Executive Summary of Starbucks

SUMMARY OF Howard Schultz Building Starbucks Community This text speaks about Howard Schultz and how he built a Starbucks Community. * Early Years This man was the oldest of three children in a modest family of Brooklyn. Indeed, his father combined 3 different jobs to support his family. His mother was a homemaker who transmits her determine to her children. She was a strong-willed person who wants a good future for her children with the respect of these values. Her dearest wish was that all go to college. Howard, who believes in the Ameri rump dream, felt that he had to plan his own future because he didnt want to stay in Brooklyn.Indeed, he met many different people who came from different backgrounds. He said that Diversity isnt something I had to learn. I lived it. Its a point which influenced his future behavior. During his teenage, Howard and his father clashed often. He will discern later that sometimes you learn lessons, but you dont realize them in the moment. But at the time he thought that his father could have accomplished so much more if only he had attempt. This cancel leadership ability stood out in the schoolyard. The Sports domain was the example.Indeed, it allows him to have a scholarship until University in Northern Michigan. after(prenominal) graduating, Schultz made a sales trainee in New-York in Xerox. Despite a good income, he didnt like this job for several reasons This Company was too bureaucratic, strict and austere and he didnt have a voice. Finally, he didnt find a link between this fraternity and his values. * Creating Starbucks Howard had already works in the subject field of coffee. So one day, he was encountered Starbucks Coffee and was very sensitive to the product and the business.He said that he felt he had discovered a whole untried continent. After that, he joined Starbucks as a director of operations and marketing. He saw the enormous harvest-time potential of this Company especially in the gourmet and food market s. He realized that during a shift to Italy. Indeed, he noticed the unique community experience that Milanese espresso bars played in their customers daily lives. He will be based on this model to launch his own business Il Giornale. This business was a chain of espresso cafes from Starbucks in downtown Seattle. It had three locations but had not yet turned a profit.So for answer to this problem, Schultz planned to consolidate the refreshfulfangled company with the name of Starbucks Corporation. Indeed, this name was so known by customers. But the development of this business wasnt so simple. The firstly in which Schultz has faced was the following One of these original investors proposed to purchase Starbucks instead, on terms that would have dramatically veerd his stake and that of his other investors. Furthermore, investors put pressure on Schultzs head. They said If you dont take this deal, youll never work in this town again. Youll never raise another dollar.Youll be dog meat. As a leader, Howard Schultz didnt renounced. He prepared an secondary plan cancelled the dilution and he managed. * Growing Starbucks The fathers death of Howard Schultz has completely changed his state of mind. He realized that his fathers life wasnt the same as hers. In those days on that point was no health insurance and no workmens compensation. So, he decided to make Starbucks the first American company to provide access to health coverage for qualified employees. Indeed, this event is directly linked to the culture and the values of Starbucks.He precious to build the king of company that his father never had a chance to work for, where you would be valued and respected no matter where you came from, the color of your skin, or your lever of education. He wanted to build a company that linked shareholder value to the cultural values that he created with the other employees of the company. The original business plan of Starbucks provided 125 new pedigrees in five year. I n the first year, the company had already open 15 stores in Northwest cities with a strong coffee culture. The addition was running.And for occur at this pace, Schultz recruited Howard Behar, an executive 10 years his senior who had 25 years of retail experience. His assignment was to innovate in response to customer requests and develop the customer experience. In an other hand, Starbucks managemented its upkeep into values and culture of the stores, reasoning that satisfied and happy baristas made for satisfied customers. For continuing in this way, Schultz was aware that growth is intoxicating and seductive but also that it covers up a tremendous amount of mistakes.To solve this problem, he shared power with others. Indeed, Schultz & Behar wanted to stay in the way of their values so they decided to codify the values in the company mission and values statement. Its important for the two leaders to share the culture of the company in each Starbucks stores. This is what distin guishes this company from others and allows it to continuing growth. For reach this terminal, in that respect were two key The first was to hire people with like-minded values and the second was to reinforce the values and culture of the company.The elaborateness of Starbucks qualification this own language into a common usage (like latte, half-caf). Schultz was also proud of making difficult choices to pass up certain growth opportunities and to stay focused. The new way adopted by Starbucks was to explore marketing carefully selected. For example, they were experimenting to combined melody and coffee stores and other entertainment ventures. It was a success. * Staying Grounded As an entrepreneur, Schultz should be irreproachable. For being that, he should learn several things like to manage vulnerability and doubt.But for understand him there werent a lot of people. So he decided to talk with Warren Bennis, a widely respected leadership and with a rabbi, during a trip in Isra el, where he had learned about the power of humility. These lessons helped Howard to understand that success is best when its shared and be better in his business. * Whither Starbucks and Schultz? The hope of Howard Schultz is that Starbucks can be a model for building a company the right way. Especially he wants that the size of the company cant erase the integrity.Its an illustration of the state of mind of Schultz. He took advantage of every opportunity for delivering his message like in leadership conferences for his store managers in which he focus on people and the merciful connection, not on numbers. He also focused on the consumer especially on customer experience. The brand wants to have a big place in customers life because it pretends that it wants to be the third place in customers lives between the home and the office. For that, Starbuck offers a global persist from coffee to CDs with the music that you can find in Starbucks stores.To combine these two ambitions, Star bucks responds to customer demand which is Hungry for humanity and authenticity. * The Schultz E-mail After the big success of Starbucks, Howard Schultz was worried about one important thing for him With the growth, Starbucks could lose the personal feeling of the neighborhood coffeehouse which Howard Schultz wanted to create. Indeed, at his arrival, his goal was to develop Starbucks as a model company including financial performance and mainly the respect of the human relationship. But this ambition wasnt simple to gull in the reality.Indeed, Starbucks had become the fastest growing chain in the history of retailing The brand began with three stores in Seattle for reach, twenty years ago, 40,000 outlets worldwide. This phenomenal expansion allows Starbucks to engage in competition with the big company like McDonalds and Dunkin Donuts. Despite this success in financially field, a question for Schultz was essential Had Starbucks lost its sense in the process of becoming a global br and? For having an answer, Schultz decided to send an E-mail to Jim Donald, Starbucks new CEO, with copies to members of the executive team.In his mail, Schultz explained his point of view about the accompaniment of Starbucks at this moment. He said that the growth had not a good effect in the customer experience. He described Starbucks with the sterility and the uniformity of store decor. The turnover is the first priority than the small coffee heritage of the brand and compromised the passion for coffee. He send this mail and waited the response of the senior team. Schultz memorandum was published on Starbucks Gossip, a web site about Starbucks, the experiences and opinions of the customers and employees. So, we could find some rumors in this about the company.But when the memo was public, the corporate communication had tried to manage the crisis and the solution was to post a confirmation that the memo was authentic. For keeping a good image, Starbucks decided to position this memo as a new way of the company. Indeed, it explained that Starbucks reinventing itself, saying it reflected the companys philosophy that ongoing success was not automatically a given. It created a go on internet and in Press. The Wall Street Journal dedicated an article about Schultzs memo with 1,500 words and some blogs like BusinessWeek. om, Bloomberg. com * Joe Noceras Challenge The buzz continued two weeks later when the business journalist for New York Times, Joe Nocera, wrote an article about Howard Schultz in his column Talking Business. He focused his attention on the two personalities of Schultz. So the name of article was Two Howard Schultz. First, he described Schultz as a sensitive man who is attached on humans values in his company with health assurance for employees, and coffee experience for customers. The article speaks about the huge social responsibility program completed by Schultz.But in a second time, he described a face completely different of Howard Schu ltz. For him, Schultz was a businessman who thinks about profit, benefit and growth so an aggressive competitor. For Nocera, Schultzs aim was to grow as soon as possible by making the best financial result. For illustrating this, he self-contained some testimonials of Schultzs colleagues who said Mr. Schultz is an enormously competitive businessman for example. An other colleague told an anecdote Howard said that they would never serve food. He thought it would dilute the experience. ) For Starbucks, there was always going to be a limit to how much coffee it could sell in any one location, so to goose same-store sales, it began selling food. All these testimonies supported the thesis that Howard Schultz was a man who wanted a quickly growth with a big profit. His first face was unspoilt a disguise to hide his true nature as Nocera. After having made an opposition between the two faced of Schultz, the journalist concluded that there was in reality only one Howard Schultz and the t wo things he wanted were incompatible.Finally, after this event, Schultz analyzed the situation and some questions arrived Was it possible to have it two ways, or were growth and authenticity incompatible? Starbucks pursue such aggressive global growth and remain the unique local coffeehouse that attracted customers in the first place? We can see that these issues were in link with the first ambition of Howard Schultz So we can ask us if this ambition was really feasible or if Schultz has failed to achieve his goal. One thing was certain The issue wasnt going to go away