Term Paper on "Starbucks Strategic Management Starbucks Has Emerged"

Term Paper 7 pages (1876 words) Sources: 7

[EXCERPT] . . . .

Starbucks Strategic Management

Starbucks has emerged as the premier specialty coffee brewer since its founding in Seattle in 1987. Since then, the chain has amassed a network of roughly fifteen thousand company-owned and licensed stores around the world with annual sales totaling around $10 billion. This paper will incorporate the ten strategy execution steps as enumerated in the Thompson text as well as incorporate similar teachings from other sources. A heading will be dedicated to each of the ten steps with relevant case study content, content from the Thompson book and/or content from other sources along the way.

Staff Organization that can Execute Strategy Well

As described in the class text, the people that are used to staff an organization are an integral part to a corporate strategy going well because whether the front-line people are on board with the strategy and understand how to execute the strategy well will make or break whether the strategy succeeds or not. Rather than just assessing whether a strategy is feasible and/or useful in accomplishing a desired outcome, it must also be assessed whether the strategy is actually being attempted in a complete worthwhile fashion and the latter comes down to whether people on the front lines (as well as managers) are properly trained and motivated to get the strategy applied to the store's path and behavior (Thompson, 2012).

In looking at the case study details, Starbucks has certainly done that well overall. One huge thing that works in Starbucks' favor is that it is hugely diversified. They do not solely rely on people actually going to their company-owned stores. Through outlets that they have in grocery/retail chain stores (e.g. Target) and through off -- the shelf products such as beans, instant coffee (Via) and so forth, they have their tendrils in a lot of different places and that only helps them over the long haul. A challenge of that approach is that a lot of the locus of control involve relies on non-Starbucks employees (e.g. retail stocking/sales associates like at Wal-Mart, etc.). One specific example mentioned in the case study itself was that different vendors (the study specifically cites airlines like United) as having different brewing equipment and this would thus lead to different quality from place to place and from company to company. Even if the people and equipment in question is not directly owned and operated by Starbucks, they have to be sure that the actions and inactions of the people that serve their coffee are not damaging the brand and that can be a delicate thing (Thompson, 2012).

Build Organizational Capabilities

Also noted by the class text and case study is the overall practice and habit of continuing to build and improve organizational capabilities. This builds nicely in many was off what was discussed in the prior section. Using organizational resources to extend capabilities and skills sets to non-Starbucks employees serving Starbucks products would be a great example of harnessing and utilizing Starbucks capabilities in a way so as to extend the reach and profits of the company while at the same time keeping the integrity of the brand in place even as potential harm to the brand's reputation could very well not be Starbucks' fault directly (Thompson, 2012).

Created a Strategy-Supportive Organizational Structure

The class text, as noted in capsule 10.1, describes that building a deep "bench" in terms of management personnel and overall succession strategies is important because managers will come and go and contingencies always have to be in place so as to maintain continuity and consistency. This is important because the company strategy and its progress cannot be fumbled as personnel leaves or shifts around. The strategy has to be crafted, perfected and kept in motion at all times regardless of who happens to be involved at any given time (Thompson, 2012).

Allocate Sufficient Budgetary Resources

Just as the right people need to be allocated to a situation, the right amount of money has to be allocated as well. The ostensible "easy" or "common sense" path may not be the right one or even a possibility depending on the circumstances. For example, the case study makes reference to the company's prior resistance to offering health insurance to part time employees, presumably due to the "return on investment" that one could allocate to a part-time employee as compared to the costs of insuring them under a health plan (let along other costs such as taxes, etc.). Regardless, the right balance and mix of money needs to be tabulated and allocated so as to allow for the purchase and maintenance of resources. Doing otherwise leads to corners being cut and things not being the right way and either of those can be damaging to the company's reputation (Thompson, 2012).

Institute Policies & Procedures that Facilitate Strategy Execution

A huge part of running any organization is instituting and properly enforcing policies and procedures. Any said policies need to be common-sense and they hav eto be enforced properly and consistently. If the policy itself is specious and/or it is not enforced in a fair and/or consistent way, all hell can break loose up to and including lawsuits. One huge dimension of that is mentioned in the class text on page 351 when it is posited how much authority should be delegated. Certain things can and should be farmed out to lower managers while more important issues, for the sake of continuity, should remain in the more upper reaches of management. Finding the right balance is important (Thompson, 2012).

Adopt Best Practices & Business Processes

In ways that are extremely similar to the immediately preceding section, finding and retention of best practices and procedures is always a good thing to do. Page 340 of the class text talks about developing capabilities internally and this section can certainly be applied to best practices as front-line people will know best how well practices and procedures are doing and why. If the process makes sense and is based on real-world practice, it will be clear but it will be equally clear and concise if the process or procedure is running amok. Sure, many learning events can occur when looking at external sources and that should actually be done as much as is possible but a lot of best practices and processes have to be based on internal patterns and experiences and that is an integral part of developing capabilities internally (Thompson, 2012).

Install Information Systems that Enable Company Strategy

A lot of people are dismissive of using information system capabilities but this is something that absolutely cannot be ignored in the modern context. For example, the Starbucks financial results tabulated and displayed in the case study. As requested by the parameters of this assignment, those tables are included as appendices in this report. The assembly and analyzing of financial and sales information is a non-optional part of the organizational strategy process nowadays because these capabilities can and should be used to show what is working, what is not working and perhaps doing all one can to nail down why all of the above occurs (Thompson, 2012).

Rewards & Incentives

As assess and scrutinized extensively under organizational leadership and behavior theory, company leaders must ascertain what makes employees "tick" and how to motivate them because this is what will drive them to perform well in the job. The class text mentions upgrading employee skills and knowledge on page 343. This expansion of knowledge and skills can be incentivizing to employees that want to expand their horizons, their experience and their ability to get promoted up through the ranks (Thompson, 2012). Managers that truly want to be useful in this regard should read up on things like Theory X and Y as well as Expectancy Theory as it is illuminating to know the perspectives that exist, what motivates employees and how motivating people can enhance results (Bogardus, 2009).

For example, Theory X states that employees are by nature lazy and disengaged and need to be prodded to comply and thrive. Theory Y, on the other hand, states that employees just need the right incentive or spark to get going. Expectancy Theory speaks to finding the pivot point whereby an employee becomes motiviated to be more engaged and active with their job and their performance (Bogardus, 2009).

Instill a Corporate Culture

In any company, there needs to be a prevailing mindset or way of doing things as this can define a company and help install a sense of camaraderie among like-minded coworkers in that company. There are some general guidelines that any good company should follow as social responsibility, as mentioned in the class text, is not irrelevant. That being said, there is not a lot of "wrong answers" vis-a-vis what is "good" or "bad" in terms of a corporate culture. As long as it makes sense and as long as it brings like-minded employees and managers to the table and it aligns them in the collective corporate strategy, that is what really matters (Thompson, 2012).… READ MORE

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