Was the Strategy of Starbucks the Right One for the Environment? The strategy of Starbuck’s always revolved around its aim to become one of the finest coffee retailer and coffeehouse in the world and maintaining quality. In order to meet the organizational goals, it is important to maintain the work environment for each and every employee(Baye, 209). The organization also concentrates on meeting the demands of its customers as well as recognizes the importance of corporate social responsibility. Under the ownership of Howard Schultz, the company has developed strategic polices and the entire structure of the stores have been changed in order to maintain and enhance its business.
The core strategy of Starbucks revolves around its customers and meetings their demands. For this purpose, they enhanced and improved their employees, provided them with the necessary employee training so that they can easily communicate with the customers. As suggested by Howard Schultz, Starbucks is considered to be popular among the general public because it concentrates on providing the best cup of coffee to their consumers in order to create an enthralling experience for them. Its strategy also concentrates on treating its employees well (Baye, 220). .
For its employees, it offers stock options for both full time and part time employees. Research suggests that its strategy is the right one for the environment. In Fortune 2005, Starbucks had been placed in third position in the list of one hundred organizations, which treated its employees well(Baye, 250). In another research, it was demonstrated that Starbucks had been successful in China. Overall, the strategy is considered to be appropriate for the environment. Starbucks was successful in China because it concentrated on "focusing its attention on its employees, Starbucks has created a strong service culture that fits well in China" (Boone & David, 105).
In the year 2001, the revenue generated by Starbucks was more than two point five billion. In the same year “the operating Income of $252.5million, and Total Net Income $181.2 million, both figures increasing substantially from the previous year” (Strehle & Cruickshank, 269). Was the type of structure used the right one for strategy and situational factors? Should another type have been used? The organizational structure was changed in order to organize and manage the employees, working in the organization.
At Starbucks, the structure also went through a change. It changed from horizontal differentiation to vertical differential. The type of structure used for strategy and situational factors is the right one (Lu Haoting, 58). Vertical differentiation takes place when wide ranging products and services are available. These products can bought and ordered in accordance to their quality, which have maximum and minimum range. The marketing positioning strategy of Starbucks is based on quality as well as the corporate image.
Research suggests that Starbucks has strong devised their strategy, which has positively influenced their brand. It is considered to be an organization, which strives for creativity and innovation and offers high quality products. The structure had enabled Starbucks to promote and position its brand name as well as to create experience. For instance, in Tokyo, Japan, Starbucks had successfully created enthralling experience for its customers by integrating the American and Japanese culture (Boone & David, 200). In the year 2003, it has more than five hundred stores in Japan. From this perspective, it is evident that the structure defined by Starbucks is appropriate and compatible.
Was the new culture the right one for strategy? Did they do a good job in forming and maintaining the culture? The culture of Starbucks organization also changed. They main philosophy of Starbucks is to treat its employees as if they are family in order to ensure that they remain loyal to their organization. Howard Schultz had devised and introduced benefits program in order to attract and retain its employees, who concentrated on dedication and strived for excellence.
The corporate culture adopted by Starbucks is considered to be appropriate. It offers higher wages as compared to its competitors offers stock options to its employees on basis of their pay and offers health benefits as well. Consequently, the rate of turnover of partner at Starbucks was sixty percent. In another report, it was found out that more eight two percent of the employees at Starbucks were fully content and about fifteen percent were content with their jobs. Research suggests that the high rate of satisfaction is often found in small, private business and organizations.
However, Starbucks had successfully ensured that its employees are treated well in order to satisfy their demands. Research also suggests that it was impossible for large, public organizations to maintain such a high level of employee satisfaction. However, Starbucks maintained this position (Boone & David, 250). Furthermore, Fortune website placed it at number three in the list of organizations, which treated its employees well. Another research demonstrated that Starbucks had successfully maintained its corporate culture in China by concentrating on its employees. By concentrating on them, Starbucks successfully created strong and robust work culture in China (Lu Haoting, 60).
The general strategy revolved around hiring and recruiting energetic and trained employees, who were dedicated and committed to Starbucks. From research, it has been suggested that Starbucks has successfully maintained its culture by treating its employees well. Were the HR changes appropriate? Anything else they should have done? As mentioned earlier, Starbucks strategy concentrated on treating its employees well. At Starbucks, all employees have mutual goals and they are considered to be partners.
Starbucks also concentrates on improving its employees by providing them constant training so that they can deal with their customers in professional manner. The investments made in training has been paid off as research suggests that t he company has “far lesser turnaround” as compared to its competitors (Millers & Sanders, 49). At Starbucks, employees are considered to be important. The low rate of turnover of employee has positively influenced in creating a positive brand image for Starbucks. From this perspective, the changes made in HR are appropriate. From research it has been suggested that the image of Starbucks in important for its future expansion, development and growth.
However, it should be noted that the Human Resource Management strategy should be fitted in accordance to the culture of the country, where it has opened its branch. For this purpose, the general strategy must be in accordance to the host country. For example, the culture in United States is distinctive and individualistic. Therefore, the performance reward system must be on basis of individual performance (Millers & Sanders, 52). In countries such as China, the work culture is collective and employees work together.
Hence, in this system, performance reward systems should not be individual. They must devise a performance reward system, which awards the entire group (Strehle & Cruickshank, 299). In such work environment, it is important to recognize and award the group. Starbucks needs to devise its HRM strategies in order to promote and publicize their brand in different cultures. Work Cited: Baye, M.R. (2009). Managerial Economics and Business Strategy (6ed. ). New York, NY: McGraw-Hill Companies, Inc. Boone, Louis E. and David L.
Kurtz. Contemporary Marketing. United States. Thompson South-Western 12th Edition. 2007 Lu Haoting. 2006 Starbucks still brewing up a storm in China In the China Daily. (North American ed. ). Jun 1, New York Miller and Sanders, "Starbucks Corporation. ", Thailand Knight-Ridder/Tribune Business News. 2009. Strehle, P. and Cruickshank, M. (2009) Starbucks - international business concept and Starbucks in Germany, University of Lappeenranta, Finland, 2009