Starbucks Organizational Structure Analysis

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

Starbucks Corporation, generally known, as Starbucks Coffee is the leading retailer and a brand of world’s forte coffee in the world, with more than 15,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim, wherever in this world where premium quality coffee is in demand. Starbucks is the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with 20737 stores in 63 countries and territories, including 11910 in the United States, 1496 in China, 1442 in Canada, 1052 in Japan and 772 in the United Kingdom. The first Starbucks was open in 1970. The name was inspired from Herman Melville’s Moby Dick, a definitive American novel regarding the 19th century whaling industry. The nautical name matches seamlessly for a store that imports the world’s finest coffees to the cold thirsty people of Seattle. In May 1998, Starbucks have finally successfully entered the European market through its acquirement of 65 Coffee Company stores initially originated from Seattle in the UK. Both companies shared a common culture, focusing on a great commitment to customized coffee, similar company values and a mutual respect.

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

Starbucks has always had a strong history of demonstrating some of the strongest instinct of organizational design; that's no surprise as much of the success of the company has been built on this practice. However, Starbucks needs to continue to adapt with the changing times and environment and can do this more readily by applying the four lessons that Nadler and Tushman specify in regards to organization design. As Nadler and Tushman point out, "The environment drives the strategic architecture of the enterprise, either through

Starbucks current structure is categorized as a mechanistic organization, which is comprised of highly vertical and horizontal complexities, highly formalizations, highly centralizations, tapered lengths of control, and highly standardizations. The CEO of Starbucks, Howard Shultz, has worked to create a more efficient and streamlined structure where information can flow freely

Starbucks is a matrix organizational structure where a business is split into different divisions of whatever functions needed and then has multiple managers for each division and finally the lower tier members. This organizational strategy allows information from the customers to travel up to the lower-tier of employees and to the corporate levels are more streamline in a flat organizational structure. This helps as it ensures that Starbuck’s culture of family is communicated. (Starbucks

Accounting helps to measure an organizations activities, process data into reports, and translate the results to decision makers. Financial statements and reports help to present the company to the public in financial terms. The information on these data statements can used to evaluate the company through vertical and horizontal analysis. Vertical analysis is the proportional analysis of a financial statement. Normally, vertical analysis is done with a financial statement over a period of time. When using vertical analysis, a line item on a financial statement is listed as a percentage of another item (Harrison, 2015). A horizontal analysis is the comparison of information or ratios over a series of reporting periods. Horizontal analysis helps investors and analysts to control how a company has grown over time. Analysts and investors could use horizontal analysis to compare a company's growth rates in relation to its competitors and industry.

Figure 2 above illustrates the Starbucks organogram in context of the global enterprise (Starbucks International Marketing Strategy, 2010).

1.Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion.

The context change in form that Starbucks found itself competing with smaller chains that resembled its former pre-expansion model with competitors focusing in creating symbolic-expressive value and fast food restaurants that had started to offer specialty coffee with more aggressive advertisement at a lower cost. The competitive context changed for Starbucks because it’s focus in mass distribution channels and its retail footprint strategy stated its product within a standard performance product value; this affected the value perception of the product.

In early 1970s the company named Starbucks Coffee Company was set up, and it expanded rapidly in the late 1980s and 1990s. The business was started with a single store of a roaster and retailer of whole bean and ground coffee, tea and variety of species. Nowadays, Starbucks has over 19,000 retail stores in more than 60 countries and has over 160,000 employees (Starbucks, Company profile, 2014; Forbes, 2013). With that number of employees, thus available workplaces, Starbucks won the second place award for the “Best Company to Work For” in January, 2005.

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 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

These days Starbucks owns more than 18,000 stores in 62 countries and is the premier roaster and retailer of exclusive coffee in the world. Back in 1971, when the first Starbucks opened, the company already had two intentions to give to people every single day till now: share specialty coffee with friends and help to make the world a little better.