Case study 2starbuck’s mission social responsibility and brand strengt

NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATION PROGRAM — —•—— BUSINESS ETHICS INDIVIDUAL ASSIGNMENT Lecturer: Nguyen Bich Ngoc CASE STUDY Starbuck’s Mission: Social Responsibility and Brand Strength Participant: Ha Nguyen Hien Anh Student code: 11220182 Class: International Business Administration 64D 1 TABLES OF CONTENT ABSTRACT I INTRODUCTION OF STARBUCKS Foundation Partnerships Products II STARBUCK’S ETHICAL ISSUES Ethical Issues in Starbucks Culture .6 Ethical Issues in Corporate Social 2.1 Environment 2.2 Employees 2.3 Suppliers .9 2.4 Customers 10 2.5 Communities .10 III BRAND EVOLUTION .10 IV SUCCESS AND CHALLENGES .11 CONCLUSIONS 13 REFERENCES 15 1 This is a preview Do you want full access? Go Premium and unlock all 16 pages Access to all documents ABSTRACT Get Unlimited Downloads Starbucks is a multinational coffeehouse chain that was founded in Seattle, Improve Washington in 1971 The company is your knowngrades for its high-quality coffee, customer service, and welcoming atmosphere Starbucks has over 32,000 stores in 83 countries, making it one of the largest coffee chains in the world Starbucks offers a range of Upload coffee and tea beverages as well as food items such as sandwiches, salads and pastries In addition to its coffee and food offerings, Starbucks is also known for its unique Share your documents to unlock stores design and customer experience Starbucks offers a mobile ordering and payment system allowing customers to order and pay for their drinks and foood items using their mobile devices Free Trial Starbucks company is committed to days ethical sourcing and sustainability, and work Get 30 of free Premium closely with coffee farmers to ensure that its coffee beans are sourced in an ethical and sustainable manner Starbucks has established itself as a leading coffeehouse chain globally, with a strong brand identity, loyal customer base, and commitment to ethical business practices Already Premium? Log in 1 I INTRODUCTION OF STARBUCKS Fo un da tio n The story of Starbucks company begins in 1971 near the historic Pike Place Market in Seattle It was here where the first store of Starbucks was opened, offering fresh-roasted coffee beans, tea and spices from over the world for customers to take home In 1982, a young man named Howard Schults joined Starbucks as director of retail operations and marketing After a trip to Milan, Italy in 1983 and experiencing its coffee bars, Schults was inspired to bring the warmth and artistry of its coffee culture to Stabucks and recognized an opportunity to develop a similar retail coffee-bar culture In 1985, Starbucks tested the first downtown Seattle coffee house, served the first Starbucks cafe latte, and introduced its Christmas Blend Since then, the company has expanded to Chicago, Vancouver, Canada and then on to across the United States and over the world Until recently, Starbucks opened three stores per day on average, but it has slowed down recently Every week, the business serves millions of clients and generates almost $13 billion in net profits Starbucks has become the third largest chain restaurant in the United States Starbucks stores are in high-traffic, high-visibility areas They are created to offer a welcoming coffee-bar atmosphere, which is a crucial component of the Starbucks brand and service After homes and workplaces, Howard Schultz wants Starbucks to become "the third place" for people customers to visit Starbucks positioned its stores in a range of locations, including workplaces, bookstores, and college campuses In order to serve a wider range of clients outside of large metropolitan markets and further increase brand exposure, it is also positioned in a few carefully chosen rural and off-highway sites The 1 corporation increased the construction of stores with drive-thru lanes to give nonpedestrian customers more access and convenience Pa rtn ers hi ps Starbucks distributes coffee and tea goods through other channels and its partners in addition to selling its goods through physical stores and granting trademark rights For instance, its super-premium ice creams, VIA coffees, Starbucks Doubleshot espresso drinks, and Frappuccino coffees may be bought in grocery stores and from merchants like Walmart and Target To produce single-cup Starbucks packets targeted for hotel rooms, Starbucks teamed up with Courtesy Products Starbucks and Green Mountain Coffee Roasters collaborated to release coffee and tea pods with the Starbucks brand These pods are intended for users of Keurig single-cup brewing systems Although the two companies would often compete, this alliance is advantageous to both Green Mountain and Starbucks Because Green Mountain is the owner of Keurig's single-serve machines, the collaboration gives Starbucks access to this equipment in order to promote a new product since of the collaboration, more people will use Keurig singlecup brewing systems since they are drawn to the Starbucks brand This collaboration between Starbucks and Green Mountain did not prevent Starbucks from introducing its own line of single-serve machines Starbucks released its Verismo 580 Brewer in 2012, enabling customers to brew their own cups of Starbucks coffee at home Starbucks has a small selection of coffees to place an emphasis on quality above quantity Not to be outdone, Green Mountain introduced the Rivo, another variety of single-serve coffee brewer Between the two businesses, the competition to dominate the single-serve coffee industry is getting more intense Starbucks' approach to location and growth is frequently criticized With its "clustering" strategy, which included, in some cases, practically putting a Starbucks on every corner, many smaller coffee shops were thrown out of business Because of how prevalent this tactic was for the majority of the 1990s and 2000s, Starbucks became the punchline of 1 This is a preview Do you want full access? Go Premium and unlock all 16 pages jokes Many people started to question if we actually needed two Starbucks locations directly across from one another However, a change in policy was brought about by the current global recession Starbucks reduced store openings, shut down hundreds of Access to allitsdocuments locations nationwide, and increased its attention on international markets Get Unlimited Downloads Pr od uct s To stay competitive, Starbucks has added a number of new products over the years With the release of its Pike Place Blend in 2008, Starbucks made the decision to get back to the basics in the hopes that this would bring the firm closer to its origins of distinctive, beautifully blendedShare coffee The company to collaborated with Conservation your documents unlock International to guarantee the beans were harvested ethically, adding to the appeal of the beverage Starbucks released Blonde Roast blend in 2011 after feedback suggested that many of its customers preferred a lighter blend Starbucks management think that customers should consistently have a positive shopping experience As a result, Starbucks started to put a renewed emphasis on the days of free Premium customer experience as one ofGet its 30 main competitive advantages Shops are replacing their outdated espresso machines with new, high-tech ones and some are switching to Clover Brand single-cup brewing machines so each customer receives a freshly brewed cup of coffee made to his or her preferences in order to improve the European coffee shop experience for which Starbucks is known Already Premium? Log in Starbucks also encourages brand loyalty by boosting repeat business The Starbucks Card, a reloadable card established in 2001, is one method it achieves this Starbucks collaborated with mobile payments provider Square to launch the Square Wallet app for mobile devices, catering to the tech-savvy customer Customers can save the details of their debit, credit, or Starbucks cards in the "app" They simply scan their phone as payment when they purchase coffee Starbucks stated in 2013 that it would display calorie counts on the menu boards of its U.S locations Starbucks customers will be able to make more informed decisions about their wellness thanks to this increased transparency Starbucks also debuted Improve your grades Upload Free Trial 1 nutritious salad bowls with fewer than 450 calories during the summer Customers are likely to view these efforts as a positive reaction to their worries given the growing desire for healthier meals II STARBUCK’S ETHICAL ISSUES Ethical Issues in Starbucks Culture In 1990, the top executive team of Starbucks drafted a mission statement that outlined the company’s guiding principles in order to aid their partners in determining if later choices and actions were appropriate Based on their partners’ feedback, the final statement stated that "people first and profits last." In fact, creating a fantastic and respectable work environment for its employees ranks as Starbucks' top guiding principle Over the years, Starbucks has maintained the mission and guiding principles through the following three things The mission statement and comment cards are first sent to all new partners during orientation Second, Starbucks consistently links its choices to the guiding principles or ideas that it upholds Finally, the business established a "Mission Review" system so that partners could offer feedback on a choice or action in relation to how well it adhered to one of the six principles These guiding ideals and values have grown to be the cornerstone of a solid ethical culture among employees who are mainly young and educated Howard Schultz, the creator and CEO of Starbucks, has long been a vocal supporter of greater public understanding of corporate ethics He addressed students at Notre Dame in 2007 and stressed the value of striking a balance between "profitability and social consciousness." According to data, Schultz firmly believes that ethical businesses outperform their rivals in the long run While it can be challenging to always act morally, he contends that in the long run it is better for a business to suffer short-term losses than to lose sight of its essential ideals Starbucks’ dedication to ethics and sustainability is another important aspect of the company’s reputation Starbucks created the Shared Planet website to respond to worries about these issues To accomplish ethical sourcing, environmental stewardship, and increased community involvement are Shared Planet's three key objectives Customers can stay informed about company initiatives by visiting the website It 1 evaluates Starbucks' performance in meeting its social responsibility objectives and gives customers a way to learn about topics like the nutritional information of the company's products and other issues involving Starbucks goods Starbucks collaborates frequently with charities all around the world With a purchase of 34.3 million pounds of Fair Trade Certified coffee in 2011, Starbucks ranked among the top buyers 9.6 million pounds of coffee that was certified organic were also bought Starbucks has a partnership with the Foodservice Packaging Institute/Paper Recovery Alliance as well In terms of use, recovery, and processing, the alliance addresses the issue of responsible foodservice packaging Furthermore, Starbucks also provides loans to poor farmers around the world In order to support shade-grown coffee and help stop deforestation in threatened areas all around the world, Conservation International partnered with Starbucks in 1998 The partnership's outcomes turned out to be advantageous for both farmers and the environment Through a charity project with Foursquare, Starbucks raised brand exposure while fostering goodwill Starbucks also collaborates with a variety of other groups, including as Business for Social Responsibility and the African Wildlife Foundation The company's attempts to be transparent, how it treats its employees, and the numerous charity commitments it makes show how sincere Starbucks is in its goal to be a moral and socially conscious business Ethical Issues in Corporate Social Starbucks has supported ethical business practices almost from the beginning, but as the firm has grown, so has the significance of upholding its reputation A department for corporate social responsibility, presently known as the Global Responsibility Department, was established by Starbucks towards the end of 1999 For shareholders to monitor Global Responsibility's performance, the company publishes an annual report, which is accessible on the Shared Planet website Starbucks cares about the communities it operates in, its workers, its suppliers, and its consumers 2.1 Environment Starbucks created an environmental mission statement in 1992, years before it was fashionable to be "green," outlining the company's environmental priorities and 1 This is a preview Do you want full access? Go Premium and unlock all 16 pages objectives The Environmental Starbucks Coffee Company Affairs team was established as a result of this endeavor with the aim of creating ecologically friendly policies and reducing the company's "footprint." In to order reduce waste through recycling, energy Access alltodocuments conservation, and partner education through the company's "Green Team" efforts, Starbucks started utilizing environmental purchasing rules Through its Shared Planet Get Unlimited Downloads website, which clearly explains Starbucks' environmental aims and how the firm performs in living up to those goals,your concerned stakeholders may now track the Improve grades company's progress Starbucks has organized a number of Cup Summits and invited various minds to create a brand-new method of manufacturing the typical Starbucks disposable cup that is completely biodegradable As a result, Starbucks started selling $1 plastic cups in tall, grande, and venti sizes These cups are intended for 30 uses Starbucks is making an effort with this to lessen the billion cups that are thrown into Share your documents to unlock the environment annually Upload 2.2 Employees Starbucks has a long legacy of putting its partners (employees) first Howard Schultz family was poor and Fred Schultz - his father whose life was nearly ruined by an unsympathetic employer who did not offer health benefits This makes Schultz always Get 30 days of free Premium prioritizes the creation of a good work environment He believes companies should value their workers When establishing Starbucks, he decided to build a company that provided opportunities for its partners that his father did not have As a result, Starbucks’ partners are provided one of the best health care programs in the coffee shop industry Besides, Starbucks industry-leading benefits Already Premium? Logfor inU.S partners also include: Family expansion reimbursement benefit, Financial well-being programs, vacation time, The key to maintaining a strong business in Starbucks is developing a shared vision among employees as well as an environment where they can actively contribute The CEO of Starbucks is the first to admit his company centers on personal interactions: “We are not in the coffee business serving people, but in the people business serving coffee.” Starbucks employees – who are called “partners” - are the heart of Starbucks experience The company believes that when investing in partners, they are simultaneously investing in its success Free Trial 1 However, being a good employer does mean that there will no disadvantages on the company Starbucks made the decision to close 10% of its locations in 2008 in order to keep offering health insurance to its workers This action, which the company made in accordance with its mission statement of "people first, profits last," demonstrates how highly it regards its partners Starbucks created a program for staff members called "Thrive Wellness" with the goal of enhancing employee health This program provides a variety of resources to help staff members incorporate wellness into their daily lives and offers resources such as smoking cessation, weight loss, and exercise 2.3 Suppliers While being most well-known coffee brands, Starbucks maintains a solid reputation for social responsibility and corporate ethics among coffee growers communitities In addition to cooperating with local authorities and nonprofit organizations everywhere it works, it cultivates beneficial connections with small coffee suppliers Coffee and Farmer Equity Practices (C.A.F.E.) is a verification program started in 2004 in partnership with Conservation International which evaluates the supply chain based on economic, social, and environmental criteria with the goal of promoting sustainable, profitable, and transparent coffee-growing practices while ensuring the welfare of coffee farmers Starbucks pays coffee farmers premium prices to help them make profits and support their families The company also invests in initiatives to construct schools and medical facilities, as well as other initiatives that assist coffee-growing communities It works directly with certain of growers through Farmer Support Centers situated in Costa Rica, Rwanda, Tanzania, South America, and China It is a significant buyer of organic, shade-grown, and Fair Trade Certified beans, further advancing economic and environmental goals In 1991, Starbucks began making contributions to CARE, a global relief and development organization as a means to support the nations where coffee is grown Starbucks' donations support initiatives including clean water systems, training in health and sanitation, and literacy campaigns Starbucks made Pike Place Blend its first beverage to get CARE certification as part of its ongoing partnership with the organization 1 2.4 Customers Starbucks is working to reorganize after the global economic crisis caused the firm to reconsider its strategy, thus building its reputation and boosting consumer satisfaction are more crucial than ever By upgrading its coffee-brewing equipment, introducing new food and drink options for consumers who are health- and price-conscious, and concentrating on its core product, Starbucks has refocused the brand Starbucks assures all of its menu items have no more than 500 calories and participates in two sodium reduction programs: the National Salt Reduction Initiative in New York and the UK Food Standards Agency Salt Campaign This is done in recognition of the obesity pandemic Instead of continuing its rapid store expansion, the firm places a greater emphasis on the quality of the coffee, the environment of its coffee shops, and the entire Starbucks experience 2.5 Communities Starbucks coffee shops have always aimed to be the "instant gathering spot" and "place that draws people together" wherever they are Store managers are encouraged to make donations to regional causes in order to strengthen the local, community-focused atmosphere of Starbucks locations According to Howard Schultz, literacy has the capacity to transform lives and offer hope to youngsters from disadvantaged backgrounds Schultz even used the advance and ongoing royalties from his book Pour Your Heart into It to found the Starbucks Foundation, which supports young writers' programs, provides opportunity grants to nonprofit literacy groups, and collaborates with Jumpstart, an organization that assists kids in getting ready for school developmentally Additionally, Starbucks approaches the issue of unemployment in America head-on The business collaborated with the Opportunity Finance Network to launch the Create Jobs for the USA program in response to the high unemployment rate With the money from this effort, community development financial institutions can fund homes, community centers, and small business ventures Starbucks gave this project $5 million 1 This is a preview Do you want full access? Go Premium and unlock all 16 pages III BRAND EVOLUTION All established companies, no matter how successful, must learn to adapt their products and image to appeal to the shifting demands their target markets This also applies to Access to allofdocuments Starbucks As consumer preferences are constantly changing, the company needs to adapt to these changes to remain relevant TheDownloads company’s association with high-end Get Unlimited coffee beverages has largely been successful throughout the years However, as the market for speciality coffee products becomes more competitive, Starbucks noticed the Improve your grades need to boost consumer perception of its brand The solution that Starbucks has found is adopting more products Not only coffee, Starbucks stores now also sell coffee accessories, teas, muffins, CDs, water, grab-andgo products, Starbuck Petites, and upscale food items In order to remain competitive, Starbucks also made a series of acquisitions to increase the value of its brand, including Share yourFresh documents to unlock Bay Bread, La Boulange, and Evolution As a result, Starbucks was able to offer high quality breakfast sandwiches as well as Paninis and wraps for lunch Starbucks updated its logo to represent its transition into the consumer packaged products industry A mermaid with the words "Starbucks Coffee" surrounding it was the company's previous logo In 2011 Starbucks announced it was removing the words and enlarging the mermaid as a signal to consumers that Starbucks is more than just the Get 30 days of free Premium typical coffee retailer Upload Free Trial IV SUCCESS AND CHALLENGES For decades, Starbucks has been successful in establishing itself as a leading coffeehouse chain globally The company has a strong brand identity that is recognized Already Premium? Log in all over the world Its logo, store design and customer experience are all unique parts of the Starbucks brand Due to Starbucks’ high-quality coffee, customer service and welcoming atmosphere, the company has a loyal customer base that is willing to pay a premium for its products creating financial success for shareholders Besides, in order to keep up with consumer preferences, Starbucks has been innovative in its product offerings, introducing new drinks and food items to its menu regularly As a result, the company still maintains its position and reputation in its target market Starbucks has successfully expanded globally, with stores in about 83 countries which helped to increase brand recognition and customer base 1 However, Starbucks has also faced serveral challengese over the years Despite its efforts to support sustainability and uphold high ethical standards Starbucks has faced harsh criticism in the past for problems such a shortage of fair trade coffee, hormoneadded milk, and Howard Shultz’s alleged financial ties to the Israeli government Starbucks began offering Fair Trade Certified coffee in 2002 as a response to these critiques Although this is not yet the case in the United States, all Starbucks Espresso in Ireland and the United Kingdom is currently 100% Fair Trade certified Another significant obstacle for Starbucks was the market bottoming out for pricey coffee products in late 2008 as a result of the worldwide recession This issue was resolved by the company by pausing its plans for worldwide expansion and focussing on enhancing its brand, ensuring customer satisfaction, and fostering consumer loyalty Another challenge for Starbucks is expansion into international markets This actually represents opportunities as well For instance, although Starbucks is inspired by coffee culture in Italy, there are no Starbucks retailers in this country And the company first will need to adapt to target Italian coffee drinkers before starting to expand into Italy Starbucks encountered significant opposition when attempting to enter the U.K market The company came under fire from the public at the end of 2012 over allegations that it had failed to pay taxes for 14 of the 15 years the business had been operating in the UK UK Uncut, a protest organization, started "sitting in" in the shops, urging customers to have their coffee somewhere else Starbucks is also considering growth in China However, Starbucks will need to overcome unexpected challenges and modify its marketing tactics in order to successfully enter the Chinese market For instance, Starbucks was compelled to shut down a retail outlet in the Forbidden City in 2007 because people thought it was strange that it was so close to such a significant site for Chinese culture People worried that the Forbidden City's history and experience would be diminished by the appearance of the Western comfort food Another challenge Starbucks must address is related to environmental issues Despite placing a strong emphasis on sustainability, Starbucks must also handle the estimated billion discarded Starbucks cups that end up in landfills annually Only 5% of its retail locations recycle the cups Starbucks has made efforts to make its cups more environmentally friendly but the cups still pose a significant waste issue for the 1 company However, it is unclear that the company will achieve its goal of total recyclability in the short term CONCLUSIONS Starbucks has been concerned with social responsibility in its corporate strategy for several reasons Firstly, it recognizes that consumers today are increasingly conscious about the social and environmental impact of the companies they support By aligning its corporate strategy with social responsibility, Starbucks can attract and retain customers who value ethical practices This can result in increased customer loyalty and positive brand perception Secondly, Starbucks understands that its success is intertwined with the well-being of the communities in which it operates By engaging in socially responsible initiatives, such as supporting fair trade practices, implementing sustainable sourcing methods, and investing in community development programs, Starbucks can positively impact the lives of its employees, customers, and communities This can lead to improved public relations, enhanced employee morale, and stronger relationships with stakeholders Lastly, social responsibility can also contribute to longterm business sustainability By focusing on environmental sustainability, such as reducing waste, conserving energy, and promoting recycling, Starbucks can minimize its operational costs and mitigate potential risks associated with resource scarcity and climate change Furthermore, by fostering a positive work environment and offering fair wages and benefits, Starbucks can attract and retain talented employees, resulting in increased productivity and reduced turnover While Starbucks is often recognized for providing a relatively high level of benefits to its employees compared to some other companies, it is not necessarily unique in this regard Several companies across various industries prioritize employee benefits and 1 This is a preview Do you want full access? Go Premium and unlock all 16 pages well-being However, Starbucks has gained attention for its comprehensive employee benefits package, which includes healthcare coverage, stock options, tuition reimbursement, and opportunities for career advancement Starbucks' commitment to Access to all documents providing these benefits can be attributed to its corporate philosophy, which emphasizes the value of its employees Get as partners in theDownloads company's success By investing in Unlimited employee well-being, Starbucks aims to create a positive and supportive work environment, enhance employee satisfaction, increase retention rates This, in turn, Improve yourand grades can lead to improved customer service and overall business performance Upload Share your documents to unlock Starbucks’ rapid growth can be attributed to a combination of factors, including both its ethical and socially responsible activities and its ability to provide products and an appealing environment that customers desire While the company’s commitment to social responsibility has helped shape its brand image and attract a segment of socially conscious customers, it is not the sole driver of its growth Starbucks’ success can also be attributed to its ability toGet offer high-quality products and a unique customer 30 days of free Premium experience The company focuses on creating a comfortable and inviting atmosphere in its stores, where customers can enjoy a wide range of coffee and beverage options Starbucks’ emphasis on customer satisfaction, convenience (with its widespread store locations and mobile ordering options), and product innovation have contributed Already Premium? Log inStarbucks’ growth can be significantly to its popularity and growth In summary, attributed to a combination of factors, including its ethical and socially responsible activities, as well as its ability to meet customer demands and provide an enjoyable experience The company’s commitment to social responsibility has undoubtedly played a role in shaping its brand image and attracting a loyal customer base, but it is complemented by other key aspects of its business strategy Free Trial Overall, Starbucks’ success has been driven by its strong brand identity, customer loyalty, innovation and global expansion The company also faces challenges related to 1 competition, labor, environment impact and changing consumers preferences However, the future still looks bright for Starbucks as the company continues to apply the balanced stakeholders orientation so crucial to its success REFERENCES Bussiness Ethics: Ethical Decision Making and Cases (Tenth Edition) PDF – O.C.Ferrell, John Fraedrich, Linda Ferrel Starbucks Heritage https://www.starbucks.com/about-us/ Starbucks Commitment to Partners https://stories.starbucks.com/press/2017/starbucks-commitment-to-partners/ 1