Starbucks overhauled their business on multiple dimensions with the return of Howard Schultz as the CEO. The aim was bringing back the focus to being the world’s top brewer of coffee.
The various measures implemented were:
• Starbucks shut down all stores across the country in order to re-train the employees on how to make the perfect espresso.
• Starbucks dropped hot breakfast sandwiches from its stores which led to loss of annual income amounting to $35,000 per store.
• The company restocked with heated sandwiches some months later but only after the company had improved the ingredients of the snacks and made them healthier.
• Starbucks implemented “Optimal Scheduling” in the fall of 2008, which provides more working hours to those who seek and need to work more hours.
• Starbucks overhauled its menu, adding a healthier selection of food. Fruit and yogurt parfaits and warm breakfast sandwiches are now part of its regular selection.
• In addition to sales through its retail stores, Starbucks started selling coffee and tea products directly to business units. Through its joint venture business with Pepsi and Dreyer’s respectively, Starbucks also retails bottled Frappuccino coffee drinks and a line of coffee ice cream.
• For the first time in its history, Starbucks announced a modified pricing structure in July 2009. According to Schultz, this was an investment in the future and “emblematic that we're going to build for the long-term and get back to the roots and the core of our heritage, which is the leading roaster of specialty coffee in the world”. These actions signified a shift in focus to a customer centered approach in an attempt to entice back the clients. Some of the other actions that the firm adopted in order to recover their position as the best brewer: • Schultz involved numerous advisors and invited proposals from the public which led to over 5000 responses. • Introduced the Swiss-made “Mastrena” espresso machines across all their stores to increase the quality of the brew. They also introduced the pike-roast and ensured that the baristas freshly ground the beans in the stores. • Starbucks scaled down on sale of books / CDs which were shifting the focus away from coffee. • Starbucks introduced customer loyalty cards and within a year, customers had loaded $150 million onto their cards. This represented a substantial enhancement in the working capital state of the company. • They replaced all their obsolete cash registers and systems in order to reduce the waiting time for customers. • Schultz fired the entire design team and had the design of all stores revamped by Arthur Rubinfield. • He brought in managers such as Sheryl Sandberg (Facebook COO) from tech companies onto the board of directors. By hiring a CTO (Chris Bruzzo), he further enhanced the company’s focus on technology. Bruzzo was responsible for an overhaul of the website and social media presence of Starbucks which improved their opinion among the youth. • They improved their supply chain which led to a 300% hike in accurate deliveries. These measures led to the turnaround of Starbucks in the period of 2008 through 2011. Subsequent to engineering a turnaround in the US, Starbucks focused on Europe where it had poor presence. It adopted a radical measure of breaking away from its uniform and objective model which was seen as “impersonal” and “mass-produced” by the Europeans. Starbucks embarked on a multi-million dollar upmarket remodeling of hundreds of stores in order to suit the perceptions of the Europeans. They also made changes to the brews to suit the native tastes which was a move away from their earlier approach of mass normalization across the globe. Starbucks carefully …show more content…
A Hohfeldian analysis of the situation would reveal that through the above strategy, the Starbucks management has violated the ‘Ethics of Authenticity’ and has suffered from the three malaises stated by Charles Taylor viz. Individualism, Instrumentalism and Structuralism. Each malaise diminished the sense and obligation of rights and duties of the management and resulted not only in a flawed epistemological position regarding the limits of reason to justify taking the customers for a ride, but also a bad moral position for the
The various measures implemented were:
• Starbucks shut down all stores across the country in order to re-train the employees on how to make the perfect espresso.
• Starbucks dropped hot breakfast sandwiches from its stores which led to loss of annual income amounting to $35,000 per store.
• The company restocked with heated sandwiches some months later but only after the company had improved the ingredients of the snacks and made them healthier.
• Starbucks implemented “Optimal Scheduling” in the fall of 2008, which provides more working hours to those who seek and need to work more hours.
• Starbucks overhauled its menu, adding a healthier selection of food. Fruit and yogurt parfaits and warm breakfast sandwiches are now part of its regular selection.
• In addition to sales through its retail stores, Starbucks started selling coffee and tea products directly to business units. Through its joint venture business with Pepsi and Dreyer’s respectively, Starbucks also retails bottled Frappuccino coffee drinks and a line of coffee ice cream.
• For the first time in its history, Starbucks announced a modified pricing structure in July 2009. According to Schultz, this was an investment in the future and “emblematic that we're going to build for the long-term and get back to the roots and the core of our heritage, which is the leading roaster of specialty coffee in the world”. These actions signified a shift in focus to a customer centered approach in an attempt to entice back the clients. Some of the other actions that the firm adopted in order to recover their position as the best brewer: • Schultz involved numerous advisors and invited proposals from the public which led to over 5000 responses. • Introduced the Swiss-made “Mastrena” espresso machines across all their stores to increase the quality of the brew. They also introduced the pike-roast and ensured that the baristas freshly ground the beans in the stores. • Starbucks scaled down on sale of books / CDs which were shifting the focus away from coffee. • Starbucks introduced customer loyalty cards and within a year, customers had loaded $150 million onto their cards. This represented a substantial enhancement in the working capital state of the company. • They replaced all their obsolete cash registers and systems in order to reduce the waiting time for customers. • Schultz fired the entire design team and had the design of all stores revamped by Arthur Rubinfield. • He brought in managers such as Sheryl Sandberg (Facebook COO) from tech companies onto the board of directors. By hiring a CTO (Chris Bruzzo), he further enhanced the company’s focus on technology. Bruzzo was responsible for an overhaul of the website and social media presence of Starbucks which improved their opinion among the youth. • They improved their supply chain which led to a 300% hike in accurate deliveries. These measures led to the turnaround of Starbucks in the period of 2008 through 2011. Subsequent to engineering a turnaround in the US, Starbucks focused on Europe where it had poor presence. It adopted a radical measure of breaking away from its uniform and objective model which was seen as “impersonal” and “mass-produced” by the Europeans. Starbucks embarked on a multi-million dollar upmarket remodeling of hundreds of stores in order to suit the perceptions of the Europeans. They also made changes to the brews to suit the native tastes which was a move away from their earlier approach of mass normalization across the globe. Starbucks carefully …show more content…
A Hohfeldian analysis of the situation would reveal that through the above strategy, the Starbucks management has violated the ‘Ethics of Authenticity’ and has suffered from the three malaises stated by Charles Taylor viz. Individualism, Instrumentalism and Structuralism. Each malaise diminished the sense and obligation of rights and duties of the management and resulted not only in a flawed epistemological position regarding the limits of reason to justify taking the customers for a ride, but also a bad moral position for the