Administration And Success Strategies In The History Of Starbucks

Administration and success strategies in the history of Starbucks

The story of Starbucks has been full of high and low since its inception to the present, such as that of most organizations. His owner, Howard Schultz, had a differentiation entrepreneurial initiative that, according to his colleagues’ perspective, consisted of selling high quality coffee in cardboard glasses twice the price of competition. Today, his company Starbucks is one of the most recognized organizations in the world for the memorable experience that its clients perceive, which allows you to consider an example of business growth. None of this could have been achieved without a set of different administrative strategies, of which some of the most important have been taken for the analysis.

Human Resources Strategies

Customer service

The clientele is the most fundamental part of every business, and if the same client visits an average establishment 18 times a month the attention he receives should always be excellent. This is the case of Starbucks, which keeps its customers happy through training to employees to serve people as if they were friends, even to the point of remembering their name and the drink they usually ask for. The Starbucks experience includes a personalized treatment in which who offers the service must be ready for the time to make decisions in favor of the client even though they are not within what is raised by the company, as is the case of delivering a free drink to whom he has shed his or to whom he requires paying with an alternative method to the accepted by the company.

In addition to all this, there are standards of service time, in which it is considered that to reach excellence they must spend a maximum of three minutes since the client enters the premises until he removes his drink.

This strategy results in maintaining customer loyalty and turning them into what is called "legendary customers", that is, those who perceive such satisfaction that make them decide to return and recommend the store to their friends.

Labor partners

As part of the motivation aimed at employees, they are offered a treatment in which they are considered partners of the company, and they have even been offered actions of the organization to encourage them to work cooperatively. For the proper functioning of the service provided, an employee or “partner” must be satisfied, so that he keeps the customer satisfied, acting enthusiastically and with availability to solve any requirement. Situations like this can be difficult to achieve in an environment in which those who work in the business are relatively young people who do not know clearly what they want in their future. Therefore, keeping them motivated and making them feel protected by their organization is something really important.

Distribution strategies

The Starbucks strategy to place and expand its points of sale consisted of opening stores in new markets and grouping stores in existing markets.

Location 

The Starbucks chain has tried to locate its premises relatively close, based on the theory that despite reducing the sales of existing stores, it is possible to cover most of the same territory, a higher number of customers is reached, and The company’s total sales are increased. The reason for this initiative is the rapid adaptation of competitors to the needs of the market, since similar companies competed for the acquisition of real estate in which to establish themselves. The company’s directive even approached the owners of their competitors’ facilities and offered them to pay until twice the lease price in order to beat their main rivals. Notoriously, a strategy like this can be executed only by a company such as Starbucks, capable of carrying out sufficient market research and absorbing losses in one store while opening another, forecasting a better result in market share and supply facilities of its premises.

A fundamental characteristic of these stores is to be located in high -transit areas, near offices, shopping centers, and universities, as well as in other places with a lot of concurrence of people and with good visibility. Features like these are of vital importance, and even more so when talking about establishments such as coffee shops, which the consumer goes through them to pass

Thursday

Starbucks ventured with its products in stores outside the company. This business turn was classified as "special operations", which came to represent 15% of the company’s net sales. These operations could be interpreted as alliances that the company carried out with hotels, airlines, distribution companies of mass consumption products, among others. To all these Starbucks establishments offered coffee or ground coffee.

Internationalization strategies:

Entry to foreign markets 

Once the market in the United States was saturated, Starbucks detected the need to enter other countries in the world. To this own licenses or subsidiaries. The importance of always being aware of what happens in the world is notorious to give way to internationalization strategies, which can represent a great advance for the company, if we think that in the United States the possible population has 5% of the world Growth that the company can have is 20 times more when internationalizing.

Knowledge of culture

The company intends to achieve strategic partners in each of the countries in which it is in part of a strategy related to adapting organizational customs to the culture of the different places where it is based. Among these customs were the amplitude of the premises and the rule of non -smoking, among others that were initially thought they could not be applied as foreign markets were explored, however, the organizational culture of Starbucks functioned as an attraction in places like Japan. On the other hand, in certain new locations for the company such as the cities of the Middle East, the acceptance of different cultures is a fundamental factor for success, as in the inclusion of traditional food to the menu of each store or divisions for men and women. It is essential to obtain as much information as possible about any new territory in which a business wants to enter, the knowledge of the different cultures can make a big difference in the reception of a certain public.

Alliances in Latin America

After having signed an agreement with Pepsico in July 2015, the marketing of a wide starbuck beverage portfolio began in the markets of the Caribbean, Chile, Colombia, Costa Rica, Guatemala, Mexico, Panama, Peru, Puerto Rico, Puerto Rico and Uruguay. This strategy expands and growing the company in the Latin American market with its product, in the same way that these two companies had already done 20 years ago with the launch of the bottle drink of Frappuccino de Starbucks, thus creating the bottled category. Considering that the company analyzes very carefully the places in which to place its stores, the commercialization of products in bottle presentation is a tool that can be very useful for the diversification of the ways to reach the public, that is, in those places in Those that possibly not foreseen profitability of establishing itself as a local, the option of distributing through third parties can be analyzed.

Strategic reinvention

The vertiginous growth of Starbucks led to a current bureaucratization, so they decided to raise two major strategy changes. One of them is to recover creativity and guts that allowed him to open gap in just a decade; And the second consists of slowing growth in the United States closing units of low performance, while increasing expansion in other countries. All these decisions and new approach were after a 50% collapse in the value of Starbucks titles in 2007, a remarkable decrease in sales and profits in most of the 15,000 stores, which forced to implement strong leadership changes and strategy.

Production strategies

Supply

To find high quality coffee in Starbucks, it has controlled its supply chain as much as possible, working directly with producers in many coffee countries for the purchase of grains, supervising the roasting process for the different flavors, and controlling the distribution around of the world.

Prepared operators

There are certain complex drinks for which a series of different activities need to be carried out, and in addition, these must be handmade and with different variations according to the customer’s order. For this reason it is necessary that those who make drinks are properly trained for it. Despite being a relatively simple task, it must be fulfilled in short periods of time, which is why if an employee is not properly prepared, he can be confused, waste resources and possibly lose the client.

Marketing strategies:

Brand strategy

To consolidate as a solid brand in the market, Starbucks was recognized by three characteristic organizational components. The first is to use a coffee world -quality coffee, imported from Africa, Central America, South America and Asia. The second component refers to providing excellent customer service, ensuring that it returns to the cafeteria many times a month. And finally there is the atmosphere of the place, also called Layout, which is oriented so that they not only buy coffee but they decide to stay.

Lack of a strategic marketing group 

Starbucks was considered one of the best companies that managed marketing, this team made up of three groups, one market research that collected and analyzed market data that were required by different business units of the company; a group that managed the development of new products and margins; and a marketing group that developed advertising and promotion plans. As the company created, they realized thanks to a market investigation that consumers saw Starbucks as a place that is aimed at earning money or opening more stores. Luego de un análisis a profundidad descubrieron que la forma de estructura que aplicaban era el problema, ya que los ejecutivos senior de Starbucks debían a asumir las responsabilidades relacionadas con el marketing, además que algunas de las tendencias del mercado eran pasadas por alto o algunas investigaciones de mercado no eran tomadas en cuenta cuando se tomaban decisiones. La solución fue la creación de un grupo de marketing estratégico, con el propósito de arreglar la situación explicada anteriormente.

Advertising 

Starbucks ha venido invirtiendo aproximadamente el 1% de sus ventas en publicidad. Dicha publicidad no tiene un enfoque tan directo, sino que más bien se promocionan los productos de la empresa mediante apariciones en películas y series, además de entrega de material en algunos de los locales. Este porcentaje de asignación de recursos relativamente bajo en cuanto a actividades publicitarias se debe a que los verdaderos esfuerzos de mercadeo de la organización se dirigen hacia la recomendación de boca en boca. La empresa ahorra costos en propagandas para redirigir ese capital hacia la mejora de las experiencias de sus consumidores, de tal manera que estos se encarguen de regresar y traer consigo nuevos clientes al establecimiento.

Introducción estratégica de productos nuevos

Con la ayuda del área de investigación y desarrollo, la empresa permanece siempre innovando tanto en el producto como en el servicio. Al desarrollar nuevas bebidas estas se incluyen en el menú entre 12 y 18 meses, no solo con el objetivo de conocer la percepción del consumidor sobre estas, sino también otro tipo de información como la adaptación de los procesos de elaboración por parte de los empleados y el cumplimiento de los tiempos requeridos.

Esta estrategia recoge información desde cualquier nivel de la organización, tomando en cuenta que las personas que atienden son quienes verdaderamente conocen los gustos de los usuarios y por lo tanto los tipos de productos que más se venden. Every member of the company’s staff should be suitable for contributing about strategic decision making because each one is a small expert in their area.

Atmosphere

All Starbucks premises are designed in order to attract customers and encourage them to remain in their premises, either by the community of their furniture or the quality of the services they offer. Therefore, a successful strategy has been implemented to which they have called “third place” and refers to four aspects that they have been able to develop in their stores, such as:

• The oasis: a silent space in stores to be able to meditate and think.
• Social interaction: maintain a social environment in which people come to satisfy their desire to be in community.
• A luxury that every person can give: a Starbucks store is a place to which any type of people can go regardless of their profession, the only thing they must have in common is to want a cup of coffee.
• Romance test: Those who go to the company’s establishments have the perception that they are in a place where they can relax and get out of their daily routine for a moment.

The solitary consumers segment is also encouraged to go a Starbucks with a computer to navigate on the Internet thanks to the wireless connection offered by the company, all this while enjoying a good cup of coffee.

Own stores

Starbucks tried to be the owner of its stores in most cases throughout its history, because having no franchises, the company managed to keep the image and the desired image for its establishments all the time, since it should not deal with Other owners who incorporate unwanted changes to the business.

Prepaid cards

The organization took the initiative to sell pre -paid cards with which a quick service is maintained and consumption is ensured for different money amounts. These cards have a cost that goes from $ 5 to 500 subscribing dollars in Starbucks products, and their use has reached such a point the number of customers you buy by card is twice those who pay in cash.

User information

One of the Starbucks marketing principles is that its customers know everything about coffee, mainly in terms of the grain coffee that markets. For this, employees are trained to provide the consumer as much information as possible, in such a way that they know how to prepare a good coffee at home or which of the products prepared in the stores to choose when they reach one of them.

Social responsability

After a market investigation showed that consumers had the idea that the company was only interested through donations to health programs in different parts of the world.

Financial strategies

A financial strategy very according to the growth intentions of the organization was the constant increase in company actions, which allowed the inclusion of an increasing level of investments, which in turn increased the speed of national and international expansion and the Product sales due to distribution and promotion efficacy.

Bibliography

• Encina Errek (2008), Interview with Luis de la Peña, Marketing Director at Starbucks Coffee, Spain, http: // pdfs.Wke.ES/1/4/8/8/PD0000021488.PDF
• Global Network Content Services LLC, DBA Financial News LLC (2007), Starbucks Coffee Company holds Annual Assembly, United States, http: // Search.Proquest.com/docvieww/465692729/2496ee439e204179pq/1?ACCOUNT = 36552.
• Global Network Content Services LLC, DBA Financial News LLC (2016), Starbucks, with strategic alliance, Colombia, http: // Search.Proquest.com/docvieww/1814550953/2496ee439e204179pq/3?ACCOUNT = 36552.
• Mena, Roberto (2008), the reinvention of Starbucks, Mexico, http: // Search.Proquest.com/docvieww/336451134/abstract/2496ee439e204179pq/16?ACCOUNT = 36552
• Subhadra, k., Dutta, S, (2003) Starbucks International Operations. Hyderabad, India: Prentice Hall
• University of the Americas Puebla, Case Starbucks Coffee Company, Mexico, http: // Catarina.Udlap.mx/u_dl_a/such/documents/lad/diaz_a_d/chapter4.PDF
• WordPress, (2008) Starbucks, the coffee giant., http: // houstonwehaabigproblem.WordPress.com/2008/03/02/Starbucks-El-Gigante-Del-Cafe-Enfrenta-La-Hora-de-La-Verdad/
• Eule, Alexander, (2015) Starbucks, near dethroning McDonald’s in market value.,http: // search.Proquest.com/docvieww/1701690345/citation/a6bb9ad3501b425apq/11?ACCOUNT = 36552
• ESAVERRI, José (2008) intend to expand Starbucks., http: // search.Proquest.com/docvieww/308015841/abstract/d3591c5f613e40a9pq/7?ACCOUNT = 36552#