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STARBUCKS corporate culture
The history of the Starbucks corporation
The history of the Starbucks corporation
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Starbucks, is one establishment that I have never been to. However, for the purpose of this research, I decided to visit one. I visited the Starbucks on Ft. Campbell Blvd. Upon entering the shop, I noticed that the atmosphere was warm and inviting, and soft music played in the background, as I went to the counter to place my order. The menu, was over whelming to me there were so many different types of coffee available, that I had to have one of the employees explain the lingo to me. The employees or rather Baristas (employees are called Baristas at Starbucks), were very helpful, they seemed to enjoy their job and I noticed all of them had smiles as they assisted the customers. The menu offered; whole bean, ground coffee, and a slew of Starbucks …show more content…
Furthermore, brand loyalty and Starbucks reward program is also a reason why customers are willing to pay their prices. According to Reyhle (2016), “customer loyalty isn’t what it used to be. In fact, research company Access Development reported that 79% of customers would take their business to a competitor within a week of experiencing poor customer service, while the estimated cost of customers switching their choice of businesses due to poor service is $1.6 trillion. Nevertheless, Starbucks, has managed to strengthen their customer loyalty in a world where customer sentiment is constantly shifting and consumers have more options than ever before of where to spend their money” …show more content…
The Starbucks Reward Program enables customers to receive benefits based on the number of reward points earned over a period of 12 months. Money is loaded on to the Starbucks Card and can be spent in Starbucks stores. Furthermore, the Starbucks card has grown in value in recent years, becoming an important source of revenue for the company”
Another observation that I made about the customers was that most of them seemed to be dressed in professional business attire most likely stopping for coffee before work. Women were mostly wearing work appropriate dresses or suits and most Men were wearing Suits or button downs and dress pants. I stayed at the Starbucks for about an hour and a half and saw only a handful of people in casual clothing. The morning was the most unique time that I observed,it being vastly different from both the mid-day and
The company’s founder and CEO, Howard Schultz, has been successful in creating Starbucks into something that we didn’t really know we needed until we had it. He has meticulously crafted a brand for the company that adds a psychological value to its offerings. Thereby, when you buy a cup of coffee at Starbucks, you buy an experience. The somewhat quiet, not-so-rushed atmosphere along with dimmed ambience and friendly staff found at Starbucks’ stores add a feel-good factor to your purchase. As a result, people are willing to pay a premium for coffee at Starbucks even if McDonald’s were running a promotion offering free coffee. The premium prices translate to superior margins for its investors.
Many people start his or her day with a cup of coffee. Coffee franchisees are growing around the world with coffee being one of the most popular drinks. A Colombia franchisee Juan Valdez is a growing franchisee in the United States specializing in coffee.
Great quality products, customized, served in clean, convenient placed stores for everyday coffee, friendly and fast serving, everything in a pleasant atmosphere - these were just few factors that lead to the great success of Starbucks during the nineties. Their USP was a place where every American could escape from home or work, for a coffee drinking ritual; high quality coffee, according to each customer's taste, served in a special, intimate ambience. Their image was supposed to appeal to anyone, being based on the idea of community, "exploiting" the need of people to interact with each other, in a "third place", away from home or work.
Starbucks Corporation provides their Partners, or employees, with benefits such as health insurance, adoption assistance, a retirement plan,
Another Starbucks business- level strategy is focused differentiation strategy (Starbucks,n.d). According to Starbucks (n.d), “this strategy a concentrating on a narrow buyer segment and outcompeting rivals by offering niche members customized attributes that meet their tastes and requirements better than rivals ' products. Starbucks has implemented a reward program that gives back to frequent customers. The "My Starbucks Rewards" program allows customers to make purchases at their local Starbucks and receive points for every purchase made with the rewards
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.
The retail environment is filled with competition creating a need for each individual establishment to offer its customers more than just a product. The producers of the product have to provide an experience in addition to the product, an experience that creates loyal customers and encourages repeat visits. Stores, such as Starbucks, have capitalized on this idea and have expanded from 1 store in 1971 to over 11,784 locations as of July 2, 2006 (Starbucks Coffee, 2006). The coffee sold at Starbucks is perceived as a premium coffee and the price charged for this product is much greater than the price charged at other locations. The question is what warrants this price difference, and why are consumers willing to pay more for Starbucks coffee
Founded in 1971 at Seattle’s Pike Place Market, Starbucks Coffee, Tea and Spices, as it was originally called, has been “brewing-up” its famous blends in over 43 countries, including the United States. Now called Starbucks Coffee Company, business isn’t just about the coffee and tea anymore. Starbucks has its own line of bottled water, handcrafted beverages, fresh food, entertainment, merchandise and a Starbucks Card. The company has received numerous awards for their outstanding business practices. Fortune Magazine has ranked them as one of “The Best 100 Companies to Work For” in 1998, 2000, 2002, and 2008 (Starbucks, 2008). The Starbucks Experience provides consumers and the general public a direct line a of business communication. From friendly baristas to press releases from CEO Howard Schultz, Starbucks keeps its “partners” informed.
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.
Everything centers on the organizational culture within Starbucks. While being a customer service-based company and understanding that the customer satisfaction and loyalty are what will make the company profitable, Starbucks takes a different approach to customer service than other companies. By hiring employees that fit in the organizational culture (ICFAI, 2005) and treating their employees well (Lefevere, n.d.), Starbucks brings in and retains customers through their happy employees. The qualities that Starbucks hires for are "adaptability, dependability and the ability to work in a team" (ICFAI, 2005). The culture is supportive and laid back (Montana, 2005). Howard Shultz, Starbucks president and CEO, has the theory "that if you treat your employees well, they will treat your customers well" (Starbucks, 1997).
"Rewarding everyday moments". The Starbucks Mantra clearly implies that they are not selling just coffee. They claim to be selling the coffee experience. Their coffee bars that sell specialty coffee also gives customers an ambience where they can be themselves. Starbucks advertises themselves as the third place between home and office, where you can escape, reflect, read, chat or listen. They have become the largest player in the coffee industry and is still looking for avenues to expand themselves.
For the assignment, I went with Rosy Perez to observe people at the Starbucks located on Cooper Street in Arlington, Texas. Although this was not a new location for either one of us, we picked to observe the establishment on Valentine’s Day. The hope was that a holiday might change the setting. By choosing a Starbucks, there was a greater possibility to blend in to the surroundings better.
For my observation I went to the Starbucks in Belton right after school. While I was there I looked at what kind of people were there, and how their conversations differed. My studies showed how people can have completely different interests based solely on their age. I also paid special attention to the kinds of drinks that people ordered; along with how they spend their time while they are there. It was fairly cold that day which impacted what people ordered, and what they were wearing.
My first observation took place on Friday, October 9, 2015 at a Starbucks located in San Marcos. It was 4:05 PM when two men got their drinks and sat down on a table to my left. They both were having on a conversation where I immediately noticed laughter and joy. Both men smiled as they spoke to each other and it seemed as if they were both having a good time. My first assumption was that they were businessmen based on the professional attire that they were wearing.