Starbucks - study case

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STARBUCKS
STARBUCKS

• FINAL PRESENTATION
• Ivonne Suwarma M9721811

Strategic Human Resource Management BA 7200701
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OutLines
COMPANY PROFILE Timeline Mission
Statement Value Proposition Strategies  

•  EVALUATION FRAMEWORK QUESTIONS
• Business Environment
• Current Architecture
• Three legs of the stool
• Changes
• Challenges

CONCLUSION SUGGESTIONS  

• Strategic Human Resource Management BA 7200701

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TimeLine
COMPANY PROFILE  
1971
1982
1992
1995
1996
2002
2003
2005
2008
Gerald Baldwin, Gordon Bowker, Ziev Siegl opened
a small coffee shop in Seattles Pike Place market
CEO Jim Donald current stores 9,100 target
30,000 stores around the world
STARBUCKS

• CEO Howard Schultz
• rapid expansion
• enhanced competition from lower-price fast food
  chains (McDonald's and Dunkin' Donuts)

• SCHULTZ
• joined the Starbucks marketing team
• convinced the company to set up an espresso bar
  in downtown Seattle

• had 140 such stores in the Northwest and Chicago
• successfully compete against other small-scale
  coffee chains

• serving 20 million unique customers in well over
  5000 stores around the globe
• Opened average 3 new stores a day.
• CEO Orin Smith (2000-2005)

Opened 676th store increasing the products in
store (CDs)

• Entered the market of Japan, Singapore, and
  Hawaii (joint ventures)

6,400 operated locations worldwide

• Strategic Human Resource Management BA 7200701

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MISSION STATEMENT
COMPANY PROFILE  

• Provide a GREAT WORK ENVIRONMENT and treat each
  other with respect and dignity.
• Embrace DIVERSITY as an essential component in
  the way we do business.

• Apply the HIGHEST STANDARDS of excellence to the
  purchasing, roasting and fresh delivery of our
  coffee
• Develop enthusiastically SATISFIED CUSTOMERS all
  the time

• Contribute positively to our COMMUNITIES and our
  ENVIRONMENT.
• Recognize that PROFITABILITY is essential to our
  future success

• Strategic Human Resource Management BA 7200701

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VaLue
COMPANY PROFILE  
Making difference in peoples lives
Unique retail store experience
to build a company with soul
Customer intimacy
Being green
Starting in 1991, the company began to create its
own in-house team of architects and designers to
ensure that each store would convey the right
image and character
COMMUNITY SERVICE
make sure customers fully satisfied
the company would never stop pursuing the perfect
cup of coffee
Reduce environmental impact
"just say yes" to customer requests
YOUTH ACTION
Partners
highest-quality coffee in the world, sourced from
the Africa, Central and South America, and
Asia-Pacific regions
At the store level, energy and water conservation
and other green building strategies
STARBUCKS RED
partners satisfactions rate consistently range
in the 80-90,
Provide many variations of coffee in order to
satisfy as many people as possible.
STARBUCKS FOUNDATION
good compensation and a comprehensive benefits
package
Recycling other forms of waste diversion
materials and furnishings were used to keep the
look consistent and expenses reasonable, no two
stores ended up being exactly alike
Employees were also encouraged to speak their
minds without fear of retribution from upper
management
ETHOS WATER FUND

• Strategic Human Resource Management BA 7200701

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Strategies
COMPANY PROFILE  

• Product Supply
• building relationships with growers and exporters
  
• checking on agricultural conditions and crop
  yields
• searching varieties and sources
• fixed-price purchase commitments
• secure an adequate supply of quality green coffee
  beans and to limit its exposure to fluctuating
  coffee prices in upcoming periods

a wide selection of fresh-roasted whole-bean
coffees (which could be ground on the premises
and carried home in distinctive packages), a
selection of fresh pastries and other food items,
sodas, juices, teas, and coffee-related hardware
and equipment
RAPID STORE EXPANSION
1992-1993 three-year geographic expansion
strategy zone vice president direct the
development of each region and implant the
Starbucks culture in the newly opened
stores Starbucks Coffee International
(SCI) overseas expansion and begin to build the
Starbucks brand name globally via licensees
PRODUCT LINE
COFFEE PURCHASING STRATEGY

• Strategic Human Resource Management BA 7200701

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BUSINESS ENVIRONMENT
EVALUATION FRAMEWORK 
Starbucks, Coffee and Technology
Wi-Fi
Music Download
RFID SUPPLY CHAIN
CARD

• Strategic Human Resource Management BA 7200701

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BUSINESS ENVIRONMENT
EVALUATION FRAMEWORK 
Market Condition
COMPETITION

• in-and-out service
• Price
• Extended drink menu
• Global

• in-and-out service
• Convenience
• Global

• Strategic Human Resource Management BA 7200701

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BUSINESS ENVIRONMENT
EVALUATION FRAMEWORK 
Market Condition
Customer base evolved and expanded
Aggressive marketing programs
Initial Target Market
MARKET
Starbucks continues to refine and target their
product offerings to the changing tastes of
consumers

• Strategic Human Resource Management BA 7200701

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BUSINESS ENVIRONMENT
EVALUATION FRAMEWORK 
Regulations
Fair Trade Certified coffee
Fair Trade Certified coffee
Fair Trade Certified Coffee

• Purchased directly from small farmers who
  cultivated less than 3 hectares of land
• Paid a guaranteed price of 1.26 Arabica, 1.06
  Robusta, and 1.41 organic beans
• Offered farmers advanced financing to help cover
  costs
• Developed long-term relationships with
  cooperatives

Starbucks Shared Planet

1. Environmental stewardship
2. Ethical sourcing
3. Community involvement

• Strategic Human Resource Management BA 7200701

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CEO/ Chairman
Partner resources
Chief Operating Officer
Store Development
Finance
Supply chain operations
Corporate Social Responsibilities
General counsel secretary
Org Partnership development
Global Consumer Product
Starbuck Coffee International
Starbucks Coffee US
Food Service
Entertainment
Marketing
RD
Partner Resources
Information System
Operation Logistic
SVP and president Europe Africa
SVP and president Starbucks Coffee Asia Pacific
SVP and president Starbucks Coffee Latin America
SVP and president Starbucks Coffee Canada
SVP and president Starbucks Coffee China
SVP, Starbucks coffee western division
Global product
Global Manufacturing operations
SVP, Starbucks coffee northwest division
Global logistic supply chain
SVP, Starbucks coffee southeast division
Global business systems solutions
Global food beverages
SVP, Starbucks coffee northeast division
Global brand strategy development
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CURRENT ARCHITECTURE
EVALUATION FRAMEWORK 
MATRIX organizational structures
BENEFIT

• Increase communication
• Knowledge/ info sharing
• More coordination
• Efficient functional structure

• Divisions overlapping
• Duality of command
• Confusion and wasteful redundancy

RISKS

• Strategic Human Resource Management BA 7200701

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CURRENT ARCHITECTURE
EVALUATION FRAMEWORK 
STAFFING Retail stores level
STORE MANAGER
ASSISTANT MANAGER
SHIFT SUPERVISOR
BARISTAS
BARISTAS
BARISTAS

• Strategic Human Resource Management BA 7200701

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3 LEGS OF THE STOOL
EVALUATION FRAMEWORK 
Decision Making
Starbucks is a values-driven company
Employees come first
bottom up decision making allows the employee to
make efficient and effective decision as each
different retail stores in different geographical
areas
Ethical Decision Making Framework Starbucks
Corporation, 2008

• Strategic Human Resource Management BA 7200701

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3 LEGS OF THE STOOL
EVALUATION FRAMEWORK 
Performance Evaluation Reward systems
EXTENSIVE MANAGEMENT TRAINING
TRAINING

• an orientation to the company
• customer service skills
• the technical skills necessary to work in the
  stores

• leadership skills
• customer service
• Diversity
• career development.

• Strategic Human Resource Management BA 7200701

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CHANGES
EVALUATION FRAMEWORK 
Streamlining management Tighten focus on
creating customer intimacy Long term
relationship

• Strategic Human Resource Management BA 7200701

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CHANGES
EVALUATION FRAMEWORK 
Close 600 US coffee shops and eliminate as many
as 12,000 jobs the most in its history
amounting to 7 of its workforce worldwide

• Streamlining Management

• Pros
• Reduce companys expenses
• Focus on global expansion
• Decrease the assumption of too much stores in
  every corner

• Cons
• Higher employee turnover rates
• Dissatisfied employee who undergo the
  streamlining management
• Value of Starbucks in the customers eyes

• Strategic Human Resource Management BA 7200701

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CHANGES
EVALUATION FRAMEWORK 
Focusing on community
Customers intimacy (Starbucks Card Rewards)

• Focus on customers
• Long-term relationship

Charities, Programs, Foundation, Volunteers
Social media marketing
Environmental commitment

• Strategic Human Resource Management BA 7200701

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CHALLENGES
EVALUATION FRAMEWORK 
Customers may not react positively to the changes
being made Baristas disagree the plan to
streamlining employee
Costs associated with planned change

• Strategic Human Resource Management BA 7200701

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CONCLUSION
STARBUCKS IS BACK TO THE BASICS

• BEST BARISTAS
• BEST COFFEE
• BEST ENVIRONMENT

• CAMPAIGN TO RETAIN CUSTOMERS
• CAMPAIGN TO SELL THE COFFEE EXPERIENCE
• CAMPAIGN TO ATTRACT NEW CUSTOMERS TO THE 3RD PLACE

• Strategic Human Resource Management BA 7200701

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SUGGESTION

• Need to sustain its exclusivity and premium price
• Too many Starbucks around, the premium and luxury
  is compromised
• The product once though of as an exclusive
  product is now a generic product which loses its
  premium

• Strategic Human Resource Management BA 7200701

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Q A
STARBUCKS
STARBUCKS

• THANK YOU

Strategic Human Resource Management BA 7200701