The local Starbucks chain store provides millions of Americans with their daily caffeine fix. Originally starting in Seattle, Washington, this small coffee shop has transformed into an essential for busy Americans. The impressive success of Starbucks can be credited partly to their operational planning. Starbucks is renowned for selling top-notch coffee beans and delicious coffee products. Unlike others, the company recognized early on that the true profit lies in selling beverages rather than just coffee beans.
Starbucks developed a unique coffee blend specifically for coffee enthusiasts, dedicating extensive efforts to procuring the finest coffee beans available. The success of Starbucks can largely be attributed to their effective operational planning strategies. This entails leveraging their strengths, adapting to market trends, and regularly assessing weaknesses and threats. Consequently, this small coffee shop has evolved into the most beloved destination in America for coffee aficionados. To comprehend operational planning, it is essential to have a fundamental understanding of the overall planning process. In contemporary business practices, corporations adopt a top-down approach to chart the future trajectory of an organization.
The executives of a company, also known as strategic planning or Top-Level management, are responsible for setting long-term goals and strategies. These goals are then classified into smaller, more specific goals by the middle level managers, also known as tactical planning. Finally, the frontline managers, known as operational planning, develop plans to achieve short-term objectives that contribute to the overall goals set by upper management.
In the case of Starbucks, the executives have defined their business with the mission statement to “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow” (Starbucks mission statement). This successful organization earned over $600 million in 2005.
Starbucks is a well-known coffee brand worldwide known for its high-quality products and excellent services. With nearly 9000 cafes across almost 40 countries, it has established a strong global presence. The company recognizes the importance of its workforce and has implemented various strategies to showcase this, including programs like the “Bean Stock” program. Through this initiative, employees are given the opportunity to own stocks in the company, ensuring that every member of the staff is invested in the success of Starbucks. This commitment extends to the hiring of exceptional operational managers, highlighting the dedication of top executives to their people.
Front line managers are a major strength of the Starbucks organization. They are responsible for ensuring profitability and utilize company programs to meet operational and organizational objectives. These supervisors train, coach, and provide direction to their staff to meet customer demands and maintain excellent customer service. The efficiency of these managers can be seen in Starbucks’ consistent ranking in Forbes’ “100 best companies to work for” list for seven of the past eight years.
The company is respected and values its workforce. It has strong ethical values and a mission statement that emphasizes environmental leadership. Starbucks, a well-known coffeehouse, needs to acknowledge its weaknesses in order to maintain its position in the market. One weakness is the need to listen to consumer feedback and avoid being labeled as the McDonalds of coffeehouses. Some consumers have expressed concerns about the homogenization of American life caused by Starbucks. To remain competitive, Starbucks must heed consumer preferences and make necessary changes to their image and venue. While Starbucks is known for innovation and creativity, they are still susceptible to potential decline in their ability to introduce new products.
The organization has a significant presence in the United States of America, with over 75% of their cafes located in their home market. There is an ongoing debate regarding the need for them to expand their business into multiple countries to mitigate risks. The organization heavily relies on its competitive advantage in coffee retail, which could potentially hinder their ability to diversify into other industries if necessary.
Weather, global events, and oil prices all have the potential to impact coffee sales. It is the responsibility of managers at all levels to address this issue and work towards expansion. Operational managers play a crucial role in finding solutions by inspiring their teams to develop creative strategies to grow the Starbucks Empire. Additionally, by seeking input from customers, top-level management can gather valuable market research without relying on external sources.
Starbucks is adept at capitalizing on opportunities. In their Santa Monica (California, USA) cafe in 2004, the company collaborated with Hewlett Packard to launch a CD-burning service, enabling customers to create personalized music CDs. Currently, Starbucks has the chance to broaden its global operations due to emerging coffee markets in India and the Pacific Rim nations.
Co-branding with other manufacturers of food and drink as well as franchising the Starbucks brand to manufacturers of other goods and services both have potential. One concern for Starbucks is that the market for coffee may not continue to grow and remain popular with customers, as another type of beverage or leisure activity could potentially replace coffee in the future. Additionally, Starbucks faces the risk of increasing costs for coffee and dairy products. Since its establishment in Pine Place Park, Seattle in 1971, Starbucks’ success has attracted many competitors and imitators that pose potential threats. The first Starbucks coffee house served a cafe latte in 1984.
At present, Americans were not familiar with the concept of coffee houses. However, Starbucks now possesses 4,666 establishments in the United States and continues to establish three to four fresh locations globally every day. Despite achieving significant growth and prosperity, the franchise faces inevitable competition. Operational managers must carefully scrutinize reports and detect any patterns to prevent losing customers. These capable managers must strategize, integrate, and lead their teams effectively, utilizing all available resources and guidance from upper management. Moreover, our society has witnessed a shift towards a more fast-paced and mobile lifestyle.
As the traditional family declines, the culture of the country has shifted to one of convenience. Society’s desire for drive-thru establishments like restaurants, banks, and drycleaners has been met by Starbucks. They successfully introduced bottled Frappuccino coffee drinks that are available for purchase at various retail locations and gas stations. Starbucks has now become a popular hangout spot for teenagers and a casual meeting place for professionals conducting business.
Starbucks introduced a strategy to provide a casual atmosphere and convenience to readers in 1993. This was similar to what Barnes & Noble was doing as they replaced traditional libraries as hang out spots. In their first co-located store, Starbucks offered high-speed Internet access for customers to surf the web, conduct business or communicate with friends while enjoying their beverage and pastry. The operational managers at Starbucks have demonstrated their effectiveness globally.
Today, Starbucks was recognized as one of the “100 Most Valuable Global Brands” by Business Week magazine (Starbucks Awards & Accolades). The remarkable popularity of Starbucks can be attributed to the exceptional operational planning skills of its management team. Despite its humble beginnings as a small coffee house, Starbucks has captured the hearts of consumers worldwide. Through meticulous planning and unwavering commitment to quality, Starbucks has emerged as the undeniable leader in the coffee industry. This success has been possible because the management team at Starbucks constantly stays connected with the public and their ever-evolving preferences, enabling them to effectively capitalize on emerging trends.
With the capability to identify potential vulnerabilities and find solutions, Starbucks successfully avoided failure. As a result, consumers in need of caffeine no longer question where to find their morning pick-me-up. Instead, they contemplate whether to order a tall or Grande when standing at their local Starbucks counter.
