Starbucks’ Strategy
Starbucks Corporation is an American multinational coffee company. The company commenced operations in 1971 as a single store located in Seattle. Currently, the company operates multiple stores across the country in other parts of the world. Starbucks is well known for serving quality coffee in a warm and friendly environment. Starbucks’ organizational culture, leadership, and management traits have been the key drivers of the company’s success. This paper is an analysis of how Starbucks executes its business strategy.
Key Elements of Starbucks’ Organizational Culture
Starbucks’ organizational culture has been critical in influencing its success in a global economy. One of the key elements of Starbucks’ organizational culture is servant leadership. In servant leadership, the management places the needs of the employees in high regard. The leadership considers employees as ‘partners’ rather than servants (Morais, Pena, Shacket, & Mujtaba, 2014). A competitive remuneration package helps in motivating the employees more. The leadership believes that by treating employees better they are likely to extend the same treatment to customers. Another element is inclusion and diversity. Starbucks’ leadership has created an all-inclusive environment for employees. This means embracing people from diverse cultural backgrounds, religion, gender, nationality, sexual orientation, physical abilities, and other differences (Morais et al., 2014). In 2014, the US Business Leadership Network recognized Starbucks as at the 2014 Disability Employer of the Year. This shows its commitment towards diversity and inclusion.
Starbucks aims at enhancing the social bonds or ties among employees (Morais et al., 2014). This is captured in one of Starbucks’ core values, which is to “create a culture of warmth and belonging, where everyone is welcome” (Starbucks Corporation, 2018). The warm culture among employees extends even to customers. The leadership expects employees to treat the customers with warmth and a lot of regard. Starbucks aims at providing quality customer service as well as the quality of products served to customers. This is critical in ensuring that the customers keep coming back. This is captured in the core values as delivering the best in all aspects.
The management plays a critical role with creating and sustaining the organizational culture. First, the management is responsible for outlining the expected standards of work. The management defines the mission, vision, and values that form a core part of the organization’s culture. The management decides the types of employees to hire in line with the existing culture. Another way of sustaining the culture is through the reward system. Lastly, the management ensures the assimilation of new employees by conducting training to ensure that they acquire the company’s culture.
Effectiveness of Starbucks’ Management Decisions
Starbucks’ management decisions have fundamentally helped in achieving the success of the company. One of the management decisions is providing customers with free wireless internet. Over the last decade, smartphones have become increasingly common and available to a larger share of the market. Consumers are increasingly relying on the internet for communication with friends or doing business. The provision of free wireless internet in various Starbucks stores across the U.S. and even outside the country helps the attractiveness of the stores to consumers (Starbucks, 2016). Consumers spend significant time at the stores, thus the need to maximize their positive experiences by providing them with free internet. The management ensures that stores are located in convenient and prime locations. In addition, the stores have high aesthetic appeal that attracts customers.
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Starbucks stores provide customers with different styles of coffee. The different styles of coffee give consumers more choices that fit their personal preferences. The different styles are premium coffee, roasted whole bean and ground coffees, Starbucks Reserve Coffee, Starbucks K-Cup Pods, and Starbucks VIA (Starbucks Corporation, 2018). Starbucks has also diversified the product portfolio to include different types of tea, drinks, food, and nutrition items. Another innovative offering to customers is the stored value cards. The stored value card program provides customers with a suitable method for making payments and enables Starbucks to gift customers (Starbucks, 2016). This is critical in developing customer loyalty. The stored value cards provide an avenue for the company to exercise its loyalty program. Starbucks’ management has successfully leveraged the application of modern technology and particularly mobile applications. Starbucks encourages customers to download the Starbucks App on their mobile phones. This app can help in completing payments or for entertainment purposes.
Management Competency
One key management competency for a successful manager at Starbucks is effective communication skills. Successful managers must be able to communicate effectively through writing or orally (Starbucks Corporation, 2018). In addition, effective communication also encompasses great listening skills. In oral communication, the effective manager should be able to communicate clearly when expressing oneself in conversations with others. The effective manager should be able use appropriate grammar, speak in a clear manner, maintain eye contact while speaking, summarize the idea of others, and express ideas in a logical manner. While applying written communication, the manager should be able to apply correct punctuation, use correct spellings, express ideas logically, use correct writing style, use visuals to convey complex information, and other considerations. Persuasive communication involves the ability to pass information in an impactful way to the audience.
Effective communication skills are a good fit for the organizational culture because this helps in communicating the management’s vision to the employees. Without effective communication skills, it might not be possible to communicate the company’s vision to the employees. Effective communication enables the management to let the employees know the direction to proceed and the determination to achieve the set goals or objectives. Once the direction has been set, the management must establish regular contact with employees in order to ensure they understand what needs to be done. As such, effective communication skills are critical in helping the management establish the organizational culture. Effective communication skills are also critical where the management needs to influence the organizational culture towards a certain direction.
Starbucks’ Ability to Achieve Long-term Sustainability
Starbuck will still be able to achieve long-term sustainability as a global leader in the coffee industry even without the input of the CEO, Howard Shultz. While Howard has steered the company to great heights, a new CEO will likely bring in new expertise and ideas leading to further expansion of the company. While Howard’s exit in 2000 saw a decline in the company’s performance in the subsequent years, succession is still critical in the company (Kowitt, 2017). New leadership may bring in ideas that may help drive the company in the new era. Although Howard’s tenure was marked by significant increases in sales revenue, new leadership may likely inject ideas that will attract the current generation, help increase sales, and establish customer loyalty. For instance, the current CEO has made efforts to develop the company’s digital and mobile operations (Kowitt, 2017). This will be essential in creating long-term sustainability in a digital era.
In summary, Starbucks has been largely successful due to a combination of a strong organizational culture and sound management decisions. The organizational culture emphasizes on treating the employees with respect and dignity. The employees are seen as partners to the company. In turn, the employees extend the warmness to customers. Management decisions such as installing free internet across stores has significantly improved customer experiences in the digital era since they are able to freely access the internet on their smartphones as they enjoy drinks and food.
References
Kowitt, B. (2017, June 8). Howard Schultz has something left to prove. Fortune. Retrieved from http://fortune.com/2017/06/08/fortune-500-starbucks-howard-schultz/
Morais, U. P., Pena, J., Shacket, K., & Mujtaba, B. G. (2014). Managing Diverse Employees at Starbucks: Focusing on Ethics and Inclusion. International Journal of Learning and Development, 4(3), 35 – 49.
Starbucks Corporation. (2018). Our mission. Retrieved from https://www.starbucks.com/about- us/company-information/mission-statement
Starbucks. (2016). Fiscal 2016 annual report. Retrieved from http://q4live.s22.clientfiles.s3- website-us-east-1.amazonaws.com/869488222/files/doc_financials/annual/2016/FY16- Annual-Report-on-Form-10-K.pdf
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