However, as the problems identified are not only limited to those solutions as previously mentioned, there could be an expansion to those solutions for solving the problems in a more flexible approach.
Therefore, Starbucks could be suggested to review and rebuild the Starbucks Experience program for its customers. Even the focus of the company is on coffee as a fundamental one, innovations still need to be done in relation to customers. New products and experiences would be debuted in Starbucks’ coffeehouse for customers to actually get the feeling that it’s all for them and made enjoyment through it. As a result, initiatives of recalling the creativity of the company should therefore be taken as customers and partners are reminded such step the company taken.
- Recommendations for future improvement to Starbucks relating to information and knowledge management.
It is recommended that, in order to make future improvement of the company, Starbucks could consider these following methods of information and knowledge management as their candidate options.
Given the current ability of how Starbucks deal with information, the information system which could be used to improve Starbucks’ information accessing abilities is the Management Information Systems (MIS). The MIS provides a chance for Starbucks to transform data from internal and external sources into information. For Starbucks, in a board meeting in which the CEO, Howard Schultz, has been questioned about the lack of profitability, he has cited the importance of such system by saying, “…we’re going to keep losing money until we can do three things. … we need a computer information system sophisticated enough to keep track of sales in hundreds and hundreds of stores.” () For that reason, by applying the MIS, the expectation of such computer system can be fulfilled that enable the management incorporate appropriate information into decision making processes.
Another additional method for the company can be the implement of the Decision Support Systems (DSS). The DSS is beneficial when there is a lack of interpersonal communication or the company is becoming less competitive in its business. For Starbucks,
- The decisions and recommendations have been adopted by Starbucks. They planned to retain customer loyalty and respond to rumors by improving customer service. Therefore, the job of me is listed as follows.
- Identification of the personnel, including customers, stakeholders and other contacts, with the relevance to business relationship of Starbucks.
Starbucks’ stakeholders can be identified as employees, customers, suppliers, farmers, shareholders, governments, community members, environmental groups, activists and so on. These stakeholders of Starbucks have been specified as follows.
According to the record, Starbucks has approximately 137,000 employees worldwide. Their jobs are not solely keen on the coffee shops’ operations which are located around the globe; moreover, they participated in a series of voluntary programs. For example, as the 2005 struck of Hurricane Katrina in New Orleans, United States, employees of Starbucks participate in the reconstruction of New Orleans. They worked on various projects, including houses, planting trees and an urban garden. (en.wikipedia.com) Their efforts helped Starbucks to make a positive effect on its public relations in business.
These are the people who constantly visit the store of Starbucks. Enjoyment of their trip could be of extraordinary importance to the company. As for the nature of customers, Starbucks provided different kind of methods for them in order to make contact more easily and effective with them, such as phone, regular mail or e-mail services. These could be used as feedback channels for monitoring the company’s performance as a fundamental method to Starbucks’ business.
It is essentially important that to make sure Starbuck’s suppliers fully aware of the needs required by the company and keep a permanent and positive relationship with qualified ones. Therefore, the Starbucks Coffee Sourcing Guidelines (CSGs) are issued, which have ended the company’s previous two-year pilot. The CSGs basically “aim to set standards for producers, which, if achieved, guarantee a premium price for their coffee crop.” (www.greenbiz.com) As a result, in order to successfully get the premium price, the suppliers must make sure that they have made the checking on their own to meet the requirements of the Guideline, which also includes additional taste tests by Starbucks. This is an endeavor made by Starbucks in its business that to keep the constant high quality on its brand through suppliers.
Fair trade has played an important role in this kind of stakeholders. As a matter of fact, Starbucks purchases coffee from farmers in 29 different countries. Once farmers have achieved multiple qualifications which set down by the Fair Trade Foundation and Starbucks practices, the company will therefore buy their coffee at a higher than market price and make sure of the contentious purchases in the future. () Resulting from this, the farmers get more stability and security on whether or not their crops will be sold and, as mentioned previously, they are able to get the premium price if they followed the Starbucks Coffee Sourcing Guidelines. This is not only for making sustain supplies in Starbucks’ business, but also for farmers’ benefits and their motivation on supplying quality coffee corns.
Starbuck’s shareholders will be given dividends and they have the right to vote on the company’s initiatives.
Issues of Starbucks sometimes need the support of municipal governments.
“Every Starbucks is a part of community.” () This is a belief held by the company. In other words, Starbucks believes that being good neighbors and helping them thrive would be the commitment wherever we do business.
As we all are living on the same and only planet, ecological considerations must be taken. There are indeed some customers of Starbucks who care about environments ask about the paper cups used. In struggling with reducing environmental impacts by the company, these questions could be answered, not only for the customer in the business but also for the earth we live in where we run business. Therefore, in order to accurately and adequately spend the time and money on environmental issues, it requires the partnership of the environmental groups for support.
Consumer activists are the people who could give the up-to-date information on Starbucks activities through a range of Internet communication tools, such as Facebook, Twitter, MySpace and other online communication services.
- Development of business networking, by appropriate methods, from the contact made with the identified sources.
- Business networking with stakeholders can be formulated as shareholders meeting.
By definition, a meeting is “a group of people coming together for the purpose of resolving problems and making decisions.” (Management 2004: 502) As for Starbucks, the shareholders’ meeting, as always, is organized by the company that encourages attendances of its shareholders every year. (www.starbucks.com) The meeting can either be attended on-spot at a chosen place by the company or as convenient as logging on to a webcast of the meeting on the Internet, wherever you are. In this way, shareholders of Starbuck are given the chance to acquire a review of the company’s recent performance, vote on some business proposals and ask some questions they have in mind with answers given.
- Business networking with stakeholders could be formed through Internet by the Starbucks Digital Network.
The Starbucks Digital Network, in partnership with Yahoo!, The Economist, ESPN Insider and other websites yet to be established, create the opportunity that, by serving up a collection of news, entertainment, lifestyle and other channel contents, a dynamic and flexible way to make a business network. (www.sjrtmdl.org) In spite of a series of channels which are included in the network, a section called My Starbucks Idea virtually made the innovation endeavors to anyone, who can use Internet and are interested in Starbucks business, to participate with their spear time favorably fulfilled and their valuable ideas given for the company.
- Presentation of ideas on achieving better decision making by involving the identified personnel.
Starbucks “empowers all partners to make decision.” (assets.starbucks.com) From Starbucks’ existing stakeholders, there is a better way in which decisions of the company can be made as “decision making lies at the heart of business activity.” ()
The purpose of adopting decision making process is to assist the committee involved in the company make decisions important to advancing its mission and goals in a “consensus-building stakeholder process.” () According to this, the importance of Stakeholder’s involvement in the company’s decision making process has been revealed.
As the stakeholders of Starbucks are identified, they could be participated in the problem solving process of the company. In other words, if the company is able to involve them and make the most benefits out of them, there will be better outcomes as the problems are solved.
They can be involved in Starbucks’ decision making by formal meetings such as in-house conference of Starbucks. It can either be horizontal, which called for “members of a certain status level” (Management 2004: 504); or vertical, which related to “members of different status levels.” (Management 2004: 504)
As a relatively important kind of stakeholders, customers can be involved in Starbucks decisions making by meetings. The annually held meeting with customers would sometimes come up with shareholders’ proposal which plays an important part in the company’s goal setting. For instance, one of the proposals called “As You Sow” made a requirement in which customers ask the company to “keep track of how many customers use disposable versus ceramic cups.” (seattletimes.nwsource.com) Later, it has become one of Starbucks goals.
Decision making processes can be made by letting suppliers to join in through the method of coaching. As previously mentioned, the Starbucks have issued the Starbucks Coffee Sourcing Guidelines (CSGs). However, in practice, the CSGs may cause delay and doubt in suppliers as a result of, say, lack of training. As a consequence, coaching, as “a specialized form of communication,” (Management 2004: 509) has been applied to them by providing training assistances according to the CSGs. Having such method in place, the managers of Starbucks then held a clear picture of the qualification of suppliers for making decisions on purchasing from them.
- Creation of strategies which contributes to personal networking for dissemination of Starbucks’ experiences and brand value.
A personal network is “a set of human contacts known to an individual.” (en.wikipedia.com) Between individuals, the interactions are made and a set of activities are supported. In other words, it is to make the relationship between individuals mutually beneficial through personal networking which is “the practice of developing and maintaining a personal network.” (en.wikipedia.com)
In order to give the customers more experiences, hence increase the brand value, from Starbucks, there are several approaches can be made through personal networking.
Due to the boom of Internet in the 21st century, in reality, online services in present days are deemed to be the most cost-saving and constructive method for personal networking. Accordingly, for the purpose of making relationship with Starbucks’ customers as a friend, the existing Starbucks Digital Network can be expanded by the following steps. First, as the current partnership of Starbucks Digital Network is limited to the relationship with Yahoo!, The Economist and ESPN Insider; there could be an expansion that makes some popular communication websites in partnership with the company. It is to make the development channels in spite of current ones. Such websites include YouTube, on which video channel is able to be made for uploading videos related to Starbucks; Facebook, the largest social network on earth where everyone can add Starbucks as a “friend”, if the company has made a page for “herself”, and share their views with the mutual friends of the company, then a network for sharing thoughts has coincidentally be made and Twitter, as a method which provides on-the-run updates for news and events of Starbucks. Then, if it is in the capability of Starbucks, the Network can be expanded to public media, such as movies, music and TV. The purpose of this is to connect Starbucks with the daily lives of customers. For suggestion, the company could either made its own films or soundtrack albums relating to the sense and satisfaction of the experiences in Starbucks, or opens a Starbucks TV channel for broadcasting programs made independently or by third-party that spreads the coffee culture, say, a documentary program can be made for the knowledge of coffee or introducing what the life style is all about in Starbucks. Last, the approach of receiving and responding of the feedbacks through previous steps should be made.
In conclusion, the undermined brand value of Starbucks resulted from the central point of only the economic efficiency rather than customers. It has also damaged the relationship between Starbucks and its stakeholders. The incident of Starbucks has taught the company a valuable lesson that the factors which affect the successfulness of the company cannot solely narrowed in how to make profit through selling. In fact, it could even adversely influence the company’s growth, as it has been shown in the case. Rather than that, figuring out ways that makes customers could truly felt and found the focus of Starbucks on them is of greater importance. Starbucks should make herself not only to be expensive but experienced as the best thing of a journey, to Starbuck, is not the goal, of getting a cup of coffee; it’s the experience within the journey that makes that best of all.
Reference:
BPP Professional Education, Management, London, Aldine House, 2004