Question

Please construct 1 full page memo on Starbucks Co. Information must be relevant to the last 5 years. Please list the reference links used for conducting the research. Construct the memo answering the questions below.

• An introduction in which you describe the company, their position in the industry, their history over the last five years, and why you are interested in researching the company.
• A top level analysis of the company. Are they a job order or a process system company? What type of company are they? How are they organized relative to centralized or decentralized? What are the major drivers of their costs? How do they capture and measure their cost? Your analysis should include research using the web into publicly available articles, analyst reports, and blog sites. You will note these sources on your reference page.

Answer 1

STARBUCKS

Starbucks Corporation is an American coffee company and coffeehouse chain. Starbucks was founded in Seattle, Washington, in 1971. As of early 2019, the company operates over 30,000 locations worldwide.

Starbucks has been described as the main representative of "second wave coffee," a retrospectively termed movement that popularized artisanal coffee, particularly darkly roasted coffee. Since the 2000s, third wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays uses automated espresso machines for efficiency and safety reasons.

Starbucks is present on 6 continents and in 78 countries and territories, with around 31,256 Locations.

Starbucks announced a debut of its first-ever original content series called "Upstanders" which aims to inspire Americans with stories of compassion, citizenship, and civility. The series features podcasts, written word, and video, and will be distributed via the Starbucks mobile app, online, and through the company's in-store digital network.[77]

Starbucks acquired the remaining 50% stake in their Chinese venture from long-term joint venture partners Uni-President Enterprises Corporation (UPEC) and President Chain Store Corporation (PCSC).

Starbucks announced that it is considering the use of blockchain technology with an idea to connect coffee drinkers with coffee farmers who eventually can take advantage of new financial opportunities. The pilot program is going to start with farmers in Costa Rica, Colombia and Rwanda in order to develop a new way to track the bean to cup journey.

Starbucks announced the closing of 150 locations in 2019, this is three times the number the corporation typically closes in a single year. The closings will happen in urban areas that already have dense clusters of stores.

Starbucks expanded its partnership with Uber Eats to bring its beverages to U.S. customers' doorsteps, as it had already done for some time in China.

Starbucks opened its biggest store ever on Michigan Avenue, Chicago. The store is open seven days a week and has 200 employees.

Starbucks maintains control of production processes by communicating with farmers to secure beans, roasting its own beans, and managing distribution to all retail locations. Additionally, Starbucks's Coffee and Farmer Equity Practices require suppliers to inform Starbucks what portion of wholesale prices paid reaches farmers.

Many times the focus is shifted away from differentiation based superiority to cost-based superiority. Thus, low cost often becomes the overall driving force of corporate profit. Low cost advantage can be achieved through increased economies of scale. In the case of Starbucks, they should improve their capabilities in their distribution network and maintain their industry lead in low transportation costs.

Starbucks, however, should not attempt to pursue cost advantage in low-cost inputs. In the specialty coffee industry, quality is determined in large part by the quality of the raw inputs, Arabica coffee beans, which are used during the brewing process. Starbucks also should not attempt to seek a cost advantage through their labor force. Undercutting these two inputs would place their brand reputation at risk, which would have a very detrimental effect on their profits. Another cost reduction strategy that Starbucks should implement, however, was identified by Hambrick and Schecter as being successful among other mature US businesses. This strategy is called asset and cost surgery. In the case of Starbucks, this would involve a reduction in excess capacity.

There are easy and cost-effective measures that can reduce energy usage and decrease greenhouse gas emissions, Starbucks has found. For example, our stores use a best practice Energy Checklist that includes practical conservation measures. Moreover, last year Starbucks undertook a number of conservation projects in our North American stores. These included replacing inefficient bulbs and fixtures in more than 2,700 existing stores, and resetting thermostats to increase heating and cooling efficiency.

As a publicly traded company, Starbucks is accountable to its shareholders. Investors measure a company by its ability to deliver strong financial results both short- and long-term, as well as by its commitment to a sustainable business strategy. So far, Starbucks has managed to do both. In doing so, we carefully balance our financial goals with our Guiding Principles and commitment to sustainability to ensure Starbucks has lasting value. While Starbucks accomplishments in recent years have created a great deal of optimism about the company’s future, we don’t rest on our laurels. Improvements can and will always be made.

References:

https://en.wikipedia.org/wiki/Starbucks

https://www.starbucks.com/

https://www.biu.ac.il/soc/sb/stfhome/bijaoui/891/case/2009/starbuck08full.pdf

https://stories.starbucks.com/uploads/2019/01/Covington-Report-to-Starbucks-Jan-23-2019.pdf

https://globalassets.starbucks.com/assets/e31d4604b78141bfb13172aa5fd67cfa.pdf

https://news.starbucks.com/news/new-starbucks-benefit-offers-backup-child-and-adult-care

https://starbucksbeanstock.com/en-us/welcome-en-us/about-bean-stock-en-us/

https://www.disabilityequalityindex.org/sites/default/files/documents/2016_DEI_Best_Places_to_Work_List.pdf

https://www.starbucks.com/responsibility/community/diversity-and-inclusion/aspirations