Starbucks Company Analysis

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1. Company History

Starbucks was founded in 1971, opening its first store in Seattle's Pike Place Market. Growing to only five stores up to 1982, the company hired a marketer, Howard Schultz, but rejected his ideas. As a result he opened his own coffee bar in 1986 based on Italian coffee cafes. A year later, he expanded to three stores and bought Starbucks for $4 million from the original owners and under him Starbucks steadily grew. Today, Starbucks has expanded to more than 7,300 stores worldwide with approximately 25 million people visiting its stores every week.

2. The Mission of the Company

Starbucks Mission Statement: "Establish Starbucks as the premier purveyor of the finest coffee in the world; maintaining our uncompromising principles while we grow".

The Starbucks mission statement was put forward by Howard Schultz. He guided Starbucks using this statement, resulting in success as the company flourished worldwide. He also describes the statement as being "an organic body of beliefs". Starbucks have also developed six guidelines to help them measure the aptness of their decisions:

- Provide a great work environment treating each other with respect and dignity.
- Embrace diversity.
- Highest standard of excellence.
- Develop enthusiastically satisfied customers.
- Contribute positively to communities and the environment.
- Profitability is essential to future success.

Starbucks has a separate mission statement to satisfy its commitment to the environment which is: "Starbucks is committed to a role of environmental leadership in all facets of our business". They developed seven guiding principles that would help them accomplish this mission:

- Developing innovative and flexible solutions.
- To buy, sell and use environmentally friendly products.
- Fiscal responsibility is vital to environmental future.
- Establishing environmental responsibility as a corporate value.
- Measuring progress for each project.
- Encouraging all partners to take part in the mission.

3. The Formal Structure

Starbucks has maintained a relatively flat organizational structure, avoiding a hierarchy as they consider their employees to be one of their most important assets. With this structure, employees are more involved through cross-functional work teams. The flexibility of the structure is noted as employees are encouraged to think of themselves as part of the business and to make decisions without having to refer to the management.

However this does not mean that Starbucks does not have a top governing body as the office of the chairman and the board of directors are at the top of the decision making process. This primary governing body also reflects the flexibility of the structure as it considers contributions from other senior level executives such as the senior vice president of human resources. Aside from the flat structure, Starbucks also incorporates a functional-based division into the system which includes various divisions that ...