Since the day of foundation in 1971, Starbucks became one of the most successful coffee companies in the world (Larimore, 2013). Success of this corporation can be called phenomenal, and the companys innovative strategies change the way of management in the 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, in order to keep the prosperity, it is necessary to develop the companys strengths and find more innovative approaches for its development. For efficient companys 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 companys accomplishments.
In the contemporary world, there are many coffee companies that achieved success, but Starbucks has become No.1 coffee brand globally. The enterprise was founded on the basis of Pikes Place store in Seattle. In August 1987, the company became Starbucks Corporation. Howard Schultz, Jerry Baldwin, Zev Siegel and Gordon Bowker chosed 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 significant attitude towards customers. The business offers fresh-roasted, whole-bean coffee, the possibility to use Wi-Fi, and purchase of music CDs to its clients.
We'll write an essay from scratch according to your instructions!
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 a name of this customer on a cup. Close relationships with the clients is essential for the Starbucks company, and this is one of the companys central advantages. One of the firms benefits is a good relaxing environment inside its cafes. Starbucks principle 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 a 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 extremely positive reputation, where the companys 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 by high employees 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. In addition, the company puts many efforts on various trainings for its workers as updated education is needed for creation of the highly proficient staff.
Regardless 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 in order to not be depended 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 companys 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 the corporation which products are accessible for all people. The main advantage is a high quality of coffee beans, and other goods; however, their price is higher in comparison with its competitors. In order 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 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 the 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 McDonalds, but Starbucks products can be bought in Starbucks cafes. Hence, Starbucks are 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 coffeehouse, 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 summer time, 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 products range diversification. Moreover, the business can provide its customers with 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 companys success, and Starbucks has to pay enough attention to this factor.
Marketing Assessment Plan
Starbucks is a brand, and positive reputation of this brand plays an extremely notable role in the companys success. Consequently, the firm must make more efforts in order to keep the 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 issues of the company. The companys logo became one of the most well-known and recognizable in the world. However, during the history of the companys logo, it has changed throughout the years. With respect to the issue, it is needed to make transformations in logo that will signify the evolution of the company. Nonetheless, the management always should take into account the retailers 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 corporations success. Social networks are extremely important part of the companys 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 of the fact that 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 marketing strategy brings many opportunities. First, it is communication with the clients; second, sharing by the necessary information, news, and ideas, and the social media is a good reminder as people are always in touch.
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 in 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 the 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 a makeup or share with 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 entertainment way.
Another significant issue is the use of technological advancements. It is beyond any doubt that technologies make peoples life more comfortable, easier, and faster. Starbucks customers prefer active lifestyle and are usually in rush, so it is vital to use technologies in order to make the service faster. For instance, currently, Starbucks offers the ability to pay through mobile phones. This kind of payments 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. In addition, 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.
Furthemore, Starbucks is well-known for its cheap Internet access, and many customers prefer to spend a time in Starbucks and using this opportunity. Specifically, the business has pplied 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 being also beneficial to the libraries themselves by increasing students traffic. The company should develop such facilities and search for the new markets or possibilities in order 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 an 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 companys success. One of the most significant keys of the companys prosperity is its employees. The leading retailer pays much attention on staffs development, 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 environment in which businesses operate is valuable for its performance. 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 business environment is the economic environment. Today, with the global crisis and other negative sides of the economy, labor market has many negative aspects. Unfavorable tendencies in economic situation lead to reduce of 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 availability of talent (Brunot, n.d.). Starbucks treats its employees in an appropriate way, and puts a lot of efforts on creating good atmosphere and working conditions, as well as fair treatment to them. This issue is crucial as good treatment of employees influences a positive reputation of the company.
The main goal of 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, it is necessary for an HR manager to hire employees who have enough competence for this department. In addition, 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 confidentially. There are many cases when the personnel come to the HR department with complaints and some of them can be personal. With regard to 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 in order to make a professional team.
Apart from the hiring process, it is also essential to implement the right managerial approaches according to relationships of superiors with their subordinates.
- In a frequent contact with their superiors.
- Can improve the performance of managers.
- Managers may be hesitant to endorse such system.
- Appraisal information should be submitted anonymously.
HR managers need to be assessed on their performance with dealing with stress in an organization. This can be done through analyzing results and behaviors.
Using the Maslows 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 the fact that team building is one of the most significant aspects of the successful activity. Thus, it is necessary to develop relationship 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. In addition, 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 its 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 contact, it is possible to lighten such aspects as content and evaluation, conflict, and customer service. As it has been mentioned above, adaptability is one of the most needed aspects of the companys efficient operation. It is recommended that the corporation is to develop such issues as education within the business by providing new trainings or educational opportunities. Moreover, it is vital to provide the employees with such training where they will collaborate with each other on the more personal level, and in its turn, this will increase its team work. 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 trainings, motivational programs, bonuses, and team building programs. The latter is a crucial for the company since all employees work in a team. Starbucks is one of the best examples of the successful HR strategy and organizational structure, but, in any case, it has its paths for improvement.
Hense, the paper has discussed Starbacks financial, economic, marketing, and organizational characteristics thoroughly and outlined possible ways to improve its operational opportunities within these dimensions.
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. In order 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. In addition, 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.