Starbucks:
The Starbucks Corporation is an American coffee company and coffeehouse chain based in
Seattle, Washington. Starbucks is a Multinational Corporation which has several stores located in
different countries.
It uses polycentric approach stuffed with host country nationals.
History:
In 1971 Starbucks' founded as a Seattle coffee bean roaster and retailer, the company has
expanded rapidly.
In April 2003, Starbucks completed the purchase of Seattle's Best Coffee.
In September 2006, rival Dietrich Coffee sell its owned retail stores to Starbucks.
In early 2008, Starbucks started a community website (My Starbucks Idea).
IN 2009, Starbucks began beta testing its mobile app for the Starbucks card.
In January 11, 2011 Starbucks released its complete mobile platform.
In September 2014, it was revealed that Starbucks would acquire the remaining 60.5 percent
stake in Starbuck Coffee Japan that it does not already own.
Mission:
To inspire and nurture the human spirit one person, one cup and one neighborhood at a time.
Existing Components of Mission Statement:
Markets
Customers
Products
Philosophy
Concern for public image
SWOT analysis
Strength
s
Opportuniti
es
Threats
Strengths:
Global Brand Recognition.
Weaknes
ses
Human resources management .
High quality products .
Diverse product mix .
Customer base loyalty.
Use of technology
Weaknesses:
Expensive products.
Overdependence in the U.S market .
Culture clash in different markets.
Negative large corporation image.
Opportunities:
Expansion into upcoming market.
Technological advances.
Expansion of its product mix.
New distribution channels.
Expansion of retail operations.
:Threats
Developed countries economies.
Increased competition.
Changing consumer tastes and preferences.
Price instability in the coffee market.
Market saturation in developed economies .
Segmenting ,Targeting and Positioning:
Segmentation:
Demographic segmentation (markets by age, gender, income, ethnic background, and
family life cycle).
Geographic segmentation (markets by region of a country or the world, market size,
market density, or climate).
Target Marketing for young adults (aged 18-24 ) Starbucks target this group through
the growth of technology and innovative ideas.
Market Positioning Starbucks has positioned themselves as a highly respected
brand, which gives them an advantage.
Organizational Structure:
The firms industry leadership is partly attributed to the appropriateness of its
organizational structure. A companys organizational structure influences management
and leadership, communication, change, and other variables critical to business success.
Starbucks has evolved to have an organizational structure that matches current business
needs. This organizational structure is unique to Starbucks, although it can be
characterized based on a conventional typology of organizational structures. Starbucks
succeeds because its organizational structure grows with the business, enabling the
company to optimize processes and the quality of its goods and services.
Starbucks Coffees organizational structure evolves to serve the needs of the business. This
structure supports the companys concerns in global expansion and diversification.
Features of Starbucks Coffees Organizational Structure
Starbucks has a matrix organizational structure, which is a hybrid mixture of different features
from the basic types of organizational structure. The following are the main features of Starbucks
Coffees organizational structure:
Functional structure
Geographic divisions
Product-based divisions
Teams
1. Functional Structure: The functional structure feature of Starbucks Coffees
organizational structure refers to grouping based on business function. For example, the
company has an HR department, a finance department and a marketing department.
These departments are most pronounced at the top levels of Starbucks Coffees
organizational structure, such as at the corporate headquarters. This feature relates with
hierarchy in the organizational structure of Starbucks. For instance, the corporate HR
department implements policies applicable to all Starbucks cafs. The functional structure
feature of the firms organizational structure facilitates top-down monitoring and control,
with the CEO at the top.
2. Geographic Divisions. Starbucks Coffees organizational structure also involves
geographic divisions. At present, the company has three regional divisions for the global
market: (a) China and Asia-Pacific, (b) Americas, and (c) Europe, Middle East, Russia
and Africa. Also, in the U.S. market, Starbucks Coffees organizational structure involves
further geographic divisions: (a) Western, (b) Northwest, (c) Southeast, and (d) Northeast.
Each geographic division has a senior vice president. In this way, each Starbucks
manager reports to two superiors: the geographic head (e.g. President of U.S. Operations)
and the functional head (e.g. Corporate HR Manager). This feature of Starbucks Coffees
organizational structure supports closer managerial support for geographic needs. Each
division head is given a high degree of flexibility in adjusting strategies and policies to
suit specific market conditions.
3. Product-based Divisions. 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 firms organizational
structure enables focus on certain product lines. In this way, Starbucks effectively
develops and innovates its products with support from its organizational structure.
4. Teams. Teams are used in different parts of Starbucks Coffees organizational structure.
However, teams are most notable at the lowest organizational levels, particularly the
Starbucks cafs. In each caf, the firm has teams organized to deliver goods and service
to customers. This feature of Starbucks Coffees organizational structure enables the
company to provide effective and efficient service to consumers.
Organizational Design:
Organizational design is a step-by-step methodology which identifies dysfunctional
aspects of work flow, procedures, structures and systems, realigns them to fit current
business realities/goals and then develops plans to implement the new changes.
Organizational design Elements:
1-Specialization:
Jobs at Starbucks are specialized especially at the retail level.
Example:
Some stores operate with a drive thru windows. At any given time there will be four
employees working to operate the drive thru window: one to take orders, one to handle cash,
one to work the espresso machine, and a floater who can fill in where needed.
2-Span of control:
Having district managers visit from 8-10 stores and having the right number of employees, a
manager can handle to be the most productive.
3-Departmentalization:
Functi
on
Geogra
phical
Produc
t
Custom
er
4-Centralization and Decentralization:
Centr
alizati
on
Decentr
alizatio
n
5-Chain of command:
Starbucks organization structure consists of board members who make decisions with the
CEO. The CEO then discusses plans with their chiefs in order to implement rules .
6-Formalization:
Starbucks does a great job with formalizing their jobs through training their employees.
