Starbucks

Introduction
Starbucks Corporation was launched in 1971 and is now the largest coffeehouse company in the
world. It is based in Seattle, Washington and has more than 20,000 outlets all over the world. It
believes in serving the best possible coffee, grown under highest quality standards and sourced
using ethical practices. Starbucks offers a range of products, viz. coffee (more than 30 blends and
single origin premium coffees), handcrafted beverages (Frappuccino, smoothies, Tazo tea, fresh
brewed coffee), Merchandise (coffee and tea brewing equipment, mugs and accessories,
packaged goods, music, books and gifts), Fresh Food (Baked pastries, sandwiches, salads,
oatmeal, yogurt parfaits and fruit cups) and Consumer Products (coffee and tea, ready to drink
products and ice-creams). The brand portfolio consists of Starbucks Coffee, Seattles Best
Coffee, Tazo Tea, Evolution Fresh, La Boulange and Torrefazione Italia Coffee (Starbucks,
2012).

Impact of Globalization and Technology

Starbucks operates in around 62 countries around the world. It has not just opened its stores in
those countries but has adapted its operations to the needs of the specific countries. The simple
fact that its menu includes local food items, to cater to the local taste, shows that the company
has truly gone global. Other than that, the company gets involved with the communities in the
specific countries. It gets the local businesses also involved in its own business operations.
With changing technology, Starbucks also upgraded its operations. It is one of the first coffee
restaurants to offer free wi-fi to its customers. In fact its status as a premier coffee brand forces it

to adopt the latest technology in its operations. Not only the market factors force the company to
upgrade, in fact, up gradation helps the company to increase the efficiency of its operations.
Though there are positive aspects of globalization and technology on the company, yet there are
many negative impacts also on the company. The number of competitors has increased along
with the intellectual property issues. Many rivals copy the business practices of the company and
even its name and logo. The company has to protect itself from such issues. With the wider
market operations, cultural conflicts have also increased widely. As the company enters into new
territories, it has to change its retail practices also, depending on the region. Similarly, the
company has to keep in mind the laws of different countries where it operates. Some countries
have sourcing norms, which puts a pressure on the company to source the raw material locally.
This creates another issue for the company as it gets difficult to maintain the quality standards.
So, globalization and technology change puts higher pressure on the company, both strategically
and financially; along with giving the benefits of wider markets and increased efficiency (Hart,
2011).

Industrial Organization model and Resource based model

Industrial organization model suggests that above average returns for a firm are determined by
external factors and not internal characteristics of the firm. When the coffee industry is analyzed,
there is a big opportunity identified for the company. More than 77 percent of all adults over 18
drink coffee on a daily or occasional basis. Just 1 in 100 cups of coffee served today is
Starbucks. So there is large scope for the company. Then there are many countries which are
either not at all catered to by the company or are not penetrated. So there is huge scope for the
company to serve in those markets, increase its market share and in turn increase its returns.

Resource based model seeks to identify the resources or the capabilities of the firm that provides
it competitive advantage. A resource or capability which is of Value, which is Rare, which is Inimitable and which can be Organized by the firm (VRIO) is said to be such a resource which
provides competitive advantage. For Starbucks, what differentiates the company from its
competitors is the whole experience which the company is able to provide. Focus on creating an
experience, providing top quality service is of value to the company. The customers visit
Starbucks stores for the whole experience; hence it is clear that the experience is rare. The
ambience that the company is able to create in its restaurants is what sets it apart. This cozy
ambience is in-imitable. As far as the Organization is concerned, the company is able to use this
capability to its advantage, as is clearly visible from the companys success all over the world,
just because it has been successful in creating a third place for the customers. Focusing on this
ability to provide a unique experience will continue to help the firm in achieving above normal
returns.

Vision and Mission Statement and Overall Success

Vision is where the organization wants to be and mission is how it wants to reach there.
Starbucks vision is as follows:
Vision- To establish Starbucks as the most recognized and respected brand in the world
The vision statement gives a direction to the organization about where should everybody aim to
reach. The companys vision illustrates that the employees must work to make the brad as the
most recognized in the world. This clearly explains the companys strategy of continuous
expansion in various new markets. Not only expansion, the company works in such a fashion
that it is able to create a niche for itself in the market. The company has been able to differentiate
its offerings from other competitors. This product and service differentiation has ensured and will

ensure that the brand is established as the most recognized brand in the world. The company is
famous not only for its products but also its service as it aims to create a third place for the
customers, other than the home and the office. Other than that, the vision statement directs the
company to work such that it becomes the most respected brand in the world. For this purpose,
the company aims to provide the best coffee as well as the best service along with ensuring that
all the stakeholders are kept satisfied. The company contributes a lot to the society also. Its
sustainability efforts are worth noting.
Starbucks mission statement is as follows:
Mission- "To inspire and nurture the human spirit - One person, One cup, and One
Neighborhood at a time.
The mission statement guides the company to improve its efficiency in operations and provide
the best products and services to the customers. The mission statement shows that the company
aims to satisfy every single customer and also aims to provide the best coffee. The company truly
complies with its mission statement as is visible from its strategy that it focuses on every single
cup of coffee and every single customer. Every customer is given due importance. And this focus
on individual customer is what differentiates the company from its competitors. This is what has
helped the company to establish a niche in the market. In short, the vision and mission for any
company inspires and directs the employees to work for the attainment of the organization la
goals. Similar is the case with Starbucks also, as its vision and mission have truly guided the
efforts of the whole organization (Starbucks, 2012).

Stakeholder Analysis
An organization cannot operate in a vacuum. It has to interact with many other entities in the
business environment to conduct its basic functions. Each of these entities affects the overall

success of the organization. From customers to suppliers to employees to government, all the
parties are the stakeholders of the company. Customers are the focus of every organization as
they are the ones who generate revenue for the company. For a company like Starbucks,
servicing the customers is even more important as the goal of the company is to give its
customers a complete experience. This experience includes providing them with the best coffee
as per their tastes. The quality of coffee depends on the raw material, for which the company has
to depend on the coffee producers and suppliers. Thus the companys ability to service its
customers and to provide them with the best of coffee depends on the quality of coffee supplied
by its coffee producers and suppliers. Also, the provision of service and the complete experience
highly depends on the employees (who are called partners). Ultimately, it falls upon the
employees to make the customers feel comfortable, understand their requirements and provide
them with their requirements. The company must ensure to keep the employees motivated as
keeping them satisfied and motivated will in turn ensure that the customers are satisfied. Then, it
is important that the company abides by the laws of the land. Any deviation from the laws may
result into even closing down of the business operations from a particular country. So, the
government and its policies are very important stakeholder of the company, which affects its very
existence and survival. In fact abiding by the laws also ensures that the interests of other
stakeholders are taken care of. Different stakeholders contribute differently for the benefits of the
company and the company itself works for the benefit of various stakeholders and is involved in
many activities and gives them their due importance. Every Starbucks store is part of a
community and the company ensures that it be a good neighbor for the communities around. It
gets the customers and partners together to volunteer in the communities. The company also
ensures that its operations are environment friendly, as every company directly interacts with the

environment. The businesses borrow the resources from the environment and hence it should
also give something in return. Starbucks strives to use eco-friendly products to the maximum
possible extent and to make its operations also environmentally sustainable (as clear from its
Global responsibility report). Thus it fulfills what the environmental groups expect from it. The
creditors and other suppliers expect the company to be responsible in making timely payments
which are due. And the competitors expect that the company plays fair in the market and does
not resort to unethical competitive practices.

References
Hart, R. (2011), The Globalization of Starbucks and its Effect On the World, retrieved on January
21, 2014, from: http://siulaw.typepad.com/international_ip_policy/2011/09/theglobalization-of-starbucks-and-its-effect-on-the-world-to-be-presented-ryan-hart.html
Starbucks. (August, 2012). Starbucks Company Profile. Retrieved January 21, 2014, from
Starbucks website:
http://www.starbucks.com/assets/9a6616b98dc64271ac8c910fbee47884.pdf