Starbuck’s Coffee strategic management case study
This course will be conducted on the presumption that students have a copy of:
Samson, D. & Daft, R. L. (2015). Management (5th Asia Pacific Ed.). South Melbourne, Vic: Cengage Learning Australia. ISBN: 9780170259798
Assessment Task 2: Case Study Report (30%)
- Assessment Details. Starbuck’s Coffee strategic management case study, pp.346-347.
Students will read and analyse the Starbucks Coffee case study on pages 346-347 of the text book and answer the three questions from the case study. The report will be 1,500 words and presented in report format with appropriate APA referencing citing a minimum of four academic references. The report will:
- Improve your knowledge of specific concepts and theories of management
- Develop your ability to apply theories and concepts to practical situations
- Encourage you to consider the effectiveness of various management theories and models as they relate to organisational functioning
- Develop your skills in research, critical thinking and analysis
- Develop your skills in academic writing.
- Criteria used to grade this task
Marking guide is included at the end of this document.
- Task Assessor
- Suggested time to devote to this task
Approximately 20 hours should be devoted to this task.
- Submission details
The report will be submitted via Moodle on the Monday of Week 10 by 11:55pm.
- Feedback and return of work
Feedback will be returned to students two weeks after submission.
Beginning with nine Seattle stores in 1987, Starbucks chairman and chief global strategist, Howard Schultz, has dramatically expanded the company’s cafes throughout the US and internationally. Service is anything but fast, and the coffee is expansive, but each week millions of customers around the globe hit Starbucks to sip skinny lattes or no-whip mochas.
Since it made its first acquisition in 1994, buying The Coffee Connection Inc., a 23-store Boston rival, Starbucks has pursued rapid expansion. Schultz had grown his enterprise from 400 stores in the US in 1994 to a global enterprise with 17651 locations in 60 markets outside of North America, including Australia, New Zealand, China, Hong Kong, Taiwan, Singapore, the Philippines and India. Starbucks teamed up with foreign partners to open its first international coffeehouse in 1996 in Tokyo. Since then, Peter Maslin, president of Starbucks Coffee International, has ‘been amazed by the global acceptance and visibility of Starbucks’ brand in all our international markets’. Starbucks adapts its development strategy to different markets by addressing local needs and requirements. It currently uses three business strategies in developing its international operations: joint ventures, licenses and company-owned operations. Starbucks views its international partners as critical to its global success. Partners are carefully chosen for their shared values and corporate culture, strong multiunit retail/restaurant experience, dedicated human resources, commitment to customer service, quality image, creative ability, local knowledge and brand-building skills as well as for their strong financial resources. In 1994, some analysts thought Schultz’s strategies were risky, but Starbucks has proved it had the flexibility and management strength to succeed.
In the US, Starbucks has formed joint ventures with the Pepsi cola company to make a bottled Frappuccino, and with Dreyer’s Grand Ice Cream Inc. to produce the number one brand of coffee ice cream in the US. Starbucks also supplies airlines such as United and Canadian Airlines and hotel chains (Starwood Hotel, Host Marriott International and Hyatt Hotel Corp.), and has extended its brand into grocery channels across the US.
Many of Starbucks’ managers have years of experience from such companies as Burger King, Taco Bell, Wendy’s and Blockbuster. Schultz believes a CEO should ‘hire people smarter than you are and get out of their way’. Equally crucial to Starbucks’ success are the ‘baristas’ who prepare coffee drinks. Starbucks recruits its workers from universities and community groups and gives them 24 hours’ training in coffee-making and lore – a key to creating the company’s hip image and quality service. To maintain quality control, Starbucks roasts all its coffee in-house.
A computer network links the expanding Starbucks empire, and Schultz hired a top information technology specialist from McDonald’s to design a point-of- sale system to enable managers to track sales. Every night, computers from all stores send information to headquarters in Seattle so that executives can spot regional buying trends.
For Schultz, a man who has already changed people’s coffee-drinking habits around the world, the challenge is ‘to become a great enduring company with the most recognized and respected brand in the world’ – a challenge Starbucks is rapidly achieving through skillful strategic management.
- Which of Porter’s competitive strategies is Starbucks using?
- Discuss how Schultz s using leadership, structure, information and control systems, and human resources to implement strategy at Starbucks
- What strategies has Schultz used in expanding Starbucks internationally?