Bucharest univeristy of economic studies faculty of international business and economics

Starbucks Corporation

project

Student: Curelea Elena-Alexandra

Group 933

Starbucks

1 .Company profile

Starbucks Corporation is an international coffeehouse chain based in Seattle, United

States with more than 16,000 stores in 60 countries, including around 11,000 in the

UnitedStates, followed by nearly 1,000 in Canada and more than 800 in Japan.The company’s

main objective is to establish the company as the "most recognized and respected brand in the

world."

It sells drip brewed coffee,espresso-based hot drinks, other hot and cold drinks, snacks,

and items such as mugs and coffee beans. Through the Starbucks Entertainment division and

Hear Musicbrand, the company also markets books,music, and film. Many of the company's

products are seasonal or specific to the locality of the store

Starbucks’ Italian style coffee, teas, pastries and confections had made Starbucks one of

the greatest retailing stories of recent history and world’s biggest specialty coffee chain.

2. Organization and strategy

Starbucks uses a matrix configuration by combining divisional and functional structures.

Because of the complexity of matrix structures, Starbucks is categorized as a mechanistic

organization, which entails high formalization, high centralization, narrow spans of control, and

high standardization.

Amongst Starbucks many achievements is its spot of being the best coffee in the fast food

and quick refreshment categories and one of the world’s most ethical companies

(starbucks.com). Its performance as a multinational firm has increased over time and led to the

expansion in global operations. The recession ,althought , was a major factor that impacted the

company’s position . Althought it had a new growth strategy — more revenue with lower costs,

Starbucks has closed 900 stores and eliminated 34,000 jobs .

The turnaround for Starbucks started with the restructuring of management where the

former chief executive Howard Schultz took back the role and set the company’s focus on core

markets. The company’s new strategy was to refocus on some of the areas that decrease risk and

up front investment. This included expanding foreign stores, with aid of partnerships that share

risk and costs, selling VIA instant coffee and other products in retail and convenience stores, and

reinvigorating the Seattle’s Best Brand coffee .Starbucks went back to its roots by focusing on

customer service , which was neglected during the period of rapid expansion . All these

decisions helped contribute to the increase in sales and profits rising to high levels once again.

In July 2011, the company announced a new structure that included three-regions, each

of which is headed by a president who answers to Starbucks Global.   The 3 divisions are: China

and Asia Pacific, America and the EMEA which includes Europe, Middle East, Russia and Africa .

The president of each region is responsible for working with all licensed Starbucks

stores as well as joint ventures within the organization.  They are also working closely with

Starbucks Global Consumer Products and Food Service Team in order to continue to be

successful.  Regional managers allow the company to meet consumer-specific needs in each

region while maintaining the overall mission of Starbucks – “to inspire and nurture the human

spirit-one person, one cup and one neighborhood at a time.”

While it successfully operates under a matrix structure, the company also has a divisional

structure as far as its products are concerned.  All products are grouped under the Starbucks

company umbrella and divided into five main groups:

1. Coffee: 30+ blends and single-origin premium Arabica coffees

2. Handcrafted Beverages: fresh-brewed coffee, hot and cold beverages, Frappuccino,

smoothies, and Tazo teas

3. Merchandise: brewing equipment, mugs and accessories, packaged goods, music, and

books

4. Fresh Food: baked pastries, sandwiches, salads, oatmeal, yogurt parfaits, and fruit cups

5. Consumer Products: coffee – whole bean and ground, instant coffee, and ice cream

4. Conclusion

In conclusion, having assessed the evidence concerning Starbucks decision to

internationalise, the internal and external environment and its impact on the company, itis fair

to conclude that the company is in a strong position to expand especially after successfully

scaling through the effects of the financial crisis while learning to be lean and efficient in the

process.