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Back then, the company was a single store in Seattle’s historic Pike Place Market. From just a
narrow storefront, Starbucks offered some of the world’s finest fresh-roasted whole bean
coffees. The name, inspired by Moby Dick, evoked the romance of the high seas and the
seafaring tradition of the early coffee traders.
In 1981, Howard Schultz (Starbucks chairman, president and chief executive officer) first
walked into a Starbucks store. From his first cup of Sumatra, Howard was drawn into
Starbucks and joined a year later.
A year later, in 1983, Howard travelled to Italy and became captivated by Italian coffee bars
and the romance of the coffee experience. He had a vision to bring the Italian coffeehouse
tradition back to the United States. A place for conversation and a sense of community. A
third place between work and home. He left Starbucks for a short period of time to start his
own Il Giornale coffeehouses and returned in August 1987 to purchase Starbucks with the
help of local investors.
From the beginning, Starbucks set out to be a different kind of company. One that not only
celebrated coffee and the rich tradition, but that also brought a feeling of connection.
Today, with more than 15,000 stores in 50 countries, Starbucks is the premier roaster and
retailer of speciality coffee in the world. And with every cup, we strive to bring both our
heritage and an exceptional experience to life.
– Starbucks runs coffee all over the world. Behind the service
of the drink so much appreciated by the consumer the American company has put in place a
system based on the data of its users to optimize its performances. The ability to exploit
them for commercial purposes has never been greater. Starbucks perfectly embodies this
scenario, enabling it to retain the edge in its field. ‘’ ’’
This is the motto that could be adopted by the giant Starbucks which has put in place a
process to better identify where to place its new points of sale.
Starbucks uses social networks to build its reputation. With more than 54 million fans on
Facebook, 3 million on Instagram, 7 million followers on Twitter and 500,000 on LinkedIn, it
now has an exceptional number of points of contact with its customers. It uses social
networks to drive product innovation
For Starbucks, the customer experience is not limited to in-store experience. In the Malaysia,
each store provides access to a unique platform, the Starbucks Digital Network, with free Wi-
Fi access. You can enjoy the Starbucks coffee by taking advantage of the international media
(New York Times, The Economist, The Wall Street, etc.) and local media.
Planning –
- –
• External factors played a major role in Starbucks goal and mission statement.
Planning for a new pattern of socialization, where people moved away from
dance clubs to a cozy atmosphere allowed Starbucks to establish itself as a
coffeehouse instead of a coffeemaker.
• Starbucks goals was to make coffee a necessity for a social experience.
• Starbucks strived to provide an inviting and reinvented place for individual to
relax despite their demanding schedules.
- –
• Starbucks focus on external factors when looking at globalization.
• One of the key aspects in globalization plans is to incorporate the surrounding
environment into the design of the stores themselves.
• Starbucks has history of a poorly planned globalization strategy. When trying
to build a market in Israel, Starbucks underestimated existing competitors and
the threat of substitute products available to locals.
- –
• With continued changes in technology Starbucks listens to their customer in
their approach. This has led to improvements to payment related customer
experience.
• Starbucks plans for providing free Wi-Fi. When first introduced Starbucks
required several checks to allow the use of their WI-Fi feed.
Starbucks control –
Leadership –
– They do not pick candidates by race, age, sex, IQ. They pick by
curiosity, innovation, emotional intelligence.
Organizational Function –
Structure is a crucial part of an organization. It defines each department’s roles and how they
are coordinated. Starbucks has a much-defined authoritative chain for reporting. Managers
delegate to their subordinates the responsibility and their function of the job roles while
meeting each customer’s need.
Starbucks employs a decentralized type of organization. This type of organizational control is
evenly dispersed across the country as a per store basis. This allows the c ompany to be more
creative and independent but also carry the organization’s core values.
HRM at Starbucks –
Starbucks understands that their staff is one of the most important sources. The first leading
rule in their objectives even places the Starbucks's feeling to staff supply a good work
environment and behave each other with regard and self- regard. Organization realizes that
their staff has so effective role in the development of the Starbucks. All staff at Starbucks are
concerned to as mates, regardless what work situation they invade. The Starbucks's cultural
measures give staff feeling of substance to their job even though it is just filling a coffee.
Every mate even part time workers are qualified for getting attention of health, take part in
Bean Stock program and get a free coffee. Under control the Bean Stock program, staff are
advised stock the reasonable sector measures a few times in one year. The staff of Starbucks
take part in a profit sharing plan.
Employee relations, Motivation, Recruitment, Selection, Training, Career development,
Performance appraisal, Benefits and rewards are some of the important functions of HRM at
Starbucks.
The success of Starbucks would not have been possible without a set of goals that the
company aimed to achieve and a set of principles, which governed the decision-making
process. The six principles of Starbucks are stated as:
1-Provide a great work environment and treat each other with respect and dignity.
6-Contribute positively to our communities and our environment, and recognize that
profitability is essential to our future success.
Application of these principles can be used as a guideline for all employees from managers to
workers to aim to achieve the company's goals, while maintaining a certain type of standard.
• : Starbucks aims at building customer loyalty through high level of customer
service at its stores. The retail objective of Starbucks is, as it says in its annual report,
“to be the leading retailer and brand of coffee in each of our target markets by selling
the finest quality coffee and related products, and by providing each customer a
unique StarbucksExperience.”
• : This involves procuring the raw material for the f inal product. The
company agents travel to Asia, Latin America and Africa for the procurement of high
grade raw material to bring the finest coffee to its customers. The agents establish
strategic relationship and partnership with a supplier which is built up after
reconnaissance and communication about the company standards. High quality
standards are maintained with direct involvement of the company right from the base
level of selecting the finest raw material which is coffee beans in case of Starbucks.
Roles and Responsibilities of employees
Starbucks also uses product-based divisions in its organizational structure. These divisions
address product lines. For example, Starbucks has a division for coffee and related products,
another division for baked goods, and another division for merchandise like mugs. This
feature of the firm’s organizational structure enables focus on certain product lines. In this
way, Starbucks effectively develops and innovates its products with support from its
organizational structure.
Technology Infrastructure
In 2008, the technology infrastructure at Starbucks had become outdated due to which the company
had faced a “technology debt”, resulting in inefficiency in processes and decrease of profits. To
revamp the aging infrastructure, Starbucks invested in a new point-of- sale program and implemented
a new CRM system in 2011.
Starbucks had built its point-of- sale data warehouse on Oracle technology. This foundation, along
with the Oracle Exadata Database Machine, enabled Starbucks to scale and seamlessly migrate its
existing Oracle-based data warehouse to Oracle Exadata to ex pand insight and facilitate decisions,
even with explosive growth in data and the user population. It also equipped their computer systems
with cloud-based collaboration tools. The new CRM system Siebel delivers a combination of
transactional, analytical and engagement features to manage a ll customer-facing operations for
retailers. It enables new options for analysing customer and product trends, thus paving way for more
personalized marketing.
Starbuck’s manages their technology with a corporate information office (CIO) and a corporate
technology division that manages every aspect of Starbuck’s information and technology needs.
Starbucks also uses Microsof t’s Office 365 online service for store email and productivity apps, but
runs corporate systems on premises. It uses s ome SaaS options, but for infrastructure needs, it relies
nearly entirely on its own heavily virtualized data centre, rather than public cloud services.
A very modern technology that is used by Starbucks to help the strategic level decision making
process is digital dashboard. In this, Key Performance Indicator (KPI) application is used by the top
management that provides it information about the key performance of the organization. It s hows
the performance by showing it on a digital dashboard that shows progress of the organization
towards organizational goal.
Security of the Information Systems
Starbucks has its operations in countries, having stores and approximately employees. The company
also offers mobile application facility through smartphones for all its customers. But all these create a
challenge to protect the data of all the customers and to make it accessible to all the stores
worldwide. Also, it has to protect itself from the cyber thugs that can create alternative payment
systems and intrude the financial institution’s system. Thus, the need is not only to create an
information system that enhance the productivity and scalability but also develop a smart security
system to safeguard the information systems.
Starbucks protects the information of its customers by using technical, physical, and administrative
security measures. By doing so, they are able to reduce the risk of loss, misuse, unauthorized access,
disclosure or modification of the information. The highly sensitive and private customer information
(including credit and debit card details) the customers provide through Starbuck’s website or mobile
applications, it encrypts the transmission of that information using the Secure Sockets Layer ( SSL)
protocol. While the company has employed security technologies and procedures to assist
safeguarding customer’s personal information, no system or network can be guaranteed to be 100%
secure.
In the future, the internet will be much f aster. Also the people that have access to internet would
tend to increase many folds. This in-turn will reduce the internet costs. As a re sult, the extranets with
the suppliers of coffee beans will increase efficiency. Extranets between farmers and Starbucks will
increase accountability and honesty.
There will also be a need of increasing Starbuck’s staff within its intelligent reporting and business
intelligence so that it can adapt to the increasing extranet, ecommerce, and sophisticated
management information systems. For this, Starbucks will need to enhance its partnerships with the
companies like IBM or Google. Like many other companies, Starbucks is also the carrier of iTunes, and
wireless fidelity. Starbucks needs to possess the knowledge and skillset of future technologies so that
it can compete with other leading brands by providing unique services that are compatible with the
latest technology. Also, Management information systems will need to expand so that it will be able
to possess data regarding the technological services Starbucks is providing and the correlated profit or
loss. Thus, it will be able to provide unique customer experience.
For the execution of its vision and strategy, Information systems has contributed significantly.
Starbucks has planned to install hundred thousand wireless chargers in m ore than seven thousand of
its stores in next three years. While the Internet of Things is a somewhat distant promise for
consumers, Starbucks is charging forward with it aggressively. Many of its store have super high-tech
coffee machines, which connect to the cloud to communicate the performance of the machines and
to track customer preferences. Through Information Systems, the company is able to track a ll its
revenues, thus understanding each store’s performance against labour, visualize product
performance during peak hours, align its sales targets, and also improve the sale margins. Starbucks is
also working on smart refrigerators that track the expiration dates of milk and other items inside,
smart thermometers, smart door locks, etc thus improving the inventory efficiency. Along with this,
Starbucks is also working to be a leader in Wi-Fi hotspot technology provider.