The paper "Operations Management for Starbucks" is a good example of a business case study. Starbucks a Seattle based Company is an international organization which was established in 1971 and it deals in high quality roasted coffee and fine tea. It was started by three partner scholars; Baldwin, Siegl and Bowker and its objective were to sell high-quality coffee beans. By 1981, the company had established five similar coffee bean retail shops and a coffee roasting shop at Seattle. Since then, the company has enjoyed fast growth in its operations.
While other organizations were suffering during the 2003 economic slump, Starbucks instead had recorded a 31% increase in profits and a 23% increase in sales. This was attributed to the product quality which became an advertising agent in itself. The company boasts its largest market share and this is attributed to its global existence with over 16000 stores in over 45 countries worldwide. This paper will carry out an analysis of the operation management at Starbucks using three tools. The study will use the five operational performance objectives, the SWOT analysis and PEST analysis in reviewing the operations at Starbucks in the Food and Beverages industry. Operations Management and Logistics of Starbucks The management staffs at Starbucks are trained on how to understand the distribution and sales of their products.
In its operations, the company has maintained a strict marketing strategy whereby it seeks to generate its revenue and profits from a number of distribution channels and consumer groups. The company encounters at least 70,000 outgoing deliveries in a week to their retail stores, distributors and consumers. This is because the company has responsibilities that require the operation management team to ensure there are a flowing and stable link between suppliers and consumers. The Company’ s operational strategy mainly focuses on its marketing efforts through branding its products as a means to stay on top of the market segment (Starbucks, 2013).
According to Gaynor (2002), product innovation is a very important marketing strategy for a company to sustain its growth. This is because product innovation aids in revenue growth and profits increase. In its marketing operations, the company has established a differentiating technique whereby it has developed a specific branding image which not only aims at producing a small scale as well as a high-quality coffee but also a friendly, relaxing and welcoming environment for its consumers.
This strategic operation of the company is reflected in most of its outlets globally, with which the company maximizes on sales and profits based on the location of a shop (Reid and Sangers, 2010). It is also reflected in its supply chain which has extended to over nineteen countries worldwide. Gaynor (2002) affirms that product innovation provides a company with an added advantage over its competitors since a company is able to design its products to meet the current dynamic demands of consumers in the global market.
As in the case of Starbucks, the company has come up with a modest roasting procedure that involves modern technologies in the production of coffee products. Some of the techniques that have been developed include; the use of high maintenance storage bags with one-way valves which ensure that the product is consistent and of good quality as well as the strict and selective procedure of sampling and choosing coffee beans.
This way Starbucks has created a reputable high-quality brand which is also included in the merchandising process in all Starbucks’ shops worldwide (Umsl, 2013).
Gaynor, G.H. (2002). Innovation by Design: What it takes to keep your Company on the Cutting Edge. AMACOM
Reid, R.D & Sangers, N. R. (2010). Operations Management, 4th Edition, Wiley, ‘Chapter 2 – Operations Strategy and Competitiveness. [Online]. Available at: http://www.wright.edu/~george.polak/ch02.ppt (Accessed on 19th June 2015)
Starbucks. (2013). Official website of Starbucks [Online]. Available at: http://www.starbucks.co.uk/ (Accessed on 19th June 2015)