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Case: StarbucksPlanning

All managers plan. The planning they do may be extensive, or it may be limited. It might be for the next week or month, or it might be for the next couple of years. It might cover a work group, or it might cover an entire division or the entire organization. No matter what type or extent of planning a manager does, the important thing is that planning takes place. Without planning, there would be nothing for managers to organize, lead, or control.


Based on Starbucks's numerous achievements, there's no doubt that managers have done their planning. Let's take a look.


Company Goals

In April 2017 Starbucks released its plans to make a sustainable impact by 2020 and beyond in four areas:

  1. SUSTAINABLE COFFEE: Serve 100 percent ethically sourced coffee; provide 100 million tress to farmers by 2025; invest $50 million in financing for farmers; and train 200 000 coffee farmers to improve long-term sustainability of their crops.
  2. GREENER RETAIL: Double the recycled content, recyclability, and reusability of Starbucks cups; by 2025 build and operate 100 000 greener retail stores; invest in 100 percent renewable energy at the store level; and empower 10 000 partners to be sustainability champions.
  3. CREATE OPPORTUNITIES: By 2025, hire 25 000 veterans and military spouses; have 25 000 graduates from the College Achievement Plan; employ 100 000 Opportunity Youth (aged 16-24 and neither employed nor in school); and hire 100 000 refugees globally.
  4. STRENGTHEN COMMUNITIES: Rescue 100 percent of food available in U.S. stores to donate through the Food Share program; have 100 percent of Starbucks stores globally participate in community service each year.


Company Strategies

Starbucks has been called the most dynamic retail brand of the last two decades. This appellation is a reflection of the success that Howard Schultz had in creating something that never really existed in the North America—café life. And in so doing, he created a cultural phenomenon. Starbucks is changing what we eat and drink. It's shaping how we spend our time and money.

Starbucks has found a way to appeal to practically every customer demographic because its customers come from a broad base. It's not just the affluent or the urban professionals, and it's not just the intellectuals or the creative types who frequent Starbucks. Despite the high price of its products, customers pay it because they think it's worth it. What they get for that price is some of the finest coffee available commercially, custom preparation, and, of course, that Starbucks ambiance—the comfy chairs, the music, the aromas, the hissing steam from the espresso machine—all invoking that warm feeling of community and connection.


Here's something you might be surprised at. You can expect to get carded at your neighbourhood Starbucks soon. What? Starbucks is making a more intentional move into wine and beer sales. The company tested the concept at a single Seattle store in 2010 and now offers alcohol at 26 locations, where store sales have shown a significant increase during the time of day when alcohol is offered. The "Starbucks' Evenings" concept offers selected adult beverages (beer and wine tailored to regional taste preferences) and an expanded food menu after 4:00 p.m.


Starbucks's loyalty program continues to distinguish it from competitors'. My Starbucks Rewards™ has almost 7 million active members with more than $4 billion loaded onto the cards. And the company has made a huge investment in mobile payments, accounting for more than 4 million transactions every week in the United States. Its Starbucks Card apps for Android phones and iPhones have been hugely popular. Eventually, customers will be able to charge their order to their credit card simply by saying their names.


Discussion Questions

  1. Discuss the types of growth strategies that Starbucks has used. Be specific. What competitive advantages do you think Starbucks has? What will it have to do to maintain those advantages?
  2. What companies might be good benchmarks for Starbucks? Why? What companies might want to benchmark Starbucks? Why?
  3. Describe how the following Starbucks managers might use forecasting, budgeting, and scheduling (be specific): (a) a retail store manager; (b) a regional marketing manager; (c) the manager for global development; and (d) the CEO.
  4. What ethical and social responsibility issues can you see with Starbucks's decision to sell alcohol after 4:00 p.m.? Think in terms of the various stakeholders and how those stakeholders might respond to this strategy.

Step-by-step answer

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