3.

STARBUCKS CASE DISCUSSION

CASE DISCUSSION QUESTIONS

1. How is Starbucks performing? Is Starbucks in dire straits? 2. What are the sources of Starbucks declining performance? How far are Starbucks problems in February 2009 the inevitable consequences of the economic recession and to what extent are there other reasons for Starbucks declining performance? 3. What is Schultzs strategy for restoring Starbucks nancial performance? Do you agree with the measures that Schultz is taking? 4. Who are the stakeholders that really matter? 5. What was Starbucks original paradigm? What is it now? What does this paradigm have to do with Schultzs strategy for turning around Starbucks?

Northwest coffee culture The 'third space'

Trained Baristas

Handcrafted coffees Sofas

Stories

Symbols

Roasted coffee aroma

Healthcare benets for 20+ hr/wk employees Higher pay than competitors

Routines and rituals

Power structures

Founder as inspirational leader.

Starbucks (Late 1980s)

Control systems Company owned stores Company sourced coffee

Organizational structures Lean horizontal structure

WTO Riots Environmental Impact Stories Hot food service Hypergrowth and global expansion Diversication into music and lm Cannibalization Wall street 'numbers' Routines and rituals

Automated machines Overpriced coffee Symbols Multinational chain

Power structures

Outsider / industry veteran CEO

Starbucks (2006)

Control systems

Organizational structures Hierarchical reporting structure

Stock options for employees

Multi-regional structure