MKTG611 Marketing Management

Write a paper about Starbucks:

-Company history

-Structure overview

-Statistics of the number of stores inside and outside America and the rate of increase and spread

-Company 's expenses, revenues, and annual profits

-Number of employees and average salary, lowest and highest

-The executive directors of the company throughout its history

-Objectives and strategies of the company

-How the company deals in its branches in countries that do not drink coffee so much such as India and China

Company Profile

Starbucks is considered as the biggest coffeehouse chain globally. Starbucks was established in 1971 and the first coffee store was opened in Seattle, Washington. In 1990 the company attained the growth and builds a new roasting plant. In the recent scenario, the coffee industry is considered as a rapid growing industry globally. The main aim of the Starbucks is to offer good quality of coffee to the consumers. In 1996 the company entered into the international market by opening stores in Japan. By the end of 2000, the company ventured into many countries from England to China to Australia with over 3300 stores. Starbucks aim is to give inspiration and develop the individual spirit with one person, one cup and also with one neighborhood at a time.

 

(Source: Starbucks, 2017).

Structure overview

Starbucks has a matrix organizational structure and also there are various features of the organizational structure. The following are the features related to the company.

• Functional structure: It is related to the grouping based on the business function.
• Geographic divisions: In this, the company consists of the geographic division.
• Product based divisions: In the organizational structure, the product based division is also one of the features and also gives focus on the product lines (Schultz, 2012). 

Statistics of the number of stores inside and outside America and the rate of increase and spread

 

(Source: Statista, 2017).

This statistic considers the stores from 2005 to 2016. In 2013, there were 11,457 Starbucks stores in the U.S. The total numbers of stores worldwide are doubled in the decade between 2005 and 2015. By considering the recent scenario, it is evaluated that there are over 13,000 stores in U.S and also more than 11,000 in other locations around the world.

 Starbucks expenses, revenues, and annual profits

 

(Source: Statista, 2017)

This Statistic gives reflection on the revenue of Starbucks, worldwide from 2003 to 2016. In 2016 Starbucks revenue amounted to 21, 32 billion. The revenue of Starbucks has enhanced similar to the growth of the store locations. Between 2010 and 2015 the growth has been doubled from 10.7 billion U.S dollar to 19.16 Billion U.S dollars. The annual profit of the company is approximately 30 billion.

Number of employees and average salary, lowest and highest

Employees are considered as the greatest asset for the company. They support their employees and enhance the experience of the customers. The total numbers of the employees are 238,000 (2016). Salary is according to the position in the organization. Starbucks lowest salary is $7.63 to $10.63 per hour.   The average salary for the employee is $9.43 an hour while the average salary of the supervisor is $11.65 an hour. Highest salary is $51.956 of a store manager (Chua & Banerjee, 2013).

The executive directors of the company throughout its history

The directors of the company are:

• James G. Shennan, JR has been the director since March 1990.
• Craige E. WeatherUp has been the director since February 1999.
• E.Ullman has been the director since 2003.He also served as a chairman of the federal reserve bank of Dallas through the end of 2014.
• Mellody Hobson has been the Starbucks director since February 2005.
• Joshua Cooper Ramo has been the director since May 2011.
• Robert M. Gates has been the director since May 2012.
• Kevin R. Johnson has served as a president and chief operating officer since March 2015 and also been the director since March 2009.
• Mary N.Dillon has been the director since January 2016.

Objectives and strategies of the company

The main objective of the company is to launch itself as a popular and respected brand globally. Also, it gives emphasis on the expansion of the branches all over the world. The new techniques, strategies, and goals are implemented so that the goals and objectives can easily be attained in an effective manner. The objective of the company helps to attain its mission every day.

Strategies are:

The company considers various types of strategy that enhance the image in the market.

• The first strategy of the company is related to the rapid store expansion strategy. In this strategy that main emphasis of the company is on the domestic and international store expansion. It also gives emphasis to the employees training and recognition, so that the employees can enhance the productivity level. Planning and store ambiance is also included in this strategy (Levy, Reinecke & Manning, 2016).
• Product line strategy: The Company gives main focus on offering a wide range of products choices to the consumers and also special product promotion is taken into consideration to enhance the growth (Wrigley & Lowe, 2014). 
• Coffee purchasing strategy:  The Company uses fixed price purchase commitment and also promotes coffee cultivation method that safeguards the biodiversity and also creates a healthy environment (Li, 2017).

Countries that do not give preference to coffee

Starbucks adopted various strategies to deal in the countries where the preference is given less to the coffee. Like in China the company considered smart market entry strategy. The emphasis is given to enhance the visibility and traffic locations so that the positive impact can be on the brand image (Rajasekaran, 2015).  The next thing company considered capitalization on the culture of drinking tea of the Chinese consumers. The company introduced beverages using famous local components like green tea. This approach has given success and converted the obstacles into the favor (Masi, Dinnella, Monteleone & Prescott, 2015).

The consumers developed a taste for the coffee which has given enhancement in the operations of the activities. In India, various discounts and promotional strategies were adopted that has grown the consumption rate of coffee. This has created a market and Starbucks is considered as a coffee house that offers high quality of products. The company gives emphasis on enhancing the image of the company and also the satisfaction level of the consumers. Starbucks should provide good quality products, and then only the goals and objectives can be accomplished in an effective manner (Garthwaite, Busse, Brown & Merkley, 2017).

References

Chua, A. Y., & Banerjee, S. (2013). Customer knowledge management via social media: the case of Starbucks. Journal of Knowledge Management, 17(2), 237-249.

Garthwaite, C., Busse, M., Brown, J., & Merkley, G. (2017). Starbucks: A Story of Growth. Kellogg School of Management Cases, 1-20.

Levy, D., Reinecke, J., & Manning, S. (2016). The political dynamics of sustainable coffee: Contested value regimes and the transformation of sustainability. Journal of Management Studies, 53(3), 364-401.

Li, P. (2017). Strategies and their effect mechanism of promoting leadership effectiveness of traditional service enterprises: a case study based on Starbucks coffee. Tourism Tribune, 32(3), 49-60.

Masi, C., Dinnella, C., Monteleone, E., & Prescott, J. (2015). The impact of individual variations in taste sensitivity on coffee perceptions and preferences. Physiology & behavior, 138, 219-226.

Rajasekaran, R. (2015). Starbucks' Entry into Tea-Drinking India. IUP Journal of Brand Management, 12(3), 45.

Schultz, H. (2012). Pour your heart into it: How Starbucks built a company one cup at a time. Hachette UK.

Wrigley, N., & Lowe, M. (2014). Reading retail: A geographical perspective on retailing and consumption spaces. Routledge.