Starbucks Case
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1. Entrance into China – Organisational Agility
Starbucks understands the demographics of different countries and tailor their strategies to suit the local culture.
Eg, Strong tea-drinking culture in China: Starbucks came up with tea-flavoured coffee in the menu.
Chinese prefer chatting over coffee as opposed to the take-out culture in the US. Thus Starbucks provided dine-in services in the Chinese market.
Handled the Forbidden City controversy well by closing the outlet there out of respect for the countrys belief and values.
2. Decentralised management leads to managers having autonomy but may lead to discrepancies in how things are done (between different stores in different countries) (eg. breastfeeding controversy)
Starbucks facilities are decentralized in meaning they take advantage of the division of labors and decision making. They share development, growth, and success with their shareholders, managers, and employees. This in return empowers their employees and allows them to work towards a common goal; they take ownership in their ideas and contributions. Because Starbucks is de-centralized this also progresses their performance by allowing the employees to improve deficient or proficient areas without consent from the top of the chain. All decisions are made store by store.
Eg, Starbucks – frappe was created by a mid-level manager in Southern California and has contributed 20% of the $11 billion in revenue for Starbucks in 2010
3. Managerial decision making – Lewins change model (before and after Schultzs regime)
Starbucks was just a company that sold coffee beans and equipment. It ventured into the beverage business after current CEO Howard Schultz took over.
Some changes Schultz proposed under his management:
Discontinuing the use of pre-ground coffee as grinding of whole coffee beans within the store would add aroma to the store
Introduced the concept of “Coffee of the Day” as well as seasonal beverages
They introduced Starbucks ice-cream for coffee lovers who also loved ice-creams & Frappucinos (sealed bottles of cold coffee)
4. Supply chain management
Bureaucratic control system >> Starbucks sets specific performance standards for its suppliers to meet >> ensures that products received are of certain standards
Coffee beans, recyclable cups
Reorganized its supply chain organization, simplifying its structure and more clearly defining functional roles
Various departments turned their attention to the second objective of the supply chain transformation: reducing costs (able to negotiate costs) and improving efficiencies.
5. Organisational culture (Competing Values Framework) and corporate