Case Study: Starbucks’ Structure
Cynthia Duff
MGT330: Management for Organizations
Instructor: James Worsley
October 13, 2014
Case Study: Starbucks’ Structure Starbucks Coffee, we all know the name and most love the coffee and atmosphere it brings to our daily lives. Starbucks started out like most organizations a small coffee shop in 1971 in Seattle’s historic Pike Place Market and grew. This small shop started out as a single owner who the employees answered to which is known as departmentalization by function and has now grown to be divided by territories known as geographic regions. This fortune 500 company is not a stranger to economic hard times, in 2008 and 2009 Starbucks closed over 600 stores. The organization went thru
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What they serve in the United States may not always be what they sell in other countries, or California may not have the same menu items as Maine. The concept is the same and the base of the organization is the same, coffee, however the pastries or type of specialty coffee may vary upon location. The form may be changed in stores offering food products and lunch due to the region-specific menu items that are served. By being flexible and accommodating to the region-specific demands keeps the organization marketable and the desired sought out location.
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. Structure configurations constitute the
To continue off of the centralizing of decision making, the company should also consider a more mechanistic organizational structure. This is a setup that is used effectively by companies such as McDonald’s as the company has a process in place to generate just the right amount of burger patties, fries and soda syrup for each branch to run smoothly. With Starbucks implementing a structure such as this, it would allow for each manager to have a centralized oint of contact for all goods. This, in turn, will lessen the burden for each branch to find their own product vendor. It will
The company markets itself as becoming a part of the community as opposed to just another chain. If one has walked into a Starbucks you can often see merchandising shelves that
Starbucks Corporation is an American company that specializes in coffee and is also a coffee house chain. Products include coffees, teas, cold drinks, and pastries. The establishments are very popular to drink coffee, socialize, and work. Starbucks has been the most popular coffee chain in the United States, it now has over 20,000 stores around the world. Starbucks’ history starts in 1971 in Seattle, Washington when three colleagues decided to sell high quality coffee beans. The company only sold coffee beans until 1983 when they added an espresso bar to their store after their CEO went to Italy to explore the coffee industry (Company Information). In 1992, the company went public and Starbucks started expanding all over the United States. The staffing structure of Starbucks is a very basic structure consisted of a board who makes policies and then executives who enforce policies and oversee the company. District managers oversee stores in specific regions who report to executives. In each store, there are managers who run the store and underneath them other managers who supervise employees who make the coffee, baristas.
Starbucks is undoubtedly an international brand. The history of coffee traces back to Ethiopia, Africa, India, Arabia, and Europe, and has been traded abroad since the 11th century. Understanding the demand and widespread market for coffee, Starbucks has triumphantly capitalized both the domestic market, and the varied international markets as well. Possessing about 6,500 retail sites worldwide, Starbucks’ net is spread across thirty countries and has been found as one of the most recognized brands all over the globe in equality to McDonalds and Toyota. This organization’s ability to build an international brand has been unprecedented- particularly since it represents a specialty
Starbucks first opened its doors in Seattle’s Pike Place Market with the name being coined from that of Moby Dick’s first mate (Schultz & Yang 1999). It has spread its shops across North America, all over Europe, the Middle East, Latin America as well as the Pacific Rim with an estimated 35 million customer weekly (Michelli, 2008). With tremendous growth from a small time coffee shop, the company has matured to an international icon that today it is one of the world’s leading retailer, roaster and brand specialty coffee (Story, 1971). The company offers whole bean coffees, espresso beverages, and confectionery and bakery items.
Starbucks extends their coffee experience to everyone: kids, teenagers and adults. Part of their success comes from their ability to create new products that fit the culture of the country. In Japan, for instance, Starbucks launched green tea lattes, which later became popular in other countries (Allison). Starbucks is well established in countries like Canada, Japan, and the United Kingdom. In the US alone, Starbucks sells 4 million cups of coffee per day (Horovitz). Their products and services have transformed the way customers view coffee. Changing the way customers order, Starbucks makes it very chic to purchase custom drinks. Starbucks is like no other coffee shop: the dimmed lights
Coffee has become an integral part of a daily life for most part of the population. Starbucks has become an iconic brand whenever people think of coffee and it has changed the way people consume coffee across the globe. Starbucks was first started as a retail coffee shop in the year 1971, Washington. As on November 2016, Starbucks is operating 23,768 stores across the globe & Starbucks corporation is the leading retailer for roasted and specialty coffee with stores and outlets spared across, 13,279 in the United States, 1324 in Canada, 989 in Japan, 851 in China,806 in the United Kingdom, 556 in South Korea, 377 in Mexico, 291 in Taiwan, 206 in Philippines, 171 in Thailand and 8 India and more. Starbucks aims to become the consumers favorite coffeeshop and to achieve that goal the company primarily focuses on customer services along with their satisfaction as their primary target. So, to prove that Starbucks corporation S mission, value and vision statement is, “To inspire and nurture the human spirit-one person, one cup, and one neighborhood at a time” [2]
Starbucks Corporation the leading coffeehouse in the world. It was founded in 1971 by Jerry Baldwin, Zev Siegel, and Gordon Bowker in Seattle, Washington. Howard Schultz was the key person who turned the company a huge success around the globe. Since the beginning Starbucks has been facing many tough challenges and yet it is still remains as the best coffee House in the world. The mission of Starbucks is to inspire and nurture the human spirit- one person, one cup, and one neighborhood at a time. Their main competitors are include Dunkin Donuts, Biggby Coffee, Caribou Coffee, McDonald 's, Panera Bread, and Einstein Bagels, ,Secret Recipe, Old Town White Coffee and Coffee Bean. The political stability shows what
Millions of people all around the world wake up and drink a cup of coffee every morning before they go to work. One of the most popular places for coffee drinkers to attend is Starbucks. The company started in Seattle’s historic Pike Place Market, which was opened in
* Starbucks expanded to pursue sales of products in a variety of distribution channels and market segments. Products were marketed to restaurants, airlines, hotels, universities, hospitals, business offices, country clubs, and select retailers. In the airline industry, Starbucks coffee was served in flights United Airlines and United Airlines. Packets of Starbucks coffee along with coffee making equipment were made available in each room in Hyatt, Hilton, Sheraton, Radisson and Westin Hotels. Coffee service was also provided in several Wells Fargo banks in California. Foodservice distributors such as Sysco
Globalization is “the integration of economies around the world through the movement of goods, services and capital across borders” and is a dynamic process through which companies, corporations and organizations leverage their strengths, magnify their reach, and decrease costs by outsourcing multiple business processes (IMF Staff, 2008). The globalization of Starbucks’ supply chain played a crucial role in attaining organizational success, having a significant impact on its business operations. This report aims to analyze the challenges that globalization presents in a constantly evolving market, and evaluate the solutions that Starbucks has implemented to manage these challenges.
The Starbucks Company is a purveyor of gourmet coffee that was founded in 1971 at Seattle’s Pike Place Market (Retrieved March 10, 2015, from http://www.starbucks.com/about-us/company-information). At that time Starbucks was a single storefront that offered premium, fresh roasted whole bean coffees. Since opening that single store Starbucks has grown to an international presence with branding that is recognizable worldwide. In addition, Starbucks has increased their product line beyond hot and cold coffee beverages to include hot and cold teas, packaged whole bean and ground coffees, high quality, fresh foods and coffee making equipment and supplies. Starbucks operates a total of 19,767 company operated and licensed stores and operates in 62 countries. In addition to the Starbucks’ brand the company also owns and operates other well-known brands such as Teavana and Seattle’s Best Coffee. (Retrieved March 10, 2015, from http://news.starbucks.com/uploads/documents/Starbucks_Fiscal_2013_Annual_Report_-_FINAL.PDF)
Launched in 1971 in Seattle, Starbucks now operates in 62 countries globally and at present remains the global market leader in the coffee chain industry. (Market Line, 2014) It has not always been plain sailing for Starbucks however with the astronomical effects of the economic crisis during 2007-08 leading on to areas of serious concern throughout the company, the result of which led on to drastic measures being taken both strategically and operationally. (Lee, 2008)
Starbucks could be called one of the largest success stories in American history. The company started from humble beginnings and worked its way to the top. Starting from a small building in Pike Place market in Seattle Washington, there are now more than 20,000 locations worldwide. The company’s mission and goals have allowed it to succeed in a fast pace world, and Starbuck’s loyal customers have stuck by their favorite brand through it all. The Starbucks experience is unique from all others. The history and progress of the company have contributed to the Starbucks lifestyle we all know today.
Starbucks is an American coffee company founded in Seattle in 1971, which developed from a single store in Seattle’s historic Pike Place Market to a worldwide company with more than 24000 retail stores in 70 countries. This paper will analyze and provide an assessment of the organizational architecture of this company.