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Marketing and Management of Starbucks
Strategic Management of Starbucks
Starbucks' Human Resource Management Practices
Starbucks takes pride in being the largest coffee maker, having its operations in more than 49 countries. Human resource is one of the core functions of a company that benefits both the company and employees to attain mutual goals and advantages. The success of organizations lies in their HR vision. Starbucks is one of the biggest organizations operating globally, and the company has enjoyed significant growth since its commencement. Highly dedicated and motivated employees are the core of Starbucks ' success; the leadership was highly familiar with this notion. Thus, hiring the right people for the right job and getting them trained to attain sustainable long-term performance. One thing that differentiates Starbucks from its competitors is the way of managing its workforce inefficient manner. The company strategy gives more significance to the employees rather than its products and services.
At Starbucks, employees are treated as the partners of the organization; they are trained and motivated to ensure they contribute positively to the organizational missions and objectives. The w4ebsitye of the company indicates that it is aimed at creating a culture that fosters respect, inclusion, and diversity. The best example of this culture was witnessed was when Starbucks’ CEO Kenneth Johnson reacted to the event of detention of black men waiting for their colleague outside Philadelphia Starbucks in April 2018 ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"MY6C2dtv","properties":{"formattedCitation":"(Stankevi\\uc0\\u269{}i\\uc0\\u363{}t\\uc0\\u279{} & Savanevi\\uc0\\u269{}ien\\uc0\\u279{}, 2018)","plainCitation":"(Stankevičiūtė & Savanevičienė, 2018)","noteIndex":0},"citationItems":[{"id":1572,"uris":["http://zotero.org/users/local/orkqtrjP/items/TDAF3UWI"],"uri":["http://zotero.org/users/local/orkqtrjP/items/TDAF3UWI"],"itemData":{"id":1572,"type":"article-journal","title":"Designing sustainable HRM: The core characteristics of emerging field","container-title":"Sustainability","page":"4798","volume":"10","issue":"12","author":[{"family":"Stankevičiūtė","given":"Živilė"},{"family":"Savanevičienė","given":"Asta"}],"issued":{"date-parts":[["2018"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Stankevičiūtė & Savanevičienė, 2018). Along with other measures, anti-bias training was scheduled in almost 8000 stores, and corporate offices were kept closed for the purpose. The company is highly focused on diversity and inclusion mission, and the company's policies are designed to support the company's objective and mission to promote equity and inclusion. The mentoring program at the company ensures seniors are well aware to mentor juniors; employees participating in these programs report a high satisfaction rate. In addition, the company promotes good employee relationships to thwart the events of workplace violence.
Starbucks' strategy to attain competitive advantage
The business strategy of Starbucks has enabled the company to build and sustain a competitive advantage despite high saturation in the market. A range of corporate and business strategies enabled the company to earn a high reputation amid its customers. One of the most successful business strategies is to offer a third-place experience to the customers away from home. Starbucks customers enjoy their work in the store, along with a cup of coffee, consuming the company's wireless internet connection. The stores are meticulously designed to captivate customers and stimulate them to keep coming back.
Starbucks was born with the idea of providing quality products and services to its customers. Thus, the business strategy of the company is aimed at quality in the beans it used, quality in the service, the ultimate source of competitive advantage. One of the major elements of Starbucks ' strategy to attain a competitive advantage is an expansion in the international markets. Quality of products and services resulted in word of mouth marketing, followed by the rapid expansion of the coffee chain in multiple cities. Quality is the unique value proposition offered to the customers to build a sustainable competitive advantage. The company clustered its stores in the significant
Another strategy was to build strong customer relationships, catering to their unique needs ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"h7Sui2bi","properties":{"formattedCitation":"(White & Moraschinelli, 2009)","plainCitation":"(White & Moraschinelli, 2009)","noteIndex":0},"citationItems":[{"id":1573,"uris":["http://zotero.org/users/local/orkqtrjP/items/HVEBRMPH"],"uri":["http://zotero.org/users/local/orkqtrjP/items/HVEBRMPH"],"itemData":{"id":1573,"type":"book","title":"The Pursuit of Sustainable Competitive Advantage: A Profile of the Starbucks Corporation","author":[{"family":"White","given":"Benjamin"},{"family":"Moraschinelli","given":"Ettore"}],"issued":{"date-parts":[["2009"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (White & Moraschinelli, 2009). Every store of Starbucks is designed to provide a multisensory experience to the customers, and in this regard, attention to detail is the main focus of the company. Baristas are trained to have a happy conversation with customers. In addition, the company opened its stores in multiple locations and saturated the market by creating awareness and acquiring a high market share. High quality and quick service pull many people to Starbuck's stores and resulted in a grave competitive advantage.
Innovation and Changes at Starbucks
The most indispensable factor in any business environment is change. The brand philosophy of keeping customers happy spins around offering quality to customers along with the enjoyable memories. In addition, the company is also keeping up with the evolving business needs and customers’ demands. Innovation in its practices and responding to the changing customer needs is something that has enabled the company to sustain a level of customer satisfaction and keep attracting customers. The contemporary innovation hub of the company, Tryer Center, is speeding up innovation, which is centered on creating digital relationships with customers, enhancing in-store experiences, and innovating beverage platforms. The company also uses an online crowdsourcing platform, Springboard, for the people to submit ideas, innovate, and collaborate. People with different knowledge level partners to enhance business performance. The company has also undergone innovation in the cold beverages that accelerated the company's sales, and they are looking forward to continuing on the same platforms ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"L87Sn4nF","properties":{"formattedCitation":"(Rogers, n.d.)","plainCitation":"(Rogers, n.d.)","noteIndex":0},"citationItems":[{"id":1574,"uris":["http://zotero.org/users/local/orkqtrjP/items/768YGAZU"],"uri":["http://zotero.org/users/local/orkqtrjP/items/768YGAZU"],"itemData":{"id":1574,"type":"webpage","title":"Starbucks is speeding up innovation at its Seattle research hub","URL":"https://www.cnbc.com/2019/05/02/starbucks-is-speeding-up-innovation-at-its-seattle-research-hub.html","author":[{"family":"Rogers","given":"Kate"}],"accessed":{"date-parts":[["2019",11,19]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Rogers, n.d.).
The company is always highly focused on market research that involves gathering customers’ feedbacks, monitoring social media, following cultural trends, and product testing. Data from several marketing research firms are also used to innovate new products, services, and processes. For instance, based on the market data of dairy-free milk sales, the company offered dairy-free alternatives that turned out very successful. The company also underwent several strategic changes in order to meet the customer requirements to better focus on enhancing customer experiences. It took several customers facing initiatives to transform customer experiences. In 208, the company made several structural changes that involved the reduction of the workforce, elimination of existing positions, and consolidation of support functions to drive functional excellence. Customer-Focused field support was established to focus more on business partners, customers, and products ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"rLxj8Vqd","properties":{"formattedCitation":"(\\uc0\\u8220{}STARBUCKS MAKES ORGANIZATIONAL CHANGES TO ENHANCE CUSTOMER EXPERIENCE - Starbucks Stories,\\uc0\\u8221{} n.d.)","plainCitation":"(“STARBUCKS MAKES ORGANIZATIONAL CHANGES TO ENHANCE CUSTOMER EXPERIENCE - Starbucks Stories,” n.d.)","noteIndex":0},"citationItems":[{"id":1576,"uris":["http://zotero.org/users/local/orkqtrjP/items/GDLZEY8Z"],"uri":["http://zotero.org/users/local/orkqtrjP/items/GDLZEY8Z"],"itemData":{"id":1576,"type":"webpage","title":"STARBUCKS MAKES ORGANIZATIONAL CHANGES TO ENHANCE CUSTOMER EXPERIENCE - Starbucks Stories","URL":"https://stories.starbucks.com/stories/2008/starbucks-makes-organizational-changes-to-enhance-customer-experience/","accessed":{"date-parts":[["2019",11,19]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“STARBUCKS MAKES ORGANIZATIONAL CHANGES TO ENHANCE CUSTOMER EXPERIENCE - Starbucks Stories,” n.d.). The company also keeps investing in brewing technologies to speed up the process of making coffee and reducing customer waiting time.
Marketing at Starbucks
Starbucks is one of the most remarkable brands, and its success lies in a strong marketing strategy. The company has been able to create a positive image globally owing to its exceptional marketing strategies. Its marketing strategy revolves around simple experiences to make customers happy and satisfied. Weakness and threats are the two most common strategic internal forces that impact the operations of the company. Based on the SWOT analysis of the company, companies use their strengths to overcome weaknesses and exploit opportunities. The following section is based on recommendations to Starbucks to convert its weakness into strength and threat into an opportunity.
Marketing Recommendations
One of the Starbuck Weaknesses highlighted is, the company is too dependent on word of mouth to create brand awareness. WOM marketing is taking an important role nowadays because it brings a lot of profits to a company with a low cost. For instance, a company using WOM marketing for its products or services may not have to spend too much money on advertising such as TVC/ printing posters and so on. The company has to give attention to the quality of products or services that are providing to customers, trying to satisfy them as much as possible during recession. When a customer is happy and satisfied, he/she will highly recommend this company's products/services to his/her family, friends, colleagues. The same goes for Starbucks; the company is able to attract a large number of customers due to the positive WOM. Nonetheless, relying too much on WOM marketing is a weakness. What will happen if there are numerous of customers saying good words about a company, the results will be very attractive for the company. Now it is time to convert this weakness into a strength. Strengths are all those actions that a company does well. It could be anything ranging from knowledge to having the right talent in the organization.
For the purpose of creating brand awareness, the company must utilize other sources and marketing techniques. In this case, the company has its hands on the power of positive WOM; it can be utilized to enhance brand image, not only in the eyes of potential customers but in the eyes of everyone. For instance, WOM promoting an excellent workplace environment, diversity, and inclusion will help a company to attract the best talent from the market. Positive WOM about company's good and ethical practices will enhance its demand in different regions of the world, ensuring a high market share for the company and making it a leading brand. It will further attract more investors building a strong value of the company
Likewise, one of the threats assessed from the SWOT analysis of the company is that a downturn in the economy can decrease customer traffic and spending. Recession is generally the setback for the company's revenues and sales, but it can be utilized as an opportunity. The company must keep investing in research and development rather than cutting costs. Many companies cut back on R&D during the recession, but investing in D&D results in a new product for customers as soon as the recession ends ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"cwcuKuL7","properties":{"formattedCitation":"(Roberts, 2003)","plainCitation":"(Roberts, 2003)","noteIndex":0},"citationItems":[{"id":1579,"uris":["http://zotero.org/users/local/orkqtrjP/items/T78ZJ8GC"],"uri":["http://zotero.org/users/local/orkqtrjP/items/T78ZJ8GC"],"itemData":{"id":1579,"type":"article-journal","title":"What strategic investments should you make during a recession to gain competitive advantage in the recovery?","container-title":"Strategy & Leadership","page":"31-39","volume":"31","issue":"4","author":[{"family":"Roberts","given":"Keith"}],"issued":{"date-parts":[["2003"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Roberts, 2003). In addition, it is the right time to spend some time learning about the customers of your weakest competitors. Focus on gaining new potential customers, along with retaining old ones. During a recession, suppliers and distributors should be managed critically to develop a long-term relationship. Think carefully about the talent needs of the company.
At the time of recession, most companies reduce their workforce to cut costs, but taking care of talent enhances employee loyalty, and they are highly motivated to devote themselves to the company's mission. In addition, the company has to deal with price fluctuations efficiently. Starbucks has already set an example of a good pricing strategy in the recession of 2008. If a company like Starbucks directly linked the price they charge consumers for each cup of coffee to the fluctuations in the market, cafe latte prices would be rising and falling constantly. Even a cup of drip coffee could change monthly, or weekly. Consumers, no doubt, would not prefer that, or tolerate that. Starbucks absorbs the commodities price fluctuations, doesn't pass those on to customers, and keeps its price to the consumer stable. Adjusting them every few years, but rarely lowering them.
Implementation of these marketing strategies based on the SWOT analysis will have an impact on the disciplines of Marketing, Finance, Management, and Operations. Leveraging the WOM strategy for several other purposes and using other techniques to create brand awareness will impact the marketing and finance department in the first place. The company will have to set marketing budgets and new plans. In addition, its operations will expand, influencing structure and management. The HR practices will also be impacted since WOM will result in the attraction of better talent. In the times of economic downturn, the company's operations will take a different turn, the finances will be lower, and cash flow will be condensed. The company might need to make some decisions with regard to change in management and structure, decisions to relocate some operations, and focusing on a few profitable products and services. In addition, the marketing strategy will be influenced to design offerings convenient for the customers to avail in the times of recession.
References
ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Roberts, K. (2003). What strategic investments should you make during a recession to gain competitive advantage in the recovery? Strategy & Leadership, 31(4), 31–39.
Rogers, K. (n.d.). Starbucks is speeding up innovation at its Seattle research hub. Retrieved November 19, 2019, from https://www.cnbc.com/2019/05/02/starbucks-is-speeding-up-innovation-at-its-seattle-research-hub.html
Stankevičiūtė, Ž., & Savanevičienė, A. (2018). Designing sustainable HRM: The core characteristics of emerging field. Sustainability, 10(12), 4798.
STARBUCKS MAKES ORGANIZATIONAL CHANGES TO ENHANCE CUSTOMER EXPERIENCE - Starbucks Stories. (n.d.). Retrieved November 19, 2019, from https://stories.starbucks.com/stories/2008/starbucks-makes-organizational-changes-to-enhance-customer-experience/
White, B., & Moraschinelli, E. (2009). The Pursuit of Sustainable Competitive Advantage: A Profile of the Starbucks Corporation.
