Starbucks Corporate Social Responsibility and Operation Management - Case Study Example

Cases to accompany contemporary strategy analysis Starbucks case study Name Institution Introduction The rise of Starbucks from a single coffee store in Seattle’s Pike Place market to a Fortune 500 company (number 261 on Fortune’s 2009 listing) is now an American business legend. The owner-managers of Starbucks were Gerald Baldwin and Gordon Bowker, former University of San Francisco students who had been running the company for 10 years. The Company sells whole bean and ground coffees, including the Starbucks and Seattle’s Best Coffee brands, as well as a selection of premium Tzo teas and other related products, to institutional foodservice companies that service business and industry, education, healthcare, office coffee distributors, hotels, restaurants, airlines and other retailers. Starbucks Corporate Social Responsibility CSR maintains the exchange of ideas on the rights and duties in an ethical way between the employees, organisation, and society are important for community relations and social purpose. Schultz’s approach to human resource management was not simply about the role of Starbucks’ employees as key agents in transmitting the Starbucks’ Experience, but also part of a broader vision of a common humanity: Furthermore, problems present have implicated the morel rights and duties among the organisation and the stakeholders, community, regional diversity and the national posing moral challenges in their overseas operations and may be tempted to lower their standards when situations permit. The counter staff at Starbucks stores-the baristas played a central role in creating and sustaining the Starbucks Experience. Their role was not only to brew and serve excellent coffee but also to engage customers in the unique ambiance of the Starbucks coffee shop. The multinational corporations have to be cautious with the challenges posed before them. The manner how leadership exercised through administrative contribution, as well as to make the improvement to prevent the wasting and the practice of fair marketing, in contradiction to corruption like facilities of the payment add up to the tendencies against human values and falling subject to submission for moral challenges in the society. The admission and recognition of the idea that organization progress means change and that each individual needs to drive it through personal progress first. In addition, acknowledging the three stages of transformation, which are unfreezing, moving and refreezing, is fundamental in this endeavour. Reducing the obstruction to strategic renewal and maximising the chances to a change the endeavour are accentuated at the unfreezing process. While the realization of the fundamentals of change and the submission to changes that have already occurred in the labor force involves the moving step. Offering healthcare was a transforming event in the equity of the Starbucks brand that created unbelievable trust among our people. We wanted to build a company that linked shareholder value to the cultural values that we want to create with Starbucks clients. Dynamic stability ensures implementing a change by connecting elements within the company and involvement with more staff members will gradually bring tinkering and kludging. This implies that employees are to be consistently informed of the prospect changes, as they are the main initiators of the resultant changes. On the other hand, managers should gather feedback from time to time by interacting with workers, and by this the business will be geared towards successful outcome in strategic reform implementation Work Value Chain and Operation Management We focus on integrating operations and supply chain strategy with a firm’s operations capabilities. This involves decisions that relate to the design of the processes and infrastructure needed to support these processes. Process design includes selecting the appropriate technology, sizing the process over time, determining the role of inventory in the process, and locating the process. The infrastructure decisions involve the logic associated with the planning and control systems, quality assurance and control approaches, work payment structure, and organisation of system quality assurance and control approaches, work payment structure and organisation of operations and supply chain functions. A firm operations capabilities can be viewed as portfolio best suited to adapt to the changing product and or service needs of a firm’s customers. Starbucks’ location strategy-its clustering of 20 or more stores in each urban hubwas viewed as enhancing the experience both in creating a local “Starbucks buzz’’ and in facilitating loyalty by Starbucks’ customers. Starbucks’ analysis of sales by individual store found little evidence that closely located Starbucks stores cannibalized one another’s sales. Recognizing that convenience of location was critical to driving sales, Starbucks began adding drive-through windows to some of its stores and locating stores specifically to capitalize on drive-through customers. While every Starbucks store is adapted to reflect its unique neighbourhood, “there is a subliminal unifying theme to all the stores that ties into the company’s history and mission-“back to nature” without the laid-back attitude; community minded without stapled manifestos on the walls. The design of a Starbucks store is intended to provide both unhurried sociability and efficiency on-the run, an appreciation for the natural goodness of coffee and the artistry that grabs you even before the aroma. This approach is reflected in the designers’ generous employment of natural woods and richly layered, earthy colours along with judicious high-tech accessorizing. No matter how individual the store, overall store design seems to correspond closely to the company’s first and evolving influences. The clean, unadulterated crispness of the Pacific Northwest combined with the urban suavity of an espresso bar in Milan Improvement in the layout and flow of work is normally associated with the incorporated downsizing, which empowers organization work teams, individual employee and the department to step up their performance and replace the long-established hierarchy. However, the number of level which will vary tremendously between organization and which, to some extent, may form a competitive advantage to the organization will also determine the performance. The layout and design of Starbucks stores were seen as critical elements of the experience. Starbucks has a store design group that is responsible for the design of the furniture, fittings, and layout of Starbucks’ retail outlets. Like everything else at Starbucks, store design is subject to meticulous analysis and planning-following Schultz’s dictum that “retail is detail.” Good communication will enhance good relationships; develop a good understanding with each other, growing intimacy, familiarity, trust, and support. As such, Schultz was unable to convince his Starbucks bosses of his vision, Schultz left to open his own Italian coffee bar, Giornale, in 1986. Conflicts in relationships have frequented to levels that it seems a normal and necessary part of healthy relationships. It is inevitable for two partners, friends, or relatives to agree on each and everything they communicate to each other at all times. There are always some instances of disagreements, which makes it critical to learn how to handle conflicts rather than avoiding them. The main cause of these relationship conflicts is communication comprehension and miscommunication between the two relationship partners. Corporate strategy of company issues to do with diversification We exist in an epoch of rapid and spectacular change where fundamental alteration in consumers preferences, tastes and subsequent anticipation and demand, advancement in technologies, competitors with innovative business representations, a number of shifts in labour force demographics and standards, fresh collective demand and limitations. Business entities ought to answer to the outside dynamics so that to develop and sustain exceptional performance. Diversification was realised when Schultz introduced “the romance of the Italian coffee bar” and recognized the opportunity for Starbucks to be a place where people would come to share the experience of drinking great coffee rather than to simply buy coffee beans. Creative strategy is a fundamental approach in gaining market share and successes in business. The distinction between breadth of reference and depth of attention recollections is connected to the lateral and vertical accepted wisdom. Central to Starbucks’ strategy is Schultz’s concept of the “Starbucks Experience.” Starbucks stores-like the original I1 Giornata coffee bars-were founded on Schultz’s idea of creating a “third place”: somewhere other than home and work where people could engage socially amidst the shared experience of drinking good coffee. With the addition of Wi-Fi, Starbucks stores become a place to work as well as to socialize. The contrast also is evidenced in divergent and convergent inventiveness. The industrious dilettante dichotomy is embedded in creativity strategy theory. Creativity calls for mental brainstorming and critical thinking in such a way as to bring cross-fertilisation of ideas when operating across a set of connections of enterprises. Further, a creative capacity to flexibly apply creative thinking between fields of domains by means of multiple contacts may perhaps result in generation of an idea Strategic renewal in organisations has proved to be successful. The change requires wide-scale innovation, recreation, and redesign of enterprise processes and organisational structures. Strategic renewal will be effectively adopted if the company embarks more on publicizing a new strategy, but stretch further and implement the new organisation capabilities using the effective resources, employee ability, and skills, which have to be advanced in the same line as well. Finance position Company-operated retail revenues increased due to the opening of 236 new Company-operated retail stores in the last 12 months, favourable foreign currency exchange rates, primarily on the Canadian dollar, and comparable store sales growth of 2% for fiscal 2008. Starbucks’ financial results for the year ending September 2008 revealed the damage being done by the economic downturn to same-store sales and margins. However, it was the results for the final quarter of 2008 that showed just how badly Starbucks was being hurt: net income was down by almost 70% and the company had experienced its first ever decline in quarterly revenues. The announcement prompted a 33c decline in Starbucks’ share price to $9.33. Chairperson and CEO Howard Schultz commented: In the midst of the weakening global consumer environment, Starbucks is following a well-developed plan to strengthen our business through operations that are more efficient and by preserving the fundamental strengths and values of our brand. Starbucks remains focused on driving the discipline and rigor necessary to create long-term shareholder value, and we are taking aggressive steps to excite customers by providing relevant value and innovation, even during this challenging time. Operating margin decreased primarily due to higher cost of sales including occupancy costs driven by continued expansion of lunch and warming programs in Canada, higher distribution costs and higher building maintenance expense due to store renovation activities. In addition, restructuring charges of $19.2 million recognized in fiscal 2008 had a 90 basis point impact on the operating margin, nearly all due to the closure of 61 Company-operated stores in Australia Core value A company vision is the most reliable statement that provides information ensuring security of job advertisements in an effort to reduce unemployment in the World. The core values ensure integrity and delivering superior and latest information or program performance. Again, it fosters an internal and external environment of increased glocalisation where any person can access job opportunities from all over the world. Starbucks is committed to build a company that linked shareholder value to the cultural values that we want to create with our customers and stakeholders. Starbucks is committed to selling only the finest whole-bean coffees and coffee beverages. To ensure compliance with its rigorous coffee standards, Starbucks controls its coffee purchasing, roasting, and packaging, and the distribution of coffee used in its operations. The Company purchases green coffee beans from coffee-producing regions around the world and custom roasts them to its exacting standards for its many blends and single origin coffees. Competitor profile The supply and price of coffee are subject to significant volatility. Although most coffee trades in the commodity market, high-altitude Arabica coffee of the quality sought by the Company tends to trade on a negotiated basis at a substantial premium above commodity coffee prices, depending upon the supply and demand at the time of purchase. Supply and price can be affected by multiple factors in the producing countries, including weather, political and economic conditions. In addition, green coffee prices have been affected in the past and may be affected in the future, by the actions of certain organizations and associations that have historically attempted to influence prices of green coffee through agreements establishing export quotas or by restricting coffee supplies. Conclusion Strategic renewal in organisations has proved to be successful. The change requires wide-scale innovation, recreation, and redesign of enterprise processes and organisational structures. Spector B. (2010) suggests that for strategic renewal to be to be effectively adopted, the company needs to embark on more than publicizing a new strategy, but stretch further and implement the new organisation capabilities using the effective resources, employee ability, and skills, which have to be advanced in the same line as well. An essential competitive advantage of any company will be its ability to offer its customers with an after sale service following the purchase of any of their products. In essence, this calls for the availability of spare parts, improvement of earlier products sold, packaging, and technical services to see to it that he product work effectively. However, in this undertaking, competing in speed is essential as a strategy to the customer needs for quality service. References Grant RM., 2008, Cases to accompany contemporary strategy analysis, John Wiley & Sons, Ltd, Publication: West Sussex. Read More