Starbucks (WAC) Business Strategy Analysis. Project report

TABLE OF CONTENTS

Sr. # Description Page #

1 Introduction 2

2 Mission Statement 3

3 Objective & Goals 6

4 PESTEL Analysis 7

5 Porter's Five Forces Model Industry Analysis 9

6 The Strategy Formulation Analytical Framework

7 Stage - I, The Input Stage 14

8 Stage - II, The Matching Stage

SWOT Analysis 17

SPACE Matrix 18

BCG & IE Matrix 20

9 Stage - III, The Decision Stage 22

SPACE Matrix

QSPM

10 Value Chain 23

11 Recommendation 28

Business Strategy & Policy, Summer 2010.

1

Introduction

Name : Starbucks Corporation

Headquarters : Seattle, Washington, U.S.

Revenue for 2003 : US$3.3 billion

CEO : Howard Schultz (Founder of Starbucks coffeehouse)

Total Stores : 5886

Company started : In 1971 in Seattle, Washington

Positioning : Starbucks positioning itself as a “third place”

Products sold include : - Beverages - pastries

- Whole coffee beans - coffee-related retail items

Starbucks, the coffee production and serving company took its exceptional name from a

character of the novel “Moby Dick” and have its roots in Seattle, Washington. Here you

can still find the very first coffee shop at the pike place market, which has been opened

since 1971. In 1987, Starbucks was bought by Howard Schultz and ever since has been

exploring all over the United States. Today Starbucks is the most known chain of

coffeehouses around the world. Starbucks is the largest coffeehouse company in the world,

with 5,886 stores in 40 countries, including around 1312 in the United States. Starbucks

sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks, and

items such as mugs and coffee beans. Through the Starbucks Entertainment division and

Hear Music brand, the company also markets books, music, and film. Many of the

company's products are seasonal or specific to the locality of the store. Starbucks-brand ice

cream and coffee are also offered at grocery stores. Starbucks’ Italian style coffee, espresso

beverages, teas, pastries and confections had made Starbucks one of the greatest retailing

stories of recent history and world’s biggest specialty coffee chain.


2

Mission StatementMission Statement:

Not provided in Case study also not in website

Mission Statement (Original)

“Establish Starbucks as the premier purveyor of the finest coffee in

the world while maintaining our uncompromising principles while

we grow.”

The six principles are:

1. Profitability is essential to our future success.

2. Provide a great work environment and treat each other with respect and dignity.

3. Embrace diversity as an essential component in the way we do business.

4. Apply the highest standards of excellence to the purchasing, roasting and fresh

delivery of our coffee.

5. Develop enthusiastically satisfied customers all of the time

6. Contribute positively to our communities and our environment

Analyzing the Mission Statement Component

It is the analysis of mission statement of Starbucks in we examined the 9 elements rather they are

or not in this company provided mission statement.

NO COMPONENT YES/NO

1. Customers Yes

2. Products or services Yes

3. Markets Yes


3

4. Technology No

5. Concern for survival, profitability and growth Yes

6. Philosophy Yes

7. Self-Concept Yes

8. Concern for public image Yes

9. Concern for employees No

It is the good mission statement which provided by Starbucks but its have not described 2

components among 9 components of Mission statement those are Technology and Concern

for employees. Company should must to discuss the technology factor in its mission

statement to let know to its stake holders about its concern about technology and also

about its employ those could be its competitive advantage by providing good services.

Proposed Mission Statement

“Establish Starbucks as the foremost provider of the deluxe coffee in the

world and also to be established as the most employee appreciated

company even as maintaining our uncompromising principles as we grow

mutually with hi-tech advances.”

The six principles are:

1. Provide a great work environment and treat each other with respect and dignity.

2. Embrace diversity as an essential component in the way we do business.

3. Apply the highest standards of excellence to the purchasing, roasting and fresh

delivery of our coffee.

4. Develop enthusiastically satisfied customers all of the time


4

5. Contribute positively to our communities and our environment

6. Recognize that profitability is essential to our future


5

Objectives and Goals

Objectives of Starbucks

Most recognized and respected brand in the world:

Company is having objective to establish Starbucks as the most recognized and respected

brand in the world.

Is to recognize that every dollar earned passes through employees’ hands

Starbucks will always appreciate the employee as the revenue which is increasing every

year is by the efficient and hardworking employees. This drastic increase in profit is not

recognized without the support of the employees who attracts the customers to a long term

relationships with the coffeehouse.

Market expansion:

Starbucks’ objective is to provide its services at the foot step to its valuable customers for

this Starbucks developing its market expansion and going into new markets and cover the

customers by lowering its price and providing good quality better then perception of its

customers.

Operations to Achieve Objectives:

For achieving its objectives Starbucks plans to continue to rapidly expending its retail

operations. And grow its sales and other operations.

CURRENT STRATEGIES USING

● Market Penetration ● Product Development

ORGANIZATIONAL STRUCTURE

N/APESTTLE


6

PESTEL Analysis

Political:

Globalization nowadays has changed worldwide trend of doing business. Companies find

it difficult to stay alive by relying solely on home market. The borders between various

countries are getting invisible. Companies are these days developing business in various

countries without boundaries. Advertisements are all over the world for many products.

Company strategists find it not an easy task to expand the business outside borders. The

basic need for globalization is to learn the different cultures of the country they plan to

start business. Taking all aspects including tax rates, law and legislation is important in

globalization. But in the case of Starbucks did not discuss as such any political factors

those can influence on Starbucks other then

Allowance for the Direct Dealing with the growers after bypassing many of the

middle market which is eventually be the point of exposure for Starbucks

politically

Economical:

People are these days looking for more earnings to continue their luxurious life. The

number of two income households is getting increased all over the world. People are

looking forward for products which reduce their time to be spent on. Improved customer

service, immediate availability, trouble free operation of products is becoming more

important. Since the world is facing crisis, people are looking forward for cheap and

quality products. Price is becoming priority to customers but Starbucks having a threat

from its competitors that they are providing low priced products and services then

Starbucks which can make negative thing for Starbucks. Increase in the inflation rates and

increase in unemployment is also a factor for demand in lower priced products.

Unwillingness to help improve the economic condition of the coffee growers

themselves by Starbucks


7

250 Pre Harvest and 650 Post Harvest financing to the Coffee growers and farmers

by the Starbucks in 2005 which more than 1.2 B Pounds

Social:

Supporting Relief Organization such as CARE

Providing Direct Support to the farmer and farm community around the world

Contribute $43,000 in 2001 for construction of the Health Clinic and School in

Guatemala

Providing the Varity if ways of improvement of Coffee Processing facilities in a

number of countries in the world

Technological:

Mass communication and high technology are creating patterns of various cultures

worldwide. Ground-breaking technological changes and discoveries are having a dramatic

impact on organization. Internet is the world information spread machines that have

covered an interaction from one user to another user. In contrast, advertising through have

brought high achievement into marketing strategy. Starbucks discusses technological us in

this case study just about its one brand “shade Growth Mexico coffee’s” Online selling

throw its website Starbucks.com but its not provided information about any other use of

technology in this case study other then just about this one bran but Starbucks can take

advantage of use of technology. Advancement of the technology can cause increased in the

distributing of the products. High technology of the Machineries can increased the supply

of the products while achieve a better profits for the Starbucks.

Ecological:

Cultivated under the Company of shade Trees in Organic product

Legal:

N/A


8

PORTER FIVE FORCES INDUSTRY ANALYSISThreat of new Entrant

Determinants Defining Question Assess the power of BuyersCircle one of the following.1 = low, 5 = high, or N/A if it doesn’t apply to your industry.

Economies of

Scale and

experience

Does successful entry require that companies have significant economies of scale or experience

1 2 3 4 5

N/A

Brand Identity Do new companies need to spend heavily on brand identification?

1 2 3 4 5

N/A

Product

Differentiation

Do new entrants need to differentiate by spending heavily on advertising, customer services or product differences to over come existing customer loyalty?

1 2 3 4 5

N/A

Switching Costs Does the buyer have to pay to switch from one supplier product to another?

1 2 3 4 5

N/A

Capital Required Does the new company need to invest large financial resources?

1 2 3 4 5

N/A

Access to

Distribution

Does the new comer have access to distribution channel for product or services?

1 2 3 4 5

N/A

Cost advantage Established companies have cost advantages over new rivals.

1 2 3 4 5

N/A

Government

policies

Government policies can help to preserve or limit competition.

1 2 3 4 5

N/A

Expected

Retaliation

If industry leaders retaliate more for new entrants then threat for new entrants will be high.

1 2 3 4 5

N/A

Threat Of new Entrants:

(Four 4’s, Two 2’s, One 3s, One 1’s, one 5’s) So the threat of new entrants is High


9

Intensity of Rivalry


Industry growth How slowly or quickly is the industry growing? Intense fight among rivals for market share

1 2 3 4 5

N/A

Fixed Cost Does your business have a high fixed cost?

1 2 3 4 5

N/A

Product

Differentiation

Is your product commodity? The closer the product is to being a commodity the higher intensity of rivalry.

1 2 3 4 5

N/A

Switching Costs How costly is it for your buyer to switch between providers?

1 2 3 4 5

N/A

Intermittent

Overcapacity

How frequently is there a problem of excess capacity in your industry?

1 2 3 4 5

N/A

Brand Identity Is branding critical for your Rival’s success? Brand identification by buyer reduces the threat of rivals.

1 2 3 4 5

N/A

Concentration

and balance

Are there a large number of firms of equal size and power, all chasing after the same customer?

1 2 3 4 5

N/A

Diversity of

competitors

Are there competitors with different strategies and frame of reference? When competitors are diverse it is more difficult to establish the rules of game

1 2 3 4 5

N/A

Intensity of Rivalry:

(Three N/A’s, Three 2’s, One 3’s)

The rivalry is very intense and Low to Moderate.


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Bargaining power of Buyer


Concentration Buyer is fragmented because to industry covers all Demographic segments.

1 2 3 4 5

N/A

Product Cost

versus Total

Purchases

!Unexpected End of FormulaDoes your product buyer’s purchase represent a significant fraction of the buyer’s cost? If so, buyer bargaining power is typically high.

1 2 3 4 5

N/A

Product

Differentiation

Product is standard or undifferentiated bargaining power is high.

1 2 3 4 5

N/A

Switching

Costs

If buyers face few switching cost there bargaining power is high.

1 2 3 4 5

N/A

Profits Profits with in the industry for buyers are if high then buyer’s power is high.

1 2 3 4 5

N/A

Backward

Integration

Can they make what you make themselves?

1 2 3 4 5

N/A

Impact on

Quality/

Performance

Is the product you offer important to the quality of the buyer’s product or services?

1 2 3 4 5

N/A

Buyers

Information

Does the buyer have complete information on the product he may purchase?

1 2 3 4 5

N/A

Bargaining Power of Buyer:

(Four 4’s, One 1’s, Two2’s One 5’s)The bargaining power of the buyer is High

Bargaining power of SuppliersBusiness Strategy & Policy, Summer 2010.

11


Concentration Are your supplier are

fragmented or highly

concentrated?

1 2 3 4 5

N/A

Presences of

Substitute

inputs

Are there any substitutes for

your supplier products?

1 2 3 4 5

N/A

Product

Differentiation

Is the supplier’s product or

service commodity?

1 2 3 4 5

N/A

Switching Costs How costly is it for you to

switch from suppliers product?

1 2 3 4 5

N/A

Importance

Relative to

Customer.

Is your industry an important

customer the supplier group?

1 2 3 4 5

N/A

Forward

Integration

Can the supplier produce the

product you make?

1 2 3 4 5

N/A

Impact on

Quality/

Performance

Is your supplier product

essential to the quality or

performance of your business?

1 2 3 4 5

N/A

Bargaining Power of Supplier:

(Three 4’s, Three 2’s, One 5,s)

So the Supplier power is HIGH


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Threat of Substitute


Price

performance

Does the substitute offer a

better price performance?

1 2 3 4 5

N/A

Switching Cost Is it costly for buyer to switch

to the substitute product?

1 2 3 4 5

N/A

Threat of Substitutes:

(One 2’s One 3,s)

So the threat of substitute is Low to Moderate

INDUSTRY COMMENTS:

As there are three high forces and Two Low to Moderate force so the over all industry is

very attractive and growth is expected to be there in the industry

The Strategy – Formulation Analytical Framework


13

STAGE 1: THE INPUT STAGE

Company’s Strengths, Weaknesses, Opportunities & Threats

Strengths: Expansions in retail operations

Product Development

New distribution channels

Employees stock ownership plans

Market development

Perceive premium product

Product differentiation

Peaceful atmosphere (Especially service with music)

Proper customer guidance by providing wide ray of coffee selection & 0pportunities.

Evaluation of companies business lines (Assembly of experienced professionals increasing growth)

Quality of service

Employees training benefits

Weaknesses: Lack of employee compensations and benefits

Critical parking place at busy streets of North America

Sales saturation

Less spending on advertising

Employees overworked/under paid.

Decrease in sale of per store.

Opportunities:


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Direct relationships with coffee farmers

Providing ready access to consumer

Unroasted beans

Market Expansion (Pacific, Northwest & California, Boston, Washington)

International Expansion (more to Asia, Europe & Latin America)

Joint ventures (for achieving the target of more then 500 branches till 2003)

New product placement at existing coffee

Espresso bar Concept

Providing Organic products

Buying in long term contracts (By less spending on cost)

Coffee of the day (Fair Trade Coffee in North America)

Threats:

Anti Globalization movements

Plummeting pressure of Coffee Prices

Labor & real estate prices

Imports & Brokers (Sale to mass Market)

Less profit from joint ventures

Cash out from the business

Substitutes

Misuses of brand names


15

STAGE 1: THE INPUT STAGE

EXTERNAL FACTOR EVALUATION (EFE) MATRIX

COMPATITIVE PROFILE MATRIX (CPM) N/A

We know that the Competitive Profile Matrix (CPM) constructed on the basis of

critical success factor of the organization that give organization the competitive

advantage against it competitors in sustaining market and getting profits. But in

this, Starbucks, case no such information give about such critical success factors

and the competitors of the Starbucks. That’s why, it is not possible to construct the

Competitive Profile Matrix.

INTERNAL FACTOR EVALUATION (IFE) MATRIX

FINANCIAL ANALYSIS

In Excel Sheet


16


STAGE 2: THE MATCHING STAGESWOT Analysis

StrengthsS1:Expension in retail operationsS2:Product DevelopmentS3:New distribution channelsS4:Employees stock ownership plansS5:Market developmentS6:Perceive premium productS7:Product DifferentiationS8:Peaceful atmosphere (Specially service with music)S9: Proper customer guidance by Providing wide array of coffee selection.S10:Evaluation of companies business lines (Assembly of experience professionals increasing growth)S11:Quality of serviceS12:Employees training benefits

WeaknessesW1:compensations and benefits W2:Critical parking place at busy streets of North AmericaW3:Sales saturationW4:Less spending on advertisingW5: Employees overworked/Under paid.W6: Decrease in sale of per store.

OpportunitiesO1:Direct relationships with coffee farmersO2:Providing ready access to consumerO3:Unroasted beansO4:Market Expansion (Pacific, Northwest & California, Boston ,Washington)O5:International Expansion ( more to Asia, Europe & Latin America)O6:Joint ventures ( for achieving the target of more then500 branches till 2003)O7:New product placement at existing CoffeeO8:Espresso Bar ConceptO9:Providing Organic productsO10:Buying in long term contracts (By less spending on cost)O11:Coffee of the day (Fair Trade Coffee in North America)

SO Strategy

S 5 , S 7 & O 8:Use espresso bar concept in world

market which will ultimately

differentiate the product from

other coffee provider.

S 11 , O 2 & O 9:

We can create customer loyalty

through adding benefit to the

product.

WO Strategy

W 6 & O7 :

Can increase sale of per store by

placing out some new product at

existing coffee

ThreatsT1:Anti Globalize movementsT2: Reducing pressure of Coffee PricesT3:Labour & real estate pricesT4:Imports & Brokers ( Sale to mass Market)T5:Less profit from joint venturesT6:Cash out from the businessT7:SubstitutesT8:Missuse of brand names

ST Strategy

S4 & T8:Can avoid the misuse of brand

name by employee stock

ownership plan( employee loyalty)

WT Strategy

W4 & T1:

Can reduce the threat of

anti globalization movements

by advertisement.


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SPACE MATRIX

Internal strategic position External strategic position

X-Axis Competitive analysis Industry strength

-2 Product quality

-3 Market capital share

-4 Technological know how

-2 Control over distributors

+6 Profit potential

+5 Growth potential

+5 Financial stability

+5 Ease of entry into market

Average= -2.75 Average= 5.25

Y – Axis Financial Strengths Environmental Stability

+4 Cash flow from operations

+5 Liquidity

+5 Leverage

+6 working Capital

+4 Cash Flow from Operation

-4 Price range Competing Products

-2 Barriers to entry

-2 Competitive pressure

-5 Barriers to Exit

-3 Risk involved in business

Average= 4.8 Average= -3.2

Total X-axis score= -2.75 + 5.25 =2.50 Total Y-axis score= +4.8 – 3. 2 = 1.6

SPACE MATRIX (Graphical Presentation)


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The Space matrix results show Aggressive response of the company. In this position, the

company has to adopt the following strategies.

Backward, Forward & Horizontal Integration

Market Development

Product Development

Market Penetration

Diversification (Related or Unrelated)


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STAGE 2: THE MATCHING STAGE

B C G Matrix N/A

BCG Matrix is also not applicable because the company’s portfolio’s share with

respect to its competitor not available.

INTERNAL EXTERNAL (IE) MATRIX

The IFE total Weighted Scores

4.0 Strong (3.0-4.0) 3.0 Average (2.0-2.99) 2.0 Weak (1.0-1.99) 1.0

High

3.0_4.0

3.0

I II III

Medium

2.0

_2.99

2.0

IV V VI

Low

1.0_1.99

1.0

VII VIII IX

IFE score 2.86 ● EFE score 3.09

GROWTH AND BUILTBusiness Strategy & Policy, Summer 2010.

20

IFE

EFE

Forward , backward, Horizontal integration

Product development

Market development

Market Penetration

GRAD STRATEGY MATRIX N/A

Grand Chart matrix describes the company’s competitive position against its

competitors and company’s market growth rate based on the results of Competitive

Profile Matrix (CPM) and BCG Matrix. But in this case, both matrixes are not

implementing due to non availability of sufficient information about the competitors as

well as the company’s products portfolio. That’s why Grand Chart not constructed.


21


STAGE 3: THE DECISION STAGE

1. POSSIBLE STRATEGIES (Strategies Selection Table) Excel Sheet

2. QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM) Excel Sheet


22

Value Chain of STARBUKS (Interlink Activities)

Currently Adding Value represented by (+)

Loosing value represented by (-)

Potential to add value represented by (P+)

Primary Activities:

Inbound Logistics:

Starbucks bypass the much of the middle market +

Starbucks Developed expertise and relationship with coffee growers themselves +

Taking out cost of its supply chain +

Joint venture with sazaby that had expertise in both retail and estate. +

Starbucks is giving direct support to the coffee growers. +

Company had purchased Peet’s Coffee and Tea, a Berkeley, California, Coffee roaster

and distributor, straining the company’s management and financial capabilities. +


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Company can pursue the opportunity of leverage the brand by introducing new

products and development of new distribution. (P+)

The New York “C” coffee prices remained at near record lows, decreasing

sourcing costs and increasing gross operating margins. (P+)

Operations:

Between 1995 and 1998 Starbucks had averaged $0.69 million per store. +

Company was continuing expand international operations at breakneck pace. +

Outbound Logistics:

Additional to its retail stores: +

1. It sells through specialty sales groups

2. Direct response business

3. Supermarket

4. Online selling at starbucks.com

Marketing and Sales:

Company is still spending less than $20 million per year on advertising. P+

Products type offering: +

Also sells bottled frappuccino coffee drinks & line of premium ice-cream through

its joint venture partners. +

Also offers a line of innovative premium teas produced by its wholly owned

subsidiary, Tazo Tea. +

$215 M profit on $3.29B sales in 2002 & expecting 25% growth in 2003. +

` New stores cannibalizing existing stores. (-)

Too many number of stores did created barriers for the competitors +

But this huge number of store owing led to downward trend in sales per stores. (-)

Before entering in any new country, the company first takes a complete research +

“Commitment to Origins” company program. +


24

All the three coffees under “commitment to Origins” program was 20-25% more

expensive compared to Starbuks traditional blends. +

Starbucks introduced Fair trade coffee in North American stores and promoted it

through various brochures and promotions. +

Company can offer “Coffee of the day” per week rather than per month. P+

Corner locations, the hallmark of early growth store provided high visibility. +

It expanded all facets of the industry as distributed through traditional supermarket

distribution systems. +

It has three-legged stool for global development which are retail coffee and

assorted specialty items, specialty sales and Frappuccino coffee drinks and

specialty coffee ice creams sold through retailer globally. +

It can enhance its marketing decide under the leadership of Howard Schultz. +

R&D for new markets in which it has to enter.+

Services:

The perceived premium was both in the products’ quality and in the method of its

delivery. +

Starbucks believe and actively giving superior services by giving the sense of

discovery and excitement and loyalty that bend the customer to Starbucks. +

It had evolved into its own Americanized version of specialty coffee provider of

coffee shop services. +

Special pastries and music provided an atmosphere of both warmth and comfort. +

Starbucks is providing ready access to consumer foot traffic such as commuting

routes. +

Employees are trained to provide wide array of advice on coffee selection and

appropriateness to potential customer. +

Internet Selling. +

Explanation:Business Strategy & Policy, Summer 2010.

25

The company owns a good repute in the global market which gives it the best strength. The

company owns 5700 total number of stores globally. As it works in with other business

partners under the contract of joint venture, the number of total stores adds up to 5886 out

of which 1312 is owned outside US market. The company offers a variety of products in

different shapes and ways which are related to their core offering (coffee) to the customers.

The company gives importance to its employees and it trains them for enhancing their

performance. They consider their employees as their partners and offer them stocks to

make them feel as they are the part of organization. This adds their morality in work. There

is a big objection to the company that, it is not giving benefit to their employees who are

over working and most of them are under paid. Due this objection the purpose of adding

the benefit doesn’t support their strategy of retaining their employees.

Stores are located in pivotal positions for consumer recognition and access. All stores were

owned by the company in domestic market inside US market. This helped the company to

increase its availability aspect in the eye of the customer. But unfortunately, this strategy

wasn’t helping the company to increase the sales per store. Infect, the stores introduced

was cannibalizing the sales of the existing stores. The company uses multiple channels for

providing the product to the end customers.

Starbucks is creating good relations with their suppliers. This helps the company to gain a

good quality product on a low price as compared to the market rates. The company gives

benefits to the as well so they can improve their economic stability.

Infrastructure:

Starbucks used two basic structures for international expansion that were company

owned and licensing agreements. +

Human resource management:Business Strategy & Policy, Summer 2010.

26

Howard Schultz joined the company as member of marketing team. +

In decade of 1990s, Starbucks expand its talent pool on the most senior levels +

Starbucks is focusing on employee training. +

Company also giving health care benefits to the employees (more then 20

hour/week). +

First time Starbucks gave stock ownership to its employees. +

Starbucks bought all foreign managers to its Seattle offices for 13 day training. +

It can start employee benefits and motivation programs. P+

Recommendations


27

Recommendations for Improvement:

1) Revamp the employee reward system

2) Tighten focus on creating the “Third Place” environment

3. Focus profitability measures on profitable sales, not just reduction in staffing

1) Revamp Employee Reward System: Large percentage of the staff are under the age of twenty

Benefits package focuses on medical, dental, and vision care, as well as the

employee stock options

Outside of hourly wage, and semiannual raises, there are few monetary rewards

2) Improve “Third Place” Environment

Site has a very high employee turnover rate

Manager “promoted” to a another store in hopes of improving their poor

performance

Site has very poor handicapped accessibility

Condition of restroom in each of our visits was poor and had no baby changing area

3) Focus Profitability Measures on More Than Just Staffing:

Store is underperforming on some high margin product segments

Too high a focus on minimizing direct labor as a key to achieve profitability

Focus on high-margin items and profitable add-on sales

By increasing pastry sales by 33%, store would realize a $16K increase in

contribution

Action Plan For Improvement

Decrease employee turnover rate

– Focus on hiring older employees where benefits package is more appropriate

– Base raises on performance rather than maximizing raises for economic reasons

– Develop and actively maintain a reward system for employees (i.e. employee of

the month)

– Develop a system of regular employee communications / meetings


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Improve site accessibility and cleanliness

– Upgrade front door and restrooms for handicapped accessibility

– Add a baby changing station

– Redesign restroom to separate cleaning supplies from bathroom or move

cleaning supplies to another location

– Focus employee attention on restroom cleanliness

Enhance Starbuck’s differentiated atmosphere

– Utilize entertainment budget to hire outside entertainers, have book / poetry

readings, etc.

– Display the store’s collection of games and activities more prominently

– Make the location more of a “scene”

Impacts

By focusing on the initial recruitment and hiring stage, and by rewarding

employees based on merit current turnover rates will be reduced.

By focusing on site accessibility and cleanliness, the physical facility will not

detract from atmosphere.

By improving Starbucks’ atmosphere, it will become a more attractive place to go.

Potential Risks

Customers may not react positively to the changes being made

Not enough available employees to meet re-aligned hiring needs

Claims of age discrimination and negative affect on sales in youth demographic

Costs associated with planned change


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Starbucks (WAC) Business Strategy Analysis. Project report

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