Question

Company: Starbucks

Here are the sections you will need to cover in your paper, in the following order:

1. What is the name and mission statement of the company?

2. What is the history of the company up through the present day? (Summarize major events and tell how those major events affected the company. A timeline may be a great way to show major events).

3. Write about at least 1 example that shows what you consider to be a good ethical decision this company has made in the past or is in the process of making/considering today. Make sure to tell why they made this decision (What prompted them to make it? What do they hope to achieve by making it? Etc). Also, make sure to tell why you consider this a good ethical decision.

4. Write about at least 1 example that shows what you consider to be a poor ethical decision this company made in the past or is in the process of making/considering today. Make sure to tell why they made this decision (What prompted them to make it? What do they hope to achieve by making it? Etc). Also, make sure to tell why you consider this a poor ethical decision.

5. Write about their marketing and distribution strategies. Please provide examples to support your statements.

6. Write about their operations. Again, provide examples to support your statements.

7. Include at least one of the following financial statements: Income Statement, Balance Sheet, Cashflow Statement (or budget). Make sure these statements are no older than 5 years.

8. Write a summary paragraph for your paper to wrap it up at the end.

Answer 1

1.The name of the company is "STARBUCKS" and the mission statement of the company is "TO INSPIRE AND NURTURE THE HUMAN SPIRIT-ONE PERSON,ONE CUP AND ONE NEIGHBOURHOOD AT A TIME."

2.TIMELINE ON THE HISTORY OF STARBUCKS

• 1971: The first Starbucks store was opened in Seattle,Washington by Three partners Jerry Baldwin (English teacher), Gordon Bowker (writer), and Zev Siegl (history teacher).   At the beginning they did not sell brew coffee, only roasted whole beans.

• 1982: Howard Schultz started to work in Starbucks as director of retail operations and marketing. One year later, in 1983 Schulz travels to Italy.

• 1984: Howard convinces the founders to test the coffeehouse concept. The first Starbucks Caffe Latte is served.

• 1985: Schultz found the store II Giornale where he sold coffee and espresso beverages using Starbucks coffee beans.

• 1987: Starbucks was sold to Howard Schultz, who had worked for Starbucks before. Two years later he had 46 stores and roasted over 2,000.000 pounds of coffee.

• 1991: Starbucks become the first privately owned U.S. company to offer a stock option program that includes part-time employees.

• 1992: Starbucks had 140 outlets with revenues of U$ 73.5 million and a company value of U$ 271 million. That year Starbucks had its initial public offering and sold 12% of the company, facilitating the expansion of the stores to nearly double number.

• 1994: Starbucks opened the first drive-thru location.

• 1996: Starbucks began selling bottled Frapuccino and opened first store outside of North America in Japan.

• 1999: Starbucks acquired Tazo Tea and Hear Music.

• 2001: Starbucks introduced the Starbucks card.

• 2003: Starbucks acquired Seattle Coffee Trading Company.

• 2004: Starbucks acquired Ethos Water.

• 2008: Starbucks acquired Coffee Equipment Company and its Clover brewing system. Launches the first Starbucks online community and joins Twitter and Facebook.

• 2009: Starbucks Launched loyalty program and Card mobile payment.

• 2013: Starbucks prices $750 million of Senior notes. Starbucks opened 1,000th stores in China and Japan.

• 2014: Starbucks revenues have increased 11% earnings per share surge 22% to a Q3 record $0.67, and it has 20,519 stores across 64 countries. Starbucks opened stores in Brunei and Colombia.

3. Starbucks has commitment to good governance,ethical conduct,and social responsibility which is the core way of doing business and strongly alinged with their drive to create and increase shareholder value.Starbucks defines their Corporate Social Responsibility as conducting business in ways that produce social,enivironmental and economic benefits for the communities. A few of the tangible benefits are :

• Attracting and retaining partners
• Customer Loyality
• Reducing Operating cost
• Strengthening the supply chain
• License to operate

Upholding to strong Business ethics is paramount to Starbucks success.The way in which CSR is managed at Starbucks continues to evolveto ensure that emerging issues are identified,prioritized, and addressed in a more systematic way.

4. EXPLOITATION OF COFFEE FARMERS: Starbucks claims of supporting the welfare of coffee farmers in developing countries in order to be portrayed as an ethical corporation.In reality these workers are manipulated and underpaid. In 2007.2 Millions childrens average children working 29.9 hours/week.

A lack of ethics leads to a wealth of problems for a business

• Legal Issues
• Employee Performance
• Employee Relations
• Company Credibility

5.MARKETING AND DISTRIBUTION STRATERGY OF STARBUCKS:

The Marketing mix of Starbucks are :

• Product : In order to hold its market position Starbucks provides premium product to its customers with an unforgettable experience. They position themselves in the market by continuously innovating their products and delivering high quality coffee.
• Price: The company has always put in their best to offer high value products to the customers. They buy the best quality coffee beans and make sure that their staff is efficiently and effectively trained. This is reflected in their price, because a Starbucks coffee is not cheap and it uses premium pricing because of the experience that it offers.
• Place: Starbucks have a clear vision, which is to have a direct and personal relationship with its consumers and thus have direct supply chain from the producers to the consumers. They have their chains all over the world. Starbucks uses more than one channel of distribution.P
• Promotion: Starbucks did not invest a lot of money on advertisement. Starbucks used their extra cash on finding and acquiring the best places for their outlets. They organized a huge event in the places where they could open new stores. They also had many other promotional activities, which included printing information on tee shirts and mugs.

The Distribution Strategy of Starbucks are :

Starbucks’ distribution strategy is to reach customers wherever they work, travel, shop, and dine; so basically, everywhere. They placed the majority of their stores in high traffic and high visibility locations.sales to non-company operated retail chains as well as hotels, airlines, and restaurants and is the second part of the distribution strategy. This part involves establishing relationships with third parties who share the same value and commitment to quality. This strategy is the most effective in grocery stores since it is less intimidating to buy a Starbucks brand product for the first time at the grocery store than it is to walk into a coffeehouse.

6. Starbucks Coffee Company’s business success is linked to the proper application of the 10 decisions of operations management. These 10 decisions refer to the different areas of operations where the firm’s management must address specific business objectives and they are as follows:

• Design of Goods and Services
• Quality Managment
• Process and Capacity Design
• Location Stratergy
• Layout Design and Strategy
• Job Design and Human Resources
• Suuply chain management
• Inventory management
• Schedulling
• Maintainance

7. Kindly refer to the following link https://amigobulls.com/stocks/SBUX/cash-flow/annual

8. SUMMARY

Starbucks began in 1971 as a single coffee shop in Seattle. Today, it’s the world largest coffee retailer, with over 19,000 locations in more than 60 countries. The staff, known as “partners” within the company and “baristas” to the public, sell over 2 billion cups of coffee every year and are at the heart of what Starbucks calls “the Starbucks Experience.” Competitors would have investors believe that Starbucks is selling marginally superior coffee at an unreasonably high price. However, Starbucks might argue this is a narrow-minded view of its business.