Starbucks Company’s Reasons for Success Case Study

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Table of Contents

Introduction
Starbucks business activities
Starbucks organisation system
Ethical and environmental policies
International business ethics policy and issues
Code of ethics
Social responsibilities
Conclusion
References

Introduction

Starbucks is an international coffee company that was founded in the year 1971 (Forty Year Young: A History of Starbucks, 2011). It is the largest coffeehouse company with operations in 64 countries across the world. Starbucks operates 23,187 stores around the world. The largest percentage of stores is located in the United States. Starbucks also operates in China, Japan, and the United Kingdom (Forty Year Young: A History of Starbucks, 2011). It offers a range of products that attract both the young and old generations.

Customers have a variety of foods and drinks to purchase. Three people that included Gordon Bowker, Jerry Baldwin, and Zev Siegl founded Starbucks after learning how to roast coffee. In 1987, Howard Schultz purchased the coffeehouse from its founders and became the new owner, chain, and CEO (Forty Year Young: A History of Starbucks, 2011). Under his leadership, Starbucks has grown in terms of both business operations and market capitalization. The company’s success can be attributed to innovation, strict adherence to business ethics, and treatment of customers with respect and integrity. Also, its environmental conservation initiatives have contributed to its growth.

Starbucks business activities

Starbucks offers drinks and food in its stores (Menu: Drinks, 2014). Its main product is coffee. However, it also provides pastries, cold, and hot beverages, sandwiches, fruits, muffins, scones, salads, and several types of snacks (Yacoubou, 2013). Its assortment of drinks includes refresher beverages, iced coffee, freshly brewed coffee, bottled drinks, espresso beverages, and tea (Menu: Drinks, 2014).

Other products include souvenir mugs and tumblers. Starbucks also operates evening locations where they sell wines and beers. These locations only operate after 4 pm. The company also has an entertainment division that serves the role of locally marketing music, films, and books.

Starbucks organisation system

The organisation system of Starbucks comprises a chairperson, CEO, president, executives, district managers, store managers, shift supervisors, and employees (Schreiner, 2014). Howard Schultz is the chairperson, president, and CEO. He oversees the activities of the whole company. The company’s executives oversee operations form the headquarters in Seattle (Schreiner, 2014). District managers oversee the operations of stores in specific districts. In individual stores, managers oversee the activities of the stores with the help of shift supervisors (Schreiner, 2014).

Ethical and environmental policies

Starbucks is committed to promoting ethical business practices and conserving the environment. To conserve the environment, the company builds energy-efficient stores, uses recyclable materials to manufacture coffee cups, and replaces their equipment with those that conserve energy (Environment: We Share Your Commitment to the environment, 2014). The company is also committed to recycling waste. Starbucks has scaled front-of-store recycling to encourage customers to participate in its waste recycling and reduction program (Environment: We Share Your Commitment to the environment, 2014). The company assists coffee farmers to mitigate the problem of climate change in their farms.

Starbucks sources its raw materials from certified sources that produce the raw materials in ways that conserve the environment (Environment: We Share Your Commitment to the environment, 2014). Also, the company ensures that products are healthy and safe for consumption. The company purchases raw materials from farmers who follow strict farming practices that reduce environmental pollution. The Coffee and Farmer Equity (CAFE) standards guide farmers on how to grow coffee that meets the required standards. Finally, Starbucks maintains high standards regarding the furniture and equipment used in all stores.

International business ethics policy and issues

Through the implementation of Standards of Business Conduct, Starbucks is committed to following business ethics in all operations. Starbucks ensures that employees comply with international business ethics that include compliance with applicable laws, transparent transactions, and working within the scope of government rules and regulations (Public Policy and Internal Standards, 2014).

The company seeks to maintain accuracy and truth in its dealings with government agencies in the countries in which it operates. Any foreign payment is executed in compliance with the laws of the U.S. and the other country. Starbucks requires its partners to obey custom and trade laws (Business Ethics and Compliance, 2014).

It is imperative for partners and its employees to provide accurate and truthful information in efforts to facilitate export and import of products and war materials. The company is against bribery as a way of influencing the outcome of business transactions and decisions with its partners or government agencies (Business Ethics and Compliance, 2014). Finally, the company follows lawful sales practices and advertising to foster fair competition with its competitors. All Starbucks employees are expected to maintain confidentiality regarding information about the company’s operations.

Code of ethics

The company’s code of ethics directs how employees treat each other, conduct business, and treat customers. The company does not allow harassment, discrimination, or bullying. Employees are required to treat each other with respect, trust, and honesty (Public Policy and Internal Standards, 2014). Customers are supposed to be treated with dignity and respect because they are an important component of the company’s success (Business Ethics and Compliance, 2014).

Employees are expected to create a work environment that fosters diversity. Employees are required to adhere to the company’s rules on workplace safety, security, and health. These rules include attendance of regular training on safety and security, avoidance of unsafe practices, and prompt reporting of accidents within the workplace (Business Ethics and Compliance, 2014). Drugs, illegal substances, and weapons are not allowed in the company’s workplaces. Finally, employees are required to avoid bribery (Public Policy and Internal Standards, 2014).

The company’s social responsibilities include conservation of the environment, improvement of local communities, and ethical sourcing of raw materials (Environment, 2014). Starbucks conserves the environment by building greener stores, recycling and reducing waste, reducing climate change, and use recyclable materials to reduce packaging waste (Environment, 2014).

The company promotes forest conservation practices, educates framers on environmentally friendly farming practices, and promoting sustainable farming methods and tools. Finally, the company supports community service programmes that aim to improve the neighbourhoods and communities in which they operate (Responsibility: Ethical Sourcing, 2014). Also, the Starbucks Foundation funds community programmes that improve the lives of people in those communities (Responsibility: Ethical Sourcing, 2014). They provide both financial and social support.

Conclusion

Starbucks was founded in 1971 as a coffeehouse that sold only coffee products. However, after Howard Schultz purchased it, its range of products expanded. Its business activities include the sale of hot and cold beverages, sale of food products, snacks, and promotion of music, films, and books. Starbucks has a wide variety of cold and hot beverages.

Its evening locations serve beer and wines only in evenings. The company’s code of ethics guides employees in their dealings with customers and the company’s partners. Starbucks adheres to international business ethics in dealing with partners, competitors, and government agencies. As part of corporate social responsibility, the company conserves the environment, sources raw materials from certified suppliers, and improves the communities in which they operate. The Starbucks Foundation supports the activities and programmes of different communities that aim to improve the lives of the people.