Since the day of its foundation in 1971, Starbucks became one of the most successful coffee companies in the world (Larimore, 2013). The success of this corporation can be called phenomenal, and the company’s innovative strategies change the way of management in modern business. From year to year, Starbucks has increased its forces and spread its coffee cafes and shops throughout the world. The organization is the most successful among coffee companies. However, to keep the prosperity, it is necessary to develop the company’s strengths and find more innovative approaches for its development. For efficient company development, it is vital to implement the most effective financial, managerial, and marketing strategies, which will increase Starbucks ‘ profit in the future. In the next three years, the company should implement necessary changes in economic and marketing strategies that will consequently help to prevent possible risks and multiply the company’s accomplishments.
In the contemporary world, many coffee companies achieved success, but Starbucks has become the No.1 coffee brand globally. The enterprise was founded based on the Pikes Place store in Seattle. In August 1987, the company became Starbucks Corporation. Howard Schultz, Jerry Baldwin, Zev Siegel, and Gordon Bowker choose a client-orientated strategy of management and changed the imagination of how the coffee company ought to work. Starbucks is having around 20,000 coffeehouses operating in more than 60 countries (Shah, Thomson, and Hawk, 2006). The history of the company has started when its founders decided to create coffee cafes that will have a specific atmosphere of relaxation and a significant attitude towards customers. The business offers fresh-roasted, whole-bean coffee, the possibility to use Wi-Fi, and the purchase of music CDs to its clients.
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One of the main winning strategies of the company is customer-orientated approaches in management and service. For example, when the customer is ordering a cup of drink, a servant or seller must put the name of this customer on a cup. Close relationships with the clients are essential for the Starbucks company, and this is one of the company’s central advantages. One of the firm’s benefits is a good relaxing environment inside its cafes. Starbucks ‘ principal purpose is to create an atmosphere where its consumers can hide from the busy world and relax. While drinking a cup of best-quality tea or coffee, the customers can surf the internet and listen to beautiful and relaxing music. Moreover, they can purchase different products, such as coffee or tea, cups or accessories of Starbucks, and even CDs with wonderful music.
Another notable benefit is that Starbucks has its coffeehouses all over the world. The brand Starbucks has an extremely positive reputation, where the company’s main benefits are good service and high quality of the products. The trademark analyzed is valued at $4 billion, and its coffeehouse segment has the highest indexes (Jurevicius, 2012). Starbucks is also well-known for high employee motivation, and good treatment. The business creates a positive environment for its staff, where every employee gets bonuses according to his or her achievements, good salary, and the possibility of promotion. Besides, the company puts many efforts into various training for its workers as updated education is needed for the creation of highly proficient staff.
Regardless of its strengths, the company has its weak sides and treats for its performance. The first weakness is high prices for its products, especially abroad, for example, in Europe, prices are too high for the local consumers in comparison with other coffeehouses. As a result, competitors with lower prices get more benefits than Starbucks. One more treat for the business operations is that to get coffee beans, the company grows this product in South America, Africa, or Arabia. For the corporation, it is necessary to find new suppliers to not be dependent on good or bad African harvests (Shah, Thomson, and Hawk, 2006). Other issues are new markets and new products.
Therefore, the paper is about to analyze the company’s financial, economic, marketing, and organizational characteristics thoroughly and outline possible improvements of its operation within these dimensions.
Economic and Financial Assessment Plan
In this proposal, there is a three-year strategic plan related to Starbucks coffee company. Starbucks is positioning itself as a corporation which products are accessible for all people. The main advantage is the high quality of coffee beans, and other goods; however, their price is higher in comparison with its competitors. To decrease the prices of the products, it is vital to decrease expenses. As it has been mentioned above, Starbucks should find new suppliers, and as a result, it will bring more opportunities to reduce costs and get more profits.
Another important opportunity for the company is to search for new markets. During these three years, the global coffee retailer must set the goals and prevent all possible risks. Coffeehouses of Starbucks are opened throughout the world, but there are some countries where it can be profitable to open new cafes or shops. For example, not long time ago, Starbucks has opened facilities in Russia and became extremely profitable and popular among local people. The new markets can be found in Asia and Eastern Europe. Such countries as Ukraine can become profitable as potential customers there welcome Western products, and its economic situation increased in recent years. In Asian countries, Starbucks can become also popular since today many countries in the region have developed favorable economic conditions and local people are open for the Western products as well.
Starbucks combines not only cafes but also sells such products as tea, coffee, and various products like cups, or accessories related to coffee. In the next three years, the firm should spread its channels of distribution. Starbucks main competitors, e.g. Nescafe or McCafe, have some advantages in their channels of distribution. Nescafe products are sold in most shops and supermarkets, and McCafe is usually located near McDonald’s, but Starbucks products can be bought in Starbucks cafes. Hence, Starbucks is to find new channels of distribution, such as supermarkets and coffee shops. However, it is necessary to consider that Starbucks products have the reputation of high-quality tea and coffee that bring people a significant mood and atmosphere of relaxation and good taste. In this regard, channels of distribution need to have the same reputation.
Another significant issue is that the range of Starbucks products is limited. In Starbucks coffeehouses, it is possible to buy coffee and tea. Nevertheless, in the next three years, the company can spread its assortment and add new goods. For instance, during summertime, in Starbucks, it is necessary to sell more cold drinks like lemonades or cocktails. In the nearest time, the corporation must choose the direction of product range diversification. Moreover, the business can provide its customers with a more extended range of food products. For instance, sell not only deserts but suggest lunches and other food. This issue also refers to such products as cups or different accessories. Diversification of the products is a critical issue in each company’s success, and Starbucks has to pay enough attention to this factor.
Marketing Assessment Plan
Starbucks is a brand, and the positive reputation of this brand plays an extremely notable role in the company’s success. Consequently, the firm must make more efforts to keep a positive reputation and increase its advantages. According to the three-year plan, it is possible to see that many changes must be set during the period intended. First, it is necessary to develop in every issue of the company. The company’s logo became one of the most well-known and recognizable in the world. However, during the history of the company’s logo, it has changed throughout the years. Concerning the issue, it is needed to make transformations in the logo that will signify the evolution of the company. Nonetheless, the management always should take into account the retailer’s main traditions and culture and make all changes according to its philosophy.
Marketing strategies in Starbucks company are phenomenal as each action of the marketing department leads to the corporation’s success. Social networks are an extremely important part of the company’s marketing strategy. As DigitalSparkMarketing (2013) has asserted, Their social media strategy is built around their company website and 6 additional social platforms, including Twitter, Facebook, Pinterest, G+, Youtube, and My Starbucks Ideas (Schoultz, 2013). One of the most valuable advantages of social media is close relationships with customers. Because Starbucks is one of the earliest adopters of the use of social media for marketing and social commerce, Starbucks has certainly taken a leadership position (Schoultz, 2013). The issue is that such a marketing strategy brings many opportunities. First, it is communication with the clients; second, sharing the necessary information, news, and ideas, and social media is a good reminder as people are always in touch.
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The company must continue to keep good relationships with its clients with a help of social media. In this field, the enterprise chooses the right direction, and in the future years, it must focus on social media marketing strategy. Nonetheless, it is also possible to change or add some innovations: for example, in recent times, it has become popular to promote products through video blogs. Most cosmetics companies use this type of advertising. There are many video blogs dedicated to beauty or make-up, where professional or not professional stylists are teaching how to create makeup or share useful beauty tips. The same practice is possible to make with Starbucks company. Representatives of this corporation can teach how to make different types of coffee at home or describe the variety of the products in an entertaining way.
Another significant issue is the use of technological advancements. It is beyond any doubt that technologies make people’s life more comfortable, easier, and faster. Starbucks customers prefer an active lifestyle and are usually in rush, so it is vital to use technologies to make the service faster. For instance, currently, Starbucks offers the ability to pay through mobile phones. This kind of payment is comfortable and has become spread among customers. Moreover, many customers prefer mobile payments. The issue is that it helps to avoid queues and reduce the time. Besides, it is possible to provide clients with other payment possibilities. Particularly, in rush time, there should be the possibility to make orders with a help of electronic devices or a servant who accepts orders through these tools. In this way, it will reduce the time spending in queues.
Furthermore, Starbucks is well-known for its cheap Internet access, and many customers prefer to spend time in Starbucks and using this opportunity. Specifically, the business has applied this framework when opening new cafes within college libraries. In this case, it has been able to offer free Wi-Fi connection for its consumers is also beneficial to the libraries themselves by increasing student traffic. The company should develop such facilities and search for new markets or possibilities to attract more people to its cafes.
The Organizational Structure
Organizational structure is one of the most important business functions within the corporation where the division of labor creates different departments (units). This is extremely favorable for efficient business performance as each department should fulfill the tasks according to its competence. Starbucks is a large company with a well-established organization, where every department is vital for the company’s success. One of the most significant keys to the company’s prosperity is its employees. The leading retailer pays much attention to staff development, a positive working environment, and motivation (Shah, Thomson, and Hawk, 2006). The HR department plays a critical role in Starbucks ‘ functioning, and the company must develop this aspect of work.
It is certainly the case that the environment in which businesses operate is valuable for their performance. The business environment is defined as two main factors such as external and internal environments. External refers to the outside influences, like state, competitors, clients, and internal refers to the inside issues of the company. One of the most important aspects of a business environment is the economic environment. Today, with the global crisis and other negative sides of the economy, the labor market has many negative aspects. Unfavorable tendencies in the economic situation lead to a reduction of the labor and hiring process. For the HR department, it is vital to consider these issues, and in the HR strategic plan, it is necessary to make plans according to hiring, compensation, and training which accommodate the availability of talent (Brunot, n.d.). Starbucks appropriately treats its employees and puts a lot of effort into creating a good atmosphere and working conditions, as well as fair treatment to them. This issue is crucial as good treatment of employees influences the positive reputation of the company.
The main goal of the HR department in this step of the process is to search the employees following the necessary competence of the department. An effective HR manager should set the range of goals concerning every department and also according to the needs of the whole enterprise. For successful work of the HR unit, it is advisable to implement some items. First, an HR manager must hire employees who have enough competence for this department. Besides, it is vital to organize the team, set the main objectives and plans of work. For the HR department, it is critical to provide the employees with confidence. There are many cases when the person comes to the HR department with complaints and some of them can be personal. Concerning the issue, it is needed to impose trust on its employees, and consequently, they will feel free to come to the HR unit with any complaints or suggestions.
For every department and HR department as well, one of the most significant concerns is related to the educational process. The HR manager is to promote its leaders and talents to make a professional team.
Apart from the hiring process, it is also essential to implement the right managerial approaches according to the relationships of superiors with their subordinates.
- Infrequent contact with their superiors.
- Can improve the performance of managers.
- Managers may be hesitant to endorse such a system.
- Appraisal information should be submitted anonymously.
HR managers need to be assessed on their performance in dealing with stress in an organization. This can be done by analyzing results and behaviors.
Using Maslow’s hierarchy of needs, it is possible to understand this situation deeply. First, there are physiological and safety needs; in that case, it is possible to include stability and employment, good salary as motivation factors. Then, there are love and belonging. Another component is esteem: every person wants to feel that he or she is respected by others, also this aspect may involve self-confidence, self-esteem. The employee does not feel it because he/she cannot realize his/her ideas at work. His/her creative and intelligent part does not have an opportunity to develop.
It is a fact that team building is one of the most significant aspects of successful activity. Thus, it is necessary to develop relationships in any team and encourage team spirit. The individuals who feel comfortable inside the team will work better than those who work in disturbing and bad conditions. Strong management and motivation of the team members can result in the most effective and productive work and loyalty. Besides, a good leader should understand that every person in the company always has a lot of useful ideas. Besides, it is always better to work together because every employee has their own strengths and can add something innovative. Relationships with the team play a crucial role in the positive work environment. The main key competencies that must be viewed are communication, leadership, and adaptability. According to the psychological contract, it is possible to lighten such aspects as content and evaluation, conflict, and customer service. As has been mentioned above, adaptability is one of the most needed aspects of the company’s efficient operation. It is recommended that the corporation is to develop such issues as education within the business by providing new pieces of training or educational opportunities. Moreover, it is vital to provide the employees with such training where they will collaborate on a more personal level, and in its turn, this will increase its teamwork. What is more, it is necessary to develop hiring approaches that will bring the opportunity in searching for new talents.
Consequently, Starbucks must provide its staff with constant training, motivational programs, bonuses, and team-building programs. The latter is crucial for the company since all employees work in a team. Starbucks is one of the best examples of a successful HR strategy and organizational structure, but, in any case, it has its paths for improvement.
Hence, the paper has discussed Starbucks’ financial, economic, marketing, and organizational characteristics thoroughly and outlined possible ways to improve its operational opportunities within these dimensions.
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To summarize, Starbucks is one of the most successful coffee companies in the world. Each aspect of its work combines innovativeness and high quality. The main goal of the corporation is to provide its clients with high-quality products and the best service. The coffee retailer has established close relationships with the consumers since its strategies are client-orientated. In the next three years, the company must set a range of goals that will increase its competitiveness. The central problem of the company is high prices. To decrease the prices of the products, it is vital to decrease expenses. Consequently, Starbucks should find new suppliers, and as a result, it will bring more opportunities to reduce costs and get more profits. Also, it is necessary to spread the assortment and find new markets for its production. According to marketing strategies, the company is to develop its logo and the way of communication with the customers. Also, Starbucks as one of the most innovative organizations has to use technological advancements for creating more comfortable services. The company ought to focus its undivided attention on the development of employees, a positive working environment, and motivation. The HR department plays a crucial role in Starbucks’ performance, and the company should develop this aspect of the work.