Table of Contents
ORGANIZATIONAL STRUCTURE GRAPH
COMPANY OWNED STORES
BALANCE SHEET (2007) GRAPH.................................................................9
LAST 3 YEAR INCOME STATEMENT
SWOT ANALYSIS GRAPH
There was a moment, once upon a time, when you heard the name Starbucks, only one thing came to mind; a delicious cup of coffee. During the course over the past few years however, Starbucks has tried to cash in on everything they could get their hands on and forgot about their original origin, and most importantly, what Starbucks used to stand for. Starbucks has used its trademarked brand name for almost anything and everything, from movie advertisements, to beverage fullfillments, as they equipped most of their stores with an increasing variety of choices for either brunch or luncheon affairs, to books and music. Starbucks got back in the game when, CEO Howard Schultz, started to reassure Starbucks customers, that the once popular coffee will return and be stronger then ever. That one change would be a dramastic change especially for their marketing structure, but will make the difference.
The Seattle based coffee company has been confronted with numerous flaws and staggering stock prices at the beginning of the year, and in March announced a series of big things to come, including numerous transitions. Some of the big things to come with the transitions included, a new simmering delicious coffee blend, improvements in their expresso making equipment, a program club full of awards to thank customers, and even an interactive website is in the works as well. Experts are skeptically envisioning, there is no doubt that the coffee guru needs to step things up and get back to their coffee origins. They also note that new innovations on a massive customer base can be also back fire against the coffee titan. In all fairness to the company, I believe in my opinion, that the aspect of doing so many things at once can be harmful if not executed correctly, and if it is not done in the proper procedure, it could hurt the company even more rather then trying to make it better. There is no question that over the past few years Starbucks has become rather generic and there name has become nothing special anymore. Starbucks really needs to step up their strategy in order to bring back to life their brand name and quality to doubting consumers.
The query for Starbucks is, How do they do that, and get back to their original origin? Well they are already on the right track by focusing on their main product which would be coffee, but if the company doesnt reinforce the change procedures to the whole organization, the new marketing strategies might plummet leaving confused customers in a daze of mocha. The unitization between customers and Starbucks, is Starbucks most important aspect of their business. The customer needs to feel happy and appreciated to purchase their products. They must feel that sense of fullfillment when ordering and drinking a Starbucks beverage, that in a nutshell is the most important piece of the puzzle that the company needs to bring back to life. That could be easier said then done, in January 2008, Howard Schultz reassumed CEO duties to a company that he largely shaped, and who is also Chairman of the Board, quickly announced a reorganization at the Executive level, as well as job cuts in the company. He conveyed that the number of changes in the company could be a concern, but would iron itself out over a period of time.
The new brew of coffee that came out in April of this past year 2008 is called, a Pike Placed Roast that the company will have fusioned at every U.S based operating facility across the country. At the same time, another change in the marketing strategy that was mentioned earlier in this paper, was a program club for registered customers to refill their cards and also receive free shots of flavored syrups. In the equipment aspect of the big transition, Starbucks introduces the new expresso makers that are designed to deliver a better, faster, and more consistant latte, then previous models used. These models will be moved into thirty percent of the U.S based stores by the end of this year, and seventy-five percent of their stores by the year 2010. Another new piece of equipment that is in the works for Starbucks is the machine called the Clover. This machine is set out to make individual cups of premium drip coffee, but they are taking their time rolling out this new machine, and Starbucks predicts, that this machine will not necessarily make it to every U.S based store. The new interactive website that is in the works for Starbucks will consist of executive blogs and calls for consumer feedback to the company.
The conversions that Starbucks is going through are some really rough times at the moment. From their stock price falling tremendously and consumer dealings with their business failing, Starbucks, over the past year, has somewhat slowed down their pace of new store openings. They had even closed numerous stores, all this in an attempt to go with the new change that the company is trying to implement. Although, Starbucks has made some aspect of change by pulling off the shelves their morning eats, which made people complain that it gave Starbucks stores a highly displeased aroma, Starbucks has not talked about more simplifying methods that the company is going to be engaged in. In my opinion, the company should cut back more on the food offerings, as well as the little nick nacks that clutter up the store, such as books, music, coffee mugs, etc., and stay focused on what Starbucks is really supposed to be about, a nice satisying fresh cup of brewed coffee.
Due to its costly prices, the current economic spill in todays market, really have customers holding on to their money, and it is taking its toll on Starbucks customers like never before. While the economy is causing various problems for everyone around the country, Starbucks should not use that as an excuse for their mishaps which started way back before the economy started to have a meltdown. In all reality, Starbucks needs to acknowledge its own role in their weakening of their business. Whats even more surprising that just released last week, CEO Howard Schultz stated, The company expects to face an extremely challenging fiscal 2009. Schultz continued, We appear to be more resilient than many other premium brands. As we head into the holiday season and Calendar 09, consumers are looking for value and weve been pleased with the steady progress of our Starbucks Rewards program and the enthusiastic reception to the Starbucks Gold Card. I am optimistic we are well positioned to weather this challenging economic environment.
In conclusion, I believe that Starbucks has a lot of continuing challenges ahead of them. They really need to see past what they have become and try to get back some of the old goals that the company once longed for. Maybe these old tactics will help the company become better in a more positive way, rather than a negative way, like the way they have become recently.
v Founded in 1971 by Gordon Bowker, Jerry Baldwin, and Ziv Siegl
v Main Industry: Coffee and tea manufacture
v Number of Employees: 172,000
v Organizational Structure: See page 3 for graph
v Headquarters: 2401 Utah Avenue South, Seattle, WA, USA
v Market Capitalization, Stock Price, Shares Outstanding: See page 4 for graph
v Other Locations: As of 2007 there were 8,505 company owned and 6,506 licensed, for a total of 15,011 stores worldwide: See page 5 for graph
v Recent Measures of total assets, total liabilities, and shareholders equity: See page 6 for graph
v Mission: To inspire and nurture the human spirit- one person, one cup, one neighborhood at a time
v CEO Howard Schultzs vision for Starbucks is to become a national company with values and guiding principles that employees could be proud of. He indicated that he wanted to include these people in the decision making process and that we would be open and honest with them
v Last 3 years revenue, gross profit, and net income: See page 7 for graph
v Products: coffee, tea, mugs, music, books, stuffed animals, coffee makers, cookies, pastries, etc.: See page 8 for graph
v Main Competitors: Dunkin Donuts (Coffee and tea), McDonalds (Coffee and tea): See page9 for graph
v Significant Customers: Caters to all types of consumers worldwide
Starbucks Licensed Stores
Organizational Change: A Bibliography
Prepared for MGT420
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Part 2: Organizational Change: A Bibliography
Book with one author
David, Fred. Strategic Management, Concepts and Cases, 11th Edition. Francis Marion University, 2006.
Organizational Change: FOOTNOTE REFERENCES
Prepared for MGT420
WORLDWIDE WEB SOURCES