group 3 midterm report about research and brief analysis of starbucks cases dominant and innovative

Figure 1-A branch store of Starbucks Source: Internet - After more than 40 years of establishment, Starbucks Coffee has always been the market leader and most prestigious company in the

INTERNATIONAL SCHOOL

VIETNAM NATIONAL UNIVERSITY, HANOI

BUSINESS CULTURE Semester If, 2021-2022

April, 2022

Table of Contents L INTRODUCTION

IL COMPANY OVERVIEW 2.1 Organizational establishment 2.2 Tangible Structure

2.2.1 Logo 2.2.2 Slogan 2.2.3 Uniform

2.3 Organizational mission and vision 2.3.1 Mission

3.3 Teamwork and leadership 3.3.1 Teamwork 3.3.2 Leadership 3.4 Creative mnovation IV CONCLUSION V REFERENCES

VI GROUP PARTICIPATION EVALUATION

I INTRODUCTION

Starbucks is a large and leading coffee company in the US as well as in the world Not only famous for its brand and products but also very successful in building the company’s culture In this report, we will study and analyze Starbucks ' dominant and innovative corporate culture We will focus on the analysis of Organizational establishment, Organizational mission, and vision, Foundation of corporate culture

Il COMPANY OVERVIEW 2.1, Organizational establishment

2.1.1 General information

- Starbucks coffee company has its head office in Seattle, Washington, USA Starbucks Coffee has always been the market leader in coffee retail sales and is one of the strongest and most prestigious brands in the US as well as around the world, with more than 23,000 shops in 64 countries

Figure 1-A branch store of Starbucks (Source: Internet)

- After more than 40 years of establishment, Starbucks Coffee has always been the market leader and most prestigious company in the US as well as around the world The company's continuous development is reflected through the diversification of product lines such as coffee drinks, fruit

juices, cakes, salads, wines, to preparation equipment coffee or music-related products All product lines of Starbucks Coffee have enjoyed high sales in recent years

- The growth of Starbucks Coffee is also seen more clearly through the continuous expansion of the market in both quantity and quality Currently, Starbucks Coffee has approximately 8000 licensed stores worldwide

- Starbucks coffee continues to promote brand development through building intangible elements for its brand Through building corporate culture, the brand image of Starbucks Coffee is always the image of a brand for the community, in the US Starbucks Coffee has created thousands of new jobs, greatly reducing the unemployment rate In the countries in Africa where there are farms and plantations that supply Starbucks coffee, the company has helped many farmers here out of poverty by providing farming technology support, providing free beans seeds, buy coffee at high prices, or even build hospitals, roads and schools for the children of farmers here

2.1.2 Development History

- Starbucks coffee company was established on March 30, 1971, at 2000 Western Avenue (Washington), this is also the first store to open The first three founders of Starbucks coffee were Jerry Baldwin - an English teacher, Zev Siegl - a history teacher, and Gordon Bowker- a writer

- In 1972, the second Starbucks Coffee store was opened

- By the early 1980s, Starbucks had four stores in Seattle, and the company's business had been consistently profitable since it opened

- In 1987 Starbucks Coffee was acquired by Howard Schultz with a total of 6 stores at that time

- In 1998, with over 1,500 stores in North America and the Pacific Rim region, the network continued to expand at an average rate of more than one store per day Revenue

in 1997 reached $967 million and profit in 1997 also hit its all-time high: $57.4 million

Starbucks Coffee's closest competitor also has just over 300 retail locations Since 1992, when the company started going public, the stock of Starbucks Coffee has increased nearly 9 times

- In 2007-2008, Starbucks Coffee fell into a serious crisis The company's share price on the Wall Street Nasdaq index plunged 42%, making Starbucks Coffee one of the worst-performing stocks in the company's history

- In 2009, the world's largest coffee shop chain overcame the storm with first-quarter revenue of US$2.7 billion, a net profit of US$242 million, an increase of 300% over the same period last year 2008, the year that Starbucks Coffee's business situation was difficult

After nearly 50 years of establishment and development, Starbucks has changed its logo many times Each time the Starbucks logo changes, it has different meanings and messages However, it was not until 2011 that the Starbucks logo was changed to match that period and is used to present

This Starbucks logo compared to the old Starbucks logo has been reduced a lot of details, and seems to be designed to be minimalistic quite a lot The main symbol of the Starbucks logo is only a mermaid image but no navel, the chest is hidden behind hair, the head is crowned, and on top is a shining star The message that this Starbucks logo brings is to combat accusations of "sexy" images

This Starbucks logo no longer has details such as the circle, and the Starbucks Coffee brand name around But the core and basic image of the Starbucks logo 1s still maintained, so this logo still creates the familiarity and familiar identity of the company The color of the Starbucks logo is also more minimalist when only keeping the main blue and white tones The green color in the Starbucks logo creates a sense of stability, brings a sense of cleanliness, and is suitable for the food industry While white represents simplicity, cleanliness, and purity The two-color tones combined in the Starbucks logo carry the message of cleanliness, deliciousness, and attraction

In general, the overall Starbucks logo is minimalistic, neater, and more attractive This logo design of the company approaches the trend of modern and minimalistic but still retains its core essence Like affirming the focus on drink quality, the style of the bar is still maintained

2.2.2 Slogan

Starbucks doesn’t have an official slogan because its logo is well known that it conveys everything that a slogan would In fact, the Starbucks Siren is recognized around the world, even without the company’s name stated alongside the image, and has become synonymous with popular culture

However, Starbucks has a mission statement that sets out the company’s culture and ethical values Besides, Starbucks has seasonal and holiday taglines via the many taglines

that are defined by its mission statement to connect with new and existing customers There are many ends connected to prove this slogan cum mission Right from respect to the farmers to being eco-friendly, Starbucks is small initiatives have rounded up to back up its mission statement

Moreover, the taglines have often changed This is due to the change in seasons, holidays, policies, owners, and much more However, what has remained constant is their idea of including ‘coffee’ or terms revolving around the same in their taglines The reason is first that it is a coffeehouse and that explains why they focus on standing as is Secondly, it also stands to indirectly reflect the ideal dream of the founders and pre successors who created Starbucks to provide the perfect coffee for every person

Have a look at a few other taglines that Starbucks strives to work according to: - ‘Ataste for the holidays’ — Created for the Christmas holiday season in 2020 - ‘Brewed for those who love coffee’ — Tagline created in 2017

- ‘Coffee that inspires’ — A general tagline initiated in 2020 - ‘Morning starts with a coffee’ — Tagline created before 2016 - ‘You’re a sip away from GOLD’ — one of the initial taglines - ‘A cup of coffee that makes you think’ — Tagline for 2021

2.2.3 Uniform

Starbucks coffee uniforms are neatly and politely designed The main color is dark green combined with black Highlight the brand's traditional blue color The logo is printed on the chest to highlight the brand for customers What makes Starbucks uniforms attractive is the apron Starbucks apron includes 3 main colors: green, black, and coffee brown with each color has its own special meaning.

Figure 3- The difference about colors of uniform apron of Starbucks (Source: Internet) - Blue uniform apron: This is the apron pattern you most often see when going to Starbucks Most of the people wearing blue aprons at Starbucks are well-trained staff, capable of serving all guests at Starbucks

- Black uniform apron: Employees wearing Starbucks ' black apron uniforms represent the company's Cafe master (also known as Coffee Master) These people will have the opportunity to participate in the annual cafe ambassador selection contest to create their own Cafe flavor This contest includes writing, Q&A to bartending

- Coffee color uniform apron: Employees wearing Cafe-colored aprons are very rare and almost impossible to see at Starbucks They are the "Café Ambassadors” and the Coffee Masters who have passed the selection contest

It can be seen that Starbucks uniforms are not only classy but also a way to help customers evaluate the qualifications of employees It will be lucky if you can see people wearing black or brown aprons in a cafe at Starbucks and enjoy the coffee they make 2.3 Organizational mission and vision

2.3.1 Mission

Starbucks highlights its mission as “to inspire and nurture the human spirit — one person, one cup and one neighborhood at a time.”

From this mission statement, a set of core principles make up the core of Starbucks company culture:

- Creating a culture of warmth and belonging, where everyone is welcome - Acting with courage, challenging the status quo, and finding new ways to grow our company and each other

- Being present, connecting with transparency, dignity, and respect

- Delivering our very best in all we do, holding ourselves accountable for results As pointed out in Starbucks 2018 Annual Report:

‘Our objective is to maintain Starbucks’ standing as one of the most recognized and respected brands in the world we continue to offer consumers new coffee and other products in a variety of forms, across new categories, diverse channels and alternative store formats We also believe our Starbucks Global Social Impact strategy, commitments related to ethically sourcing high-quality coffee, contributing positively to the communities we do business in and being an employer of choice are contributors to our objective.’

2.3.2 Vision

Vision at Starbucks to “treat people like family, and they will be loyal and give their all.” The vision statement is articulated around the concept of family, loyalty, and generosity What it means from the business standpoint is that Starbucks is a place where people spend a lot of time Therefore, it has to feel like a second home

2.3.3 Development strategy and Core values Development strategy

Starbucks Coffee’s main intensive growth strategy is market penetration This strategy supports the company’s intensive growth by maximizing revenues from existing markets, using the same or existing food and beverage products Starbucks already has a presence in more than 78 countries and territories To maximize revenues and growth in these current markets, the company applies market penetration by opening more company-owned stores or licensed/franchised café locations.

Core values

Starbucks core values comprise “teamwork, integrity, respect for culture, and perseverance,” These core values of the company are a representation of the codes of conduct that ensures the establishment remains true to the expectations of its mission and vision statements Various components relate to Starbucks core values

+ Teamwork + Integrity + Respect for culture + Perseverance

Starbucks first component is an emphasis of how important the company values coordination with both its stakeholders and clients towards the growth of the firm It closely relates to the second element that calls for all the processes of the company to be carried out in the nght way that promotes the expectations of the third component of the core values as well

The company does this because it recognizes the variations of cultural elements in its locations across the globe Considering the competition Starbucks faces from other major players in the sector, it emphasizes on perseverance to remain stable and maintain its command

II FOUNDATION OF CORPORATE CULTURE 3.1 Labor compensation and motivation

3.1.1 Labor compensation

In-store employees at Starbucks are classified as baristas, shift supervisors, assistant store managers, and store managers The pay for Starbucks baristas is quite consistent Wages range from $6 per hour to $13 per hour, according to a study of 580 Starbucks baristas, with the average income being $8.68 per hour Shift Supervisors make an average of $10.77 per hour, with a range of $8 to $14 per hour, according to a comparable poll of 286 employees Similarly, Assistant Store Managers make between $25,000 and $40,000 per year, with an average salary of $32,829 based on an 85-person study.

According to a research of 184 Starbucks Store Managers, compensation ranged from $34,000 to $58,000 The average income for a Store Manager was $43,143 There was little research available on senior level employee salary; Starbucks is not compelled to divulge this information to the public ("Starbucks Salaries")

3.1.2 Employee Motivation at Starbucks

Motivation is critical in any firm since it has a substantial influence on employee work behavior Howard Schultz, the CEO of Starbucks Corporation, believes that the key to Starbucks' success is not coffee but rather its staff Employees' working experience must be constantly accumulated, and opportunities for advancement for partners must be provided This is the only method to ensure the operation's long-term viability As a result, a flawless education and training policy is required for greater firm performance (Michelli, 2007) Starbucks has an interactive framework that allows employees to learn amongst themselves on the job, allowing them to inspire partners to please themselves and achieve a higher level of performance

- Equal treatment the managers in Starbucks treat each word people equally and all of the staffs are called ‘partners’, even the supervisors of each branch are called it as well

- Listen to employees: The partners have the right to determine what policy is best for them, and the directors appreciate each option Starbucks even wants every employee to participate in establishing and implementing strategies, as well as attaining their goals as a group

- Good welfare measures: All workers, even informal personnel, are provided with a variety of welfare benefits, such as commodity discounts, medical insurance (covering health, vision, and dental), and vacations Furthermore, partners who work more than 20 hours per week are eligible for benefits Starbucks likewise believes that debt financing is not the ideal option, thus it elected to distribute stock dividends to all employees through a free scrip issuance Employees can profit from the company's dividends under this policy As a result, they share the same purpose; in other words, they are motivated to boost sales in order to gain greater profits.