Assignment 1: Starbucks’ Strategy Essay
Assignment 1: Starbucks’ Strategy
The purpose of this paper is to explore key elements for Starbuck pertaining to their success their approach to organizational culture and management’s role in the proven success it has experience globally. Next, to converse about decision-making strategies that Starbuck’s management has implemented to maintain it competitive position in the market place; share a competency that is used by management and why this particular competency assist in the company’s success regarding organizational culture. Lastly, share my opinion on long-term sustainability in the global industry; in addition could the company continue without Mr. Howard Shultz as CEO. Organizational Culture
In business management it is imperative that strategies are created and implemented so the company can experience growth and increase there revenue; additionally they must consider competition advantage, short and long-term planning to continue to sustain their position in the market, include the global market if it is applicable. In looking at Starbucks as a company a global leader in their respected industry, management had to consider the business strategies previously mentioned. However, management additionally had to consider organizational culture as part as of their strategic planning, along with being culturally sensitive since they operate globally.
According to research, “the concept of culture helps managers understand the hidden, complex aspects of organizational life” (Draft, 2012, p.75). When Starbuck’s management strategically design plans to for company success it requires them to look at various elements both internally and eternally. This is important because when dealing globally the must understand the beliefs, values, etc. before operating in a particular area. Furthermore, internally they have to ensure that their employees understand this information as 3
well; by doing this it will make the operation operate smoothly without any interruption to the operation. For instance, gaining an understanding observing things that are visible or tangible which can be critical to internal operation such as, observing employee, beliefs, values, and much more. This requires management to incorporate the company’s mission and vision so it will eliminate conflicts so the company can function, as management desires in order to be profitable and competitive in the industry. The other key element is to focus on external elements, which will attract consumers to their stores, which is important when competing in a global competitive market. An analysis must be conducted to understand the customer; competitor positioning, and marketing plans that will gain and allow the company to build its customer base; this may require understanding customs, symbols, locations, etc.
Thus, will increase profits and reduce liabilities and risk. Based on research it describes adaptability culture in both internal and eternal segments. “Managers encourage values that support the company’s ability to rapidly detect, interpret, and translate signals from the environment into new behavior responses. (Draft, 2012, p.78). This type of understanding in organizational cultural behavior promotes achievement and consistency for Starbucks. Managerial Decisions
Starbucks has been successful in their operation for many reasons because management is cognizant that customers need to feel welcomed and relaxed based on the facility layout and location. Additionally, this is back by employees who share in management’s beliefs and values. Furthermore, the company is effective because they offer a variety of products that caters to their customer base. Perhaps one of the best advantages that management offers to their customers are free services such as Wifi, reduced cost on music such as CDs and free musical downloads for electronic devices, along with diverse music that caters to all ethnic groups.
Management effectiveness against their competitors depends on cost, technology, productivity, and much more. The long-term goal for any company is to increase profits and decrease there lost without compensating quantity over quality. This requires management to do business with quality producers of coffee from around the world so their customers can have a variety of good to select from. Additionally, the decision-making that management made to appeal to customers relies on technology and it has proven to be effective in their competitive advantage over the competition.
Research suggests that, “technology should be acquired to support the company’s chosen competitive priorities, not just to follow the latest market fad. Also, technology may require the company to rethink its strategy” (Reid & Sanders, 2010, p.43). It is imperative that management continues to be innovative in this area because technology is always changing so they have to constantly look for ways to improve marketing, quality of products, and operational procedures. Key Management Competency
A key managerial competency that managers should have at Starbucks understands that customer service and productivity enhances their capabilities as being global leader. The service that customers receive in a timely fashion will always be an important factor when operating a business, thus, having knowledgeable staff that understands the functionality of the operation will minimize wait times, products will be made to company standards, and much more.
Furthermore, offering the customers more service that are free and accessible is a key capability that will help them to fit into various organizational cultures; the key is that customers are the priority; having great products; effective marketing and pricing strategies, and conducting a competitive analysis quarterly so they will know how to make adjustments that best suit the market conditions. Lastly and perhaps one of the biggest competencies management at Starbucks has and must maintain is good employees because they are an asset, they have the ability to take 5 directives, initiative, and produce a quality product that will keep customers satisfied and selecting them over the competition. These are all good competencies to have when operating a successful business globally. Long-Term Sustainability
As a global leader in the coffee industry it can be said that the company has they proper structure and infrastructure to remain a leader globally even if the CEO, Mr. Howard Shultz were to be replaced. Senior management has a sound business plan in place that is long-term and it will maintain its profitability as long as the company keeps its core values, beliefs, etc. Along with this the company will have to be diverse in its operation and products. Furthermore, the business will continue to thrive as long as the employees embrace change and are given rewards to help to maintain a positive morale and atmosphere, especially when operating and interacting with customers daily.
It is believed that long-term sustainability involves proper planning, along with this management must understand the organizational cultures both internally and externally and must be willing to adapt. Also, in order for long-term sustainability to occur management must make periodic marketing forecast and competitor analysis; always look for ways to improve and create new products; invest in better equipment and training for employees; make cost adjustments due to economic conditions, and much more. If the company continues to embrace and operate in this manner it will achieve long-term goals and objectives without the current CEO. Conclusion
In closing, Starbucks is a global leader in the coffee industry and as previously mentioned, in business management it is imperative that strategies are created and implemented so the 6 company can experience growth and increase there revenue; additionally they must consider competition advantage, short and long-term planning to continue to sustain their position in the market, including the global market.
One of the elements Starbuck’s understands the importance of organizational culture; the company has been successful with their management and training department to incorporate their beliefs, values, etc. into the skills needed to compete against others in the coffee industry and by doing this the company has been able to expand, and has experienced an increase in profits. This type of business philosophy is critical when continuing long-term in achieving goals and objectivities through effective business strategies.
Also, management must be confident in decision-making and must be willing to adapt when there are changes in the market, this may include but is not limited to the following, making changes to symbols, slogans, etc. Finally, it is believed that Starbucks could continue to operate as a successful company if the CEO were to change. The company has a sound business plan and training program that appeal to internal and external components to organizational culture. Additionally, management in their operation comes from diverse backgrounds and the company has been able to capitalize on their innovative ideas and have implemented changes that have not only benefited the company but more importantly the customers globally.
Draft, R. (2012). Management (10th ed.). Mason, OH: Cengage Learning. Reid, D. & Sanders, N. (2010). Operations Management. An Integrated Approach (4th ed.). John Wiley & Sons, Inc.