Starbucks’ Strategy Essay
Starbucks’ Organizational Culture
Starbucks is an American global company based in Seattle, Washington. The company has been in existence since 1971. To cope with the ever-changing business environment and to meet the needs of the customers, Starbucks focuses heavily on organizational culture, which undoubtedly is an important strategic resource that Starbucks uses to gain competitive advantage in the global market.
Organizational culture forms a key constituent part of the internal environment within which managers work. Daft (2012) defines culture as, “the set of key values, beliefs, understandings, and norms shared by members of an organization” (p.75). Starbucks values work relationships and appreciates employees as the first point of contact with customers. Employees at Starbucks are valued as “partners” and are called Baristas and are regarded as the face of the company who “create uplifting experiences for the people who visit the store and make perfect beverages-one drink and one person at a time” (Brown, 2012).
Starbucks fosters a company culture that values the needs of the customers. The old adage that the customer is always right holds true at Starbucks and gets a new impetus through the provision of unique experience. Service at Starbucks is customized for every customer from the time the order is placed. The Barista writes the customer’s name on the cup and once the beverage is ready calls out the name in the cup. As much as this is just a simple way of tracking one’s order, the effect of having one’s name called out is tremendous. By the time the customer’s name is called out, the customer might have already forgotten he or she gave out his/her name at the register and might feel known to the Baristas. This gives the service a personal touch lifting the whole service experience to a new level. Starbucks great customer service contributes to its success in a global economy.
The great customer service experienced at Starbucks comes from well-trained employees. Starbucks’ values are inducted through continuous employee training. Employees are encouraged to have conversation with customers and if possible learn and remember their names. The training equips the employees with soft skills as well as product knowledge to help meet the needs of diverse customers. A well-trained workforce espouses the company’s culture. Starbucks Corporation CEO, Howard Schultz has written that, “so much of what Starbucks achieved was because of its employees and the culture they fostered” (Katzenbach and Aguirre, 2013). A well-trained Starbucks workforce is thus a key contributor to its success in a global economy.
Employees at Starbucks are subject to dress code. Dress and the green company logo are the artifacts that are visible to the customer and go a long way in entrenching Starbucks culture. The Starbucks logo is increasingly gaining prominence globally not entirely because of marketing efforts by the company, but because of the ‘coffee’ experience the company serves. Whether the green logo was conceived to portray a commitment to the environment or a sheer stroke of genius, one cannot tell but obviously it is a memorable cultural symbol. The logo and the dress code help in evoking brand recall globally making Starbucks’ the coffee house of choice globally.
Starbucks organizational culture is anchored on diversity. Diversity at Starbucks is real and inclusion of all ethnicities and cultures is evident at a glance. This has made Starbucks stand tall among competitors both locally and globally. Integrated diversity and inclusion comes handy when expanding to foreign markets and in my opinion, this has contributed to its success in a global economy. Diversity has also given customers a sense of belonging which is in line with Harold Shultz’s vision of creating a third place—a place between work and home.
Organizational culture is important to an organization as it energizes and enhances the employees leading to high performance. For a company’s culture to be beneficial, it has to be aligned with the company’s strategies. This is the role of management. It is the management’s role to create a culture that embodies what it takes to succeed in the environment not to forget that there has to be a near perfect sync between culture, strategy, and the environment. Depending on the needs of the environment and the strategic focus of the organization, management has to choose which category of culture to put emphasize on. The four main cultural categories are adaptability, achievement, involvement, and consistency (Daft, 2012).
Sustaining an organizations culture is as important as creating one. It is the management’s role to guide the organization so as not to veer off the set values, beliefs and norms. The ‘way we doing things here’ as much as it carries organization culture undertones has a direct bearing to the standards in the organization. It is the role of management to uphold these standards so as to deliver consistent and attractive profitability.
Starbucks’ Innovative Offerings
Starbucks espouses a culture of innovativeness. In recent times, the management decisions in providing innovative offerings for its customers such WiFi and style of coffee has established its unassailable lead in coffee shop industry. Starbucks stored are envisaged to be more than coffee shops but a meeting place for professionals. The provision of free WiFi in all Starbucks stores fit very well with the company’s mission. Free WiFi is value addition to the stores and resonates well with customers who can transact business online as they enjoy a cup of coffee. The innovative offerings give Starbucks stores unique ambiance differentiating them from other coffee houses. Product or brand differentiation is important in gaining competitive marketplace advantage.
Innovative offerings are key differentiators and as much as they as easily aped by competition, the first company to offer new services has an advantage over others. Starbucks style of coffee is unique. The company offers many innovative variations in sizes, flavors and preparation techniques. This is geared towards meeting the tastes of diverse customers. Provision of variety to its customers makes Starbucks achieve its current competitive marketplace advantage. It is worthwhile noting that Starbucks is widening its product portfolio as part of its innovative offering.
Tea, water and a host of other bottled drinks feature prominently in Starbucks menu. Starbucks evening offering sells bottled beer or wine at select stores. Drive-thru Starbucks are mushrooming in some locations where customers can grab a cup of coffee on the go. This is in response to customers who have time pressure, but still need their daily dosage of coffee. Starbucks reward cards are innovative offerings that are proving very effective in strengthening the company’s competitive advantage. Starbucks has not been left out in social media usage and a customer can tweet coffee to his/her tweeter follower. Key Management Competency
One key competency that a successful manager at Starbucks is likely to have is human skills. According to Daft (2012), “Human skill is demonstrated in the way a manager relates to other people, including the ability to motivate, facilitate, coordinate, lead, communicate, and resolve conflicts” (p.11). Starbucks is about people; building relationships with employees and customers. To be effective in building relationships, one has to have strong human skills. A key pillar of Starbucks’ organizational culture is building relationships. Human skills competency is essential in fostering Starbucks’ culture of relationship building. A manager possessing the human skills competency would be a good fit as he or she would sustain Starbucks’ existing values and beliefs fostering the company’s ongoing high performance.
Starbucks after Howard Shultz
Starbucks would achieve long-term sustainability as a global leader in the coffee industry without the organization’s CEO, Howard Shultz. Starbucks appeal globally is on the rise. This could be as a result of the company’s marketing efforts or the emergence of global citizens. Global citizens are a new type of citizens identified by researchers as positive toward international brands as they view them as a signal of higher quality (Hawkins et al, 2013). Whatever the case, Starbucks remains a powerful brand that is well received globally with a potential to remain the industry’s leader with or without Shultz. Howard Shultz has contributed immensely to the growth of Starbucks.
He is a cultural leader who has helped built enviable culture at Starbucks. In place are tested values systems and plans that can be replicated or deployed by future CEO’s to maintain Starbucks momentum should Shultz call it a day. The cultural values he has put in place at Starbucks are connected to the business performance and would, in his absence, see Starbucks forge forward to achieve long-term sustainability as a global leader in the coffee industry. The CEO is the most visible leader in a company and to some extent the custodian of the organization’s culture.
However, no one CEO should be indispensable as the organization should always be more important than the individual. When Shultz finally does exit the scene, and if there is no succession plan in place, the market is replete with qualified people who can lead Starbucks to greater heights of success. A few years back Apple Company was synonymous to Steve Jobs and many where skeptical about the survival of Apple Company after Steve Jobs. As it turned out, the company is doing very well under a new leader. The same can be said of Starbucks and Shultz. An organization that is anchored on sound management principles and a sound corporate culture should be able to survive a change in leadership and scale greater heights of success as it can weather any marketplace storm. Mastering the environment, good products or services and satisfied customers has seen organizations such as Coca-Cola maintain leadership in their respective industries under different CEO’s for decades.
Brown, J. (2012). The Role of Baristas in Starbucks. Retrieved on 4/23/2014 from http://starbucks-baristas.blogspot.com/2012/09/v-behaviorurldefaultvmlo.html Daft, R. (2012). Management (10th ed.). Mason, OH: Cengage Learning Hawkins, D. I., Mothersbaugh, D. L., & Best, R. (2013). Consumer Behavior: Building Marketing Strategy (12 ed.). McGraw Hill. Katzenbach, J., & Aguirre, D. (2013). Culture and the Chief executive. Retrieved on 4/22/2014 from http://www.strategy-business.com/article/00179?pg=all