REPORT TITLE

2018

BUSINESS MANAGEMENT AND ETHICS

FINAL PROJECT

SUBMITTED BY:
RIDA FATIMA ANMOOL (1947133)
PRIYANKA SUNDARLAL (1947131)
PRITHIVI DEMBLA (1947130)
BUSINESS MANAGEMENT AND ETHICS
BSAF 2A

COMPANY NAME
Authored by: Your Name

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TOPIC: SELECT ANY Select any firm from Forbes list of innovative companies and gather
information about that why they are falling in that innovative list; what specific management
functions they are performing to be on that list.

STARBBUCKS -TOP MOST INNOVATIVE

COMPANY

INNOVATION IS A PART OF STARBUCKS’S DNA AND LEADERSHIP IS A HEART OF

STARBUCKS

INTRODUCTION:
COMMUNITY, CONNECTION, CARING, COMMITED, COFFE five Cs define the essence of Starbucks,
“It happens millions of times each week – a customer receives a drink from a Starbucks barista – but
each interaction is unique”
“We aren’t in the coffee business, serving people. we are the people business, serving coffee”
Their goal is to share coffee friends and make the world a little better and to bring new ideas in the
business. Their mission is to inspire and nurture the human spirit- one person- one cup- and one
neighborhood at one time. It was started in 1970 with a single store, offering the world's finest fresh
coffee beans in 1981 Howard Schultz joined company as CEO (brought a lot of innovation in company)
In 1983 he visited Italy and was inspired by the Italian coffee and made a vision to bring the Italian
coffeehouse tradition in US (a place for conversation and a sense of community) In 1987 he purchased
the company and he didn't only passionate to purveyors of coffee, but everything that goes with full
of rewarding house experience, and by offering other items like premium teas, fine pastries and other
delectable treats and the music in store in chosen for artistry and appeal. It’s not usual to see people
coming at Starbucks to chat meet or even work, a part of daily routine they are some than they brew
They makes sure everything they do is through the lens of humanity,- from commitment to the
highest quality coffee in the world, the way they engaged with customers and communities to do
business responsibly. Today they are serving with 31000 stores in 75 countries -world’s largest coffee

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retailer and top most innovative company in the world by offering a range of exceptional products like
beverages, iced cold, pastries, ice creams etc.

INNOVATIONS -DNA OF STARBUCKS:

Starbucks has always thought outside the box from the beginning whether its coffee flavors and other
beverages innovation ,store design innovation, digital mobile innovation , innovate partners benefits
or social impact innovations, it took the concept of the corner coffee shop and totally revamped the
coffee experience, And the company has always had the ability to roll out new products relatively
quickly. Starbucks invests heavily in R&D (research and development). It received the 2014
outstanding corner innovator (OCI) Award; honorees were chosen for cooperate commitment to
innovation as a strategy to grow their business. Starbucks ‘system to Accelerate results (STAR) process
has enables the company to test and measure new products and measure customer interest. In 2015,
Starbucks was recognized as Forbes magazine as one of the 100 most innovative companies in the
world.
A glimpse of Starbucks ‘innovation process can be the seen in how it approaches the all-important
Christmas season, since “Starbucks has Christmas down to a science “It takes many months of meeting
and tastings before rolling out the flavors and aromas. The company’s product innovation process
must be doing something right, as many years of its Christmas products have been popular for years.
For instance, the company’s Christmas blend debuted in 1985. The gingerbread latte was a Christmas
2000 innovation. The Caramel Brule latte come out during the 2009 holiday season. During the
Christmas 2011 innovation, customers got their first taste of the Skinny Peppermint Mocha-a nod to
the trend of healthier, but still tasty, products and the line of petite desserts, which were introduced
to commemorate the company's 40th birthday. But obviously, given Starbucks outcomes, it's not only
the Christmas products that have been successful. One of Starbucks ' creations was a line of light-
roasted coffee beans and brews. And the popularity of energy drinks led the company to create a line
of " natural" energy drinks called Refreshers. The new fruity, carbonated drink that's high in
antioxidants will get its energy boost from unroasted green coffee extract. Schultz told shareholders
that the company is continuing to create lots of Starbucks products that " live outside of our stores
“Starbucks Refreshers are sold at 160,000 grocery stores and made -to-order versions are sold in
Starbucks stores.
To see software engineers at Starbucks is a unique thing, they are doing to innovative company’s
technology culture. Tryer hub research is also biggest innovation of Starbucks.

STARBUCKS AS RETAIL STORES:

In the beginning of its year, Starbucks was selling its coffee beans, equipment’s, gadgets and all the
possible things which are required to make a good coffee. Starbucks was more a retail store than a
café.

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OPENING A CAFÉ:
They opened its first café in Seattle, making an environment so much comfortable and experience of
enjoying the superb aroma of coffee which was loved by the coffee lovers in their shop. This thing
naturally paved the way for later success.
MARKETING STRATEGY:
The most innovative strategy of Starbucks is their marketing strategy which is quite unique as
compare to other brands.

PREMIUM QUALITY:
Star bucks have got the premium quality coffee. It is the fastest growing innovative coffee brand in
the world. Star bucks believe in serving the best quality of the coffee to its customer which creates its
brand name in the mind of customer. They have a full belief in this thing that the product which they
are serving should be the best, there shouldn’t be any compromise on the quality of their coffee
because they have got loyal customers. If they won’t maintain their quality coffee, they are going to
lose their brand image quite badly. There are quite benefits of good quality as it helps the brand to
create its reputation. Good taste and quality means that the people are going to recognize and rate
your product in the food market.
UNIQUE FLAVOURS OF COFFEE:
Starbucks have got some several different unique flavors of coffee for their customers who like to
indulge in new flavors. Starbuck has positioned itself in a way that it gives the customer the premium
experience of having a coffee, the feel you get after having premium coffee of Starbucks is of totally
on the different level.
AN ASTHETIC DINE IN:
Providing the best quality coffee, the Starbucks provide one of the most sophisticated ambiance to its
customer for a dine in where they can sit back and enjoy their tea in peace. Starbucks are basically for
those people who belong to the lead class means the people who want to enjoy coffee and loosen up
their daily fatigue in resting up at a place.
OFFERING FREE COFFEE TO THEIR LOYAL CUSTOMERS:
Starbucks is using quite unconventional techniques for its marketing and branding. They sometimes
offer the free coffee service to their loyal customer whenever they bring out some new flavors in the
market as it gets them to take feedback from those customers. And just because of this service from
Starbucks they do have quite high word of mouth marketing. They just not only provide coffee to the
customer they also do provide all sort of flavors to their customer that they can even purchase the
flavors and make coffee for themselves at their home. This is a quite ethical behavior of them.
A PERFECT PHOTOGRAHY:

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One of the most innovative marketing strategies of the Starbucks is their picture quality which is
looks beautiful, real and make people believe on the product. The picture style of Starbucks is
growing up quite nicely the angle which they select to click the picture the lights in which they get
their product place to get the picture all of these techniques get the Starbucks picture look quite real
authentic and believable. Every sort of their products picture is clicked in different lights different
angles with different postures. The picture of Starbuck looks so real that it looks so human centric
and it is styled with some imperfections that it creates an appetite appeal.
STARBUCKS WEBSITE:
Starbucks was the first company to launch its website in 1998 and then in 2002 they start providing
free WIFI to their customers, and after this Starbucks started building its social media presence just
because of this new additional technology, it has to adapt with it. Starbucks started having growth in
their sales. Almost they were having around 11 percent of their entire outlet sales through mobile
orders. Through this mobile service they were quite able to manage a feedback from the Customer’s
and their customers also start feeling loyal with them because they were continuously asking them
are they satisfied with their service. They kept on asking their customer that what they think that
need to improve in our product range or in our services.
FREE PRODUCTS BY WINNING GAMES:
Starbucks even launched its game for its customer that people can play game and can win a free
product on the win, this was a quite attractive marketing campaign of Starbucks.
COMSUMER TASTE:
Besides providing only coffee to their customers, they are indulging themselves in providing various
varieties of coffee, i.e. cold coffee, hot beverages, fresh brewed coffee, cold brew, non-coffee
blended beverages and Frappuccino coffee. Depending on consumers’ taste. Even if ought to observe
difference in taste, the taste of star buck’s coffee in china is different as compared to that taste which
is available in United States. They know how to adapt things according to the country.
STARBUCKS SIGNATURE ESPRESSO:
Starbucks closed all the US locations for only one afternoon so that they can train their more than
135,000 baristas that how to make its signature Espresso. Starbucks goal was to remind customers
what they loved about the brand, by making stores an experience rather than a place to get a quick
coffee.
CUSTOMER CONNECTION INNOVATION - WITH PARTNERS
The interesting thing is to see software engineer at Starbucks, they joined hands with Microsoft, IBM
and juniper networks to incorporate digital throughout like Al, blockchain, sustainability, as we know
Starbucks is all about human connections and for making it better, they are using technology Using
deep brew AL model, to be able to suggest customers with Starbucks app in mobile contextual
information of Starbucks for e.g. unpredictable weather or make decisions in uncertain environment
Moreover, they are using blockchain which allows customers to track the supply journey of the beans
they buy (ln 2019 Starbucks worked with more than 380000 farmers to ensure ethical sourcing)
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Moreover, it's provides customers to order in a simple way, barista wears mic and use natural
language processing, allowing eye to eye contact with customers without typing need
CEO- JOHNSON says customers are at an all high time.
INNOVATIVE WAY OF DOING SOCIAL GOOD
In recent years, the company has focused on reshaping the business model in a way to do social
goods it includes Partnership with feeding America to donate 100% of the leftover to nearby
community groups, Efforts to decreased the company's food waste , Opening cafes in economically
depressed cities of US to boost development, and provide job opportunities to refugees.
STRONG BEVERAGE INNOVATION:
They recently launched cloud macchiato, which features espresso, vanilla, syrup, caramel and light
and airy foam served over ice, exceeded expectations and drove incremental expectations.
STARBUCKS IS SPEEDING UP INNOVATION AT ITS SEATLE
RESEARCH HUB:
Starbucks has tested 133 unique projects at the tryer center with huge investments and 40 of them
are currently in stores in some form, the vision of the TRYER and the next wave innovation at the
brand is CEO Kevin Johnson, At tryer employees are testing out of new combinations for cold
beverages , using rapid prototyping via 3D printer and even trying out new mechanism with
company’s new partnership with ubher.
MANGMENT FUNCTION THEY ARE PERFORMING TO BE
ON INNOVATIVE LIST:
They aren’t performing any specific management function; they are mostly performing every function
but yeah, we can’t reject the fact that leadership is their visionary management function.
STARBUCKS-LEADERSHIP:
Starbucks recognize the importance of having individuals with excellent leadership skill throughout
the company Howard Schultz says being a great leader, involves finding a balance between
celebrating what’s made a company successful in the past, and creating enough confidence in your
people, so they follow the path. from the creation of the company Starbucks allows to company to
grow to initiative innovative strategies. He knows how to build trust and emotional attachment with
staff and customers, and trust is the heart of leadership, he negotiates with employees at the time of
decision making, and create a strong ownership sense with employees and that encourage
employees to share the success of a company .He ensured their empowerment, high wages and
appreciate feedback from employees, and moreover provide leadership training courses to upper
-level and low-level employees, because the secret to satisfy customers is to satisfy staff Moreover
Howard Schultz believes that , everything matters , not just a cup of coffee for e.g. his vision is to
make a Starbucks a third place after home and work, focus on best service of customers with digital
apps and design seats etc. Moreover, they do such events to surprise their customers, such as to

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open a café an hour ago if there is already a que of customers. Moreover, he respects culture and
diversity and build stores design according to the location. To become a good leader is required to set
vision and his vison is to treating people with respect and dignity, He knows the importance of
knowing customers and employees for e.g. BARISTA gives a personal to customers, who regularly
orders and Schultz also believes that employees have ideas to offer , and principle was elemental to
the creations of Frappuccino which was blended by one of his employees. Today we can see that the
Starbucks is one of the leading companies and have been able to achieve its goals and it’s because of
the coordination, today they are sustaining with leading function of management.
STARBUCKS DECISION MAKING:
The process of decision making at Starbucks starts considers opinion from every employee and also
consider the decision of customers, a quite unique, successful decion making by Howard Schultz at
the time of financial crisis;
When Howard Schultz stepped out from the company in 200( remained CEO), after him company
couldn't survive ,no effective decision making by other staff Company was facing financial crisis , then
he returned after 8 years ( was his good decision) and made a goal to restore Starbucks experience,
reawaken the emotion of customers and . Firstly, he took the decision to close all (at that time) 7100
Us stores for evening to retrain 135,000 baristas on the coffee experience, no doubt it was bold
decision. Another controversial decision was to held a leadership conference with store managers
and partners to energize employees around what Starbucks stand for and what needed to be done
for the company to survive and prosper , Meetings caused many costs ( fare meals and hotels etch
rather than gathering together in Seattle,( headquarters) he chose New Orleans as the site for
conference. here was a city still recovering from Hurricane Katrina, which had totally devasted it five
ears early in 2005. Talk about the logistical nightmare- and it was but the decision was a symbolic
choice, New oreanls and Starbucks both were trying to succeed and rebuilding. Another decision
taken by him was like closing 800 stores and laying off 4000 partners, were more difficult, since the
transition time Schultz made a lot of decision with employees by ignoring cost of gatherings,
Starbucks regain its position and started leading again. Decisions like scheduling maintaince are also
a part of Starbucks decision making.
STARBUCKS -ORGANIZING:
Starbucks has expanded its organizational structure according to today’s business need and success is
credited, in part to its adaptive organizational structure, and today’s Starbucks success lies on this
because it influences all areas of management like leadership etc. Starbucks has matric organizational
structure, Its divided in many features”
FINANCIAL HIERACHY -A company has separate HR department, marketing department and financial
department.
GRAPHIC DIVISIONS: This enables closer mangers to support for the global needs for e.g. company
has three regional divisions,
PRODUCT BASED DIVSIONS: for e.g. the company has divisions for coffee and other related products.
TEAMS: Its major corporate culture, enable to provide efficient services to customers.
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STARBUCKS -CONTROLLING:
Starbucks managers use different types of controls to ensure that the company meet its goal of
innovation ,it enables to monitor progress and take corrective action the controls include transaction
controls , security control, employees controls, and organizational performance controls, the
Bureaucratic controls( most important) instill use of rules and authority to guide employee’s
performance, other control can be like travelling and communicating to local farmers , because they
are famous for high quality coffee and trust factor too ,moreover digital timers are places where
employees can easily see them to measure time, another example can be , one of the employee tried
to theft customers credit card number and shortly Starbucks management terminated the employee,
moreover company tries to control operating costs , for e.g. they introduced new thinner garbage
bags , will save the company half a million dollars a year. Their high quality can be seen like. more and
more competitors are entering in the market but still its hold biggest share in the market, even in
china too.
STARBUCKS-PLANNING:
Based on Starbucks numerous innovations, there’s no doubt that managers have done their planning.
Starbucks is known for strategic planning. strategic preparation is targeted at providing a company
with a competitive advantage over other firms. A competitive advantage is where an organization can
perform tasks differently or more than other businesses.
Starbucks has also worked on product diversity. Like the other competitive coffee brands like Taiwan
Island Coffee and Canada Baiyi Coffee. And also, in order to enter the vast Chinese market, Starbucks
adds more Chinese tastes of tea drinks to be more suitable. This perfect plan makes Starbucks
successfully. It has opened 566 stores in China and its net income of about $400 million a year. This
shows its strategic planning.
the store design of Starbucks is divided into three areas: Chinese-style wooden tables and chairs area,
American style sofa area and a spacious modern bar stools style high table area; Starbucks replaced
its previous standardized design, In order to ease the American and Chinese traditional decoration
and which is easy in adapting to the Chinese market. This also shows us the strategic planning.
Moreover, their every Christmas launched program become famous because they start planning a
year ago.
Their planning of loyalty programs also made them distinguished from other customers, moreover
their all innovations must have gone through proper planning, that’s why Starbucks falls in the list
Forbes today.

CONCLUSION:
Today Starbucks falls in the list of Forbes (top most innovative companies), no doubt, Starbucks made
31000 stores today from a single retailer, its because of the loyalty and trust they maintained with
customers, they do perform every function so effectively by started by many programs on
innovations taking care of customers facilities , providing digital services .These people acted like
startups today. They listened to customers, asked for opinion and improve processes it’s a place on
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the corner where you could go, meet your friends and business associates for a relaxed hour or three.
Schultz brought a transformational leadership to Starbucks Organization by keeping a clear way of the
company’s heading by taking after the vision and mission explanation and serving as an
organizational role model. Starbucks Organization may be a strong and maintainable organization
within the worldwide coffee showcase and strives to achieve the factors of spirituality at work like
innovation commitment , strong leadership , sustainable environment and organizational and
financial sustanibility.Throughout the day since Howard Schultz joined a company its been innovating
and reshaping in a new way by bringing new ideas.