A Brief History of Starbucks

Starbucks has always been the place to find the worlds

best coffees. But in 1971, you would have had to travel all the
way to our only store in Seattles historic Pike Place Market.

The first Starbucks opens. The name

comes from Herman Melvilles Moby
Dick, a classic American novel about
the 19th century whaling industry. The
seafaring name seems appropriate for
a store that imports the worlds finest
coffees to the people of Seattle.

Howard Schultz joins Starbucks in

1982. While on a business trip in Italy,
he visits Milans famous espresso bars.
Impressed with their popularity and
culture, he sees their potential in
Seattle. Hes right after trying lattes
and mochas, Seattle quickly becomes
coffee-crazy.

The demand for great coffee allows

Starbucks to expand beyond Seattle,
first to the rest of the United States
and North America then further a field.
After becoming one of the first
speciality coffee companies to offer
both stock options and health benefits

to all its partners, Starbucks becomes a

publicly traded company.

The Starbucks phenomenon continues.

At the time of writing, Starbucks has
more than 15,500 locations in more
than 43 countries. In addition to
excellent coffees and espresso drinks,
people enjoy Tazo tea and
Frappuccino ice blended beverages.

Organizational Structure
Starbucks has a matrix organizational structure, which is
a hybrid mixture of different features from the basic types of
organizational structure. The following are the main features
of Starbucks Coffees organizational structure:
1. Functional Structure. The functional structure feature of
Starbucks Coffees organizational structure refers to
grouping based on business function. For example, the
company has an HR department, a finance department
and a marketing department. These departments are
most pronounced at the top levels of Starbucks Coffees
organizational structure, such as at the corporate
headquarters. This feature relates with hierarchy in the
organizational structure of Starbucks. For instance, the
corporate HR department implements policies applicable
to all Starbucks cafs. The functional structure feature of
the firms organizational structure facilitates top-down
monitoring and control, with the CEO at the top.

2. Geographic Divisions. Starbucks Coffees organizational

structure also involves geographic divisions. At present,
the company has three regional divisions for the global
market: (a) China and Asia-Pacific, (b) Americas, and (c)
Europe, Middle East, Russia and Africa. Also, in the U.S.
market, Starbucks Coffees organizational structure
involves further geographic divisions: (a) Western, (b)
Northwest, (c) Southeast, and (d) Northeast. Each
geographic division has a senior vice president. In this
way, each Starbucks manager reports to two superiors:
the geographic head (e.g. President of U.S. Operations)
and the functional head (e.g. Corporate HR Manager). This
feature of Starbucks Coffees organizational structure
supports closer managerial support for geographic needs.
Each division head is given a high degree of flexibility in
adjusting strategies and policies to suit specific market
conditions.
3. Product-based Divisions. Starbucks also uses productbased divisions in its organizational structure. These
divisions address product lines. For example, Starbucks
has a division for coffee and related products, another
division for baked goods, and another division for
merchandise like mugs. This feature of the firms
organizational structure enables focus on certain product
lines. In this way, Starbucks effectively develops and
innovates its products with support from its
organizational structure.
4. Teams. Teams are used in different parts of Starbucks
Coffees organizational structure. However, teams are
most notable at the lowest organizational levels,
particularly the Starbucks cafs. In each caf, the firm has
teams organized to deliver goods and service to
customers. This feature of Starbucks Coffees
organizational structure enables the company to provide
effective and efficient service to consumers

Line of Business

Starbucks offers a range of exceptional products that

customers enjoy in our stores, at home, and on the go.
Coffee: More than 30 blends and single-origin premium
coffees.
Handcrafted Beverages: Fresh-brewed coffee, hot and
iced espresso beverages, Frappuccino coffee and noncoffee blended beverages, Starbucks Refreshers
beverages, smoothies and teas.
Merchandise: Coffee- and tea-brewing equipment,
Verismo System by Starbucks, mugs and accessories,
packaged goods, books and gifts.
Fresh Food: Baked pastries, sandwiches, salads, salad and
grain bowls, oatmeal, yogurt parfaits and fruit cups.
Consumer Products
Coffee and Tea: Whole bean and ground coffee
(Starbucks and Seattles Best Coffee brands),
Starbucks VIA Instant, Starbucks Coffee K-Cup
pods, Starbucks and Teavana Verismo pods,
Tazo tea filterbags, and Tazo tea latte
concentrates.
Ready-to-Drink (RTD): Starbucks bottled
Frappuccino coffee drinks, Starbucks Discoveries
chilled cup coffees, Starbucks Discoveries Iced Caf
Favorites, Starbucks Iced Coffee, Starbucks
Doubleshot espresso drinks, Starbucks
Doubleshot Energy Coffee drinks; Starbucks
Refreshers beverages, Evolution Fresh bottled
juices, Tazo bottled iced and juiced teas.

What countries they link in

Starbucks stores are a neighborhood gathering place for
meeting friends and family. Starbucks customers enjoy quality
service, an inviting atmosphere and an exceptional beverage.

Total stores: 22,519* (as of June 28, 2015)

Argentina, Aruba, Australia, Austria, Bahamas, Bahrain,
Belgium, Bolivia, Brazil, Brunei, Bulgaria, Canada, Chile, China,
Colombia, Costa Rica, Curacao, Cyprus, Czech Republic,
Denmark, Egypt, El Salvador, Finland, France, Germany,
Greece, Guatemala, Hong Kong, Hungary, India, Indonesia,
Ireland, Japan, Jordan, Korea, Kuwait, Lebanon, Macau,
Malaysia, Mexico, Monaco, Morocco, Netherlands, New
Zealand, Norway, Oman, Panama, Peru, Philippines, Poland,
Portugal, Puerto Rico, Qatar, Romania, Russia, Saudi Arabia,
Singapore, Spain, Sweden, Switzerland, Taiwan, Thailand,
Turkey, United Arab Emirates, United Kingdom, United States
and Vietnam.

Operations System
1. Design of Goods and Services. Starbucks emphasizes
premium design for its goods and services. The premium
character is linked to the companys broad differentiation
generic strategy, along with its premium pricing strategy.
Other firms, such as manufacturers, are also involved in
the design of some goods like Starbucks mugs. In this
decision area of operations management, Starbucks
ensures that its goods and services reflect the firms highend brand image.
2. Quality Management. Starbucks also uses the premium
character in quality management. For instance, the
company carefully sources its coffee beans from coffee
farmers who comply with Starbucks quality standards.
The firm also prefers to buy coffee from farmers certified
under the Starbucks Coffee and Farmer Equity (CAFE)
program. Premium quality service is ensured through
servant leadership and a warm friendly culture. In this
decision area of operations management, Starbucks
implements high quality to align with the firms premium
brand image.

3. Process and Capacity Design. Process and capacity

efficiency is one of the contributors to Starbucks success.
The companys processes are highly efficient, as
observable in its cafs. Also, Starbucks optimizes capacity
and capacity utilization by designing processes to meet
fluctuations in demand. For example, processes at the
firms cafs are flexible to adjust personnel to a sudden
increase in demand during peak hours. In this decision
area of operations management, Starbucks aims to
maximize
cost-effectiveness
though
efficiency
of
workflows and processes.
4. Location Strategy. Starbucks location strategy focuses on
urban centers, especially those with large middle and
upper class populations. Most of its cafs are in densely
populated areas. Also, Starbucks occasionally uses
strategic clustering of cafs in the same geographic area
to gain market share and drive competitors away. This
decision area of operations management shows that
Starbucks emphasizes areas with affluent consumers who
could afford its premium priced products.
5. Layout Design and Strategy. The layout design of
Starbucks cafs maximizes workflow efficiency. It also
supports a warm and friendly ambiance to match the
companys organizational culture. This layout strategy
does not maximize space utilization for tables and seats
because Starbucks focus is on premium customer
experience, which involves higher prices for more leg
space in the cafs. In this decision area of operations
management, Starbucks prioritizes customer experience
over space utilization.
6. Job Design and Human Resources. Starbucks human
resource management integrates organizational culture in
all areas of the business. This organizational culture
involves the employees-first attitude that cares for
Starbucks workers. Also, at the cafs, the company uses
work teams of baristas. In other parts of the organization,
Starbucks uses functional positions, such as HRM
positions and inventory management positions, with less

emphasis on work teams. In this decision area of

operations management, the focus is on ensuring that the
Starbucks culture is woven into every job, while satisfying
basics on technical specifics of tasks.
7. Supply Chain Management. Starbucks Coffees supply
chain is global, although majority of the companys coffee
beans come from farmers in developing countries. The
companys strategy for its supply chain involves
diversification of suppliers to ensure stability of supply.
Starbucks also uses its Coffee and Farmer Equity (CAFE)
program to select and prioritize suppliers. This program
uses criteria for ethical practices, including emphasis on
sustainability. Thus, in this decision area of operations
management, Starbucks integrates ethics and corporate
social responsibility with supply chain efficiency.
8. Inventory
Management.
Inventory
management
at
Starbucks is linked with the firms supply chain and
various facilities. At the cafs, inventory management
involves office automation and manual monitoring. In
Starbucks
supply
hubs,
automation
is
more
comprehensively used. The company aims to minimize
stockout and ensure continuous supply of coffee beans to
its cafs. Starbucks addresses this decision area of
operations management by focusing on supply adequacy
and automation.
9. Scheduling. Starbucks uses automated and manual
scheduling approaches for its various business activities.
The company also applies flexible schedules for
management personnel. This decision area of operations
management relates with Starbucks in terms of the firms
objective of streamlining processes, while allowing some
degree of flexibility among management positions in the
organization.
10.
Maintenance. Starbucks maintains its physical assets
through dedicated teams of employees trained for
maintaining facilities and equipment, as well as third
parties that offer maintenance services. These third

parties include local businesses that provide equipment

tune-ups for Starbucks cafs. In addition, the company
maintains its human resource capacity through training
and retention strategies that include relatively high
compensation. Thus, Starbucks addresses this decision
area of operations management through the involvement
of caf personnel, dedicated maintenance teams, and
third-party service providers.

OUR STARBUCKS MISSION

To inspire and nurture the human spirit one person, one cup,
and one neighborhood at a time. Here are the principles of how
we live that every day:

Our Coffee
o It has always been, and will always be, about quality.
Were passionate about ethically sourcing the finest
coffee beans, roasting them with great care, and
improving the lives of people who grow them. We
care deeply about all of this; our work is never done.
Our Partners
o Were called partners, because its not just a job, its
our passion. Together, we embrace diversity to create
a place where each of us can be ourselves. We
always treat each other with respect and dignity. And
we hold each other to that standard.
Our Customers
o When we are fully engaged, we connect with, laugh
with, and uplift the lives of our customers even if
just for a few moments. Sure, it starts with the

promise of a perfectly made beverage, but our work

goes far beyond that. Its really about human
connection.
Our Stores
o When our customers feel this sense of belonging, our
stores become a haven, a break from the worries
outside, a place where you can meet with friends. Its
about enjoyment at the speed of lifesometimes
slow and savored, sometimes faster. Always full of
humanity.

Our Neighborhood
o Every store is part of a community, and we take our
responsibility to be good neighbors seriously. We
want to be invited in wherever we do business. We
can be a force for positive action bringing together
our partners, customers, and the community to
contribute every day. Now we see that our
responsibilityand our potential for goodis even
larger. The world is looking to Starbucks to set the
new standard, yet again. We will lead.
Our Shareholders
o We know that as we deliver in each of these areas,
we enjoy the kind of success that rewards our
shareholders. We are fully accountable to get each of
these elements right so that Starbucksand
everyone it touchescan endure and thrive.

Onward.

Assignmen
t
In

Humanities
3
( 9:30 10:30 MWF )

Submitted By: Moriel Handugan

Threcia Mae Emperado
Submitted To: Ms. Michelle Trangia