business ethics individual assignment case study 2 starbucks mission social responsibility and brand strength

NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATION PROGRAM

BUSINESS ETHICS INDIVIDUAL ASSIGNMENT

Lecturer: Nguyen Bich Ngoc CASE STUDY 2

Starbuck’s Mission: Social Responsibility and Brand Strength

Participant: Ha Nguyen Hien Anh Student code: 11220182

Class: International Business Administration 64D

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ABSTRACT

Starbucks is a multinational coffeehouse chain that was founded in Seattle, Washington in 1971 The company is known 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 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 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

Starbucks company is committed to ethical sourcing and sustainability, and work 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.

L INTRODUCTION OF STARBUCKS

1 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

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corporation increased the construction of stores with drive-thru lanes to give non- pedestrian customers more access and convenience

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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 nghts 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 single- cup 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

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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 its store openings, shut down hundreds of locations nationwide, and increased its attention on international markets

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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 blended coffee The company collaborated with Conservation 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 customer experience as one of its 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

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

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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

Il STARBUCK’S ETHICAL ISSUES

1 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

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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 1s in its goal to be a moral and socially conscious business

2 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

21, Environment

Starbucks created an environmental mission statement in 1992, years before it was fashionable to be "green," outlining the company's environmental priorities and

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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 order to reduce waste through recycling, energy conservation, and partner education through the company's "Green Team" efforts, Starbucks started utilizing environmental purchasing rules Through its Shared Planet website, which clearly explains Starbucks’ environmental aims and how the firm performs in living up to those goals, concerned stakeholders may now track the 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 4 billion cups that are thrown into the environment annually

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 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 for U.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.

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.FE.) is a venfication 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.