Starbucks' 2008 Crisis: Analysis of Problems, Solutions, and Results
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AI Summary
This report delves into the 2008 financial crisis faced by Starbucks, examining the challenges and strategic responses. The analysis begins with an overview of Starbucks' history and the problems encountered, including declining profits, store closures, and customer dissatisfaction. The report explores the quantitative and qualitative data, analyzing the impact of the crisis and the strategies implemented to overcome it. Key approaches discussed include Total Quality Management (TQM) and Customer Relationship Management (CRM), with an emphasis on the changes made by the new CEO, Howard Schultz, and the importance of customer feedback. The report critically appraises the effectiveness of these approaches, providing a stock market analysis and suggesting alternative strategies. The conclusion summarizes the findings, and recommendations are offered based on the analysis. This report is intended to provide a comprehensive understanding of Starbucks' crisis management and business development strategies during a critical period.
Table of Contents
1. INTRODUCTION.......................................................................................................................2
1.1 Objective is missing...............................................................................................................2
1.2 Structure of the assignment....................................................................................................2
2. History of the company................................................................................................................3
2.1 The problem-..........................................................................................................................3
2.2 Data collection.......................................................................................................................5
2.3 Quantitative data....................................................................................................................5
2.5 Impact and duration of the problem.......................................................................................8
2.6 Approach to solve the problem- ............................................................................................8
3 Analysis and discussion................................................................................................................9
3.0 Critical appraisal of the approach used..................................................................................9
3.1 Strength and weakness of the approach...............................................................................12
1.What is the current approach used, named it..........................................................................12
3.2 Outcome of the approach used.............................................................................................13
3.3 Other approach.....................................................................................................................13
3.4 Suggestion for Starbucks to use other approaches...............................................................14
3.5 Casual factors of the problem..............................................................................................14
3.6 Root cause of the problem...................................................................................................15
3. Stock Market analysis................................................................................................................15
4. CONCLUSION..........................................................................................................................17
5. RECOMMENDATION.............................................................................................................18
6. REFERENCES..........................................................................................................................19
1. INTRODUCTION.......................................................................................................................2
1.1 Objective is missing...............................................................................................................2
1.2 Structure of the assignment....................................................................................................2
2. History of the company................................................................................................................3
2.1 The problem-..........................................................................................................................3
2.2 Data collection.......................................................................................................................5
2.3 Quantitative data....................................................................................................................5
2.5 Impact and duration of the problem.......................................................................................8
2.6 Approach to solve the problem- ............................................................................................8
3 Analysis and discussion................................................................................................................9
3.0 Critical appraisal of the approach used..................................................................................9
3.1 Strength and weakness of the approach...............................................................................12
1.What is the current approach used, named it..........................................................................12
3.2 Outcome of the approach used.............................................................................................13
3.3 Other approach.....................................................................................................................13
3.4 Suggestion for Starbucks to use other approaches...............................................................14
3.5 Casual factors of the problem..............................................................................................14
3.6 Root cause of the problem...................................................................................................15
3. Stock Market analysis................................................................................................................15
4. CONCLUSION..........................................................................................................................17
5. RECOMMENDATION.............................................................................................................18
6. REFERENCES..........................................................................................................................19
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1. INTRODUCTION
Main focus of the report is to discuss the issue that were faced by Starbucks in the year
2008. Further, it consists of the ways that were implemented in order to overcome the issues in
effective manner (Cramer, 2017). There were alternative strategies that were applied by the firm.
In this context, CEO was changed from Jim Donald to Howard D. Schultz. In the year 1987 to
2000, Schultz was CEO, then again he was appointed as the CEO in 2008.
The type of perception that was carried out Schultz was different, he focused on develop
strong relationship customers (George, Johnson and Smith, 2016). There were feedback taken
from customers and more than 100 changes were made in the type of services and products that
were delivered by the firm.
Main problem that were faced by the firm was related with the losses that they were
facing fur to crisis of 2008. It is important to take up appropriate step so that the rate of
performance can be improved and the issue faced can be solved.
1.1 Objective is missing
Objectives of this assignment is to focus on the problem that has affected the business
that already been solved. It consists of critical analysis of the solutions that were made by
Starbucks with the help of strategies and theories to take up appropriate decision making. Below
given are the objectives that will be covered:
1. Managing customers complaints and attaining the targets
2. Approaches of management to solve problems.
3. Decisions taken by management for better solution.
4. Making use of suggested approach.
5. Recommendation of solution.
1.2 Structure of the assignment
There are different aspects that will be covered in the research. In this context, main
focus of the assignment is to determine the decisions that are taken by the business so that
problems faced can be solved in appropriate manner. Below given is the flow of report that is
followed:
Analysing the issue faced by Starbuck in the year 2008.
Approaches applied by the firm to solve the issue.
Analysing whether the approach applied was effective enough to solve the problem.
Main focus of the report is to discuss the issue that were faced by Starbucks in the year
2008. Further, it consists of the ways that were implemented in order to overcome the issues in
effective manner (Cramer, 2017). There were alternative strategies that were applied by the firm.
In this context, CEO was changed from Jim Donald to Howard D. Schultz. In the year 1987 to
2000, Schultz was CEO, then again he was appointed as the CEO in 2008.
The type of perception that was carried out Schultz was different, he focused on develop
strong relationship customers (George, Johnson and Smith, 2016). There were feedback taken
from customers and more than 100 changes were made in the type of services and products that
were delivered by the firm.
Main problem that were faced by the firm was related with the losses that they were
facing fur to crisis of 2008. It is important to take up appropriate step so that the rate of
performance can be improved and the issue faced can be solved.
1.1 Objective is missing
Objectives of this assignment is to focus on the problem that has affected the business
that already been solved. It consists of critical analysis of the solutions that were made by
Starbucks with the help of strategies and theories to take up appropriate decision making. Below
given are the objectives that will be covered:
1. Managing customers complaints and attaining the targets
2. Approaches of management to solve problems.
3. Decisions taken by management for better solution.
4. Making use of suggested approach.
5. Recommendation of solution.
1.2 Structure of the assignment
There are different aspects that will be covered in the research. In this context, main
focus of the assignment is to determine the decisions that are taken by the business so that
problems faced can be solved in appropriate manner. Below given is the flow of report that is
followed:
Analysing the issue faced by Starbuck in the year 2008.
Approaches applied by the firm to solve the issue.
Analysing whether the approach applied was effective enough to solve the problem.
Proposing alternative approach for the issue.
Providing recommendations
2. History of the company
Starbucks was founded in the year 1971 and was founded by Jerry Balswin, Gordon
Bowker and Zev Siegl in the year 1971 and it is headquartered at America. Currently they have
their businesses at 26696 locations. It is a leading coffee chain and conduct their operations
across the various nations. Main focus of cited firm is to deliver high quality services and the
price that is taken from them is also high (Finch, 2016 ). They understand the requirement of
customers and make changes in their products and services. In other words, they are well known
for their taste and quality. Further, the products they deliver include whole bean coffee, espresso
coffee, tea products, fresh juices and beverages including snacks, chips, etc. (Fuchigami and
et,al., 2016). Cited firm had about 50 stores in US and operates in 43 other countries. Further, it
has attained different type of rewards like “Most Admired Company”, “Best Business”, etc. to
give more information on the company and their structure, employees.
2.1 The problem-
The world's largest coffee retailer, Starbucks, pulled itself out of the financial meltdown
of 2008 by aligning its operations with customer demands through social media. The company
closes 600 stores in the US but with the help of social media platforms they have create their
brand value and improving their functions and raises its productivity and also tries to add value
by using innovation techniques such as Wi-Fi service so that certain thing directly improve their
quality.
Providing recommendations
2. History of the company
Starbucks was founded in the year 1971 and was founded by Jerry Balswin, Gordon
Bowker and Zev Siegl in the year 1971 and it is headquartered at America. Currently they have
their businesses at 26696 locations. It is a leading coffee chain and conduct their operations
across the various nations. Main focus of cited firm is to deliver high quality services and the
price that is taken from them is also high (Finch, 2016 ). They understand the requirement of
customers and make changes in their products and services. In other words, they are well known
for their taste and quality. Further, the products they deliver include whole bean coffee, espresso
coffee, tea products, fresh juices and beverages including snacks, chips, etc. (Fuchigami and
et,al., 2016). Cited firm had about 50 stores in US and operates in 43 other countries. Further, it
has attained different type of rewards like “Most Admired Company”, “Best Business”, etc. to
give more information on the company and their structure, employees.
2.1 The problem-
The world's largest coffee retailer, Starbucks, pulled itself out of the financial meltdown
of 2008 by aligning its operations with customer demands through social media. The company
closes 600 stores in the US but with the help of social media platforms they have create their
brand value and improving their functions and raises its productivity and also tries to add value
by using innovation techniques such as Wi-Fi service so that certain thing directly improve their
quality.
Illustration 1: Starbucks Financial performance
(Source: Starbucks, 2015)
In accordance with the above figure, it can be stated that the rate of performance relate
with profit made is too low in the year 2008 and 2009. The sales got negatively affected and they
were facing huge losses. However, it is identified that there are improvement in sales since 2009
and this was possible with the efforts made by CEO.
The rate of competition that are faced by Starbucks is high. There are many other firms
that delivered customers with similar set of products and services (Schönsleben, 2016 ). There
are different type of issues that were faced by the business with the crises that occurred in the
year 2008. As per the researchers, it was stated that due to the high price that are charged by the
firm for their services is the main reason for their losses that were faced. At the time of crisis,
customers preferred to make use of the services that are delivered to them at low cost. In the year
2008, there were 600 shops of Starbucks that were not making much profit and they faced about
28% of fall in profits when compared with the profit that were made in the year 2007 (Heizer,
2016). Then in the year 2009, 300 stores were closed down and 67000 employees were laid off.
(Source: Starbucks, 2015)
In accordance with the above figure, it can be stated that the rate of performance relate
with profit made is too low in the year 2008 and 2009. The sales got negatively affected and they
were facing huge losses. However, it is identified that there are improvement in sales since 2009
and this was possible with the efforts made by CEO.
The rate of competition that are faced by Starbucks is high. There are many other firms
that delivered customers with similar set of products and services (Schönsleben, 2016 ). There
are different type of issues that were faced by the business with the crises that occurred in the
year 2008. As per the researchers, it was stated that due to the high price that are charged by the
firm for their services is the main reason for their losses that were faced. At the time of crisis,
customers preferred to make use of the services that are delivered to them at low cost. In the year
2008, there were 600 shops of Starbucks that were not making much profit and they faced about
28% of fall in profits when compared with the profit that were made in the year 2007 (Heizer,
2016). Then in the year 2009, 300 stores were closed down and 67000 employees were laid off.
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2.2 Data collection
Both qualitative and quantitative data were gathered so that day to day operations that are
performed by the business can be undertaken in effective manner. This way, it is favourable
enough to raise in depth understanding for that strategies that are applied by the firm. The areas
in which they need to improve are also considered so as to overcome problem effectively and
efficiently.
2.3 Quantitative data
There are many fluctuations that are faced by the Starbucks but they were able to
maintain their operations in effective manner. Below given are the stock markets of the firm
from the year 2000 to 2009.
Illustration 2: CPG Revenue
(Source: Starbucks earning, 2015.)
In accordance with the above given figure, it can be stated that the rate of revenue that
were made by the firm is increasing at an increasing rate. This shows that people prefer to make
sure that services that are delivered by the firm. However, from the year 2008 the revenue has
fallen. Further, the operating income of the firm has also fallen from 2008. When CEO changed,
Both qualitative and quantitative data were gathered so that day to day operations that are
performed by the business can be undertaken in effective manner. This way, it is favourable
enough to raise in depth understanding for that strategies that are applied by the firm. The areas
in which they need to improve are also considered so as to overcome problem effectively and
efficiently.
2.3 Quantitative data
There are many fluctuations that are faced by the Starbucks but they were able to
maintain their operations in effective manner. Below given are the stock markets of the firm
from the year 2000 to 2009.
Illustration 2: CPG Revenue
(Source: Starbucks earning, 2015.)
In accordance with the above given figure, it can be stated that the rate of revenue that
were made by the firm is increasing at an increasing rate. This shows that people prefer to make
sure that services that are delivered by the firm. However, from the year 2008 the revenue has
fallen. Further, the operating income of the firm has also fallen from 2008. When CEO changed,
then there were strategies implemented in which price of the products were raised and this was
also a negative impact over the business (Starbucks in Expanding by taking on Debt, 2015).
Further, main emphasis was made on understanding the issues or problems that were faced by
customers. This was helpful to understand the areas in which customers prefer to have
improvement. Main focus of any firm is to gain maximum profit. This is can be done when
requirement of service users are satisfied. When Starbucks focused on solving the problems
faced by customers, then they were able to develop strong relationship with them. As a result, the
rate of market share slowly improved.
2.4 Qualitative data
By consideration the sales that are made by cited firm, it can be stated that they are not
perform with their full efficiency. It is the responsibility of the management to take up proper
steps so that they can overcome the problems. The rate of visitors reduced and the main reason
identified for this was high price that are taken from firm for their products and services. There
are about 300 stores that were closed down and 6700 employees were sent off from their job.
More specifically, below given are the issue or problems that were faced by the firm:
Staff skill Fail to have strong interaction with customers.
Poor understanding of customers’ requirements
Equipment’s Lack of understanding among employees
Outdated technology
Quality Failure in maintaining quality by employees
Positioning Requires to have effective positioning of food
dishes
Handling methods No proper inventory control
No wastage control system
Monitor
Equipment’s
Monitoring system to be implemented
Accountability of equipment
Staff willingness Lack of team work
Lack of training
Equipment
There is no proper equipment to implement the
different ideas given by the customers
Space The venture do not have efficient space in their
also a negative impact over the business (Starbucks in Expanding by taking on Debt, 2015).
Further, main emphasis was made on understanding the issues or problems that were faced by
customers. This was helpful to understand the areas in which customers prefer to have
improvement. Main focus of any firm is to gain maximum profit. This is can be done when
requirement of service users are satisfied. When Starbucks focused on solving the problems
faced by customers, then they were able to develop strong relationship with them. As a result, the
rate of market share slowly improved.
2.4 Qualitative data
By consideration the sales that are made by cited firm, it can be stated that they are not
perform with their full efficiency. It is the responsibility of the management to take up proper
steps so that they can overcome the problems. The rate of visitors reduced and the main reason
identified for this was high price that are taken from firm for their products and services. There
are about 300 stores that were closed down and 6700 employees were sent off from their job.
More specifically, below given are the issue or problems that were faced by the firm:
Staff skill Fail to have strong interaction with customers.
Poor understanding of customers’ requirements
Equipment’s Lack of understanding among employees
Outdated technology
Quality Failure in maintaining quality by employees
Positioning Requires to have effective positioning of food
dishes
Handling methods No proper inventory control
No wastage control system
Monitor
Equipment’s
Monitoring system to be implemented
Accountability of equipment
Staff willingness Lack of team work
Lack of training
Equipment
There is no proper equipment to implement the
different ideas given by the customers
Space The venture do not have efficient space in their
premises.
2.5 Impact and duration of the problem
Huge losses were faced by the Starbucks in which many stores were closed down as they
were not able to meet their minimum targets. The problems were lasted for two years in which
they were not able to overcome the problem (Li and Coates, 2016). However, new CEO was
appointed who understand the main cause of the problem and appropriate steps were taken so
that rate of performance can be improved in positive manner. From the year 2010 they were able
to improve their sales and profitability in positive manner.
2.6 Approach to solve the problem
Total quality management
Starbucks was also facing an issue of quality control system so management need to
ensure about key standards which assist in resolving issues. Total quality management model is
being employed by the management so that customer focused values are being set out in order to
deal with issues. Total employee involvement is also being taken into account to ensure about
standards in terms of operations (Yu and Fang, 2009). New guidelines in respect to suppliers of
coffee beans is being presented which assist in resolving the issues.
Company has focused on various activities like team meeting and common interaction is
essential to refer so that employee commitment can be advanced. Along with this, strategic
thinking is being promoted by having a changes in operational values. Proper time standard is
being set out in order to have delivery of product to the customer.
CRM theory
Customer relationship management is the great approach that can help in resolving
financial problems of an organization. It is the holistic approach that supports in retaining
consumers in the organization for longer duration (Customer Relationship Management: Related
Theories, Challenges and Application in Banking Sector, 2017 ). There are many factors which
impact on CRM implementation such as leadership, poor management, change management, IT
tools, HR management etc. But it is responsibility of managers that to build relationship with
customers so that they become loyal and company can fulfil their requirements. By analysing the
diverse factors in respect to employees needs and other issues the Starbucks has focused on issue
of handling and storage. It is the theoretical aspect which helps in gaining competitive advantage
2.5 Impact and duration of the problem
Huge losses were faced by the Starbucks in which many stores were closed down as they
were not able to meet their minimum targets. The problems were lasted for two years in which
they were not able to overcome the problem (Li and Coates, 2016). However, new CEO was
appointed who understand the main cause of the problem and appropriate steps were taken so
that rate of performance can be improved in positive manner. From the year 2010 they were able
to improve their sales and profitability in positive manner.
2.6 Approach to solve the problem
Total quality management
Starbucks was also facing an issue of quality control system so management need to
ensure about key standards which assist in resolving issues. Total quality management model is
being employed by the management so that customer focused values are being set out in order to
deal with issues. Total employee involvement is also being taken into account to ensure about
standards in terms of operations (Yu and Fang, 2009). New guidelines in respect to suppliers of
coffee beans is being presented which assist in resolving the issues.
Company has focused on various activities like team meeting and common interaction is
essential to refer so that employee commitment can be advanced. Along with this, strategic
thinking is being promoted by having a changes in operational values. Proper time standard is
being set out in order to have delivery of product to the customer.
CRM theory
Customer relationship management is the great approach that can help in resolving
financial problems of an organization. It is the holistic approach that supports in retaining
consumers in the organization for longer duration (Customer Relationship Management: Related
Theories, Challenges and Application in Banking Sector, 2017 ). There are many factors which
impact on CRM implementation such as leadership, poor management, change management, IT
tools, HR management etc. But it is responsibility of managers that to build relationship with
customers so that they become loyal and company can fulfil their requirements. By analysing the
diverse factors in respect to employees needs and other issues the Starbucks has focused on issue
of handling and storage. It is the theoretical aspect which helps in gaining competitive advantage
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and it supports in enhancing profit of the firm (Customer Relationship Management: Related
Theories, Challenges and Application in Banking Sector, 2017). This is the way by which
organisation can maintain their relationship with the customers. Customer relationship
management is the best technique where they can resolve this problem.
In order to overcome the problem, management as per the strategy applied by new CEO,
they focused on improving the relationship with customers. Feedbacks were taken from
customers so that they can convey about the problems that were faced by them. Then appropriate
steps were taken so that strong customer’s relation can be developed. Such kind of steps in
respect to CRM application is being taken into account by the management of Starbucks so that
staff willingness can also be measured properly (Panagiotaropoulou, 2015). Further, they
develop mobile application so that all the customers are able to determine the offers that are
delivered by the firm. Below given are the strategies for reducing the rate of problem within the
organization:
Providing workers with appropriate training so that skills and
capabilities can be developed.
Rewarding employees based on their performance.
Taking feedback from workers and customers
3 Analysis and discussion
3.0 Critical appraisal of the approach used
It is need to critically analyse that how world's largest coffee retailer, Starbucks, pulled
itself out of the financial meltdown of 2008 by aligning its operations with customer demands
through social media. The analysis can be done with the help of Constructive controversy
approach which consist of different stages that are to find the statement of the problem, different
conclusion, uncertainty of the statement and finally result of the problem. Constructive
controversy approaches have been used in order to solve the problem and make effective
decision making. Constructive controversy involves deliberative discussions aimed at creative
problem solving (Esampally and Kumar, 2017). It can be contrasted to debate (a competitive
process where one view wins over the other), concurrence seeking (which suppresses
disagreement and consideration of alternatives ), or various individualistic processes. Most of the
people solve their problems on by own and take their decisions and any new problem are arising
Theories, Challenges and Application in Banking Sector, 2017). This is the way by which
organisation can maintain their relationship with the customers. Customer relationship
management is the best technique where they can resolve this problem.
In order to overcome the problem, management as per the strategy applied by new CEO,
they focused on improving the relationship with customers. Feedbacks were taken from
customers so that they can convey about the problems that were faced by them. Then appropriate
steps were taken so that strong customer’s relation can be developed. Such kind of steps in
respect to CRM application is being taken into account by the management of Starbucks so that
staff willingness can also be measured properly (Panagiotaropoulou, 2015). Further, they
develop mobile application so that all the customers are able to determine the offers that are
delivered by the firm. Below given are the strategies for reducing the rate of problem within the
organization:
Providing workers with appropriate training so that skills and
capabilities can be developed.
Rewarding employees based on their performance.
Taking feedback from workers and customers
3 Analysis and discussion
3.0 Critical appraisal of the approach used
It is need to critically analyse that how world's largest coffee retailer, Starbucks, pulled
itself out of the financial meltdown of 2008 by aligning its operations with customer demands
through social media. The analysis can be done with the help of Constructive controversy
approach which consist of different stages that are to find the statement of the problem, different
conclusion, uncertainty of the statement and finally result of the problem. Constructive
controversy approaches have been used in order to solve the problem and make effective
decision making. Constructive controversy involves deliberative discussions aimed at creative
problem solving (Esampally and Kumar, 2017). It can be contrasted to debate (a competitive
process where one view wins over the other), concurrence seeking (which suppresses
disagreement and consideration of alternatives ), or various individualistic processes. Most of the
people solve their problems on by own and take their decisions and any new problem are arising
the individual decision is depended as per that manner only. It is very useful for the management
and organisation to take down decision by using different approaches on that regard and which
helps them to solve down the problems and decision making will also be done (Li and Coates,
2016). It is important for the management and organisation to follow the appropriate guidelines
so which helps them to take decision. There are five steps that are involved in this model are as
follows:
Step 1 Statement of the problem
The world's largest coffee retailer, Starbucks, pulled itself out of the financial meltdown
of 2008 by aligning its operations with customer demands through social media. The company
have to closes 600 stores in the US due to financial crises in the year 2008. The Starbucks suffers
from different problems from couple of years whether it would be technology, service and
various complaints have been received from their customers in that regard and for various
problems the company prepares a list and take certain approaches in regard to that context and
the problem related to its also affect its quality and also decreasing their standards ( Fuchigami
and et,al., 2016). The laboratory testing is also been done and various samples are been collected
to check their quality and standards and ineffective results are come out in that favour. The
certain problems are faced by the company and these certain factors affected the company
quality and standards and also decrease their market value In the market and the company uses
such material in their form of lead and other materials which used by the company in producing
coffee that directly affects its quality and also customers and their faith and loyalty towards it is
also affected (Kapur and Kumar, 2016 ). The basic problem faced by the venture that their prices
of their products and services. In the year 2008, when the economy was facing financial crises,
people were not having enough money to spend on premium coffee. This is the reason By March
30, 2008, their profit had fallen 28 per cent compared to the same period in 2007. In 2009, it
closed another 300 stores and laid off 6,700 employees.
Problem to approach Approach to solution
Find the basic problem: that is economic crises Constructive controversy approach
implementation
Find the different causes that arise the
problem: income of people that they not able
Gather data and community discussion
and organisation to take down decision by using different approaches on that regard and which
helps them to solve down the problems and decision making will also be done (Li and Coates,
2016). It is important for the management and organisation to follow the appropriate guidelines
so which helps them to take decision. There are five steps that are involved in this model are as
follows:
Step 1 Statement of the problem
The world's largest coffee retailer, Starbucks, pulled itself out of the financial meltdown
of 2008 by aligning its operations with customer demands through social media. The company
have to closes 600 stores in the US due to financial crises in the year 2008. The Starbucks suffers
from different problems from couple of years whether it would be technology, service and
various complaints have been received from their customers in that regard and for various
problems the company prepares a list and take certain approaches in regard to that context and
the problem related to its also affect its quality and also decreasing their standards ( Fuchigami
and et,al., 2016). The laboratory testing is also been done and various samples are been collected
to check their quality and standards and ineffective results are come out in that favour. The
certain problems are faced by the company and these certain factors affected the company
quality and standards and also decrease their market value In the market and the company uses
such material in their form of lead and other materials which used by the company in producing
coffee that directly affects its quality and also customers and their faith and loyalty towards it is
also affected (Kapur and Kumar, 2016 ). The basic problem faced by the venture that their prices
of their products and services. In the year 2008, when the economy was facing financial crises,
people were not having enough money to spend on premium coffee. This is the reason By March
30, 2008, their profit had fallen 28 per cent compared to the same period in 2007. In 2009, it
closed another 300 stores and laid off 6,700 employees.
Problem to approach Approach to solution
Find the basic problem: that is economic crises Constructive controversy approach
implementation
Find the different causes that arise the
problem: income of people that they not able
Gather data and community discussion
to afford premium coffee (Ballis, Karapetis
and Ballis, 2017 ).
Finding the solution: Social media platforms to
find the different ideas given by customers
Idea from CEO
Implementation of 100 ideas given by the
customers
Step by step implementation
Permanent solution: their Profit again starts
rising up (Heizer, 2016).
Decide Solution(Two type of solution:
Temporary solution and permanent)
Step 2 Different conclusions
Conclusion 1 Founded in 1971 in Seattle, Starbucks is present in 50 states in the US and 43
countries. It is one of the most respected brands, winning awards such as Best
Business, Most Admired Company , 100 Best Corporate Citizens etc. While its
quality is unquestionable, its price has always been higher than those offered by
the domestic coffee houses in various countries.
Conclusion 2 The biggest issues faced by the venture as the economy crises in the US in year
2008. So the ventures have rapid expansion of their products, but they face the
biggest competition from the McDonald.
Conclusion 3 The previous leadership had blamed the economy and the higher cost of dairy
products for the slump in business.
Conclusion 4 They have change their strategies that is redone of the store layout, they have use
technology oriented strategy.
Conclusion 5 They have started taking ideas from the customers with the help of different
social media platforms
Step 3 Feels uncertain
In this stage the organisation start finding the uncertainty, that whether they will able to
implement the solution, their solution will be accepted by stakeholders or weather their solution
will go for the long run, the uncertainties are as follows:
and Ballis, 2017 ).
Finding the solution: Social media platforms to
find the different ideas given by customers
Idea from CEO
Implementation of 100 ideas given by the
customers
Step by step implementation
Permanent solution: their Profit again starts
rising up (Heizer, 2016).
Decide Solution(Two type of solution:
Temporary solution and permanent)
Step 2 Different conclusions
Conclusion 1 Founded in 1971 in Seattle, Starbucks is present in 50 states in the US and 43
countries. It is one of the most respected brands, winning awards such as Best
Business, Most Admired Company , 100 Best Corporate Citizens etc. While its
quality is unquestionable, its price has always been higher than those offered by
the domestic coffee houses in various countries.
Conclusion 2 The biggest issues faced by the venture as the economy crises in the US in year
2008. So the ventures have rapid expansion of their products, but they face the
biggest competition from the McDonald.
Conclusion 3 The previous leadership had blamed the economy and the higher cost of dairy
products for the slump in business.
Conclusion 4 They have change their strategies that is redone of the store layout, they have use
technology oriented strategy.
Conclusion 5 They have started taking ideas from the customers with the help of different
social media platforms
Step 3 Feels uncertain
In this stage the organisation start finding the uncertainty, that whether they will able to
implement the solution, their solution will be accepted by stakeholders or weather their solution
will go for the long run, the uncertainties are as follows:
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Uncertainty 1 Uncertainty 2 Uncertainty 2
They try to expand their
business, by serving different
products and services to the
customers but they face huge
competition from the
McDonald.
With that they have
implemented social media
platforms, but uncertainty was
there, weather the customers
will serve ideas or not on
social media platforms
100 ideas of the customers
have been implemented by the
customers, they need to find
that weather these ideas will
help them to solve the issues
(Schönsleben, 2016 ).
Step 4 Search for better understandings
Scenario In this scenario, social media platforms plays very significant role. Venture have
started communication and connecting with the customer. They try to take different
ideas from the customers in order to create much better understanding about the
environment and market place where customers and competitors exist.
Step 5 Draw conclusion
The conclusion was drawn in three ways, which are in term of customers and expansion,
the conclusion are as follows:
Conclusion 1 They have started expanding their business where they face huge competition
from the McDonald
Conclusion 2 They have started using social media platforms and mobile app where they
used to collect different ideas from the customers by communicating with
them.
Conclusion 3 They venture have implemented 100 ideas given by the customers in order to
create connection with the customers and solve the different issues faced by
Starbucks related to the economic crises.
3.1 Strength and weakness of the approach
Strength and weakness of TQM
They try to expand their
business, by serving different
products and services to the
customers but they face huge
competition from the
McDonald.
With that they have
implemented social media
platforms, but uncertainty was
there, weather the customers
will serve ideas or not on
social media platforms
100 ideas of the customers
have been implemented by the
customers, they need to find
that weather these ideas will
help them to solve the issues
(Schönsleben, 2016 ).
Step 4 Search for better understandings
Scenario In this scenario, social media platforms plays very significant role. Venture have
started communication and connecting with the customer. They try to take different
ideas from the customers in order to create much better understanding about the
environment and market place where customers and competitors exist.
Step 5 Draw conclusion
The conclusion was drawn in three ways, which are in term of customers and expansion,
the conclusion are as follows:
Conclusion 1 They have started expanding their business where they face huge competition
from the McDonald
Conclusion 2 They have started using social media platforms and mobile app where they
used to collect different ideas from the customers by communicating with
them.
Conclusion 3 They venture have implemented 100 ideas given by the customers in order to
create connection with the customers and solve the different issues faced by
Starbucks related to the economic crises.
3.1 Strength and weakness of the approach
Strength and weakness of TQM
The venture has considered TQM model which helps them to find the different issues as
well as helps them to identify the different strategies by which they can able to solve the
different issues. It has allowed to identify the issue which was quality control and employee
participation is one of major issue. It impacts the overall development in diverse manner which
need to be referred properly. Along with this, TQM has allowed to improve standards in order to
create dynamic team. Team meeting are being conducted in regard to have discussion about the
issue. It is necessary to have evolution of key issues which is essential to refer so that goals and
objectives can be accomplished. Another key strength of TQM is that it allows to have effective
identification of risk factor in respect to practice (McAdam and Reid, 2011). On the basis of
identification better understanding can be development. Starbucks has considered deep
understanding for better conclusion. After evolution the standards to improve coordination and
quality is being taken into account. It allows to have improved focus on decision matrix so that
Starbucks can have continuous improvement.
Key weakness of TQM is that it majorly focuses on the quality aspect which might affect
the sustainability in terms of other elements. Total Quality Management requires change in
mindset, attitude and methods for performing their jobs. It means special skills and training
among employees is required which might affect the overall cost factor.
Strength and weakness of CRM
Strength: It helps the organisation to find the different causes of the problem and how
that they can conclude that problem and solution in different ways. The organisation have
focused on reducing the different issues faced by them related to the different aspects of
economy, this method helps them to find that what are the different causes of the
problems and also helps to find the different strategies which helps them reduce the root
cause of the problems (Panagiotaropoulou, 2015). So they have taken different ideas from
the customers and try to implement it to the organisation.
Weakness: As there are different conclusion is being drawn in this method, implementer
get confuse that which need to be executed. Other than that weakness can be when the
data is not collected than it is not possible for the venture to solve the problem.
3.2 Outcome of the approach used
Outcome
well as helps them to identify the different strategies by which they can able to solve the
different issues. It has allowed to identify the issue which was quality control and employee
participation is one of major issue. It impacts the overall development in diverse manner which
need to be referred properly. Along with this, TQM has allowed to improve standards in order to
create dynamic team. Team meeting are being conducted in regard to have discussion about the
issue. It is necessary to have evolution of key issues which is essential to refer so that goals and
objectives can be accomplished. Another key strength of TQM is that it allows to have effective
identification of risk factor in respect to practice (McAdam and Reid, 2011). On the basis of
identification better understanding can be development. Starbucks has considered deep
understanding for better conclusion. After evolution the standards to improve coordination and
quality is being taken into account. It allows to have improved focus on decision matrix so that
Starbucks can have continuous improvement.
Key weakness of TQM is that it majorly focuses on the quality aspect which might affect
the sustainability in terms of other elements. Total Quality Management requires change in
mindset, attitude and methods for performing their jobs. It means special skills and training
among employees is required which might affect the overall cost factor.
Strength and weakness of CRM
Strength: It helps the organisation to find the different causes of the problem and how
that they can conclude that problem and solution in different ways. The organisation have
focused on reducing the different issues faced by them related to the different aspects of
economy, this method helps them to find that what are the different causes of the
problems and also helps to find the different strategies which helps them reduce the root
cause of the problems (Panagiotaropoulou, 2015). So they have taken different ideas from
the customers and try to implement it to the organisation.
Weakness: As there are different conclusion is being drawn in this method, implementer
get confuse that which need to be executed. Other than that weakness can be when the
data is not collected than it is not possible for the venture to solve the problem.
3.2 Outcome of the approach used
Outcome
On the basis of TQM application the service delivery system of Starbucks has been
advanced in recent years. It has improved the work culture and reduced the wait time among
customers. It is beneficial for better customer satisfaction which leads to improved level of
success. In total quality management the taste and operation of coffee making has been advanced
to great context which assists in attracting more customers (McAdam and Reid, 2011). With an
assistance of this, key measure in regard to sustainability has been advanced and lead to
impressive level of success. Along with this, CRM has allowed to improve the customer and
supplier relationship which assist in effective and productive operation (Panagiotaropoulou,
2015). By having an effective consideration of CRM the issues in terms of customer needs
identification has been resolved because it assist in tracking the record of loyal customers.
On the basis of analysis, it can be said that Starbucks has improved its performance in
diverse manner. The sales and market share of company has also advanced to great context. It
has been noticed that Starbucks has reached out the $80 to its price share. It indicates that brand
value and overall performance has been advanced in regard to have sustainability. It has
improved the sustainability and lead to impressive level of success. Market opportunities and
customer base has also been advanced with an effective application of tactics.
3.3 Other approach
The other approach which can be used by the venture in order to solve the problem is root
cause analysis approach. Root cause analysis have been used by the organisation in order to find
that what are the different cause of the problem, how information is being collected and how
does solution can be implemented (Heizer, J., 2016).
Root cause approach
advanced in recent years. It has improved the work culture and reduced the wait time among
customers. It is beneficial for better customer satisfaction which leads to improved level of
success. In total quality management the taste and operation of coffee making has been advanced
to great context which assists in attracting more customers (McAdam and Reid, 2011). With an
assistance of this, key measure in regard to sustainability has been advanced and lead to
impressive level of success. Along with this, CRM has allowed to improve the customer and
supplier relationship which assist in effective and productive operation (Panagiotaropoulou,
2015). By having an effective consideration of CRM the issues in terms of customer needs
identification has been resolved because it assist in tracking the record of loyal customers.
On the basis of analysis, it can be said that Starbucks has improved its performance in
diverse manner. The sales and market share of company has also advanced to great context. It
has been noticed that Starbucks has reached out the $80 to its price share. It indicates that brand
value and overall performance has been advanced in regard to have sustainability. It has
improved the sustainability and lead to impressive level of success. Market opportunities and
customer base has also been advanced with an effective application of tactics.
3.3 Other approach
The other approach which can be used by the venture in order to solve the problem is root
cause analysis approach. Root cause analysis have been used by the organisation in order to find
that what are the different cause of the problem, how information is being collected and how
does solution can be implemented (Heizer, J., 2016).
Root cause approach
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Root cause analysis (RCA) is a systematic process for identifying “root causes” of
problems or events and an approach for responding to them. By having an effective
consideration of root cause approach the management of Starbucks has gained idea to have
effective management. With an application of RCA the organisation can easily have
identification of factors which assist in attaining goals (Fisher, 2007). Focusing on
corrective measures of root causes is more effective than simply treating the symptoms of a
problem or event.
Root cause Information collection Strategies implantation
The root cause of the problem
is that there was economic
recession in the US in year
2008 which have reduces the
sales and profit margin of the
venture
The information is being
collected from the different
social platforms and
application
The venture have collected the
different ideas from the
customers and then trying to
implement it in order to have
large customers base again.
Strength:
It can help in identifying base of the problem and abolish it from the root.
It allows improving the coordinated work practice in order to meet objectives.
Structural improvement is key aspect that can be attained by Starbucks
Weakness
It takes long time to identify the main issue High investment is required which may rise the overall cost
Sig sigma
Apart from this six sigma approach is also effective theory that helps in minimizing
errors and improving business performances. Six Sigma is a set of techniques and tools for
process improvement. With an effective application of six sigma the diverse factors need to be
analysed such as define, measure, analyse, improve and control. As same the Starbucks has
initially identified the issues which have impact on the organisational performance. Afterword’s,
measurement in regard to impact of such issue on the performance is also essential to consider.
Along with this, identification of cause behind the problem is taken into account by Starbucks in
the analyse stage. After this, standards and methods are being implemented such as delivery of
problems or events and an approach for responding to them. By having an effective
consideration of root cause approach the management of Starbucks has gained idea to have
effective management. With an application of RCA the organisation can easily have
identification of factors which assist in attaining goals (Fisher, 2007). Focusing on
corrective measures of root causes is more effective than simply treating the symptoms of a
problem or event.
Root cause Information collection Strategies implantation
The root cause of the problem
is that there was economic
recession in the US in year
2008 which have reduces the
sales and profit margin of the
venture
The information is being
collected from the different
social platforms and
application
The venture have collected the
different ideas from the
customers and then trying to
implement it in order to have
large customers base again.
Strength:
It can help in identifying base of the problem and abolish it from the root.
It allows improving the coordinated work practice in order to meet objectives.
Structural improvement is key aspect that can be attained by Starbucks
Weakness
It takes long time to identify the main issue High investment is required which may rise the overall cost
Sig sigma
Apart from this six sigma approach is also effective theory that helps in minimizing
errors and improving business performances. Six Sigma is a set of techniques and tools for
process improvement. With an effective application of six sigma the diverse factors need to be
analysed such as define, measure, analyse, improve and control. As same the Starbucks has
initially identified the issues which have impact on the organisational performance. Afterword’s,
measurement in regard to impact of such issue on the performance is also essential to consider.
Along with this, identification of cause behind the problem is taken into account by Starbucks in
the analyse stage. After this, standards and methods are being implemented such as delivery of
coffee order in 5 minutes. At last, controlling and monitoring through feedback process is
essential to refer so that goals and objectives can be accomplished.
Strength
It helps in minimizing operational errors.
Quality of operational process is essential to refer so that goals and objectives can be
accomplished.
Weaknesses
It is costly due to vast application in process.
It is complex which might affect the development of structural values.
Require specific skills among members to meet objectives.
3.4 Suggestion for Starbucks to use other approaches
Company should use sig sigma approach, it will help in measuring the loop fall in the
system and abolishing it completely (Heizer, J., 2016). This supports in improving operational
efficiency. This approach aids in improving quality and accuracy of the operations. By this way
problems will be minimized and entity will be able to earn more profit. Six Sigma is more
appropriate for the business entity because it allows to have continuous improvement in the
practice. By having an analysis of such values the issues are being overcome in regard to have
sustainability. It allows to eliminate the errors so that overall performance can be advanced.
Improvement in quality is also key benefit which can be attained through application of
Starbucks. Six Sigma is defined as a limit of 3.4 defects per one million products or service
processes, where anything not acceptable to the end customer is considered a defect. It means the
Starbucks can have better control in respect to quality measurement so that issues can be
overcome. Standards in respect to coffee bean boiling for specific drinks can be set out so that
quality measurement can be ensure.
3.5 Casual factors of the problem
The factors which cause the problem for the organisation is income level of the US
citizen is decreasing and Premium price of their products which can be afford by the people.
Negligence of management in keeping the records well and motivating the employees are the
main factor of the problem (Schönsleben, 2016). Due to which people are not satisfied with the
firm and complains are increasing. Ineffective HR practices is another factor due o which entity
is unable to perform its work in effective manner. If HR professionals are not having an
essential to refer so that goals and objectives can be accomplished.
Strength
It helps in minimizing operational errors.
Quality of operational process is essential to refer so that goals and objectives can be
accomplished.
Weaknesses
It is costly due to vast application in process.
It is complex which might affect the development of structural values.
Require specific skills among members to meet objectives.
3.4 Suggestion for Starbucks to use other approaches
Company should use sig sigma approach, it will help in measuring the loop fall in the
system and abolishing it completely (Heizer, J., 2016). This supports in improving operational
efficiency. This approach aids in improving quality and accuracy of the operations. By this way
problems will be minimized and entity will be able to earn more profit. Six Sigma is more
appropriate for the business entity because it allows to have continuous improvement in the
practice. By having an analysis of such values the issues are being overcome in regard to have
sustainability. It allows to eliminate the errors so that overall performance can be advanced.
Improvement in quality is also key benefit which can be attained through application of
Starbucks. Six Sigma is defined as a limit of 3.4 defects per one million products or service
processes, where anything not acceptable to the end customer is considered a defect. It means the
Starbucks can have better control in respect to quality measurement so that issues can be
overcome. Standards in respect to coffee bean boiling for specific drinks can be set out so that
quality measurement can be ensure.
3.5 Casual factors of the problem
The factors which cause the problem for the organisation is income level of the US
citizen is decreasing and Premium price of their products which can be afford by the people.
Negligence of management in keeping the records well and motivating the employees are the
main factor of the problem (Schönsleben, 2016). Due to which people are not satisfied with the
firm and complains are increasing. Ineffective HR practices is another factor due o which entity
is unable to perform its work in effective manner. If HR professionals are not having an
appropriate application of standards then it might be possible that application standards may get
affected. Along with this, such issues might affect the costing factor which can affect the overall
development. Also, project completion can be delayed which need to be referred. In addition to
this, it can be said that policies formation without identification of needs in business is also a
crucial factor which might affect the operational values. It is necessary to have application of
standards in terms of needs identification so that issue can be resolved.
3.6 Root cause of the problem
The root cause of the problem is Economy situation of the US which was decreasing in
the year 2008 and due to that income level of the people have been decreasing (Schönsleben,
2016).
Hierarchy
Policies
Standard operation procedures are the main central of the problems. There are many issues
that increases this issues such as low employee willingness and due to which productivity is low.
And management do not pay attention on its staff members. Rout cause leads to demotivation of
workers. Another root cause issue identified within Starbucks was regarding problem with a cup
of coffee. It has been noticed that cup at Starbucks were not easy to handle which has created a
convenience to the customers (Root Cause, 2014). By having an effective consideration of such
values the issues are being taken into account. Defects are produced by production processes so
management has considered such values in desired manner by setting out various standards.
3. Stock Market analysis
There are different fluctuations that are taken place in relation with the price share of
Starbuck. There are huge losses that they have to face. Below given are the price shares of cited
firm since 1995 to 2015:
In accordance with the above figure, it can be stated that there are high negative impact
that can be seen in the year 2008 and 2009. Main reason for this was considered to be the price
and targets that were set by the business were not attained.
Below given are the market shares of Starbucks from the year 2010 to 2014:
affected. Along with this, such issues might affect the costing factor which can affect the overall
development. Also, project completion can be delayed which need to be referred. In addition to
this, it can be said that policies formation without identification of needs in business is also a
crucial factor which might affect the operational values. It is necessary to have application of
standards in terms of needs identification so that issue can be resolved.
3.6 Root cause of the problem
The root cause of the problem is Economy situation of the US which was decreasing in
the year 2008 and due to that income level of the people have been decreasing (Schönsleben,
2016).
Hierarchy
Policies
Standard operation procedures are the main central of the problems. There are many issues
that increases this issues such as low employee willingness and due to which productivity is low.
And management do not pay attention on its staff members. Rout cause leads to demotivation of
workers. Another root cause issue identified within Starbucks was regarding problem with a cup
of coffee. It has been noticed that cup at Starbucks were not easy to handle which has created a
convenience to the customers (Root Cause, 2014). By having an effective consideration of such
values the issues are being taken into account. Defects are produced by production processes so
management has considered such values in desired manner by setting out various standards.
3. Stock Market analysis
There are different fluctuations that are taken place in relation with the price share of
Starbuck. There are huge losses that they have to face. Below given are the price shares of cited
firm since 1995 to 2015:
In accordance with the above figure, it can be stated that there are high negative impact
that can be seen in the year 2008 and 2009. Main reason for this was considered to be the price
and targets that were set by the business were not attained.
Below given are the market shares of Starbucks from the year 2010 to 2014:
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Figure 1: Revenue and Operating income
(Source: Starbucks in Expanding by taking on Debt. 2015)
In accordance with the above, given figure, it can be stated that since the year 2010,
Starbucks is able to raise their profitability in positive manner. Use of social media is an
important aspects that has used by the firm. The rates of internet users are increasing drastically.
It is a helpful source that helps to interact with people and to know their preference (The HBR
interview, 2016). Further, Starbucks also introduced their own application and this was a
beneficial attempt to raise the sales and profitability. Customers were able to place their order
and were also able to make it available to their door steps. Further, it also updated them with the
offers that were provided by the firm.
(Source: Starbucks in Expanding by taking on Debt. 2015)
In accordance with the above, given figure, it can be stated that since the year 2010,
Starbucks is able to raise their profitability in positive manner. Use of social media is an
important aspects that has used by the firm. The rates of internet users are increasing drastically.
It is a helpful source that helps to interact with people and to know their preference (The HBR
interview, 2016). Further, Starbucks also introduced their own application and this was a
beneficial attempt to raise the sales and profitability. Customers were able to place their order
and were also able to make it available to their door steps. Further, it also updated them with the
offers that were provided by the firm.
Figure 2: Stock Price in 2000 during step down of CEO Schultez
Further, below given are the profits that are made by Starbucks from the year 2015 to 2017:
Cash Flow (mil) 2017 2016 2015
Cash at the beginning of the year $2,128.8 $1,530.1 $1,708.4
Net Operating Cash $4,174.2998 $4,575.1001 $3,749.1001
Net Investing Cash $(850) $(2,222.8999) $(1,520.3)
Net Financing Cash $(3,001.6001) $(1,750) $(2,256.5)
Net Change in Cash $333.5 $598.7 $(178.3)
Cash at end of the year $2,462.3 $2,128.8 $1,530.1
Capital Expenditure $(1,519.4) $(1,440.3) $(1,303.7)
It can be said from the above graph that stock price of the organisation have decreases
from 31st march 2000 to 30th April 2000. This is because Howard Schultz have been resigned
from the CEO post of the organisation which have been decided on 6th April 2000. Thus, it can
be said that the stock price of the venture have been reduced due to resign of CEO Howard
Schultz on 6th April.
Further, below given are the profits that are made by Starbucks from the year 2015 to 2017:
Cash Flow (mil) 2017 2016 2015
Cash at the beginning of the year $2,128.8 $1,530.1 $1,708.4
Net Operating Cash $4,174.2998 $4,575.1001 $3,749.1001
Net Investing Cash $(850) $(2,222.8999) $(1,520.3)
Net Financing Cash $(3,001.6001) $(1,750) $(2,256.5)
Net Change in Cash $333.5 $598.7 $(178.3)
Cash at end of the year $2,462.3 $2,128.8 $1,530.1
Capital Expenditure $(1,519.4) $(1,440.3) $(1,303.7)
It can be said from the above graph that stock price of the organisation have decreases
from 31st march 2000 to 30th April 2000. This is because Howard Schultz have been resigned
from the CEO post of the organisation which have been decided on 6th April 2000. Thus, it can
be said that the stock price of the venture have been reduced due to resign of CEO Howard
Schultz on 6th April.
In accordance with the above given table, it can be stated that the rate of performance in
recent years have also raised in positive manner. The rate of growth that the firm has is positive
enough and they are able to attain their goals and objectives in effective manner (Finch, 2016).
The strategies that are applied by the business have helped in developing trust and confidence
within the mind of customers. Further, the issues that are faced by each of the customers are
properly considered and this way, it is favourable enough to make sure that they raise the sales
and profitability.
Figure 3Stock price decrease at Jim appointment
Figure 4Stock Price at job cuts in 2008
recent years have also raised in positive manner. The rate of growth that the firm has is positive
enough and they are able to attain their goals and objectives in effective manner (Finch, 2016).
The strategies that are applied by the business have helped in developing trust and confidence
within the mind of customers. Further, the issues that are faced by each of the customers are
properly considered and this way, it is favourable enough to make sure that they raise the sales
and profitability.
Figure 3Stock price decrease at Jim appointment
Figure 4Stock Price at job cuts in 2008
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From the above two graphs, it can be stated that stock prices of the Starbucks have been
decreases. When it is concerned about the first graph then Jim Donals who was the former of the
organisation have been assigned as the CEO of the venture in 2005. As the Jim have been made
the CEO, the share price of the organisation have been reduces. Whereas when it concerned
about the second graph, when the organisation have terminated more than 100 employees in the
year 2010, again the share value of the firm have decreased. Thus, it can be said that when ever
the big decision of the organisation have been taken at that time share value if the venture have
been decreased.
4. CONCLUSION
From the report, it can be stated that Starbucks were facing different type of issue in
order to operate their functions (Finch, 2016). The type of perception that was carried out
Howard D. Schultz was helpful enough to stabilize the performance. Further, it can be stated that
taking feedback from customers is helpful enough to know the issues that are faced by them.
Through appropriate steps taken help the business to improve their performance level and sales.
Further, employees are the one who present the products and services to customers
(Schönsleben, 2016). It is important for the firm to have appropriate support from the side of
workers so that they are able to put on their full efforts in attaining the goals and objectives.
Cited firm identified that there are different type of issues that were faced by customers.
Feedback from services users were gathered so that they are able to determine the issues that are
faced by them. This way, there were more than 1000 changes that were made. Among the
changes made, one of the effective strategy was introducing mobile application that helped in
connecting with customers and delivering them services as per their need and requirements
(Kapur and Kumar, 2016). Other than that it can be summarised that US economy have faced
very big economic problem that is recession, where people was not having enough money to
afford the coffee of Starbucks. Other that than the prices of coffee was so much premium. It was
the biggest challenge for the venture. In order to deal with this issue they have used different
social media platform and mobile technology to collect the different issues given by the
customers. Gradually they have started implementing the ideas given by the customers. This
have reduces the problem of venture and they have come out from the economy crises.
5. RECOMMENDATION
What Why Who Where Which
decreases. When it is concerned about the first graph then Jim Donals who was the former of the
organisation have been assigned as the CEO of the venture in 2005. As the Jim have been made
the CEO, the share price of the organisation have been reduces. Whereas when it concerned
about the second graph, when the organisation have terminated more than 100 employees in the
year 2010, again the share value of the firm have decreased. Thus, it can be said that when ever
the big decision of the organisation have been taken at that time share value if the venture have
been decreased.
4. CONCLUSION
From the report, it can be stated that Starbucks were facing different type of issue in
order to operate their functions (Finch, 2016). The type of perception that was carried out
Howard D. Schultz was helpful enough to stabilize the performance. Further, it can be stated that
taking feedback from customers is helpful enough to know the issues that are faced by them.
Through appropriate steps taken help the business to improve their performance level and sales.
Further, employees are the one who present the products and services to customers
(Schönsleben, 2016). It is important for the firm to have appropriate support from the side of
workers so that they are able to put on their full efforts in attaining the goals and objectives.
Cited firm identified that there are different type of issues that were faced by customers.
Feedback from services users were gathered so that they are able to determine the issues that are
faced by them. This way, there were more than 1000 changes that were made. Among the
changes made, one of the effective strategy was introducing mobile application that helped in
connecting with customers and delivering them services as per their need and requirements
(Kapur and Kumar, 2016). Other than that it can be summarised that US economy have faced
very big economic problem that is recession, where people was not having enough money to
afford the coffee of Starbucks. Other that than the prices of coffee was so much premium. It was
the biggest challenge for the venture. In order to deal with this issue they have used different
social media platform and mobile technology to collect the different issues given by the
customers. Gradually they have started implementing the ideas given by the customers. This
have reduces the problem of venture and they have come out from the economy crises.
5. RECOMMENDATION
What Why Who Where Which
Employee
relations
By motivating
team,
performance can
be improved
(Ballis, Karapetis
and Ballis, 2017).
Line managers,
HR management
Symphony Standard
operational
procedures
Policies Proper guidelines
and awareness
can be increased
by policy making
Head office Head office Department head
It can be recommend from the case or report that the venture should use and implement
different strategies which helps them to enhance their sales and customer market segment, the
strategies may include:
Use of different social media tool where they promote their brand by serving different
sales promotion such as discount, vouchers, offers etc. this can helps them to attract large
customers.
They can create an app where they can take orders from the different customers and serve
different goods and services at customer's door.
They can create large active online community that influences the company's product
strategy, and gathers suggestions on every aspect of its operations.
They should reduce the waste which is being created by the disposable cups, this will
create publicity for the organisation.
relations
By motivating
team,
performance can
be improved
(Ballis, Karapetis
and Ballis, 2017).
Line managers,
HR management
Symphony Standard
operational
procedures
Policies Proper guidelines
and awareness
can be increased
by policy making
Head office Head office Department head
It can be recommend from the case or report that the venture should use and implement
different strategies which helps them to enhance their sales and customer market segment, the
strategies may include:
Use of different social media tool where they promote their brand by serving different
sales promotion such as discount, vouchers, offers etc. this can helps them to attract large
customers.
They can create an app where they can take orders from the different customers and serve
different goods and services at customer's door.
They can create large active online community that influences the company's product
strategy, and gathers suggestions on every aspect of its operations.
They should reduce the waste which is being created by the disposable cups, this will
create publicity for the organisation.
6. REFERENCES
Books and Journals
Ballis, A., Karapetis, F. and Ballis, T., 2017. Towards the Implementation of Optimal Train
Loading Plan in the Athens-Thessaloniki Freight Services. International Journal of
Operations Research and Information Systems (IJORIS), 8(2). pp.78-92.
Cramer, J., 2017. Corporate Social Responsibility and Globalisation: an action plan for
business. Routledge.
Esampally, C. and Kumar, G.P., 2017. Adoption Levels of Sales and Operations Planning
(S&OP) Framework by Indian Auto Component Manufacturers' for Balancing Supply
with Demand. Journal of Marketing Vistas, 7(1). pp.1-11.
Finch, B., 2016. How to write a business plan. Kogan Page Publishers.
Fuchigami, Y and et,al., 2016. Analysis of the mechanism hindering sustainable forestry
operations: A case study of Japanese forest management. Forests, 7(8). p.182.
George, D.L., Johnson, E.J. and Smith, M.J., 2016. Student preferences regarding didactic
content and practical experiences of influenza vaccination clinic business operations in a
pharmacy business and entrepreneurship elective. Currents in Pharmacy Teaching and
Learning, 8(2). pp.207-212.
Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.
Kapur, P.K. and Kumar, U., 2016. Special issue on reliability, infocomm technology and
business operations. International Journal of System Assurance Engineering and
Management, 7(4). pp.399-399.
Li, C. and Coates, G., 2016. Design and development of an agent-based model for business
operations faced with flood disruption. Complex Syst.: Fundam. Appl, 90. p.275.
Schell, J.M., 2016. Private equity funds: Business structure and operations. Law Journal Press.
Schönsleben, P., 2016. Integral logistics management: operations and supply chain management
within and across companies. CRC Press.
Yu, H. and Fang, W., 2009. Relative impacts from product quality, service quality, and
experience quality on customer perceived value and intention to shop for the coffee shop
market. Total Quality Management. 20(11). pp.1273-1285.
Panagiotaropoulou, S., 2015. Starbucks Case Study: Innovation in CRM strategies, means of
enabling E-Commerce. LinkedIn Pulse.
Books and Journals
Ballis, A., Karapetis, F. and Ballis, T., 2017. Towards the Implementation of Optimal Train
Loading Plan in the Athens-Thessaloniki Freight Services. International Journal of
Operations Research and Information Systems (IJORIS), 8(2). pp.78-92.
Cramer, J., 2017. Corporate Social Responsibility and Globalisation: an action plan for
business. Routledge.
Esampally, C. and Kumar, G.P., 2017. Adoption Levels of Sales and Operations Planning
(S&OP) Framework by Indian Auto Component Manufacturers' for Balancing Supply
with Demand. Journal of Marketing Vistas, 7(1). pp.1-11.
Finch, B., 2016. How to write a business plan. Kogan Page Publishers.
Fuchigami, Y and et,al., 2016. Analysis of the mechanism hindering sustainable forestry
operations: A case study of Japanese forest management. Forests, 7(8). p.182.
George, D.L., Johnson, E.J. and Smith, M.J., 2016. Student preferences regarding didactic
content and practical experiences of influenza vaccination clinic business operations in a
pharmacy business and entrepreneurship elective. Currents in Pharmacy Teaching and
Learning, 8(2). pp.207-212.
Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.
Kapur, P.K. and Kumar, U., 2016. Special issue on reliability, infocomm technology and
business operations. International Journal of System Assurance Engineering and
Management, 7(4). pp.399-399.
Li, C. and Coates, G., 2016. Design and development of an agent-based model for business
operations faced with flood disruption. Complex Syst.: Fundam. Appl, 90. p.275.
Schell, J.M., 2016. Private equity funds: Business structure and operations. Law Journal Press.
Schönsleben, P., 2016. Integral logistics management: operations and supply chain management
within and across companies. CRC Press.
Yu, H. and Fang, W., 2009. Relative impacts from product quality, service quality, and
experience quality on customer perceived value and intention to shop for the coffee shop
market. Total Quality Management. 20(11). pp.1273-1285.
Panagiotaropoulou, S., 2015. Starbucks Case Study: Innovation in CRM strategies, means of
enabling E-Commerce. LinkedIn Pulse.
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McAdam, R. and Reid, R., 2011. SME and large organisation perceptions of knowledge
management: comparisons and contrasts. Journal of knowledge management. 5(3).
pp.231-241.
Fisher, M.L., 2007. Do Not Copy or Post. Harvard business review. Pp.1.
Online
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through:<https://www.businesstoday.in/magazine/lbs-case-study/how-starbucks-
survived-the-financial-meltdown-of-2008/story/210059.html>
Starbucks earning. 2015. [Online] Available through:< https://seekingalpha.com/article/497541-
starbucks-2q12-earnings-preview-a-strong-quarter-in-the-brewing>
The HBR interview, 2016. [Online] Available through:< https://hbr.org/2010/07/the-hbr-
interview-we-had-to-own-the-mistakes>
3 Terrible Reasons to Sell Starbucks Stock. 2014. [Online] Available through:<
https://www.fool.com/investing/2017/03/18/3-terrible-reasons-to-sell-starbucks-
stock.aspx>
Starbucks. 2015. [Online] Available through:<
https://www.slideshare.net/AngelWong9/starbucks-updated-updated>
Customer Relationship Management: Related Theories, Challenges and Application in Banking
Sector, 2017. [Online]. Available through
<https://pdfs.semanticscholar.org/554c/014c4f57793d819cb2210742c0a37e8b7b29.pdf>
Maslow’s Hierarchy of Needs Theory, 2017. [Online]. Available through
<http://www.managementstudyguide.com/maslows-hierarchy-needs-theory.htm>
Root Cause, 2014. [Online]. Available through
<http://www.thwink.org/sustain/publications/brochures/04_RCA_At_Thwink/
RCA_At_Thwink_Pages.pdf>
management: comparisons and contrasts. Journal of knowledge management. 5(3).
pp.231-241.
Fisher, M.L., 2007. Do Not Copy or Post. Harvard business review. Pp.1.
Online
Brewing innovation: The world's largest coffee retailer, Starbucks, 2008. [Online] Available
through:<https://www.businesstoday.in/magazine/lbs-case-study/how-starbucks-
survived-the-financial-meltdown-of-2008/story/210059.html>
Starbucks earning. 2015. [Online] Available through:< https://seekingalpha.com/article/497541-
starbucks-2q12-earnings-preview-a-strong-quarter-in-the-brewing>
The HBR interview, 2016. [Online] Available through:< https://hbr.org/2010/07/the-hbr-
interview-we-had-to-own-the-mistakes>
3 Terrible Reasons to Sell Starbucks Stock. 2014. [Online] Available through:<
https://www.fool.com/investing/2017/03/18/3-terrible-reasons-to-sell-starbucks-
stock.aspx>
Starbucks. 2015. [Online] Available through:<
https://www.slideshare.net/AngelWong9/starbucks-updated-updated>
Customer Relationship Management: Related Theories, Challenges and Application in Banking
Sector, 2017. [Online]. Available through
<https://pdfs.semanticscholar.org/554c/014c4f57793d819cb2210742c0a37e8b7b29.pdf>
Maslow’s Hierarchy of Needs Theory, 2017. [Online]. Available through
<http://www.managementstudyguide.com/maslows-hierarchy-needs-theory.htm>
Root Cause, 2014. [Online]. Available through
<http://www.thwink.org/sustain/publications/brochures/04_RCA_At_Thwink/
RCA_At_Thwink_Pages.pdf>
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