STARBUCKS: CHALLENGE AND CHANGE

Team Watermelon:Lê Trường GiangNguyễn Thị Minh HiềnNguyễn Thu HiềnNguyễn Thanh Phương

Content:

Introduction of Starbucks

Strategic design Political Culture Challenge in 2007

- The leader: Howard Schultz

Change and Success

Recommendation

Introduction of Starbucks Started as a small coffee shop in 1971 in

Seattle Created by Jerry Baldwin, Zev Siegl and

Gordon Bowker One of the most famous and biggest coffee

companies in the world More than 17000 stores in 50 different

countries.

STRATEGIC DESIGN

Strategic Grouping: configuration by combining divisional and functional structures:

1. Divisional type: divided in to department that manages their own activities through formulation their own objectives and goals

2. Functional structure: divides its labor into cross functional work teams, which allows employees to report to multiple supervisors.

STRATEGIC DESIGN

Strategic Grouping: configuration by combining divisional and functional structures:

2011: announced a new structure that includes three-regions:

1. • China and Asia Pacific = All Asia Pacific markets and China

2. •Americas = United States, Canada, Mexico, and Latin America

3. •EMEA = Europe, U.K., Middle East, Russia, and Africa

STRATEGIC DESIGN

Strategic Grouping

LinkingInternal:- open communication between employees,

higher management- allows innovative ideas, problems and

solutions to be heard in a timely manner.- Information technology systems

STRATEGIC DESIGN

Strategic Grouping

LinkingInternalExternal:- incorporated a social networking site

STRATEGIC DESIGN

Strategic Grouping Linking

Alignment has innovative Human Resource practices provides a positive, healthy and committed

workplace for the employees encouraged employee to think of themselves as

partners in the business benefits package to both part-time and full-time

employees

POLITICAL Stakeholder- including customers, suppliers,

environmental groups, shareholders, coffee farmers, community members and staff

POLITICAL Stakeholder

Power:- vertical divisions- the leaderships have more power than the

employers: as like the manager vs. worker, senior-long tenure vs. new comers, full-time employees vs. contractors

CULTURE Value: ethical Symbol

CULTURE Value: ethical Symbol Subculture- based on things such as ethnicity, age, sex,

work groups, departments, union memberships and occupational or professional skills

The challenge of Starbucks2007: Year of the most terrible crisis

- The stock price went down by 42%.

- Become one of the companies that have the

worst decrease in stocks of Wall Street

- By the end of 2008, Starbucks’ profit

decreased by 50%

Causes of crisis

economic crisis in the US and the world

has more competitors

Put quantity over quality

the company was becoming saturated and no longer

unique

In 2007, Jim Donald was sacked and Howard Schultz, after 8 years being

the Chairman of the Board of Directors, again became the CEO of

Starbucks

Howard Schultz

born July 19, 1953 in the slums of Brooklyn, New York

graduated from Northern Michigan University with a bachelor's degree in Information

has strong will and big dream

1988- 2001 and 2007-now: CEO of Starbucks

Further change

s

Communication

strategy

Services and products

improvement

Changes

Services and products improvement

create warm and familiar space for customers

Services and products improvement

create warm and familiar space for customers

re-train the employees and upgrade equipment

Services and products improvement

create warm and familiar space for customers re-train the employees and upgrade equipment

Care about quality of product

Communication strategy

1. hired consultants to get more ideas

Communication strategy

1. hired consultants to get more ideas

2. invested a huge amount of money on advertising

attention on social media, these channels to keep contact with the customers

Communication strategy1. hired consultants to get more ideas

2. invested a huge amount of money on advertising attention on social media, these channels to keep contact with

the customers

applied some ideas of customers and employees to products and services and offered gifts for their users

Further changes

raised salary for employees according to their performances

maintained the health insurance for employees

ensured to double the amount of highly certified coffee beans to provide the best source of coffee

Four dimensions of change

Scope of change—radical Pacing of change—punctuated Source of change—top-down Process of change—planned

SuccessAt the end of the first quarter of 2010, the

company had successfully brought Starbucks to its reign:

customers were pleased with Starbucks services had more than 5millions fans on Facebook and more than 500,000 followers on Twitters 2013: Starbucks rank fifth in the world

according to the numbers of fans on Facebook

RECOMMENDATION Expand store in different countries Consider the national culture Diversity product Starbucks can also involve the employees in

the personal development training programs instead of focusing only on professional training and development.

THANKS FOR YOUR ATTENTION

THANKS FOR YOUR ATTENTION

THANKS FOR YOUR ATTENTION