared genuine about his apology and was determine to make things right.

Evaluation of the Organizations Response, Effectiveness, & Alternative Tactics

Starbucks was applauded for the way they held the matter. The public relations team performed at a notable level. Kevin Jonson, CEO of Starbucks, revealed deep remorse and embarrassment for what had occurred at the Starbucks in Philadelphia. Having the CEO personally reach out to both victims to apologize and to try to make things right was phenomenal. Both Jonson and the two gentlemen agreed they didn’t want this situation to repeat itself. The settlement of both men is a tribute to their positive intentions despite the fact they had been humiliated.

Due to the organized protest at the site and the national boycott of Starbucks, Kevin Jonson announced that he would be closing 8,000 stores to offer employees with bias understanding training. After researching on the organizations response, it is presumed that Starbucks will in fact continue to sell their coffee around the world despite the inconvenience they faced earlier this year. The highest priority this organization possesses is their clientele’s trust. Since 1971, Starbucks famed itself as a do-the-right-thing sort of company.

The company embraces diversity and has promoted certified Fairtrade products. The golden rule as noted in the online article “How Starbucks highlighted five of the new rules of crisis management” by Mike Hatcliffe, is that all crisis plans are required that a direct  statement be delivered within an hour of the crisis. Starbucks delivered their message two days after via Twitter, which was weak on their end. However, the company recovered efficiently after their crisis. An alternative tactic that Starbucks should of and could have proceeded on doing was using alternative internet platforms to convey their first message.

A mast message via Twitter, Facebook, Instagram, and even on the television would have been in my opinion a quicker way to react. Although the intermediates that were associated with the statement included their lawyers, PR team and CEO, the statement was given later than expected. However, the message was given and received which is one of the steps to fixing the crisis. Although Starbucks continues to learn from their crisis, they will be below the microscope more than they have ever by the public.

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