Starbucks Corporation

Starbucks Corporation

Name:

Institution:

Starbucks Corporation

Starbucks is an American coffeehouse chain from Seattle, Washington. The company operates globally with interests and outlets in different states in the world like Britain, Malaysia and New Zealand. With more than a thousand branches spread all over the globe, Starbucks is the world’s largest coffee chain. The firm’s success and dominance on the global scene dates back to 1987, when its current CEO Howard Schultz purchased it from the founders. After buying the firm, Schultz started to model the company around what was called “the Starbucks experience”. The company placed its focus on engaging its customers and building the Starbucks brand (Schumpeter, 2011).

The “Starbucks experience” established the market for specialty coffee. Within this market, the daily practices and customs of regular consumers were changed as they started to pay higher prices for products that earlier generations had disregarded (Schumpeter, 2011). Under Schultz’s ownership, Starbucks came up with new market strategies that were very effective in driving the company to the top. The coffeehouse business was approaching a point of saturation so Starbucks decided to redesign their products. This way they set out a new niche for themselves within the coffeehouse industry and created a whole new market within which they could operate. Their access to this new market was then boosted by Starbucks’ focus on the experiences of their customers. According to Nancy Koehn, Starbucks success can be attributed to word-of-mouth brand building that was bolstered by the “Starbucks experience” (as cited in Schumpeter, 2011).

Corporate responsibility is one of the things that stand out about the Starbucks coffee chain. The company’s has for a very long time focused on satisfying its customers and employees. Starbucks refused to franchise and put the profits that it was making back into its infrastructure. Employees were well paid and for those who worked for more than twenty hours a week, the company granted healthcare benefits. These decisions made Starbucks stand out from the crowd as the firm went against the practices that define many of the world’s largest companies and organizations (Schumpeter, 2011).

Starbucks CEO, Howard Schultz, is in many ways the embodiment of the firm’s responsible conduct. His purchase of the company from its founders started a new era for both Starbucks and the coffeehouse business. Under Schultz’s stewardship, the firm employed many of the market strategies that have endeared it to consumers and market observers. Starbucks followed up this rapid growth with expansion into other countries and regions on the globe. This way, the brand transformed itself into a household name. Not all of these strategies have worked, however, and Schultz has been the first to admit this. The company performed poorly in the years 2008 and 2009. Schultz conceded that this was the result of certain decisions that he made, which failed to work out (Schumpeter, 2011).

Schultz’s social responsibility is not limited to the firm’s business operations. Recently, Schultz started a petition to end the ongoing government shutdown. He stated that the American people currently lack an effective platform for airing their grievances with regard to the current political debacle. This petition will provide the people with a chance to let the government know of their displeasure with the destructive politics in which the democrats and the republicans are currently engaged (Patton, 2013). Schultz’s sense of social responsibility has extended to other issues in the past. He has been vocal about the raging debate on firearms in the United States. The coffee chain recently requested that customers going to its outlets leave their firearms at home (Barrett, 2013). This request came in light of a series of mass shootings in the recent past that had reignited America’s fierce gun debate.

References

Barrett, P. M. (2013). Starbucks to customers: Please leave your guns at home. Business Week. Retrieved from http://www.businessweek.com/articles/2013-09-18/starbucks-to-customers-please-leave-your-guns-at-home

Patton, L. (2013). Starbucks CEO Schultz starts petition to end government shutdown. Business Week. Retrieved from http://www.businessweek.com/news/2013-10-10/starbucks-ceo-schultz-starts-petition-to-end-government-shutdown

Schumpeter. (2011). The Starbucks debate. The Economist. Retrieved from http://www.economist.com/blogs/schumpeter/2011/01/starbucks_and_its_new_logo