I. Introduction
Starbucks today is widely recognized as the megabrand for coffee, and there clearly are no close competitors that have its international recognition and scope. Starbucks has grown to employ over “160,000 people and generates about 13.6 billion dollars annually” (Forbes). Much of Starbuck’s success is attributed to a man with a clear vision and drive: Howard Schultz. Howard Schultz’s passion for delivering quality coffee along with a positive café experience has given him the motivational determination to demonstrate exceptional leadership traits. This paper will give a brief overview of the history of Starbucks, and will then investigate the changes that were made after Schultz stepped in. Furthermore, problems that
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He made sure to add “A players” to his team: roasters and café owners with decades of experience, a president of a profitable beverage company, and a CFO with eighteen years of management consulting experience at Deloitte and Touche. Schultz was able to see the need to recruit strong players with a lot of experience in the coffee and management industry. Early on, Schultz addressed the lack of organization management that was crucial for Starbucks to accelerate forward.
Employee Enthusiasm and Commitment Another problem that Schultz faced was the issue of building a strong core of employees throughout the company. Schultz found that as the company grew, it lacked strong dedication from its employees. Starbucks had a high turnover rate, just like many other entry-level service jobs at McDonalds or retail stores. Schultz saw this as a huge problem for not only the money Starbucks lost through losing an employee and having to pay more to hire and train new ones, but also losing team members. Schultz wanted to create an environment for Starbucks employees in which they would want to stay in. Schultz had difficulties convincing Starbuck’s Board of Directors to invest in constant training, higher salaries, and rewards based on merit. He even went far enough for wanting baristas to become invested in building Starbucks into a great company, and thus offered them stock options. The biggest action step
These two exceptional leaders also shared the leadership task related traits of emotional intelligence, passion for the work and the people and courage. An internal locus of control and flexibility was also evident in both leaders. In BuBrin 2013 page 46-50, where ‘flexibility and adaptability is necessary for a leader to be able to cope with change, especially because a leader is someone who facilitates change’. Howard Schultz embodied the very essence of flexibility and adaptability as when Starbucks needed to alter virtually everything about how it operated in order to survive, Howard chose to cut costs by $500 million, shut down 800 stores and lay off more than 4,000 employees
Since Starbucks entered the coffee retail business, the company has made many trade-off business decisions. The first major trade-off was made when Howard Schultz wanted to acquire present day Starbucks from three entrepreneurs Baldwin, Siegel and Bowker. Therefore, Schultz prior to the acquisition made the trade-off to open his own coffee bar in 1986 instead of staying at Starbucks as the manager of retail sales and marketing. A bold feat, Schultz was able to replicate success and was offered to buy Starbucks for $4 million. At the time of the acquisition, many investors, including the former Starbucks owners, would not expect that the American consumer would pay a premium for coffee products. Schultz, after calculating the opportunity cost, was convinced that Starbucks would become a large coffee chain not only in the United States but internationally too. Reflecting this approach, Schultz’s trade-off worked. Starbucks, according to our book has revenue exceeding $13 billion and nearly 200,000 employees. The company has also expanded to 40 countries with 17,000 stores (Hill et al., 2015).
The extraordinary success Starbucks experienced during the early 1990s resulted from Howard Schultz’s passion and vision to create a coffee culture in the United States similar to the coffee culture he experienced while traveling to Italy. Schultz’s vision of the Starbucks brand evolved around providing a quality product while delivering exceptional customer service in an inviting atmosphere. Starbucks’ success can be attributable to the following factors:
business model may seem, there is plenty of hard work invested and financial risks taken to grow
Onward: How Starbucks Fought for Its Life without Losing Its Soul. Howard Schultz with Joanne Gordon. New York: Rodale, Inc., 2011. 331 pages.
Schultz was able to value multiple shareholders due to paying attention to both the customers and the employees as ultimately Starbucks strive to perform well financially over time. Moreover, his leadership was to motivate his employees through self esteem, appreciation, and self respect as this identifies valuing the development potential of employees. That’s why the employees were working as a family which ultimately led to meeting Schultz expectations. Therefore, he was a theory Y manager that beliefs to support his employees and they would learn more if they carry responsibility and become autonomous. He also believed that creativity is
Howard Schultz is a passionate, American businessman who used his brilliant creativity and entrepreneurial dedication to reform the ways of a business. He is known for being the CEO and chairman of the well renowned company Starbucks. He was born on July 19th, 1953, in the city of wonders, Brooklyn, New York, United States. As a child, his family financially struggled, and his parents often worked overtime and extra shifts to raise the family. Howard was raised in a low income neighbourhood, where all the families would be similar to his, which highlighted the difficulty Howard had growing up. Yet to this day, he is one of the wealthiest businessmen in the world. He gained his business talents and skills from experiencing his father 's
This case assignment discusses the history of Starbuck’s accomplishments as they entered the American coffee culture heritage. In 1983, The chairman and CEO Howard Schultz traveled to Italy and had a dream to carry the Italy coffeehouse ritual back to the United States. Schultz was focused on creating an environment meeting company that makes good coffee but also be a social experiment. Starbucks today opened more than 19,000 stores functioning in 62 countries. Starbucks has numerous rewards that globalization has offered and they have significantly benefited from it, while in the coffee industry. Starbucks has a wide-range in marketing strategies to benefit the customers. During the different obstacles that Starbucks has encountered, they must stay reliable in quality and uphold to adjust to different customer values.
Howard Schultz, ranked by Business Insider as one of the top CEO’s of the past twenty years, shaped the consumption of coffee into an experience and developed a strong brand, Starbucks, that is recognized internationally. Eight years later after resigning in 2000, Schultz saw the company going downhill and decided to take control again, as CEO. The Starbucks creator had a vision for his company and shaped the culture by putting an emphasis on quality product and implementing the motto “employees first”. From early on, Starbucks was ahead of its time. Schultz offered healthcare for part-time and fulltime employees, extending this to domestic partnerships as well. Additionally, he makes an outstanding effort to employee minority workers, reimburse partial tuition and distribute employee stock options to baristas. After returning in 2008, Schultz made a controversial move of electing to send 10,000 managers to a leadership conference, which totaled over $30 million. He claims that this move was saving point for Starbucks and without it, the company surely would have failed.
Dear Diary, this is Howard Schultz writing to you today. I am sitting here reminiscing about my early years at Starbucks. I remember working at Hammarplast, when my curiosity got the better of me, and I wondered why this small coffee shop was ordering so many plastic cone filters. It is worth noting, that I had no ulterior motives when visiting Starbucks in 1981. Subsequently, I was impressed with their operation, and expressed my desire to work with the company. Consequently, it took me over a year to convince them, but eventually, I was awarded the marketing director position. Then, shortly after, during a trip to Milan I discovered the romance of coffee. Interestingly, I knew that there was a way to incorporate what I learned in Milan into the Starbucks brand, I just had to convince the owners. I remember the guys rejecting some of my ideas, thinking that my style was unsuited for the laid back atmosphere. Unfortunately, I was unable to convey my vision effectively, it was never the right time or the right path for those guys. Shortly afterwards, I left to pursue my dreams, of an espresso empire. Surprisingly, a few years later, I found out Starbucks was available to purchase. Somehow, I was able to raise the capital needed to purchase Starbucks, and this is when my dream began to blossom. Thus, I always felt that, I was the only one that was able to envision what the company could be. First, I started with the employees. Moreover, I wanted the employees to feel as if
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
“Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” (Starbucks, 2013). That is the mission statement of Starbucks. Whenever you think about who has the most premier cup of coffee or the most mouthwatering Frappuccino, you can’t help but visualize the green twin-tailed mermaid coffee icon. With more than 21,000 locations in 66 countries and revenue upwards of US $16.44 billion (Fortune 500, 2015), something or more importantly someone is the major key to this success. And that someone would be Howard Schultz the Chairman and Chief Executive Officer of Starbucks. Schultz sees the road to his company’s success just as steps to brew the perfect cup of coffee. This essay is about how Howard Schultz is a proven effective business leader. Shown directly with his motivation techniques, strategic decision making and planning and organizational restructuring.
First of all, Howard Schultz had a clear vision about his company. It is important for a great leader to have a clear vision about what to achieve. The emphasis on importance of employees is the outstanding point in his vision. This is why Starbucks has been investing in their
With time the small industry of coffee has modernized into a multibillion dollar industry that surrounds the world. With the growth of the industry there has been many world wide changes. Over the past 30 years coffee shops have jumped to the front of the public culture. New coffee shops have changes the face of American cities along with British, German, Colombian, Kenyan and Indonesia towns to name few. (Coffee a comprehensive guide to the bean, the beverage, and the industry) Around the world coffee has become part of the daily culture and coffee shops have grown to accommodate the massive demand that people ask for. Without the growth of the industry there would be a shortage of the product and many would have to go without their beloved beverage. In the United States alone there has been a massive increase in the number of coffee shops. In 1980 the number of coffee shops was a year 2,000 and by 2008 there was an astonishing 27,715. (Coffee a comprehensive guide to the bean, the beverage, and the industry) This was an increase of over ten times in the short time. 11,000 of those stores, almost half, were Starbucks one of the biggest coffee brands in the worlds. The growth of Starbucks is due to the work of Howard Schultz a worker for the company before they became as massive as they are today. Starbucks started very small in Seattle, Washington in the mid 1970’s. Howard bought out the owners and then went on to turn the small company into a massive corporation. (Coffee a
In the early 1980’s Howard Schultz, became captivated and saw possibilities in the fledgling specialty coffee market as he studied and observed that only a few Independent specialty coffee roasters existed and most of these businesses were small operations without large advertising budgets. Schultz recognized that many companies such as Peet’s and Starbucks had an enthusiastic base of regular customers who were