COMPANY ANALYSIS

MANAGEMENT THEORIES

INDUSTRY: RETAIL SPECIALITY COFFEE INDUSTRY

COMPANY: STARBUCKS

ABOUT RETAIL SPECIALITY COFFEE INDUSTRY:

The retail coffee specialty industry represents a distinctive and dynamic

segment within the broader retail sector, focusing on the sale of premium
and uniquely sourced coffee products. Specialized coffee shops, both large
chains like Starbucks and smaller independent cafes, form the backbone of
this industry. These establishments prioritize the quality of their coffee
beans, often opting for ethically and sustainably sourced varieties. The
industry caters to consumers who seek a more refined and diverse coffee
experience beyond traditional options.

Premium coffee products are a hallmark of the retail coffee specialty

industry, with an emphasis on distinct flavors and high-quality brewing
methods. Specialty coffee shops often offer a range of brewing techniques,
from pour-over to espresso, allowing customers to appreciate the nuances
of different coffee beans. This emphasis on craftsmanship aligns with the
broader "third wave" coffee movement, where coffee is treated as an
artisanal product with a focus on origin, roasting techniques, and unique
flavor profiles. The industry's commitment to providing a diverse and
elevated coffee experience has contributed to its growth and popularity
among discerning consumers.
The retail coffee specialty industry's success is not only rooted in the quality
of its products but also in creating inviting spaces for consumers to enjoy
their coffee. Many specialty coffee shops prioritize creating a comfortable
and aesthetically pleasing environment, positioning themselves as "third
places" where customers can socialize, work, or relax. This emphasis on the
overall experience, coupled with a dedication to high-quality coffee,
distinguishes the retail coffee specialty industry and continues to shape its
evolution.

ABOUT STARBUCKS:
Starbucks, founded in 1971 in Seattle, Washington, has become a global icon
in the coffeehouse industry. Renowned for its commitment to providing a
premium coffee experience, Starbucks has established a ubiquitous
presence with thousands of stores worldwide. The company offers a diverse
menu of coffee beverages, teas, and snacks, and is particularly known for its
espresso-based drinks. Beyond its product offerings, Starbucks has played a
transformative role in shaping the coffee culture, introducing concepts like
customizable drinks, the use of coffeehouse as a "third place" for socializing
or work, and a focus on ethical sourcing through initiatives like the Coffee
and Farmer Equity (C.A.F.E.) Practices. Starbucks' distinctive green logo and
the aroma of freshly brewed coffee have become synonymous with a global
coffee culture that values quality, convenience, and community.
Starbucks' success is attributed not only to its product quality but also to its
emphasis on creating a unique and inviting atmosphere in its stores. The
company's coffeehouses are designed to be welcoming spaces where
customers can enjoy their beverages, connect with others, or work.
Starbucks has also embraced technology, introducing innovations like
mobile ordering and rewards programs to enhance customer convenience.
With its commitment to social responsibility, sustainable sourcing, and
continuous innovation, Starbucks remains a prominent player in the retail
coffee industry, influencing consumer preferences and setting standards for
the coffeehouse experience.

APPLICATION OF SCIENTIFIC MANAGEMENT THEORY:

 Standardization:
Starbucks emphasizes standardization in its beverage preparation processes. The
company has detailed standard operating procedures (SOPs) for making each type of
drink, specifying the precise measurements, brewing times, and presentation standards.
This ensures consistency in the quality of beverages across different Starbucks locations.

 Specialization:
In Starbucks, employees often specialize in specific roles, such as baristas, cashiers, or
shift supervisors. This specialization allows employees to develop expertise in their
assigned tasks, contributing to the overall efficiency of the store operations.

 Incentives:
Starbucks utilizes incentive systems to motivate employees. This may include
performance-based bonuses or recognition programs for baristas who consistently
provide excellent customer service or achieve specific sales targets. Incentives are
aligned with individual and team performance goals.

 Training and Development:

Starbucks invests in comprehensive training programs for its employees. Baristas
undergo training to ensure they are proficient in beverage preparation, customer
service, and store operations. Ongoing development programs contribute to employee
skill enhancement and adaptability.

 Performance Monitoring:
Starbucks monitors performance through various metrics, including customer
satisfaction scores, sales figures, and operational efficiency indicators. Performance data
is used to identify areas for improvement and maintain high standards across the
Starbucks chain.

APPLICATION OF GENERAL MANAGEMENT THEORY

 Division of Work
Starbucks implements the division of work by assigning specific roles and responsibilities
to its employees. Baristas, for example, focus on preparing beverages, while cashiers
handle transactions. This division allows employees to specialize in their tasks,
contributing to overall efficiency.

 Authority and Responsibility

Authority and responsibility are clearly defined within Starbucks' organizational
structure. Store managers have the authority to make decisions related to daily
operations, staffing, and customer service. Baristas and other staff members have
responsibilities aligned with their roles, ensuring a clear chain of command.

 Discipline:
Starbucks maintains discipline through adherence to company policies and procedures.
Employees are expected to follow standardized processes for preparing beverages,
handling customer interactions, and maintaining cleanliness. This discipline contributes
to a consistent and positive customer experience.

 Unity of Command:

Unity of command is evident in Starbucks' hierarchical structure. Each employee reports

to a single supervisor or manager, preventing confusion and ensuring that instructions
and expectations are clear. This structure helps maintain order and accountability.

 Unity of Direction:
Starbucks aligns its efforts toward common goals and objectives. The company's mission
and values are communicated throughout the organization, guiding decisions and
actions. This unity of direction ensures that all employees work towards shared
objectives, such as providing high-quality coffee and creating a welcoming environment.
 Subordination of Individual Interests to the General Interest :
Starbucks promotes a culture where individual interests are subordinated to the general
interest of providing an excellent customer experience. Team members prioritize
customer service, and the company emphasizes shared values and goals to foster a
cohesive work environment.

 Remuneration of Personnel:
Starbucks offers competitive remuneration to its employees, including benefits and
opportunities for advancement. The company recognizes the importance of fairly
compensating its staff to enhance motivation and job satisfaction.

 Centralization
While Starbucks maintains a degree of centralization in decision-making to ensure
consistency across its stores, it also values local decision-making. Store managers have
the authority to make decisions that cater to the specific needs of their locations,
striking a balance between centralization and decentralization.

 Scalar Chain
Starbucks follows a scalar chain where information and decisions flow through the
organizational hierarchy. This chain of command ensures that important information
reaches the right levels of management and facilitates effective communication
throughout the organization.

 Order:
Starbucks places a strong emphasis on orderliness and cleanliness in its stores. The
layout, organization of equipment, and cleanliness contribute to a positive customer
experience. This principle aligns with Fayol's concept of maintaining order in the
workplace.
LEVELS OF MANAGEMENT

 TOP LEVEL MANAGEMENT:

At the top management level, Starbucks executives and senior leaders apply strategic
management principles. This involves setting the overall direction and long-term goals
for the company. Strategic decisions, such as expansion into new markets, introduction
of new product lines, or adjustments to the overall business strategy, are made at this
level.

 MIDDLE LEVEL MANAGEMENT:

Middle management at Starbucks is responsible for translating the strategic goals into
actionable plans. This involves coordinating with various departments, setting
departmental goals, and ensuring that day-to-day operations align with the overall
strategy. Fayol's principles related to authority, responsibility, and unity of direction are
particularly relevant at this level.

 LOWER LEVEL MANAGEMENT:

Operational management at Starbucks, including store managers and shift supervisors,
applies Fayol's principles to oversee day-to-day tasks. This includes division of work
(different roles for baristas, cashiers, etc.), unity of command (clear reporting
structures), and discipline (adherence to standard operating procedures).