Control Mechanisms

Starbucks is dominant coffee brand in North America, which also is well-known worldwide. Established in 1971 as coffee shop oriented to a niche of coffee purists, in late 1980’s it turned to be a constantly growing chain of stores that sold whole-beans and premium-priced coffee to mostly affluent, well-educated customers. In years 1992-2002 company was showing at least 5% annual growth. And by 2002 Starbucks was serving already 20M customers in 5886 stores (both operated and licensed) around the globe, had $3.3 billion net revenues and was opening 3 new stores a day in average.

Starbucks is rated as the number one World’s leading coffee distributor. Customers satisfactions are always be in the center of their business and the company works consistently to maintain it as customer look forward to a unique experience when visiting one of Starbuck stores. With over 12,000 stores worldwide, Starbucks has always aimed at achieving and maintaining competition in the industry.  Starbucks success reside in many factors :  the company is admire and respected worldwide,employees are recognized and respected for what they contribute to the success of the company. Open communication

The role of Internal auditing in Starbucks’ is to assure and consult the activity that is designed to add more value and to help improve the organizations operations on a daily basis. It establishes objectives by placing a systematic and disciplined approach to help better evaluate and to help improve the effectiveness and control of the company. External audit is done by an outside independent service provider who can provide a vital impact to Starbucks’ by giving a second opinion on things such as accounting records. This

starbucks Corp., an international coffee and coffeehouse chain based in Seattle, Washington, has expanded rapidly since its opening in 1971. These outrageous success was due to its well-developed strategy vision which lay out the company's strategic course in developing and strengthening its business. Starbucks is a global corporation that sells authentic coffee in 30 countries, reporting revenues of nearly $5.1 billion in 2006. The main goal of Starbucks is to embrace diversity by applying the highest standards of excellence. Starbucks strives to perfect the relationship with the working class by making the service as fast as possible because they believe that every customer has their own personal rate. One

Controlling is a part of management that is not considered to be as important. Like planning, it is a continual process; like organizing, it involves translation like leading, it involves diplomacy. Controlling is monitoring work progress to the company goals, and taking corrective action when required. (University of Wisconsin Whitewater, July 5, 2006, chap. 1)

Seeing a Starbucks sign reminds a person of the tantalizing flavors that are brewed from the store that sells millions of people their first cup of coffee every morning. Upon walking into the store, it is inviting and welcoming. The staff is friendly and helpful and the crowd is eager to enjoy that bittersweet java on the taste buds. When an order is made, the staff prepares each individual cup of coffee fresh, and exactly to the customer’s preference. Starbucks Corporation is the leading retailer, roaster and brand of specialty coffee in the world. Starbucks Chairman Howard Schultz has built a booming empire, with 13,500

Starbucks is a strong competitor in the service sector and a leader in the gourmet coffee industry. With a continued growth rate in store openings and maintaining successful profitability of its operations, Starbucks has demonstrated its ability to sustain a reliable and steady growth. Starbucks’ ability to contend with the vulnerability to current financial threats such as economic recession, higher interest rates, and global competition, is constantly proven by its incomparable brand image, its continual product innovations, and its exceptional customer service. This

By analyzing the qualitative aspects of Starbucks, the reader can gain a better understanding of the why and how of the organization. This report will examine the company through four integrated lenses: company history, leadership, culture, and strategy. These four components of the company build off one another and help to provide a holistic view of the Starbucks Empire and the health of the company. The history of Starbucks provides understanding of how the company has evolved into a global brand and the direction of future direction. The Starbucks company culture offers insight into the values that drive the company and how members of the organization interact with each other, customers, and other stakeholders. Starbucks’ evolving strategy incorporates the company’s history, both successes and failures, to refine approaches that worked in the past and improving those that no longer serve the company well. Additionally, the innovation and commitment to consumer experience embody the corporate culture,

Starbucks began to experience financial problems in 2008 and 2009; this was mainly due to the recession and rumored of poor business strategy (LaMonica, 2008). When a company goes thru a hard financial time the organization pauses and looks at organizational structure to see where the breakdown occurred or change could be implemented. ” Centralization and decentralization refer to the degree of delegation of decision making, authority, and power within an organization” (Reilly, Minnick, Baack, 2011). The leadership should centralize power and decision-making for the operations as a whole. With Starbucks a large fortune 500 company with locations all over the world, this will be difficult. By standardizing a plan for all franchise and locations to follow and maintain would help the business be uniformed however allow the flexibility for region-specific demands.

First, Starbucks has effectively applied the product differentiation strategy. To achieve it, the company has specialized in different product mixes, aligned its business locations to a specific ambiance that suits the context, and varied the customer experience, thus resulting in a higher customer service satisfaction. Further, Coskun, Basligil, and Baracli (2008) note that Starbucks prides in having their customers enjoy a premium service. Therefore, the company’s signature strategy has worked well thus far, as competitors find it difficult to imitate. Second, the enterprise has coordinated its acquisition and portfolio strategy, thus consolidating the market. As discussed in the background chapter, Starbucks has a portfolio network of eight brands under its stable. Third, Starbucks’ international expansion strategy has worked well, with a presence in 70 countries (Starbucks, 2017). These factors, coupled with its financial capability, offer Starbucks an edge over its

The company has also developed a structure and control system. With the realization that human capital holds a vital role in the development and sustainability of any institution, that of Starbucks included, it has taken to task to protect the same. To develop this, the company has an elaborate system that ensures the production levels of the company are met with pride. This like other leaders in the same has entailed ensuring they have an empowering corporate culture, topped by ensuring their employees enjoy competitive benefits.

Starbucks needs to evaluate the best in it is production and services. It also needs to look at it is assets compared to the competitors and if they are worthy their capability.

What was once a small coffee shop opened by Gerald Baldwin, Gordon Bowker, and Ziev Siegl in 1971, Starbucks Coffee Company has grown into the number one specialty coffee retailer. With over 10,000 coffee shops in more than 30 countries, of which 4,200 are licensed and franchised and 6,000 are owned, the company’s main objective is to establish Starbucks as the “most recognized and respected brand in the world,” (Moon). Currently, Starbucks is relying on retail expansion, product innovation, and service innovation to achieve a long-term goal once set by current chairman Howard Schultz: “The idea was to create a chain of coffeehouses that

Organizational architecture involves the decision rights within the firm, the method of rewarding and the evaluation of performance. Starbucks is more likely to be decentralization in terms of assigning decision rights. The organization structure of Starbucks is a matrix structure with both functional subunits and product subunits. Functional subunits such as store development, product innovation and customer relationship management (Leadership, 2017). Product/geographic subunits would be: 1) Americas, 2) China/Asia Pacific, 3) Europe, Middle East and Africa (Starbucks Corporation, 2016) Each subunit has different senior officers, which decentralize decision rights to different officers and then different levels of managers. In terms of rewarding individuals, the executive compensation of Starbucks consists of base salary, annual incentive bonus and long-term incentive. Beside salary, there are benefits such as Broad-Based Equity Program, Future Roast 401(k) Starbucks Match, College Achievement Plan and Enhancing the Partner Experience for employees of Starbucks (Starbucks Corporation, 2017) Moreover, Starbucks evaluates performance of individuals and

Starbucks uses a matrix organization structure similar to most big corporations. The functional feature of Starbucks’ departmentalization is having an HR department, finance department and a marketing department. These departments are only utilized at the top levels of Starbucks’ organizational structure, mainly its headquarters. For example, the HR department would typically implement a new policy and that policy would apply to all Starbucks cafés. This facilitates top-down monitoring and control with the CEO at the top. Doing this helps the company maintain consistency throughout its stores and allows for employees to know what is expected of them. Starbucks also involves geographic divisions, which are mainly in the Chinese, American and European markets with each division having a vice president. This allows for each manager to only have to report to two superiors, the geographic CEO and the functional CEO. This helps for closer geographical needs and each division is given a high degree of flexibility in strategy and policy. Next, Starbucks uses product-based divisions that address product lines such as coffee, baked goods, merchandise, etc. Starbucks is a brand and they market their own merchandise with supports from its organizational structure. Finally, teams are also used with its most notable team structure being the baristas. They work together to make the product which are given to the customer that can watch it being made. It takes a team to provide top notch