Starbucks' Online Strategy and Its Impact on Reputation and Profit

Starbucks, a well-known global coffee company, is expanding its online strategy to enhance customer engagement and increase profits. The company currently posts different information on various social media sites, which can be confusing for followers. To improve their online presence, Starbucks should plan and post updates at the same time across all platforms, maintain a consistent schedule, and avoid overwhelming users with too many hashtags. Furthermore, maintaining high standards of cleanliness in stores is crucial to prevent negative reviews and reduce customer satisfaction. By implementing these strategies, Starbucks can increase customer loyalty and drive profits.

Running head: ONLINE MANAGEMENT 0
Social Media Strategy and Management

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Table of Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................3
Starbucks Corporation................................................................................................................4
Starbucks Existence over Social Media.....................................................................................4
Consumer over Social Media.....................................................................................................5
Marketing Policies.....................................................................................................................6
Use of Technology.....................................................................................................................6
Ethics, Privacy, and Safety.........................................................................................................7
Conclusion................................................................................................................................10
Recommendations....................................................................................................................11
References................................................................................................................................12
Appendix..................................................................................................................................14
List of Figures
Figure 1: Starbucks Consumers...............................................................................................14
Figure 2: Starbucks Consumer Satisfaction Rate.....................................................................14
Figure 3: Starbucks Ethics.......................................................................................................15
Figure 4: Starbucks Profits.......................................................................................................15

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Executive Summary
The report analyses the importance of social media in modern organisations strategies.
It assists organisations to expand their business globally. Most consumers prefer to interact
with their preferred brand on social sites. More than 80 percent of world’s enterprises use
social media for marketing of their products. The benefits of social media advertisement are
enormous for corporations.
Starbucks has successfully implemented online marketing policy in their business
model. The company builds their consumer's loyalty by interacting with them over social
websites. This policy has gained a significant advantage to Starbucks. They use social media
posts to collect information from consumers regarding their feedback on their products and
apply such ideas on product development stage.
Starbucks implement modern technology to improve their consumer’s facilities. One
of the key parts of Starbucks online strategy is privacy and safety of consumer data. They
apply safety procedure to avoid the leakage of their consumer data. The effective adoption of
online strategy benefited Starbucks significantly and sustains their future development.

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Introduction
The advancement of internet services has popularised the use of social media sites. A
large number of people use social media sites to communicate and share their content. With
time, it is becoming a critical part of people’s lives. There are more than 2.46 billion active
social media users in 2017. The popular social media sites include Facebook, Twitter,
Instagram, and YouTube. Companies are using social media sites to improve their interaction
with consumers and enhance the audience for their marketing. It has become significantly
important for corporations to adopt a social media strategy for their growth. Now
corporations are spending millions of dollars for adopting better social media strategies and
securing their data online.
The primary objective of this report is to analyse the online strategy of Starbucks,
which assists them by enhancing their customer base. The necessity and benefits of online
presence shall be evaluated from Starbucks perspective. Other aspects of social media will be
discussed in the report as well, such as customers, regulations, safety, and technologies.
Further, the report will scrutinise the theories of online experts and provide recommendations
to implement these theories in Starbucks strategy.

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Starbucks Corporation
Starbucks was first established in Seattle, Washington as an American corporation, in
1971. The corporation operates more than 23 thousand stores globally, in coffee stores
industry. The key features of Starbucks are the quality of their product, rich taste, and
excellent social environment. The company serves an average of 500 consumers every day, in
each of their stores. In 2016, the corporation generated a profit of US$21.3 billion. To
maintain their stores and for manufacturing their beverages, the company employs more than
236,000 employees.
Starbuck’s online strategy was adopted in 2008 by CEO Howard Schultz, to change
the reputation of the company. The organisations suffered a huge loss in 2008 which forced
them to implement new business policies. Starbucks uses their reputation and their
consumer’s value to implement a successful online strategy. This strategy increases the social
interaction of company and consumers (Schultz 2012).
The first step of the strategy included opening a Facebook page to allow customers to
interact with the company. After that, Starbucks has increased their presence in almost all
social media sites. The online policy of Starbucks proves to be beneficial for the company,
even in a depression.
Starbucks Existence over Social Media
Starbucks is significantly popular over various social sites as compared to their
competitors. They use their online presence to increase their customer’s base and advertise
their products. Following are the statistics of different social websites:
1. Facebook: 37.07 million likes
2. YouTube: 141 thousand subscribers
3. Twitter: 11.9 million followers
4. Pinterest: 319 thousand followers
5. Instagram: 15.2 million followers
6. Google plus: 4.8 million followers
As per Sindhwani and Ahuja (2014), the company implements various policies to
maintain their high presence over social websites. This strategy augments the demand for

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company’s products in-between consumers. Starbucks did not just use their online
presence for their benefits, the instead company is known for using their popularity for
improving the situation of society. As per Mattson (2012), the most popular initiative
from the company includes their association with RED to raise money for AIDS
awareness causes. RED assists in raising HIV awareness in African kids and provides
them medical facilities to fight AIDS. Starbucks associated with location sharing social
sites Foursquare, to give $1 for each Starbucks location post on the website. This helps
them rising more than $250,000 for charity purposes.
The research of Engagement db (2008) divides various companies, who use social
media strategy, into different categories. Starbucks was entered in Mavens category, in
which the corporations have the highest level of consumer interactions over social
websites. These corporations communicate with their social media audience to prove
them information and solutions for their quarries. The social media interactions are an
essential part of their corporate model. Starbuck’s online strategy provided them a
competitive advantage in coffee shops industry (Eisinggerich et. at. 2015).
Consumer over Social Media
According to Haskova (2015), the motive of most online strategies is to increase the
number of followers on social media websites, but it is not an easy job. Strategic planning
from corporation’s management is required to enhance their online presence. According
to O’Farrell (2013), Starbucks audience comprises of hip adult peoples who demand
unique taste and high-quality beverages (Figure 1). They usually pay extra for the better
social environment in a restaurant or coffee house. Starbucks introduces various new
beverages according to different occasions to attract a large number of consumers.
Tong (n.d.) provided that the enterprise advertises their beverages as an essential part
of people’s lifestyles, like Red Bull. Instead of attracting coffee drinker, the company
focuses on their target demographics’ requirements. Starbucks use their online posts to
give details about new offers and products launch to their followers. Their online
followers can also post quarries or feedback regarding any product, which usually solved
by the organisation.

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Marketing Policies
With a significantly large number of loyal followers, Starbucks prefer to advertise
their products on online mediums to reach a broader audience. Starbucks strategically
plan their posts and maintain a minimal approach on online sites. Starbucks online
marketing policy emphasis on reliability of information shared online. They did not post
every small update or constant share new information; instead, they share the information
which is necessary for consumers. They do not post update much time in a day; instead,
they plan their posts to increase its effectiveness (Jain & Shah 2017).
The company also improves its consumer satisfaction rates with the help of social
media interactions. Starbucks reply to the feedbacks and questions of customers to
provide them better information. This augments a consumer’s trust and loyalty in the
brand. To increase the impact of online presence, Starbucks introduce different
campaigns. These online campaigns allow consumers to interact and share with the
company. Many companions are related to charity and others are related to advertising of
certain products, for example, My Starbucks Idea, PSL, Non-profit and RED campaign.
Successful campaigns are one of the primary reasons for Starbucks successful online
presence (Hossain & Islam 2015).
As per the research of Chua & Banerjee (2013), the online presence also benefits the
company in product development procedure. Starbucks takes ideas from consumers or
conducts a survey to determine the requirements of consumers. This information assists
company in preparing beverages according to consumer requirements. Starbucks is
significantly popular between celebrities, therefore, celebrities followers also prefer
Starbucks over other coffee houses. The company also create various advertisement
featuring internet personalities to attract their online followings.
Use of Technology
The popularity of modern technology, such as smartphones and internet based
facilities, encourage organisations to implement such technologies into their business
procedures. Starbucks implement these technologies to improve the experience of their
consumers. Following are few examples of Starbucks adaptation of online technology
into business:

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 Availability of Free Wi-Fi: Starbucks is known for their free Wi-Fi facility in
every store. Many people perform their work using Starbucks internet. Singh
(2016) provided that the Wi-Fi users are welcomed with a home page which
encourages consumers to follow Starbucks on social sites. In the RED campaign,
Starbucks donated $1 for every user who uses Starbucks Wi-Fi for checking in
their location on foursquare.
 Online Ordering and Payment Service: To improve their consumer’s
experience, Starbucks introduced a new feature in their mobile application which
allows consumers to order their beverage through the application. The consumers
can place their order, pay online and collect their beverage from the nearest stores.
The company proved this service in stores of North America, Canada, and
England. The consumers prefer these options because they do not have to wait in
line for ordering their beverage and this also increased the productivity of workers
by freeing their time (Hamann et. al. 2014).
 Modern Programmes: Modern social media tools assists companies to gain
detailed information about their audience on social media. They can determine the
gender, preferred drink and interest of their consumer by using online applications
such as Facebook Insights and Google Alerts. The company ascertains these
details by analysing their follower’s data. The organisation uses such data to
advertise their products to the specific audience, and encourage them to share their
interest with other peoples (Aiello & Dickinson 2014).
 Partnerships and Offers: Starbucks collaborate with other companies to provide
their consumer new offers and discounts. Notably, Starbucks collaborate with
iTunes and Spotify to play music in various stores and also provide gift cards and
their services to their consumers. Starbucks attracts online consumers by
organising giveaways and offers on their social media platforms.
Ethics, Privacy, and Safety
The modernisation of social media sites has increased its benefits but along with
benefits, there are several threats for using online platforms. The risk of cyber-attack has
grown considerably in past decade. The social media account of various companies has been
hacked and a large amount of sensitive data has been leaked on the web. This increases the
concern regarding the safety of private data online by different companies. Many popular

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companies such as HBO and Yahoo, got their accounts hacked by unknown hackers. The
government has increased the regulations regarding online privacy and put a restriction on
companies who use their follower’s data (Davidson & Stevens 2012).
Starbucks has implemented a safe privacy policy on their online platforms, which protects
the security of their followers. The enterprise does not collect any personal data from the
followers and allow the data collected for research are collected through anonymous routes.
As per Leaver (2017), Starbucks mobile application contains sensitive data of their
consumers such as name, bank details, and address, which can be leaked by hackers online.
Therefore, the company maintains a high level of cyber security to reduce the risk of cyber-
attacks. Various physical and technical safety procedures are implemented by the company to
avoid the risk of cyber crimes.
As per ethical issues, Starbucks adopt ethical policies to avoid any unethical conduct in
the organisation. Recently, Starbucks was involved in tax evasion charges in the united
kingdom, along with other large organisations such as Google and Facebook. According to
Dowling (2014), Starbucks uses their European stories to avoid paying taxes. These charges
reduced the online reputation of the enterprise (Figure 2). The company pledged to pay 10
million as taxes for next two years, to regain their consumer's trust.
Starbucks implement Corporate Social Responsibility principles to avoid any unethical
issues. The CSR policy of the company is based on preserving the interest of various
stakeholders such as employees, suppliers, environment, and consumers (Bruhn-Hansen
2012). Following are key points of Starbucks CSR policy:
 Use of biodegradable product to serve their beverages, in order to reduce the pollution
in the environment. The brewing process of the company ensures a minimum amount
of wastage of products. From 2015, Starbucks has declared that 99 percent of their
coffee beans are produced from ethical sources only. Starbucks use online campaigns
to increase the environmental awareness in public such as Non-profit campaign.
 Starbucks maintains a high standard of quality throughout their stores since this is
their key characteristic. The company also ensure the safety of their employees and
maintain a positive reaction with them. The main ethical principle of Starbucks is to
use only high-quality ingredients in the products.
 The company does not use their position to gain an unfair advantage over its
competitors. They do not defame their competition on social sites or enter any illegal

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contracts. The company properly implement different country’s government
regulations in their stores.

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Conclusion
In the limelight of the above executed analysis, it has been inferred that social media
usage is a necessary part of business strategy. Social media benefits companies by connecting
them with their target audience, collecting useful data for product development and analysing
the demand of the public. Starbucks has effectively applied social media strategy into their
business model, which has significantly benefited the organisation. The company uses their
online presence to interact with consumers and improving their facilities quality. Starbucks
does not just focus on increasing benefits; instead, they also benefit the public by various
charities. This helped them maintain a positive reputation on online websites (Figure 2). They
also implement technology for improving their services and widely advertise their products.
The implementation of online services assists Starbucks in gaining positive reputation and
enhancing their profits.

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Recommendations
There are some policies that Starbucks can apply to improve their online strategy even
more. Following are some of the examples:
 Starbucks post different information on different social sites which confuse their
followers. The company should plan their posts and update them at the same time
over all the different social websites.
 The company should also adopt a proper schedule for posting their information on
social websites. Many times organisation stops the quantity of consumer’s interaction
and just avoids their online followers, which should be avoided by enterprises.
 The firms are criticised for the number of hashtags used by them over social sites.
Due to this crucial hashtags such as Non-Profit, did not get proper attention.
 Many of Starbucks stores do not maintain a high standard in cleanness. Frustrated
consumers share this on social media sites of the company which reduced their value
since they are known for high-quality standards. The company should avoid such
embarrassing situations by maintaining proper cleanness throughout their stores
(Gregory 2015).

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References
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in the global redesign of Starbucks stores. Visual Communication, 13(3), 303-321.
Bhardwaj, V. (2014). Starbucks' Growth: A 20-Year Review. Seeking Alpha. Retrieved from
< https://seekingalpha.com/article/2153683-starbucks-growth-a-20-year-review >
Bruhn-Hansen, S. (2012). Corporate Social Responsibility–A case study of Starbucks’ CSR
communication through its corporate website. Unpublished master’s thesis, Illinois
State University. Retrieved from http://pure. au. dk/portal/files/45282206/ba_thesis.
pdf.
Chua, A. Y., & Banerjee, S. (2013). Customer knowledge management via social media: the
case of Starbucks. Journal of Knowledge Management, 17(2), 237-249.
Dali. (2014). Case #5: Starbucks: Mobile App. Dali. Retrieved from <
https://dali0266.wordpress.com/2014/04/04/starbucks-mobile-app/ >
Davidson, B. I., & Stevens, D. E. (2012). Can a code of ethics improve manager behavior and
investor confidence? An experimental study. The Accounting Review, 88(1), 51-74.
Dowling, G. R. (2014). The curious case of corporate tax avoidance: Is it socially
irresponsible?. Journal of Business Ethics, 124(1), 173-184.
Eisingerich, A. B., Chun, H. H., Liu, Y., Jia, H. M., & Bell, S. J. (2015). Why recommend a
brand face-to-face but not on Facebook? How word-of-mouth on online social sites
differs from traditional word-of-mouth.
Gregory, L. (2015). Starbucks Coffee’s Vision Statement & Mission Statement. Retviered
from http://panmore. com/starbucks-coffee-vision-statement-missionstatement.
Hamann, L., Luschnat, K., Niemuth, S., Smolarz, P., & Golombek, S. (2014). CSR in the
coffee industry: Sustainability issues at Nestlé-Nespresso and Starbucks. Technische
Hochschule Wildau.
Haskova, K. (2015). Starbucks Marketing Analysis. CRIS-Bulletin of the Centre for Research
and Interdisciplinary Study, 2015(1), 11-29.

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Hossain, M., & Islam, K. Z. (2015). Generating ideas on online platforms: A case study of
“My Starbucks Idea”. Arab Economic and Business Journal, 10(2), 102-111.
JAIN, S., & SHAH, A. (2017). EFFECT OF SOCIAL MEDIA MARKETING ON
STARBUCKS. International Educational Scientific Research Journal, 3(1).
Leaver, T. (2017). Born digital? Presence, privacy, and intimate surveillance.
Mattson, C. E. (2012). Buying Stuff, Saving Lives—A Critical Account of Product (RED)'s
Economics of Attention. Southern Communication Journal, 77(3), 216-238.
O’Farrell, R. (2013). Who Is Starbucks’ Target Audience. Retrieved from httpzii.
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Singh, J. (2016). The influence of CSR and ethical self-identity in consumer evaluation of
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Tong, S. More Than Coffee: Starbucks’ Social Media Presence Analysis.

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Appendix
Figure 1: Starbucks Consumers
(Source: Dali 2014)
Figure 2: Starbucks Consumer Satisfaction Rate
(Source: Statista 2017)

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Figure 3: Starbucks Ethics
(Source: Really Good Companies 2017)
Figure 4: Starbucks Profits
(Source: Bhardwaj 2014)