This assignment need to investigate and develop an innovative strategy to ensure Starbuck remains relevant in their operations worldwide.
2. Background and situation analysis
Our story began in 1971. Back then we were a roaster and retailer of whole bean and ground coffee, tea and spices with a single store in Seattle’s Pike Place Marketplace. Nowadays, we are fortunate to welcome masses of clients over our doors daily, in more than 17,000 locations in over 50 countries. Since 1971, it always has been and will continuously be about excellence. We are enthusiastic about decently obtaining only the premium Arabica coffee beans and roasting them with great care. Our passion for coffee is rivaled only by our love of sharing it.
Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.
We’ve always believed in serving the best coffee likely. Our objective for all of our coffee to be mature with the utmost standards of quality, using ethical sourcing practices. Our coffee buyers personally travel to coffee farms in Latin America, Africa and Asia to handpick the utmost quality arabica beans. When these quality beans reach at our roasting plants.
Our stores are a welcoming third place for meeting friends and family, enjoying a quiet moment alone with a book or simply finding a conversant apartment in a novel town.
Total stores: 17,009 (as of January 2, 2011) 8,870 Company?owned, 8,139 Licensed stores.
Starbucks operates in more than 50 countries worldwide as indicated below:
Africa, New Zealand, North America, South America, Europe, Asian and United States of America.
We offer the premium coffees in the biosphere, grown, prepared and provide by the finest persons. The company’s workforce, who we call partners, are at the heart of the Starbucks Experience. Our store partners are devoted to coffee knowledge, product know-how and client service. We have faith in giving our associates with respect and dignity. We are proud to offer two landmark programs for our partners, all-inclusive well-being coverage for entitled full? and part?time companions and fairness in the company through our Bean Stock program.
Starbucks Coffee, Seattle’s Best Coffee, Tazo Tea, and Torrefazione Italian Coffee.
Communal Participation: From the neighbourhoods where our stores are located to the ones where our coffee is developed – we have faith in being involved in the societies of which we are part. Getting individuals together, inspiring change and making a difference in people’s lives – it’s all part of being a good neighbour. By 2015, we plan to contribute one million volunteer hours each year to our communities.
3. Value Chain Analysis and Value Stream Mapping
The value stream mapping is a process to analyse the existing form and intention of upcoming form or pattern of the product to improve the process. Starbuck regards it employees as key role players in the success of the organisation by serving their communities with excellent service delivery which is vital for business growth.
The value stream mapping is normally known in the manufacturing, logistics and supply chain management. In this innovative and competitive markets whereby time, price and quality plays a vital role in the prosperous strategies and consumer faithfulness. Value chain is string of activities within the organization comprising of design, production, promotion and distribution (Zidan, 2016). It imperative that when a produce is offer to the end user the chain starts first with manufacturing the product, packing, transport, warehousing and distribution to the consumer.
Process Activity Mapping is a method built on time with mainly utilise in this method to determine the actual total duration to produce a product in a set period of time which include value adding purposes. This analysis helps the organisation to determine its competitive position and helps to comprehend the strategic impact of value actions and its cost drivers. It assist with the gathering of information like design, products, market, delivery and support services whereby the main aim is to accomplish the organisation goals of cost effectiveness and value added unique services.
Value chain has a significant impact on the competiveness and high return on investments. The main objective is to form and reinforce the competitive benefit and effectiveness. When mapping is done the organisation clearly understands the business process better and that insight helps the organisation to identify the problems and bottlenecks within the organisation. This process can give the organisation an indication where to improve in its services and can apply this process repetitively for continues improvement. Once the organisation iron out the bottlenecks the end-user can benefit on time, cost and quality deliverance.
Greater performance can be achieved if all resources are committed and allocated at all levels of the organisation. The value stream mapping can assist the organisation to easily recognise the wastage during production process which give the company idea where to root out the waste from production to delivery to add more value to the customer by providing affordable, quality, easily available and timely product to the consumer.
This process focusses on activities that adds value to the customer by managing activities via creating competitive advantage. Starbuck creates a friendly working environment were employees feel at home and own the company by heart as management respect, understand and appreciates their employees and communities their operates in.
Value chain cannot links the activities in order as if lose vision over the activities in the chain together. The biggest challenge of value chain is that it forces industry to break into segments. One of the challenges is that managers mostly focus on functional performance which is a long standing tradition and with process mapping and when changes or improvements are proposed than changes in operations might be compromise (Bowersox, 2013).
It has being proven that individuals functional level perform better in class but this practices does not suit in team work and continues improvement across the organisation.
Starbuck management refuses and employee who wanted to invent the Frappuccino whereby they thought is a terrible suggestion but with the continues research and supporting information which help the employee to eventually her idea approved by management and now Starbuck generates billions of dollars per annum for the Frappuccino brand.
4. Development of Starbuck Organizational strategy
Over the next 5 years, Starbucks will grow to nearly $30 billion in annual revenue with more than 30,000 stores globally. Starbucks partners (employees), coffee and corporate reputation (trust in the company) drive long-term brand loyalty. ‘We measure what drives perception of our brand and the single most important thing, is the connection made between partners and customers’.
Starbucks seven strategies for growth:
1. Be the Employer of Choice – Spend in associates capable of bringing a higher client know-how.
2. Principal in Coffee – Continue to build our leadership position around coffee agronomy, sourcing, roasting, preparing and serving handmade hot drink.
3. Grow the Store Collection – Intensification the scale of the Starbucks store footprint with disciplined expansion. (Different formats, licensing chances and worldwide growth)
4. Generate New Events to Visit Stores – Cultivate store usage across day parts with new product offers. In addition to breakfast, create new food offerings for dine, evening nourishment and refreshments, and sunsets.
5. CPG Brand Growth – Focus on the Starbucks brand to unlock profitable growth rarely seen in consumer packaged goods internationally.
6. Create Teavana – Generate a second main business in tea. The worldwide tea market is about a $109 billion dollar industry. (Emphasis on Tea Bars, relevant tea products and formats, Teavana in Starbucks, and Teavana in the grocery walkway)
7. Spread Digital Meeting – Motivate suitability and brand engagement through mobile commerce platforms. This includes expanding the number of clients partaking in My Starbucks Loots, and launching Moveable Demand & Pay and Distribution. (1 in 8 Americans received a Starbucks gift card for Christmas)
The current Starbuck Performance Indicators
• Financial Performance Pointers
• Ecological Performance Pointers
• Labor Practices and Decent Work Performance Indicators
• Human rights Performance Indicators
• Society Performance Indicators reviews and/or impact assessments
Starbuck must focus on the following performance indicators in order to enhance the business future prosperity:
Staff and Management Performance Indicators
• Revenue Growth vs Store outlets Openings – It is imperative to monitor the growth in revenue compared to the store outlets openings to avoid cross subsidiaries.
• Low productivity cost – To avoid high cost of the product we need to manage the process of preparation of the food and coffee as simple as possible.
• Price of the final product – Very important to do regular price comparisons with the competitors in order to be price competitive.
• Profit per Employee vs Employee salary – The profit per employee must always be higher than the salary of the employee.
• Return On Investment – Very important to recover your return on investment hence one must carefully consider the decision made during purchasing goods and services.
• Proper food control measures must be in place to avoid wastage. Limited stock control for perishable goods. Regular stock taking as part of the control measures.
• Total Food Bill – Control the daily expenses.
• Kitchen Labour – It is proper to measure the labour bill to ensure the staff is productive to avoid unnecessarily losses.
• Total sales per head – the total sales must be divided among the number of customers to determine unit cost.
• Seating Arrangements – The seat must arrange is such a way that customers must walk freely between the tables. Some customers enjoy open space hence provision should be made for seating outside as well.
• Front Staff – Productivity levels must be agreed and monitor clearly.
Sales and Marketing
• Number of customers – simple a good measure.
• Visits – Regular visits to corporate clients and surveys to determine what your clients think of your organisation.