Starbucks

Previous findings have suggested that human resource management practices and beliefs play important roles in the management of businesses today especially when it comes to planning, recruiting and motivating employees to commit themselves for the organisation. Comes to issues of Therefore, there is a unique relationship between the human resource management practices and techniques employed by an organisation and its overall performance. Certain sets of human resource practices are critical for any organization restructuring and if they are not implemented, they will lead to poor performances.

These practices as discussed below are important in jumpstarting the organisation’s revenue and profit growth if well utilized. This paper will examine various functions of human resource management in relations to business objectives. Literature review on HRM models The contrast of hard and soft concepts of HRM began in the U. S although it has been highly been discussed in British books. Organizations use different models of HRM, among these models is soft and hard concept of HRM. “Soft” concept centres on treating organization’s employees as valuable assets and a foundation of competitive advantage of the organization.

Nonetheless, organizational certainty seems “hard” with an organization stressing qualitative, evaluative and strategic elements of controlling a “head count”. (Legge, 1995) This dichotomy has been observed by several scholars such as Noon (1994) Ulrich (1996) have stated that many companies most of the time stresses the principles of soft HRM model, the truth which employees experience regarding strategic control makes the soft model to be similar to hard model. Thus, it is important that organization reveal the gap amid rhetoric and certainty in order for the organizations to plainly analysis how effective its HRM strategies are.

Hard and soft HRM versions are the most two broadly accepted models of HRM. These two versions are founded on opposing viewpoints of human character as well as management control strategies. While the hard version is founded on strict strategic managing and economic concept of man in accordance to theory X of management, the soft version is founded on managing through dedication and n accordance to theory Y of management. The Harvard model According to Keenoy, and Anthony, (1994) they suggest that the Harvard model has several significant strengths.

One is the reality that Harvard incorporates acknowledgment of a different stakeholder interests in an organisation. Two, the Harvard models identifies the recognition of a wide variety of related influences on organisation’s selection of HRM strategy. In Harvard model, business strategy of an organisation is viewed as being essential Keenoy, and Anthony (1994) Patterns concerning unionisation of employees, labour market rules, employees characteristics, community norms and many other factors are all encompassed.

Of high significance is what is known as “matching” concept of HRM, which was initial put forward by Blyton and Turnbull (1998)It was later outlined by Fombrun et al’s (1984) in their book, Strategic Human Resource Management. In this book Fombrun et al affirm that Human Resource structures and organisational arrangements ought to be run in a manner which is matching with the strategy of the organisation. According to Peters, and Waterman, (1982) this comprises the skeleton of matching theory.

Generally, matching concept of HRM simply illustrate how effective an organization is, and is based on a ‘firm fit’ linking HRM strategy and the business strategy of the organization. However, when this model is compared with the UK HRM practices, the use of this concept is apparent in two clearly dissimilar manners as acknowledged by Peters and Waterman (1982) which, cause further problems in terms of interpretation and implementation. The Guest Approach: Peters, J.

and Waterman, (1982): in his observation quotes Keenoy (1990) through stating that Guest’s HRM approach has undertaken to describe SHRM as being a distinctive management approach regarding human resource relationships. Poole and Mansfield (1994):clearly observes that, Guest (1991) distinguishes that the four outcomes of HRM which are specifically identified in the Harvard HRM model namely, commitment; competence; congruence and cost effectiveness make up an “implicit theory”, Guest goes ahead to formulate his individual theory of HRM, he forms a “particular approach” to employment managing.

This explanation of HRM was made possible as a result of the actuality that Harvard framework comprises of analytical as well as prescriptive aspects. Hendry and Pettigrew (1990) explains the views of stakeholders of an organization, situational factors effecting the organization, strategy choice of the organization and levels in the management as each one being an analytical aspect. The measurement of wanted results is seen as being essentially regulatory.

Guest approach on HRM has resulted to work on HRM practices which investigate the probable beginnings of this model forwarded by Guest and the scope to which statistics proposes it is being practiced (Guest 1990, 1991). The model derives it strength in the fact it is inherent of the Harvard model and articulates it in a simpler and clearer way, it also has an added carefully formulated set of hypothetical proposals, which are able to be assessed.

Unluckily as Keenoy and Anthony, (1994) observes Guest’s HRM approach could get into the snare of disapproving HRM practitioners for not being able to conform to a picture scholars have selected for them. Pettigrew approach The other application concerning the Harvard model of HRM which is mentioned by Keenoy . aand Anthony,. (1994) is the approach of Pettigrew. The Pettigrew approach has been viewed as downplaying the prescriptive aspects contained in Harvard model; accordingly Pettigrew approach widens the investigative aspects.

However, Hendry & Pettigrew (1990) have been known to be critical of what is termed as “armchair practices involving matching strategy to the HRM practices which are instituted in the matching concept as well as of Guest’s recognition of HRM practices with a specific management style of an organization. In addition to the management models which exits in UK there is also an increasing number of literatures that centres only on HRM for instance, Storey (1987): Purcell and Gray, (1986) This indicates a change from the viewpoint that was taken that HRM was just an aspect in management concept.

Storey (1998) has made HRM to be considered as an important and critical and hence has been seen as independent from HM. Storey and other scholars writing about HRM have made it possible for us to understand HRM practices deeply. This as it has been stated by Legge (1995) is due there practical outcomes and also theoretical outcomes. PM and HRM The personnel management (PM) and HRM dates back to the beginning of 20th century, (Hall, 1987) underscores this fact when he talks of British reformers for example Robert Owen as one of the predecessors in the field of PM.

PM development was speed up after the Second World War as a result of professional bodies being formed targeting personnel managers. The PM was dealing with personnel issues in the organization. There is a lot of literature on PM, however, Dainty, (2000) refers to PM as having five definite stages which includes initiation, pioneering, self-criticism, strategic HRM and also decentralization stages. Organisation selected For the aim of this paper we shall examine HRM practices of Starbucks Corporation, one of the leading multinational companies in the world.

Starbucks Corporation is a big multinational coffee and coffeehouse chain/outlet company which is based in United States. Starbucks currently is the biggest coffeehouse company in the whole world, with a record number of 15,011 stores located in 42 countries. Starbucks sells brewed coffee, espresso-based hot drinks, hot and also cold drinks, snacks and products for instance mugs and coffee beans. Starbucks has an entertainment division and Hear Music brand, Starbucks also markets music, books and film. A lot of these items are seasonal or specific to the locality of the store.

Some grocery stores sell Starbucks branded ice cream and coffee. (Starbucks Corporation, 2007) Evaluation of HRM of Starbucks Corporation As stated before, human resource management is simply the management of the people who are working in an institution or an organization. This has to be done because employees affect how far or how successful an organisation will be. Human resource management involves the managers clarifying to the employees the organisation goals. Any organisation needs to attract, maintain and also manage its employees. These tasks fall under the HRM.

Employment flexibility Starbucks Corporation has understood this aspect and that is why it recognizes that its employees are one of their highly valuable resources. The very first guiding rule in their mission statement also addresses the Company’s principle towards its employees: “Provide a great work environment and treat each other with respect and dignity”. The management recognizes that the Starbucks employees play a foremost function in the expansion of the company. (Hoovers. com, 2007) Manpower planning Human resource management main function is manpower planning.

If an organisation lacks proper planning in its human capital then it will undergo costly penalties. Having the right staff, in terms of numbers and skills is a task that the human resource may strategies well. When it comes to sourcing the human resource must source well so that it can get the maximum benefits from its workforce. The HRM of Starbucks has to understand that overstaffing is a waste and expensive to the organisation and does not add any value to the organisation but, instead reduce the competitive advantage of the organisation.

(Dainty, 2000) In planning of the workforce, an assessment of current and future needs of the Starbucks is taken into account, compared to the available resources together with future predicted resources. Then appropriate strategies can be undertaken to balance demand and supply of the work force. Thus, before sourcing for more workers, the human resource takes analysis of the current workforce profile in terms of numbers, ages, skills, experience, gender, flexibility, forecast capabilities, etc.

the human resource then can adjust this for say 2 or 5 years ahead so as to amend for normal employee turnover, retirements and staff movement in accordance with the business plan in relation to the corresponding time frames. (Dainty, 2000) The result from this gives the HRM of Starbucks a lot of information on how to come up with sourcing plans that will be able to add value to the organisation. The HRM have a well “though out” and sound sourcing demand programme for different dates in future which then, can be compared with the rough supply programmes.

The evaluation will then show the steps that have to be taken when sourcing in order to strike a balance. (Dainty, 2000) The undertaking of such workforce planning program saves the Starbucks a lot of money at the same time add competent staff to the organisation who can take the Starbucks to new heights. Starbucks Corporation Manpower planning can be termed as systematic human recruitment, managing, planning, and placement is the growth of an employee in terms of management, planning, staffing and recruitment. In Starbucks Corporation Manpower planning has helped the company to;

1. Develop a workforce that can perform higher-grade assignments 2. have the right numbers of employees 3. maintain employees and offer them career development 4. Provide the usual training of new recruited workforce (Armstrong, 2006) Recruitment strategies Recruitment being very critical in organisation, appraising and selecting right employees for available jobs entails the capability to evaluate the skills and competency requirements needed by the job position and comparing them with the ones available on the labour market. (Beardwell, and Holden, 1997)

Beardwell and Holden (1997) states that, employee selection is important as it is a way in which a company ensures that it obtains the right human resource for specific job. Employee sourcing falls in the broader perspective of human resource. Employee sourcing is very important in Starbucks. It consists of administration, performance and staffing. All these are interrelated activities that are carried out in an organization. Management and staffing activities help in ensuring that employees with right or desired skills are recruited.

The employees have also to be in the right numbers desired by the organization. Employee sourcing aims at ensuring that employees are at the right place at the right time. HRM of Starbucks in this case is concerned with ensuring that employees perform their best. Best recruitment processes insure that the organisations get the best staff that can improve and add value to the company. The human resource has to undertake the following recruitment strategies to ensure best selection.

The HRM of Starbucks have a high ensured that it carries out its recruitment process well to get highly qualified staff. The HRM of Starbucks uses competency framework. Competency involves having a measurable pattern of abilities, behaviours; skills and knowledge that one needs to have in order to perform a task. Competencies normally form the foundation of ensuring effective performance in any position in an organization. This always involves values that have to be demonstrated by employees.

The following competency framework is used when a Starbucks in sourcing for its workforce (Beardwell and Holden, pp 92-97). Human resource management (HRM) practices of Starbucks Corporation are among the best as attested by being rated as on of the best companies to work for by Fortune magazine. (Fortune. com, 2002) The management knows that the most important asset for any organisation-its human resource-requires extensive investment, commitment, financial benefits among others to be highly motivated and also committed to the company. (Armstrong, 2006) Conclusion

Today, employees are no more human resource to be exhausted but employees have become human capital, thus an asset to an organisation that need to be protected and developed. There are several models which try to explain HRM. Human resource management have a challenge of coming up with strategic ways that can add value to the organisation. The HRM has a function of delivering strategy insights in the organisation so as to enable the organisation to be more effective in sourcing, evaluating and motivating employees in this increasingly unstable business environment.

Starbucks HRM has fashioned a corporate culture which promotes soaring productivity levels through their proficient employees, whom the company values a lot. It is clear that in today’s business world, a company has to have competitive and strategic HRM practices to gain competitive advantage.

Reference:

• Armstrong. M. (2006): Handbook of Human Resource Management Practice, 10th edition, (Kogan Page) London,
• Beardwell, I. and Holden, L (1997): Human resource management; a contemporary perspective; London;
• Financial Times, Blyton and P. Turnbull (eds); Reassessing Human Resource Management, London: Sage, 233-255.
• Dainty, A; (2000): Improving employee sourcing within construction organisations, Proceedings of the ARCOM 2000 Conference; Glasgow; Vol. 1;
• Druker, J (1995) Misunderstood and undervalued; Personnel Management in Construction, Human Resource Management Journal, Vol. 5, No. 3,
• Findingdulcinea (2008): Starbucks: Out with the New, In with the Old. ” “Finding Dulcinea” January 12, 2008 (www. findingdulcinea. com/news/business/Starbucks/ ) accessed on 8/2/2008

Cataracts is known worldwide as one of the largest and most successful coffee shops. The green circle and mermaid symbol, that has become so well known, it can be seen in nearly every US city, and the company has ambitious plans to expand rapidly off-shore. Howard Schultz started the company in 1987 when he bought out his bosses and began expanding. Cataracts expansion, so far, seems to be rather successful as they have opened over 16,000 coffee shops in 44 countries and have no plans of slowing down.

Although the company has experienced exponential growth and unprecedented success It Is not without Its problems. For one, there Is an Increasing level Is dissatisfaction with employees which seems to stem from Cataracts aggressive expansion. With so many employees and stores nation and worldwide employees are becoming increasingly jaded and out of sync with the original mission statement of Cataracts, which was to focus on superior customer service, and service with a smile. Workers are also complaining about being over worked and under compensated. Still bigger problems present themselves.

The baby boomers, Cataracts bread and butter consumer, are slowly disappearing, giving way to the more thrifty, down-to- earth generation X, who have become increasingly weary of powerful and rich corporations and whose focus seems to have shifted from the mainstream to the local in most consumer categories. Generation Seer’s are feeling out of place In expensive coffee shops and seem to prefer cheaper alternatives, or prefer to simply make their own coffee. Generation Seer’s are also wearier because of some shady practices that Cataracts engages In, such as predatory real estate, which lends to

Seer’s already heightened alert for corporations. Cataracts also does a lot of things right. They cater new products to new markets, such as a green tea Production that was first developed for and introduced in Japan. It has since been a hit and released in the USA. They seem to grasp the fundamental concept that not all markets are the same and understand that existing products might need to be tweaked for them to succeed abroad. They have a sound business model, which lends them ownership to all stores, meaning that stores are not franchised and the corporate hand can interfere with each store as they see fit.

The company is expanding rapidly, but the US market Is quickly becoming saturated. To fuel continued expansion and maintain a 20% annual growth the company must go overseas, and this presents problems all on their own, because as we know every cultures tastes and values differ, which Is a pivotal lesson of International marketing. I think that Cataracts business model is sound. As we know the goal of any Dustless Is to maximize senatorial Investment r sucks NAS done Tanat. I nee nave recorded insane sales figures and have grown from 17 coffee shops in Seattle 15 years ago to over 16,000 outlets in 44 countries.

Sales have climbed an average of 20 percent annually since the company went public, hitting 673 million last year. They are clearly doing something right, but in my opinion the success will be short lived. Society is shifting gears and the world is changing directions from a world of tangibles to a world of services, from a world of waste to a world of saving. While Cataracts makes a quality product there are also many viable, cheaper, even better substitutes that you can make yourself, and I think that you will see the decline of sales will coincide with a decline in the population of boomers.

Mr… Smith Cutbacks is one of America’s true success stories and a wonder of today’s corporate world. A brand known throughout the world, Cutbacks is a beacon for coffee lovers everywhere. The coffee house phenomenon that started as a dream to come up with the best coffees, best customer service and best coffee experience any coffee lover would appreciate. Cutbacks started as a coffee roasting company with a single store in Seattle Washington, and has come to be one of the most successful companies in the world serving millions.

Since its inception in 1971, Cutbacks has been a model for what many aspire to but often come up short. The following is a brief overview of the company’s finances, including a comparative and ratio analysis to measure profitability and liquidity. Current Ratio Current ratio Is a common financial ratio to measure the liquidity of a corporation. The short term ability Is measured, of a company to pay the maturing obligations, and meet unexpected need for cash (Skies, Kismet, , 2011). Current assets divided by current liabilities is the current ratio formula.

Between working UAPITA and current assets, current assets is the more dependable formula (Skies, Kismet, , 2011). Two companies may have very similar working capital and yet have drastically different current ratios. For every dollar of the current ratio, depicts how much current assets, per that dollar the company has (Soles, Kismet, , 201 1 The negative fact of the current ratio is that It doesn’t explain where the asset is. It can be a large portion in inventory which is not the same as having a complete asset.

A dollar in inventory does not pay as quickly as a dollar in ash. Cutbacks current assets are 1 1 ,516. 7 (In millions), and the liabilities is 7,034. 4 (Cutbacks, 2013). The current ratio is 1. 63, for every dollar the asset is 1. 63 for the corporation. Return on Assets This ratio Illustrates how effective management Is at generating profit from the company’s assets. Return on assets is calculated by dividing net income over total assets and multiplying that figure by 100. Net income and total assets data can be found on the balance sheet from a biblically traded companies ASK report.

Return n assets when simplified shows how many additional dollars the company assists generate. Cutbacks return on asset figure Is . 45673. Meaning each dollar in asset generates roughly $. 45 of Income In 2013. By this figure Cutbacks management did a Commonly referred to as return on net worth, this ratio illustrates profitability by how well a company increases the value of common stock holder investments. These increases are typically re-invested in the company or paid in dividends. To calculate ROE net income is divided by common share holder equity and multiplied by 100.

Cutbacks ROE figure for 2013 is $1 . 17350. For each dollar invested by common stock holders Cutbacks generates Just over $1. 17. In 2012 the ROE ratio was a whopping $26. 59. A sharp drop in equity and an equally staggering increase in liabilities in 2013 lead to both profitability figures to be very low by historical and industry standards for Cutbacks. It would be safe to say that if these events occurred during the start up phase off business they likely would not survive. Inventory Turnover Inventory turnover is an important part of any business.

This information illustrates how much capital the company has used in comparison to how much inventory it has sold. Company leaders use this information to make financial decisions. This concept is condensed by Jon Scribbled on Indistinguishableness. Com as “The inventory turnover rate measures the number of times you have turned your inventory during the past 12 months” (Scribbled, 2014). The formula for the turnover ratio is the cost of goods sold divided by the average inventory. The Cutbacks company leaders use this information as well.

In order to clarify and understand how five dimensions of situational influences affect buyer behavior, this essay is going to answer three questions. First of all, physical surrounding and social factors will be demonstrated by providing some definitions and relevant instances. Secondly, case study will be analyzed based on three factors such as social surrounding, task definition and temporal perspective.

Finally, Struck cafe would be chosen as an example to analyze how they has developed their promotion, place and product related to physical factor. Question 1 Firstly, as can be known, situational influences are basically five factors that affect customers when they want to make buying decision. One of the most visible features that may have a direct impact on their decisions is physical surrounding like store location, interior decoration, music, smell, temperature and amount of choice provided.

This factor would be used as a tactic to attract customers or keep them stay longer in stores. For example, these days, Coles and Woolworth have had almost same price and promotion for their customers so most people have chosen to shop in en of these because that is simply the nearest supermarket from their house. In addition, how companies decorate their shops, what kind of music they play and which fragrance they choose to use in their stores or products play a prominent role to approach their potential clients.

According to Bell (1975)g’s study, there is a relationship between store’s atmosphere and purchasing outcome that means the more enjoyable atmosphere the store have, the more money their customers are apparently willing to spend (as cited in Manic and Radars, 2006). Moreover, when they spend more time to stay inside, it may lead to a chance that they would buy enplaned goods.

Furthermore, in 2000, the American Wine Council demonstrated that their most wine consumers were female who prefer having sweeter taste and smell and that is one of the reasons why many companies such as Chardonnay and Cabernet Sauvignon produce sweet wine more than dry one (as cited in Brewer, Salina & Miller, 2011). In general, as can be understood that physical surrounding includes the mostly tangible elements that could be used to influence people’s buying behavior in a straight line.

Secondly, there is one of the most unavoidable impacts that many buyers are usually affected when they make up their mind on archiving a product especially a valuable things such as phone, car, house, etc. Is social surroundings. Culture, family, reference group and social class are the elements, which would be insisted in this situation. In this case, the majority of customers possibly give their decision to buy a product based on the suggestion from their relationship around them. In 2006, Chuan et. Al stated that “Shopping in company increases purchasing outcomes” in their research.

It can be considered that clients who come with friends or group tend to spend more money and buy more items than who go alone (as cited in Manic & Radars, 2006). According to Genevieve (2006), since there are plenty of benefits that social influence are brought, many companies choose to launch their advertisements at the time that they probably know that time for family viewers such as Walt Disney or group of friends like football game. That would lead to a successful effect, which they would like to approach their potential customers.

In short, social surrounding is a significant factor, which seems to help businesses achieving a greater consumption if they may implement it appropriately. Question 2 It is the intention of this question to identify and briefly analyze three key of educational influences related to specific case study when Kate has to make a final decision to buy a smartened for her boyfriend, John’s birthday. First of all, when she has a demand to purchase a gift in her boyfriend’s birthday occasion that is task definition.

That is the reason why she not only spends a lot of time to find the information for this purchasing but also emphasizes on the feature and brand of smartened that her boyfriend would like to own particularly. In the other words, she prioritize his demands at the first. Additionally, it is easy to understand why she asked his friend and the sale consultant for enforcing her desirable decision. In this circumstance, it is quite clear to realize how social factor affects customer behavior. There are two social surroundings in this case: membership groups and aspirations groups.

In this case study, Kate would be influenced by advise of John’s friend who is in membership group and knew John’s personality and character very well. His recommendation for Phone 5 would have the most vital impact on Skate’s decision because of his better knowledge over her boyfriend’s interests and preferences as mentioned in case study. However, Kate would be confused to give the final selection, for she also consider the option Samsung galaxy SO from professional sale consultant who is in aspiration groups and may have much better experiences in smartened.

Therefore with the purpose of solving this issue, she has to consider the third situational influence – temporal perspectives which would probably enforce her so as to fugue out the most suitable present for her boyfriend due to his fast approaching birthday. In Genitive’s book (2006), he indicates, “Time pressures and technology have combined to produce a rapid growth in high quality’. Thus, it seems to be related to Skate’s problem when she has to determine as soon as possible.

That would cause the issue that the less time she has, the faster decision she has to make. In brief, as following this case study, it is possible to recognize that social factor predominantly affects how customers behave in general and Skate’s in particular. Also, this is the main reason making her hesitated to reach the final selection. Question 3 As stated in the introduction, in this section, Struck would be chosen as an example to demonstrate how a business implies social surroundings and succeeds in

China for making marketing strategy by following three of four stages in UP – place, product, promotion. Struck, which is known as one of the most famous and valuable brands in the world, have opened first outlet in China since 2007 and will have extended to 1,500 stores by 201 5 (China Observer, 2011). Hence, which reasons have made them survive and success in China, where is well known as an initial traditional maintained country, will be described sketchily relating to social features in this bellowed part. First of all, with the aim of approaching Chinese market

Struck has settled store system in many virtual locations where there are crowded pedestrian places as usual as they did in America but with Chinese style’s decoration for making their customers feel convenient. Picture 1: Struck in China (n. D. ) As can be seen in the above picture, that is the general decoration of Struck in China. Furthermore, Struck has especially allocated one of their stores in the Forbidden City (in the picture bellow) where is the most respectful and traditional symbol for Chinese history.

It is one of the noticeable tactics that Struck wants to access China’s market through Chinese cultural architectonic. In addition, with mainly target customers who are the growing middle class they have set their own image to become fashionable and trendy (McKee & Lawmaking, 2009). In this case, their potential customers would like to come in, have a seat, talking with friends and have a Struck cup of coffee. That means they have adapted themselves by using reference groups in social surroundings.

Picture 2: Struck in The Forbidden City (n. D. ) Secondly, According to Wang (2012), there is an important strategy in product placement that Struck introduced their beverages using Chinese popular local ingredients like green tea. This strategy has helped Struck to overcome the upcoming trouble which western cafe would threaten Chinese traditional drink – tea. That means they have tried being a Struck by Chinese and American cultural combination and avoiding totally implementing typical American concept into Chinese market.

Finally, as mentioned previously, since Struck has been running a cafe system to make them become a trend, the most effective promotion for them is mouth to mouth. As long as the development of globalization included China, the monger generation tends to follow the new trend and experience the western culture. By recognizing what is happening in the world, Struck has given their customers “Struck – Experience” (Wang, 2012). That is how they has confronted with China’s market and made it possible and the most second largest market behind original market – America.

In conclusion, the five dimensions of situational influences play a vital role in marketing strategy to attract and deal with how customers behave to make their buying decision.

The purpose of this paper is to analyze Cutbacks business strategy, customer value proposition, company’s operations and the risks to financial results and reporting in the short term. BUSINESS STRATEGY The Cutbacks former strategy was centered In offering a high quality product to a narrow consumer segment (coffee lovers), therefore, a focus strategy. Later on, primarily thanks to the vision of Howard Schultz, the company moved to the differentiation strategy which is defined by Porter as differentiating the product or service offering of the firm, creating something that is perceived industry wide as being unique” .

Some of the advantages of this strategy are: customers have a lower insensitiveness to price, opportunity for higher margins, creation of entry barriers thanks to customer loyalty and brand uniqueness CUSTOMER VALUE PROPOSITION The brand strategy was best captured by the phrase “live coffee. ” From a retail perspective, this meant creating an “experience” that people would want to incorporate Into their everyday lives.

There were also three components to the branding strategy: 0 Coffee – Cutbacks offered the highest-quality coffee in the world and controlled much of the supply chain as possible to help Insure that. A Service Or what was also referred to as “customer intimacy. ” This included simple things such as remembering someone’s name or drink order. 0 Atmosphere – Cutbacks stated that people came for the coffee but stayed for the atmosphere. Therefore it was important to provide a comfortable atmosphere that allowed a sense of community.

Inbound logistics. Cutbacks Involve company agents in choosing coffee beans producers, communicate the standards related to the quality of coffee beans, establishing strategic relationships with suppliers and organizing the supply-chain management. 0 Operations. Cutbacks operations are conducted in two ways: direct operation of the stores by the company and licensing. For the most part, Cutbacks is vertically integrated, controlling its coffee sourcing, roasting, and distribution through its retail stores. 0 Outbound logistics.

This has traditionally involved selling its drink coffee-based products are being sold through a set of leading supermarkets. Marketing and Sales. Cutbacks has shown to use less of traditional advertising; instead relying more on its image advertising, such as movie and television placements. They also rely on word of mouth advertising achieved through the high quality of products and high level of customer services. Service. Providing superior level of customer services is one of the Cutbacks’ main objectives and it is driven from the mission statement of the company.

The threat of substitute products and services is substantial. Specifically, substitutes for Cutbacks Coffee include tea, Juices, soft drinks, and energy drinks, whereas pubs and bars can be highlighted as substitute places for customers to meet someone and spend their times outside of home and work environments. Cutbacks suppliers have high bargaining power due to the fact that the demand for coffee is high in global level and coffee beans can be produced only in certain geographical areas. However, the threat of new entrants is medium in that the coffee market is changing.

The need for ambiance and a place to share is losing edge to the on-the-go alternatives, and should a new entrant come along with a different business model there is room for threat.Starbucks positions their products based on quality and image. It is critical that Cutbacks position their brand for what the brand stands for: an innovative industry leader that produces high quality products. Brand image, as already shown, is a goal that all the future functional strategies will work to attain.

OPERATIONS The risk of market saturation – One risk that faces Stardust’s is its ability to maintain profitability with opening such a large number of stores in such close proximity to each other. Stardust’s may want to consider slowing this expansion in order to maintain profitability. REPORTING – Commodity risks and their volatile impact on refit and loss – Cutbacks have a big exposure to dairy?to milk and didn’t have any means of fixing price with their suppliers. When it comes to coffee, Cutbacks’ coffee trading group, which buys coffee worldwide, executes the risk management.

Cutbacks measure their risks, but they have the tools, using futures and some fixed- price purchases, to manage risk over the next 12 to 18 months. That said, Cutbacks are looking to help them by designing structures to hedge much longer term?out two to four years. CONCLUSION Cutbacks success is achieved through a few factors: 0 Outstanding Quality of the coffee brewed Fast growth of new stores all around the world These factors not only have increased the sales but also the reputation among the coffee lovers.

Cutbacks encounters aggressive competition in all areas of its business activity. The market for each of their business segments are characterized by vigorous competition among major corporations with long-established positions and a large number of new and rapidly growing firms. Anyway, as Cutbacks have a good financial capacity with good strategies it can overcome all the competitors to shine high as the first class coffee purveyor.

Starbucks first opened its doors in 1971, in Pike Place, Seattle, Washington by owners Jerry Baldwin, Zev Siegl and Gordon Bowker, and initially sold coffee beans and coffee-making equipment. In 1981, the 3 owners hired Howard Schultz to be the Director of Retail Operations. Schultz had proposed to them the idea of selling drinks as well, and not just coffee beans and equipment, but his proposal was rejected.

Schultz left Starbucks in 1986 and went on to start his own chain of cafes called Il Giornale. The year after that, Starbucks owners Baldwin, Siegl and Bowker sold their company to Schultz, who then proceeded to rename his chain of Il Giornale cafes to “Starbucks”. Having conquered his expansion in Seattle, Schultz stared opening more stores within the U.S., and then internationally.

With over 20,000 stores worldwide, Starbucks has become the fastest expanding coffeehouse in the world. The opening of 680 stores in the past 13 months has “helped boost the coffee company’s 4th quarter fiscal 2014 revenue by 13%” (Forbes, 2013), proving to still have what it takes to be a top respected coffee company in the world.

Starbucks’ Target Customers

Howard Schultz set Starbucks to be a different kind of company. Not one that just delivers good and premium coffees, but one that brings people together as well; a form of connection. Starbucks’ “mission to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time” (Starbucks, n.d.), brought about the need to create the “Third Place Experience”. The “third place” means the place everyone goes to between home and work. Starbucks has stayed true to this marketing strategy of theirs, with customers from different walks of life coming into the coffee house. Be it for a professional meeting, for socializing, or just a quick pick-me-up, Starbucks has created a comfortable, non-threatening atmosphere, where people do not just come for a “cuppa”, but stick around for the environment. This makes “the Starbucks Experience” (Starbucks, n.d.).

Starbucks’ primary target of customers are working adults, ranging from 25 to 40 years of age. These customers are usually well educated, earning a higher income, and are more involved in being socially responsible and environmentally friendly. These values from the coffee company are what most of this target audience like being associated with (Huffington Post, 2013). 40 percent are young adults, roughly between the ages of 18 and 24. “Starbucks targets prestigious college campuses and appeals to these students as an alternative place to socialize and study” (Huffington Post, 2013).

You may also be interested in “Starbucks pricing strategy”

Despite boasting about the coffee company being committed to diversity, Starbucks’ target clientele are often the upper-middle class, and college-educated people who are mostly white. Hence why their prices are much higher than regular coffee joints. They target people who are willing to pay not just for quality coffee, but also for excellent customer service and a comfortable atmosphere that promotes familiarity.

Macro Environmental Factors of Starbucks

Starbucks is categorized under the “Specialty Eateries & Catering services industry of the Leisure sector” (Hoover’s online, 1999). This industry is famous and known to be dismally politically influenced, with its economic environment rapidly growing, and having very little social and technological changes that would potentially affect the industry.

Political influences mainly affect Starbucks through government-imposed minimum wage fluctuations. Their workers are trained to perform few tasks such as coffee making, food preparation and cashiering. With such few job functions, there is hardly a need for highly experienced or educated employees. This would allow Starbucks to pay their workers at minimum wage or just slightly higher, making Starbucks very sensitive towards increasing the minimum wage of their workers as that would increase labour costs. Other political influences that can affect Starbucks’ profits are regulatory and licensing restriction, government rent control, tax base determination and labor laws.

The increasing demand of food and beverage services causes Starbucks’ rapid economic environment growth. Starbucks’ greatest concern is its relationship with its coffee bean producers. Nations producing coffee are influential on coffee-purchasing companies. This is because coffee is the world’s second largest traded supply, and prices of coffee beans are being subject to significant market volatility. Starbucks demands for premium green coffee beans, resulting in irregular pricing and are usually sold at negotiated prices. Starbucks’ greatest concern is that the producers would ally and artificially make the coffee prices inflate (Diedrich, 1999).

Social changes affecting Starbucks are consumers’ perceptions towards coffee and caffeine being a stimulant. Caffeine, when used, does produce some negative effects, namely rapid heart beating, waves of nausea and bouts of insomnia. Even though the chances of suffering from these side effects are unlikely, having consumers perceive caffeine negatively would cause a decline in the demand for coffee.

Starbucks is a popular place for a bite or drink. However changes in taste and brand preferences can affect Starbucks. Changes in overall eating habits can influence Starbucks. Consumers may move towards eating a more filling meal rather than having finger food or light snacks such as bagels and doughnuts in Starbucks. Even though the risks of social changes are affecting Starbucks, but judging from the constant demand and growth, few exist at this point for concern.

Technological change might influence Starbucks to a great extent. As technology improves, advertising products, and improved production and distribution can be done faster and easier. The Internet can be used as a platform to promote Starbucks within the industry while providing more ways to purchase products. With improvements in technology and new machinery, food and beverage products can be produced more efficiently over time.

TABLE OF CONTENT CASE STUDY ON MOTIVATING PARTNERS AT STARBUCKS2 Question 1: Given Starbuck’s training approach, benefits, package, work/life program, and partner relations mechanisms, what insights have you gained about its approach to employee motivation? Explain your answer. 2 Introduction2 Motivation2 Expectancy- Probability (E to P)4 Instrumentality- Probability (P to O)4 Valence- V(R)5 Conclusions6 Question 2 : What needs does Starbucks appeal to through its training approach, benefits package, work/life program and partner relations mechanisms? 7 Employees’ inner satisfaction. 7 Equal treatment8 Listen to employees8

Question 3: What is important to you in terms of your personal work motivation? How does that which motivates you fit with Starbuck’s approach to motivating partners? 10 CASE STUDY ON MOTIVATING PARTNERS AT STARBUCKS Question 1: Given Starbuck’s training approach, benefits, package, work/life program, and partner relations mechanisms, what insights have you gained about its approach to employee motivation? Explain your answer. Introduction Starbucks Corporation, the most famous chain of retail coffee shops in the world, mainly benefits from roasting, selling special coffee beans and various kinds of coffee or tea drinks.

It owns about 4000 branches in the whole world. The reasons of why Starbucks is worldwide popular are not only the quality of coffee, but also its customer service and cosy environment. Besides, it is also famous for its satisfaction of employees. The turnover rate of employees at Starbucks was 65% and the rate of managers was 25% a year However, the rates of other national chain retailers are 150% to 400% and 50% respectively. Compared with them, the turnover rate of Starbucks is much lower than other industries on averagely.

As a result, Starbucks would be one of the optimal business models for the strategies of employee motivation, customer satisfaction and cooperation of teamwork. Motivation Motivation refers to forces within an individual that account for the level, direction and persistence of effort expended at work[1]. People have basic needs such as food, secure or achievement, that translate into an internal tension that motivates specific behaviours with which to fulfil the need. If the behavior leads to ones success, the person will fall in the state of satisfaction or we can call it reward[2].

Rewards are two types; intrinsic and extrinsic. Intrinsic rewards refer to satisfaction occurs in the process of performing an action. Such as a salesperson that sold encyclopaedias for intrinsic reward of helping children read well. Extrinsic refers to a reward given by another person such as promotion and bonuses. The understand that I had on Starbuck’s approach to its employee motivation is best by explaining the case based on the Vroom’s Expectancy Theory of Motivation; is based on an idea that work effort is directed toward behaviors that people believe will lead to desired outcomes.

The Expectancy Theory of Motivation explains the behavioral process of why individuals choose one behavioral option over another. It also explains how they make decisions to achieve the end they value. Vroom introduces three variables within the expectancy theory which are valence (V), expectancy (E) and instrumentality (I). The three elements are important behind choosing one element over another because they are clearly defined: effort-performance expectancy (E to P expectancy), performance-outcome expectancy (P to O expectancy).

Three components of Expectancy theory: Expectancy, Instrumentality, and Valence. 1. Expectancy: Effort > Performance (E>P); 2. Instrumentality: Performance > Outcome (P>O); 3. Valence – V(R) Expectancy- Probability (E to P) Expectancy is the belief that one’s effort (E) will result in attainment of desired performance (P) goals. Factors associated with the individual’s Expectancy perception are self efficacy, goal difficulty, and control. Self efficacy is the person’s belief about their ability to successfully perform a particular behavior.

Goal difficulty happens when goals are set too high or performance expectations that are made too difficult are most likely to lead to low expectancy perceptions. Control is one’s perceived control over performance. In order for expectancy to be high, individuals must believe that they have some degree of control over the expected outcome. Starbucks had matched employees to the jobs based on their abilities and clear communicating the tasks requires for the job is an important part of this process. This process took place within the 25 hours of classroom training.

Instrumentality- Probability (P to O) Instrumentality is the belief that a person will receive a reward if the performance expectation is met. This reward may come in the form of a pay increase, promotion, recognition or sense of accomplishment. In Starbucks, they offer various types of benefits package includes full medical and dental insurance coverage, disability and life insurance, vacation days, a retirement saving plan with match company contributions, discounted stock purchase plans and stock options as part of Starbuck’s BEAN STOCK Program.

Instrumentality is low when the reward is given for all performances given. Factors associated with the individual’s valence for outcomes are trust, control and policies. If individuals trust their superiors, they are more likely to believe their leaders promises. When there is a lack of trust on leadership, people often attempt to control the reward system. When individuals believe they have some kind of control over how, when, and why rewards are distributed, Instrumentality tends to increase.

Formalized written policies impact the individuals’ instrumentality perceptions. Instrumentality is increased when formalized policies associates rewards to performance. Valence- V(R) Valence: the value the individual places on the rewards based on their needs, goals, values and Sources of Motivation. Factors associated with the individual’s valence for outcomes are values, needs, goals, preferences and Sources of Motivation Strength of an individual’s preference for a particular outcome. Motivation = expectancy x instrumentality x valence

Managers should make each factor positive in order to ensure high levels of motivation. Conclusions Referring to this case study, the new Baristas carefully selected and will receive 25 hours classroom training before they start their job. During this training, Baristas will be trained, coached exposed to the company’s goals, diversity awareness, customers, succession planning and career development plan. This would be the E to P Expectancy Concept. The Baristas then exposed to the company’s benefits and rewards; where the P to O Expectancy Concept occurs.

The last one is the Valences outcomes. Starbucks distribute rewards that employees’ value. This action can increase the expected value of outcomes resulting from desire performance. Expectancy Theory of Motivation remains ones of the better theories for predicting work effort and motivation, and with one limitation that is, the theory had ignore the role of emotion in employee effort and behavior. Question 2 : What needs does Starbucks appeal to through its training approach, benefits package, work/life program and partner relations mechanisms?

From my analysis earlier, Starbucks training approach, benefits package, work/life program and partner mechanism had fall into needs theory of Expectancy Theory. As I have stated earlier that this theory had ignore the emotional factor. As this theory seems using some kind of mathematical method on measuring the level of motivation, the emotional entity was so abstract and difficult to measure. What most important is the positive impact or the outcome occurs. I wanted to conclude that there were several soft impacts happened in Starbucks as the consequences of the implementation of Expectancy Theory.

Employees’ inner satisfaction. A pervious researcher, Pugh & Hickson cited Elton Mayo made an investigation called ‘Hawthorne Experiment’. According to the results, if managers provided a suitable working environment considering each personal requirement and their sense of satisfaction rather than a higher salary or bonus, workers were encouraged to be more hard-working and efficient. He also verified that if managers of an organization do not consider about individual works’ needs and wants, then treat them as equal units would “maximize payment and minimize effort”.

As a result, how to use non-financial incentives would be an important issue for nowadays business. The chief executive officer of Starbucks Corporation, Howard Schultz, considers that the tip of success in Starbucks is not coffee but employees. Constantly accumulating the working experience of employees and providing chances of promotion in a company for working partners is the way to operate sustainability. He firmly believes that the spirit of Starbucks is employees and feels honoured about the value of Starbucks employees.

For this reason, it is necessary to have a perfect education and training policy for better performance in a company. Starbucks offers an interactive structure that makes personnel instil themselves into their job; hence they can motivate partners to satisfy themselves then achieving a new level of performance. Equal treatment The managers in Starbucks treat each workpeople equally and all of the staffs are called ‘partners’, even the supervisors of each branch are called it as well. In order to narrow the gap between managers and employees, they also co-work with the basic level staffs in the front line.

Due to this, they can maintain a well management system and create a much closer and more familiar atmosphere than other place, which makes not only employees can enjoy their job but also customers are affected by their enthusiasm. Listen to employees Starbucks has a well-organized communication channel for employees. It places a great importance on labours. For example, managers plan the working hours per workers and arrange the schedule of time off, according to their wants to meet their requirements. There are interviews weekly to see what employees’ need is.

A special survey called ‘Partner View Survey’ is taken off approximate every two years. The managers can receive feedbacks through the event to which part should be improved or what issue should be paid more attention to. The partners have the right to figure out what is the best policy for them, and the directors show a respect for each suggestion. Starbucks even wants every employee to join in making and developing plans, then achieving their goals all together. As a result, the policies and principles are communicated between all staffs, and there is no limitation in employees’ personal opinions.

For this reason, business could improve their strategies even innovate by different ideas. Question 3: What is important to you in terms of your personal work motivation? How does that which motivates you fit with Starbuck’s approach to motivating partners? My important personal work motivation would be the physiological, safety and social motivation. If one organizational can provide this, I would say that I will be there for a period of time. There would be important leadership implications to enhance workplace motivation.

There are staff motivation opportunities by motivating each employee through their style of management, compensation plans, role definition, and company activities. Physiological motivation can be imposed by company by provide ample breaks for lunch and recuperation and pay salaries that allow workers to buy life’s essentials. In government sector (where I work for), offers physiological needs, safety needs and also social motivation. Based on my individual view, managers within this sector may become varies in style of leaderships. This happened due to different background of race, culture and political views.

If the managers fail to be fair or fail to perform, dissatisfaction among workers may occur. In government sector, most of the organizations within tend to be people orientation than result orientated. This similar to the environment in Starbucks, its employees, including informal personnel, are offered a great deal of welfare policies, for instance, commodities discounts for employees, medical insurance (including health, vision and dental) and vacations. Moreover, the partners who work over 20 hours a week are entitled for benefits. This related to safety needs.

Social needs can be generate a feeling of acceptance, belonging, and community by reinforcing team dynamics. Howard Schultz and other Starbucks senior executives worked to instill some key values and guiding principles into the Starbucks culture. The keystone value in the effort “to build a company with soul” was that the company would never stop pursuing the perfect cup of coffee. Because of this, they have the same goal; in other words, they are motivated to increase the sales to earn more profits. Starbucks just handles personnel with its core value, which is the employees are the most important asset of Starbucks.

Showing a respect to employees and well-developed environment have lead Starbucks to produce the best working quality for customers and an increase in profits. Starbucks establishes a well-developed system to keep good relationship between managers and employees. At first, the leaders of a retail shops use the same title “partner” as a basic level worker to narrow the gap of bureaucracy. Furthermore, they co-work in the first line to eliminate the distance between different statuses. Secondly, the numbers of employees are usually from three to six.

Such a small size of a retail shop makes staffs acquaint with each other easily and deeply. In the co-working period, this helps a team to match different personalities and majors quickly to achieve well performance. Next, the suggestions and complaints provided by employees are treated of equal importance. In the same way, they have a right to participate in the process of revising company policies as well as a manager. In that case, each staff thinks that they also play an important role in company operating, and they can join to work out a direction of Starbucks.

These give employees not only a respect, but a sense of participation. Yet, this Starbuck’s approach was hardly to be found in government sector. In public sector, they tend to uphold the hierarchy line. There were obvious gap between managers and subordinates. Furthermore, the organizations normally contain numbers of staffs. ———————– [1] Schermerhorn,Hunt,Osborn and Uhl-Bien “Organizational Behavior 11th edition” John Wiley & Sons (Asia) Pte. Ltd. 2011 [2] Richard L. Daft “Management” The Dryden Press 1997